The Reason for Being Ethical in Business: Moral or Marketing Orientation?

Abstract

The extant literature often declares that ‘ethical behavior is good for business,’ but the invoked reasons are often related to marketing consequences rather than with moral values. On the other hand, if ‘ethics is good for business,’ how can be explained the unethical behavior of many corporations—such as the Enron case? To understand this paradoxical situation, we initiated a research project contacting 300 French and 300 UK SMEs, randomly selected from the Kompass database. The 248 SMEs’ French managers and the 266 UK managers that responded favorably to our invitation received a short email questionnaire focused on three issues: the necessity of ethical behavior for their business prosperity; their capacity to act unethically to save their business from a difficult situation; and if ethical actions have less value if they are not actively publicized. Results indicate that the majority of French and UK SMEs’ managers consider that business ethics has both a moral and a utilitarian justification: they agree that ethical values represent a condition for corporate success, but they directly link this positive effect with the aggressive diffusion of positive messages about the ‘ethical profile’ of their firm. More than half of respondents in both countries recognized that they will not hesitate to act unethically if these actions are necessary to save their business but outlined in their comments that their choice will be also determined by the possibility that their acts could be discovered.