Successful People Don’t Lie; Ethics are Important in Business


Vivek Wadhwa, a technology entrepreneur, hit home when he said,

“Corporate executives and business owners need to realize that there can be no compromise when it comes to ethics, and there are no easy shortcuts to success.”

Often, we see ‘ethics’ being pushed to the ‘Mission & Values’ page of a company without being translated into its day-and-day processes. And yet, they do play a crucial role in the long-term success of any organization.

Ethics in business can earn you happy customers who come back to you with more business and recommend you to their social contacts – online and offline. Similarly, when you treat your works well, they’ll be motivated to perform better and provide better service to your customers.

I am not rambling. Here is some hard evidence for you:

  • An international study by Larry Fauver and his team found that better employee treatment fosters innovation and technical efficiency in the workers and motivates them to excel in the work they do.
  • Another study at the University of Warwick suggested that happy employees are 12% more productive. Google, which invests generously in employee support initiatives and rates high in employee satisfaction levels, saw a growth of 37% – which shows how ethics and morals are not just ‘empty talks’. In business, they have always mattered and will always matter.
  • A 2012 study, focusing on the financial services sector, found that when a salesperson behaves ethically with a customer, it leads to higher customer satisfaction and earned greater loyalty for the bank.
  • A 2006 study by Kathleen D. Vohs and her colleagues led one group of subjects to think about money, while the control group was left unscathed. The study had some sobering results. It was found that subjects who were primed to think about money:
  1. chose to do a solitary activity (cooking) over social one (having dinner with friends),
  2. chose to work alone than with peers,
  3. donated less to charity,
  4. were less eager to meet new people, and
  5. were more reluctant to ask for assistance and less helpful when others asked for it.

It is not hard to guess why such behavior patterns can be detrimental to any business.

In this article, we will look at why an entrepreneur should be honest.

Pros and Cons of Ethical Business Practices

Why is Treachery seen acceptable?

Let’s take advertisements. A study found that only 18% of claims made in the cosmetics ads are true. Scientific-sounding terms such as ‘dermatologically-tested’ or ‘clinically-proven’ are used generously in the full-page advertisements of top-notch fashion magazines like Marie Claire, Vogue, and Glamour to fool people.

Taco Bell


Nestle’s Maggi was recently banned in India because it hid the number of harmful products it uses. Volkswagen made false claims about the amount of carbon monoxide emissions its diesel cars cause.

The companies make such false claims to get an edge over the high competition in the market and win more customers. In such a market environment, it becomes very difficult for an entrepreneur to be entirely honest with its customers and shareholders.

However, there is one thing to be noted here. Once the unethical behaviors are revealed, the company’s public image gets shattered and its profits and reputation dip down almost immediately.

Why does it pay to be honest?

Effective Management: The leaders of organization lay the foundation for building a business based on business ethics. When the management philosophy and strategies are ethical, the effect cascades down to all aspects of a business. Ethical accounting practices to ethical HR practices to being honest with the shareholders and the customers – are all part of this deal. An entrepreneur who does not ensure that his business follows an ethical approach from the top down, he takes a great risk of polluting each facet of his business with malpractices that can affect the firm’s profitability negatively.

Optimized Performance: As we have discussed earlier, happy employees are more productive. On the other hand, unethical HR practices that cause employee happiness levels to slide down can only cause unrest in the workplace. The turnover of the employees dips too and employee retention becomes a problem. The time and money the company spends on recruitment and training of new employees shrinks its profits in the long term.

Impeccable Public Image: Most companies depend on the goodwill of their investors and shareholders, especially the publicly traded companies. If a company indulges in unethical behavior and gets discovered, it stands to lose investor confidence and the trust of its shareholders and public in general. Years of hard work and investment in building the reputation of the brand goes down the drain, and it can take several years to regain everybody’s trust again.

Loyal Customers: In a business environment, ‘customer’ is the KING. Customers bring in business which reaps profits, and you need to be extra cautious when you deal with them. A company whose salesperson makes an effort to what exactly the customer needs and offers the best-fit product or service can almost expect ‘repeat’ business from the same customer.

A marketing assignment help provider says, “Most of my income comes from students who recommend me to their friends and peers because of the quality of my work. I don’t make exaggerated claims about what I can do for them or never make false promises about winning them best grades. They come to me because I provide them with authentic information and data or point them to the right resources which can help them complete the tasks assigned to them.”

Why Good People make Bad Choices when it comes to Business?

Enron’s company policy read, “Employees are charged with conducting their business affairs in accordance with the highest ethical standards.” We all know what happened. The company went bankrupt because the executives hired billions of dollars in debt using accounting loopholes and false financial reporting.

Often we see perfectly ‘normal’ and ‘nice’ people have been led astray when it comes to businesses because of several reasons:

  • They do not speak up because they are afraid of how their bosses react when they point out to an issue, or think that no one cares about what they have to say.
  • Their targets are so high that they have to compromise on the ways to achieve them.
  • They do not have enough resources to do what they are asked to do. Hence, they have to think of alternate (read unethical) ways of doing things – including lying and manipulating records.
  • They follow the footsteps of their leaders. When the senior management and executives of a company follow unethical practices, they take it as the ‘company norm’ and start adjusting to the culture.

It takes conscious efforts to breed ethical and moral work culture in a business environment but it certainly makes a business sustainable and more profitable in the long term.

Rruchi Shrimalli is a Content Marketing Manager for,, and several other websites. She is a writer and a journalist at heart, and has been writing articles on various aspects of the Education domain since 2010. Her articles have been published at,, and Employment News.

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