Benefits of Being Ethical
Business: Cambridge International GCSE (2027 Exams), topic 6.4.2
Benefits of Being Ethical
There are benefits to a business operating in an ethical way:
Marketing
- Consumers are increasingly making buying decisions based on whether a company is ethical or not. A company acting in an ethical way can often advertise based on this and this helps to develop a positive public image and increase sales.
- Green and Blacks use Fairtrade cocoa beans to manufacture their chocolate.
- The Body Shop (a cosmetics shop) won a lot of customers’ business by advertising their ethically sourced and exotic ingredients.
Employee motivation and culture
- If employees are treated in a fair and honest way, then they are more likely to want to maximise their efforts for the business. This can increase the productivity of workers.
- John Lewis staff are called “partners” and they are widely viewed as the best treated staff in the UK retail industry. John Lewis is often ranked in the The Times' Top 100 companies to work for.
Stakeholders
- Other stakeholders are affected if a company acts in an ethical way and this is beneficial for the business.
- For example, treating customers in a fair and honest way (offering a fair price and good returns policy etc.) makes the customer more likely to buy from the company again.
- Also, some shareholders will be more likely to invest in an ethical company because it gives them a moral purpose.
Test yourself on Benefits of Being Ethical
Why follow ethical business operations?
What is not a good way to motivate employees?
Why might shareholders invest in an ethical company?