It wasn’t all that long ago that our ideas of success in business were built on principles that grew to popularity in the 1980s. Running the rat race. Climbing ladders and stepping on people all the way up. There were these notions of doing anything and everything it took to win in a Machiavellian, ends-justify-the-means way.
I think most of us in the 21st century would say that that’s not how we want to do business. That’s not how we want to consume and support businesses, at the very least. But is the question of ethics in business that clear-cut?
We don’t have to look far back to see stories of unscrupulous companies acting unethically—even illegally—in an effort to get ahead. The controversy around Turing Pharmaceuticals in 2015, for instance, caused outrage when upon acquiring the rights to the drug daraprim (which aids in the treatment of HIV/AIDS), raised the price by over 5000% from $13.50 per pill to $750 per pill.
In a Forbes article on the controversy, contributor Raquel Baldelomar posed the long-debated question on ethics in business:
“Some business executives [say] that a CEO’s main responsibility is to maximize profits and shareholder value within legal parameters—even if that means having low ethical standards. Others would argue that CEOs have a social responsibility to conduct business in an ethical manner even if that means securing a slightly lower return on investment. Who’s right? Does it depend on the industry?” — Raquel Baldelomar, Forbes
Do Ethics in Business Really Matter?
Regardless of how one views the argument or what side you land on, one thing is certain: the public at large turned on Turing Pharmaceuticals and turned on them fast. Former CEO Martin Shkreli quickly became known as “Pharma Bro,” was ridiculed and vilified for his decision to hike prices and was later arrested on unrelated securities fraud charges.
It did not go well for Shkreli.
While that’s only a case study, and one could argue that unethical people in business don't often get their comeuppance, there’s a strong case to be made for conducting business with the highest ethical standards. Here’s why:
1) Your reputation always comes out.
No matter how much you try to conceal it, your reputation is always there. Unethical practices won’t stay hidden. Even if you don’t make a public unethical decision or a questionable deal with a client, there are still small chances to choose between right and wrong every day: with employees, in meetings, even in the parking lot. We all have choices. Each and every one either builds towards a good reputation or it takes away from it.
2) Good ethics inspire confidence and trust.
If strong ethics build a good reputation, know this: even if you feel it causes you to miss out on opportunities and revenue, it will come back to you in positive ways. A good reputation can’t be bought or be replaced. It inspires confidence and trust and encourages others not only to work with you but to stick by you through thick and thin.
3) Good character protects you and everyone around you.
It seems as though every day brings another celebrity scandal with it. I can’t help but feel bad for the people around them—the loved ones, friends, and people who are hurt and disappointed when not just breaches of ethics, but truly heinous acts come to light.
Our ethics protect not just ourselves but the people we care about. It protects our families and employees. It helps keep us above reproach, and from having to make up for any lapses in judgment. It’s just better when we take the high road.
4) Sticking to ethical standards forces you to grow.
When we choose to maintain high ethical standards, it doesn’t guarantee that things will be easy. Far from it. If anything, it will be harder. Choosing the unethical way is no doubt easier! But when we do stick to our guns and choose the ethical path, we’ll find it will pay off not only in outward perceptions but in personal growth. We’ll be forced to have self-control and to think more critically about our choices.
If we want to succeed in business, that’s what we want! We don’t want to take the easy way. We want to take the way that challenges us and builds a legacy that’s worth having.