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Why should a business be ethical

Updated: Jun 18, 2023

A business should be ethical for a number of reasons

  1. Customers prefer buying from ethical businesses

  2. Legal controls in certain countries enforces ethical practices

  3. Stakeholder pressure

  4. Pressure groups

What are considered unethical practices

  1. Low wages - below minimum wage

  2. Child labour

  3. Migrant exploitation

  4. Health and safety working environment

  5. Animal testing

  6. Pollution

  7. Discrimination

Why are some business unethical

As business are have profit objectives, some businesses may overlook welfare of workers and consumer well-being in order to reduce cost to increase profits.

How does businesses behave unethically to consumers

Some businesses mislead consumers on price and quality of products, while some include hazardous materials in products or faulty components that may not be safe to use.

How does government prevent unethical business practices

They do so by imposing taxes and fines, suspending its business operation or closing the business. Most governments have legal controls in place for businesses to comply. However, in some countries, grants and subsidies are provided to help lower cost to encourage businesses to operate ethically.

Each country have different legal controls. As such, many large businesses may take advantage of certain lapse in policy in certain countries that may enable them to operate unethically.

How does pressure groups promote ethical practices

In countries where ethical practices are not enforced as legal controls, pressure groups play an important role by creating bad publicity for these businesses. They act to persuade customers to boycott their products by exposing evidence of unethical practices.


  1. Legal controls

  2. Branding

  3. Pressure Groups


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