Business Ethics and Organization Performance: A Critical Review

Abstract

Aim: The objective of this study is to critically review the relationship between business ethics and organizational performance. Methods: The sources of data for this review study were secondary data which involves a profound review of the past work of authors to test the alignment of the review objectives. The paper focuses on three main theories of business ethics, Utilitarianism theory, Deontological theory and Norm theory. The three theories were used because of the significant correlation they have to this study's objective, making it easier to understand the roles of business ethics towards the organization's performance. It reviewed elements that influence business ethics and organizational performance including integrity, good corporate governance, transparency, honesty, confidentiality, fairness, and corporate social responsibility. Business ethics has many dimensions, but the purpose of business ethics, as a discipline of study is not very much about teaching the difference between right and wrong, but to give organizations the tools for dealing with matters of moral complexity for strategic decisions that could lead to the anticipated performance. Conclusion: Following a critical review of the subject, it was discovered that organizations that aspire to succeed cannot do without incorporating certain business ethics into their corporate governance. Therefore, setting a system of balanced ethical principles in business is the foundation for any business system to reach its optimum performance.