Ethical practices are vital to any organization given the environmental and corporate governance sensitive industry. In this case, the decision for an organization to engage in meaningful ethical practices is in most cases motivated by certain factors.

Long term viability

Any business that focuses on serving the market for an extended period must have a healthy climate. In other words, the organization must put into consideration those actions that embrace self-disciplined standards that will satisfy the needs of the society as a whole (89). Organisations have a responsibility towards the community and assuming the socially responsible posture implies embracing ethics. Organisational goals, in this case, have to focus on economic and legal obligations through exercising overall responsibility such as community affair involvement, showing concern towards urban decay, and even fighting racial discrimination. Long term viability is an intrinsic motivator which induces the moral duty of the organization towards the consumers, an action that positively contributes to the financial aspect of the organization in the long run.

Cost and risk reduction

This motivation facilitates the need for organisations to practice responsible business behaviors towards the society as a failure to do this will lead to significant consequences. Ill practices such as employment discrimination, failure to pay tax, among other practices can lead to an organization being shut or paying damages. Ane example of such companies that have faced significant consequences due to practicing unethical behavior is the Volkswagen which not only spent approximately $ 35 billion damages but also destroyed its image in the motor industry. Besides this, an organisation that does not embrace ethical business practices can face opportunity costs. An organisation can face problems in communication, an action that leads to operational delays, lost opportunities as well as misusing of staff time. The delays can further lead to an organisation failing to secure or renew contracts and expanding its operation. This fact arises from the reputational costs that are possible to stem from ill business conducts that negatively harm the bottom line as well as scare off potential investors. In this case, to avoid incurring such costs and risks, an organisation has to employ ethical practices to govern the management, employees and the organisation as a whole.

Shared value creation

An organisation can only achieve success if it embraces the shared value creation motivation. Shared value creation is considered the economic value generation as well as addressing societal challenges. A responsible business through ethical practices is in a better position to effectively reconceive products and services through redefining the value chain productivity. As a result, the organisation would have built supportive industry clusters that positively impact the society. In other words, a business can survive the financial market only through ethical practices. For instance, looking at profit maximization in the financial market, an organisation through ethical practices can purpose to use its resources effectively by engaging in those activities that can not only increase its profits but also satisfy the needs of the society. According to Theodore Levitt’s admonitions, social concerns initially proved to be the government’s welfare, but this has changed since any given business that wants to succeed has to put the society in consideration as this is a profit motive(87).

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