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How to Incorporate Ethical Decision Making into Your Business Strategy

Learn how to integrate ethical decision‑making into your business strategy. Discover key insights and practical tips to foster a responsible and sustainable approach.

Your values and ethics will impact every aspect of your business, from how you treat your customers and employees to how you develop products and marketing strategies.

Ethical business decisions foster trust in the workplace and with customers. As an ethical business, you engage in practices that align with your customer's values and create products and services centered around them.

But what is ethical decision making and how does it affect your business's success? Keep reading to learn more about ethical decision-making.

Ethical decision-making is based on values like respect, responsibility, fairness, and trustworthiness. Ethical principles in business allow you to approach topics with fairness and care for others, recognizing and reviewing all the options available to make the most ethical choices.

Ethical decisions build trust and ensure all your decisions are good ones as they pertain to your business. As a business owner, you have an ethical obligation to your employees and customers that can affect sales and revenue because it impacts your overall reputation.

The ethical decision-making process requires you to think about the different choices you have in front of you and how you can achieve your business goals. For instance, is there a more ethical alternative that can help you succeed?

Making ethical choices requires you to know about ethical issues and find the best ethical alternative to suit your business. Ultimately, your business decisions should align with your code of ethics, and you should inspire your employees to make similar ethical decisions in their everyday lives.

Unfortunately, making ethical decisions isn't always easy. You may have an opportunity to work with another client who is a competitor of one of your existing clients for more money. However, using ethical reasoning can help you make the right decision when it comes to ethical dilemmas that can affect your overall business.

Benefits of ethical decision-making in business

Ethical decision-making in business comes with more than just a sense of satisfaction in knowing you're doing the right thing. Your customers want to shop with ethical brands whose values align with their own.

When you consider the ethical aspects of your business and find ways to include ethical principles in everything you do, you can expect the following benefits:

Improved reputation and customer loyalty

Customers want to spend their money on products and services from ethical brands. This may mean that they engage in ethical conduct, like treating employees fairly or ethical standards when it comes to producing their products.

Your customers have ethical values, and they expect your business to have the same. If your business takes ethical actions, you can attract more customers whose values align with yours, improving your reputation and customer loyalty.

Enhanced employee satisfaction and retention

Employees want to work for businesses that make ethical decisions; they don't want to work for employers who make poor decisions, lie, or cheat their way to the top. Your employees know the difference between right and wrong, and they expect you to adhere to their ethical obligations.

Increased productivity and efficiency

Ethical decision-making in business can increase productivity and efficiency because it only focuses on ethical options. By demonstrating respect, employees will feel confident to make their own decisions without waiting for your approval, increasing both morale and overall productivity.

Reduced legal and financial risks

Engaging in an ethical decision-making process reduces the risk of legal or financial consequences of unethical decisions. An ethical decision would be to adhere to a contract no matter what.

On the other hand, an unethical decision would be to violate the contract for your own personal gain. When you violate a contract, you leave your business open to lawsuits, which can cost you both time and money. However, you can avoid these consequences by engaging in a more ethical

You can use several ethical frameworks throughout your business to enhance the decision-making process. These include different theories for making ethical decisions that can directly affect your business, its customers, partners, and employees. Let's take a look at these ethical theories that can help you approach ethical dilemmas easily:


The utilitarian approach focuses on the most ethical action and causes the least harm. In a business, the utilitarian approach can provide the most benefits, seeing issues in black and white. With it, you can determine the solution that negatively impacts customers, employees, and the business the least.

You can tap into your business data to determine possible outcomes to a particular decision, including costs and benefits or consequences for the business as a whole.

Deontological Ethics

Deontological ethics consider actions when they're morally good, regardless of whether the outcome is good. Being honest no matter what is a deontological ethics theory. In theory, being honest is a good thing, but it can cause harm.

Another example of deontological ethics is showing respect. For instance, you may demonstrate respect to your superiors. While respect is always a good thing to have in the workplace, honoring your superiors' every wish can be detrimental to the business and make intelligent staff members avoid speaking up.

On the other hand, deontology is consistent. If you promise to be honest no matter what, you focus on your intention rather than the consequences. However, ignoring the consequences in business can be detrimental.

Virtue Ethics

Virtue ethics is the belief that acting according to certain virtues is ethical. Ultimately, this theory deals more with morality rather than a set of rules or outcomes. Individuals who use virtue ethics understand how their choices reflect the values of the business itself, assuming that there are ideals a business should strive for.

Common ethical issues in business

Ethical dilemmas are common in business. On a daily basis, you deal with so many people, including stakeholders, employees, and customers. Conflicts of interest, discrimination, harassment, and theft are some of the most common ethical issues in businesses today.

Conflicts of interest

A conflict of interest occurs when an organization or individual chooses personal gain over their duties. A conflict of interest might occur if an employee starts freelancing for their employer's competitor.

Conflicts of interest typically have legal consequences because they can affect both businesses. Remember, employees are bound to a code of conduct and ethics to act in the organization's interests rather than for personal gain. If your employees are violating that code of conduct, they can be terminated.

Of course, conflicts of interest are fairly broad, so some employees and business owners might not even realize what they're doing. Hiring a relative to work for your company if they're unqualified counts as personal gain, even though it's not financial and can affect the health of the organization.

Meanwhile, an employee might create a conflict of interest if they start their own company offering similar services to their employer. Of course, this isn't always the case. If you disclose your actions to your employer and they approve it, it may not be a conflict of interest. However, failing to disclose this information can result in a conflict of interest and legal ramifications.


Discrimination is another common ethical dilemma in business. Making ethical decisions is often an important part of the hiring process. If discrimination occurs within your business, it can be damaging. Not only can it damage your reputation, but it can affect your sales and ability to recruit top performers.

Your HR and legal teams should be aware of anti-discrimination laws that can impact your business, including age, disability, equal pay, pregnancy, race, religion, and sex and gender laws that protect employees.


Harassment is technically a kind of employment discrimination and includes things like physical, verbal, sexual, and emotional harassment that affect an employee's well-being. Employees are protected from harassment by the law, and they can't lose their jobs for reporting it, regardless of who they report to.


Bribery is a less common unethical practice in modern businesses, but it does still happen. For example, a pharmaceutical business might bribe doctors, hospitals, or healthcare facilities with kickbacks or incentives to prescribe their drugs to patients. These are the exact opposite of ethical decisions and can impact both businesses.

If the word gets out that a business is bribing doctors, no patients will want to use their medication anymore. But, on the other hand, no one will trust doctors who accept bribes instead of prescribing better treatment options.

Intellectual property theft

Intellectual property (IP) theft is another common ethical dilemma in business today. Businesses own IPs like trademarks, patents, copyrights, logos, and so forth. When another party uses your inventions or unique ideas, they're engaging in IP theft, which can occur due to human error or hackers stealing your property.

Another common form of intellectual property theft is the sharing of trade secrets. Your business's trade secrets are considered any type of information that's not generally known to the public, such as how you do something. A trade secret can be a baker's specific process and ingredients for making cookies.

Unfortunately, your trade secrets can get out if an employee shares that information, whether it's an accident or not. If your trade secrets are exposed, it's impossible to get them back from the public, which can be detrimental to your business.

An ethical decision-making process focuses on doing what's right and avoiding causing harm to others. Here are a few ways to incorporate ethical decision-making in your business strategy:

Assessing the current ethical status of your business

Review the current ethical status of your entire business. Take a look at how your products are made, how your employees act, and how you conduct business yourself. Is your business ethical?

If you want to have an ethical business, you need to integrate ethical principles into everything you do, holding everyone within the organization accountable for their actions and being honest while respecting others.

There are many types of business ethics, but what makes a business stand out to modern consumers is social responsibility, transparency, and fairness.

Social responsibility means meeting stakeholder needs while accounting for the social impact of meeting those needs. Your business's goal is to sell products, but are those products sustainable? If the answer is no, you may not be running an ethical business.

Additionally, consumers expect companies to be transparent about their processes. If you create a beauty product, your customers will want to know if they're testing on animals. Not being transparent can make consumers distrust your brand, making them less likely to purchase your products.

And finally, fairness relates to how you treat others. Consumers want to know the brands they purchase from have inclusive, diverse, and fair workplaces that treat their employees well.

Creating an ethical code of conduct

A business's code of conduct is a manual that clearly states its values, goals, and ethics to help staff understand how they're expected to behave. However, leadership should also follow an ethical code of conduct since values typically start at the top. If a business leader isn't ethical, they can't expect their employees to be because they must lead by example.

Once the code of conduct is defined, leaders should find ways to encourage employees to report unethical behavior.

Implementing ethical decision-making processes

Implementing an ethical decision-making process takes time but will allow you to make better business decisions. How will you make decisions as an organization? Again, this is where you must lead by example. You can implement processes across the entire company to help employees make more ethical decisions in their day-to-day tasks using charts and referring to their code of conduct.

Monitoring and enforcing ethical behavior

After implementing more ethical decision-making processes, you should monitor your organization to determine whether employees are adhering to the new rules. Of course, you should also have a process for how employees can report unethical behavior since you can't spend time with each employee every single day.

Encouraging a culture of ethical behavior

An ethical leader fosters an ethical environment. Running an ethical business aligns your values with those of your customers, increases trust, and keeps your reputation in good standing.

Share your business's values with your customers. Mailchimp makes informing customers about your ethical actions easy to inspire trust and help build more valuable relationships. Create web pages, emails, and social media posts that keep customers updated on your ethical business practices.

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