Journal of Business Ethics 91 (1):145-154 (2010)

This paper examines the philosophical basis for the argument that there is a connection between ethical behavior and profitability. Both sides of this argument – that good ethics is good business and that bad ethics is bad business – are explored. The possibility of a moral floor above which ethical behavior is not rewarded is considered, and an economic experiment testing such a proposition is discussed. Johnson & Johnson suffers a potentially devastating blow when some cyanide-laced Tylenol capsules cause several deaths. Johnson & Johnson voluntarily pulls Tylenol off the shelf, to universal acclaim. When Tylenol is returned to the marketplace, its share of the over-the-counter painkiller market becomes greater than it was before the tragedy. Arthur Andersen, the venerable accounting firm, is caught in the web surrounding the downfall of Enron, Inc. As Enron’s various sins are discovered, it is found that Arthur Andersen auditors had signed off on flawed audits and had shredded documents to cover themselves. Andersen is prosecuted for, and convicted of, obstructing justice (although the conviction is later overturned). Today the firm barely exists and has no resemblance to the Big Five accounting giant of 1999. These stories seem to indicate that ethical (or unethical) behavior leads to positive (or negative) financial results. But the philosophical arguments underpinning such statements are seldom subjected to proper analysis. They are perhaps wishful thinking, or perhaps based on examples such as the above without considering other examples that may reinforce a contrary position. This paper will explore the philosophical arguments and empirical evidence regarding these statements and state some research questions for exploration in this area. In particular we will propose the possibility that a moral floor exists above which firms that engage in ethical activities will not reap rewards, but below which firms that engage in unethical activities will be punished by actors in the economic marketplace. We will discuss an economic experiment to determine if such actors indeed form a moral floor.
Keywords ethical behavior  corporate social performance  corporate financial performance
Categories (categorize this paper)
Reprint years 2009, 2010
DOI 10.1007/s10551-009-0074-4
Edit this record
Mark as duplicate
Export citation
Find it on Scholar
Request removal from index
Revision history

Download options

PhilArchive copy

Upload a copy of this paper     Check publisher's policy     Papers currently archived: 71,464
External links

Setup an account with your affiliations in order to access resources via your University's proxy server
Configure custom proxy (use this if your affiliation does not provide a proxy)
Through your library

References found in this work BETA

View all 12 references / Add more references

Citations of this work BETA

Toward an Ethical Theory of Organizing.Naveed Yazdani & Hasan S. Murad - 2015 - Journal of Business Ethics 127 (2):399-417.

Add more citations

Similar books and articles

The Golden Rule and Business Ethics: An Examination.Brian K. Burton & Michael Goldsby - 2005 - Journal of Business Ethics 56 (4):371-383.
What's so Special About a Special Ethics for Business?Earl W. Spurgin - 2000 - Journal of Business Ethics 24 (4):273 - 281.
Business Ethics: A Helpful Hybrid in Search of Integrity.Edmund F. Byrne - 2002 - Journal of Business Ethics 37 (2):121 - 133.
Is There “No Such Thing as Business Ethics”?Eric H. Beversluis - 1987 - Journal of Business Ethics 6 (2):81 - 88.
Profit: Some Moral Reflections.Paul F. Camenisch - 1987 - Journal of Business Ethics 6 (3):225 - 231.
Is There Any Ethics in Business Ethics.Robert Trundle - 1989 - Journal of Business Ethics 8 (4):261 - 269.
Business Ethics: Is It Useful? – An Empirical Study of Chinese Enterprise.Ying Hong - 2002 - Business Ethics, the Environment and Responsibility 11 (4):335–342.
Exploring Business School Ethics.Johannes Brinkmann & Ken Peattie - 2005 - Journal of Business Ethics Education 2 (2):151-169.


Added to PP index

Total views
73 ( #159,671 of 2,520,756 )

Recent downloads (6 months)
1 ( #405,623 of 2,520,756 )

How can I increase my downloads?


My notes