Every corporation should be adamant about developing and sustaining an ethical business culture. Moreover, corporate executives must demonstrate ethical examples and ensure their employees follow their behaviors. As asserted by Mulki, Jaramillo, and Locander: “there is also an increased awareness that unethical behaviors, even when they are legal, can damage a firm’s image and reputation, resulting in customer defections, lost employee morale, and employee turnover”. A firm’s actions must not only be right, their actions must also look right. Practitioners have determined that when firms observe a formal code of ethics, with high standards, the codes and employee behaviors translate into long-term customer relationships and loyalty. In particular, when effective ethical codes are in place, a climate conducive to job satisfaction and organizational commitment are experienced by sales personnel – those who have a major relationship with end-use consumers.
The cliché of “employee empowerment” should also carry with it an ethical philosophy. As such, there are several positive business results that stem from ethical and empowered employee behaviors: productivity, innovation, and consumer loyalty. Since corporate ethics have profound implications on business performance, companies should establish universal ethical behaviors to encompass every stakeholder: employees, suppliers, and consumers. Cullen, Praveen, and Victor expressed the works of Schwepker; who “found that stronger enforcements of ethical rules and codes were positively related to organizational commitment”. Consequently, the best performing firm’s practices are: maintaining the appropriate ethical organizational climate and motivating members to believe and act in a manner that fosters good decision-making throughout the enterprise. To effect good moral and ethical change, top management must commit to establishing an environment where ethical behavior is the norm and is valued. Why? Because consumers can and do send a message to unethical firms by partitioning their relationships with immoral companies. So, is there a connection between corporate ethics and customer relationships – you bet!