A Culture of Ethical Behavior is Essential to Business Success

The recent scandal that rocked Wells Fargo is nothing new. Stories of corporate malfeasance often end with civil settlements paid to the U.S. Department of Justice. But how is potential future business impacted when a company is caught with its hand in the cookie jar? New research from the University of Notre Dame suggests what you might already expect: unethical behavior is immensely damaging to a business’s future prospects.

“Both high-quality service and low unethical behaviors are important to predicting business unit performance,” Kaifeng Jiang, the lead author of the study and assistant professor of management at the University of Notre Dame’s Mendoza College of Business, told Business News Daily. “This is especially so when the market is very competitive, because then the customers have a lot of options and could … switch to another product or service provider.”A research paper published in the Journal of Applied Psychology, “Do It Well and Do It Right: Impact of Service Climate and Ethical Climate on Business Performance and the Boundary Conditions,” examined the intersection between the quality of service a business offers and its adherence to ethical mores by looking into conditions at nearly 200 movie theaters. The findings reveal that quality service and an ethical business plan are essential for long-term business success.

Read the entire story on the Business News Daily website.

Jia Hu, assistant professor of management & organization, was a coauthor for the study.