Question

A business should be managed ethically because

[A] it reduces employee turnover
[B] it increases the likelihood of government intervention
[C] it reduces the likelihood of lawsuits by employees or customers
[D] businesses with good reputations attract customers

Answer 1

Businesses should be managed ethically because it establishes a good reputation, reduces the likelihood of lawsuits, and decreases employee turnover.

Step-by-step explanation:

The primary reason a business should be managed ethically is that it helps in establishing a good reputation, which in turn attracts customers. When buyers know that a firm is concerned about its reputation, they are less likely to worry about receiving a poor-quality product. For example, a well-established grocery store with a good reputation can often charge a higher price than a temporary stand at a local farmer's market, where the buyer may never see the seller again.

In addition, managing a business ethically reduces the likelihood of lawsuits by employees or customers. Ethical behavior ensures that employees are treated fairly and customers are not deceived or harmed, making it less likely for lawsuits to occur.

Furthermore, ethical management reduces employee turnover. A discriminatory business that underpays its workers may face employees leaving for jobs with better pay and working conditions. This market pressure can cause the discriminatory business to improve its behavior.