Businesses need to earn revenue that exceed their costs in order to survive, and sometimes that can create a pressure to "cut corners" when it comes to ethical behavior. If a company can keep costs low by dumping pollution into the environment, win contracts by making bribes, trap customers into buying addictive but unsafe products, avoid product redesign by leaving dangerous defects in their products, etc., it may seem like a competitive necessity to do so.
Because of occurrences of these problems, citizens have supported governments in passing a variety of regulations to control and restrict business practices. Often these regulations come at a cost, both to the business and government. Business leaders are sometimes frustrated with the time spent and delays incurred because of the bureaucracy. They generally aren't eager to bring more of it upon themselves, but that is what happens when firms don't make ethical decisions voluntarily. To compound the unethical organization's problems, customers may refuse to buy their products, and the firms may eventually find themselves the target of expensive lawsuits.
A company is not just a big money-making machine; it is run by people, including management at all levels and the front line employees. If managers take a long-term view, they will generally discover that ethical behavior is both viable and much preferable for their firm. Also it's also a big boost to employee morale and enthusiasm: people generally prefer to work in a firm that produces a worthwhile product or service that is a benefit to the world, rather than one that leaves in its wake undesirable, counterproductive side effects.
For upper managers to make their decisions ethically isn't quite enough, however, because people throughout the organization are also making decisions-- decisions about procurement, design, safety, etc. Those people usually want to make ethical decisions too, but they may sometimes feel a need to resort to "not quite ethical" practices in order to keep their jobs. Therefore, it us up to leaders in the organization to make it apparent to everyone that this isn't so, and to put means in place to encourage ethical behavior.
Business ethics is not new, and sometimes it can play an instrumental role in rescuing a company. For one example of a company rescue using some basic ethical principles that dates way back to the 1930s, check out the story of the Four Way Test.
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