Question

All organizations have a "moral structure" --the generally accepted understanding of ethical conduct in the organization. What does it matter whether an organization is ethical or not? Why is moral structure important or not?

Answer 1

The ethical conduct of business is very important to install trust among all the stakeholders of the business.
Typically the managers of a company are different than its owners.
The owner's trust the managers to run it with highest ethical standards representing the true and fair view. As they themselves cannot go and check the business on a daily basis.

The moral structure is important because:
It increases the investor's trust which in turn magnifies investors wealth in the business.
Which is essential for the survival of the business.
In turn, it creates a good image of the business.

The consumer feels confident in using business products and services, it ensures the smooth functioning of the business.

It stops malpractices and promotes quality standards.
Example: Enron is a great example of what happens to unethical business practices. It destroys the company and investors value.