Why to be ethical at all?

Organizations that have a long term outlook should also have a strong purpose for their existence and they also must have an ethical guideline that navigates them towards their purpose. This is applicable for individuals as well. That ethical guideline should also stand the scrutiny of a very fundamental investigation. More often than not, it is not the case. What is the right thing to do has become a matter of convenience.  Taking a step back and asking a more basic question "Why to be ethical at all?"

Here, I try to answer that question with Game Theory. Consider a game in which two players he and she can do the right thing or convenient thing. Their pay-offs can be shown in the diagram

If he and she act independently they would act rationally and both would do the convenient thing and that would result in an overall inefficient result. In case both of them cooperate and decide to do the right thing that would maximize the over all result. In such a case, doing the right thing is ethical but if one of them decide to break the contract and do the convenient thing he will much more in return and she who did the right thing according to the contract will be losing. This scenario can be projected to the ethical dilemma we face as individuals and as an organization. A society that has rational and ethical actors will always do the right thing. This may be influenced by moral norms of the society, systematic nudges and enforceable laws. A society that achieves the group level rationality will maximize the returns for all actors. But a society that fails in achieving this equilibrium due to majority actors breaking the ethical contract, eventually settle for suboptimal equilibrium of both actors doing the convenient thing and thus having much lower overall return.

So the first principle argument for why to be ethical is, it is in one's own interest to do the right thing and encourage others to do so. If one indulges in an unethical act, it may create benefit for self in the short term, but eventually its lose-lose for all involved. And in societies that have strong ethical system, doing the convenient thing may be bad even in the immediate term.

So do the right thing!

Ref :  https://plato.stanford.edu/entries/game-ethics/