ABSTRACT
Companies look at ethical business practices as only adding to costs and consider these practices as a factor that constrains profitability. This view indicates ethics and profit to be inversely related. A more positive view, however, is the positive correlation of an organization’s ethical behaviors and activities with resultant profits. In fact, having an image associated with ethical business activities can be the source of a major competitive advantage. High business-ethics standards can contribute to profitability by reducing the cost of business transactions. In light of this view, the study analyzes the relationship of companies’ understanding of business ethics with their financial performance. The study is on the following issue: What is the nature of the relationship of medical company owners’ and their partners’ understanding of business ethics in Malatya, Turkey with their financial performance? Data has been collected from the owners and partners of medical companies operating in Malatya using a questionnaire. As a result of correlation and regression analyses, we have found the relationship between job ethics and financial performance to be very low and negative (r = -286) and the firms’ understanding of business ethics to have little explanatory power over the impact on companies’ financial performance.