Business ethics can negatively affect the performance of an economy. In a case where the government sets particular laws and guidelines that are to be followed by the organizations. In order to make money and build a reputation in the market, organizations sometimes undergo some unethical practices which adversely affect the organization and economy as a whole.

For example, Tax evasion by any organization leads to huge penalties and fines from the government, and also, the organization needs to pay a high cost for the legal battles. Performing unethical practices will demonstrate a negative image of the organization in the market and simultaneously, demotivate consumers and affect the overall economy as the government also is not able to collect the relevant amount of funds as tax.