Background: In this study, the first effect of business ethics and corporate social responsibility in the social legitimacy of business and competitive advantage is studied. Then, the moral Degradation in society's direction and impact of business ethics and social responsibility in improving the organization's performance is evaluated.

Method: the present study is descriptive-correlation. Population of study includes all financial managers who are active in the manufacturing and non-manufacturing companies in 2014. Among all, 50 companies were selected by simple random sampling. The research tool was C. Petty. Data were analyzed by multivariate regression.

Results: Organizations with social responsibility have more advantages in compare with other organizations. But the organizations that comply with the principles of ethical business in compare with other competitors do not gain any competitive advantage. CSR's legitimacy is respected by the community. But the organizations that respect to business ethics does not have any legitimacy by society. In a society with moral degradation, organizations that have a high social responsibility, has a competitive advantage and legitimacy of the community.

Conclusion: With moral degradation, the society pays more attention to ethical codes by organizations.  Internal values of organizations like business ethics has been respected in normal conditions, but with moral degradation will be the essential factor for improving the performance of organizations.