Ethical Behavior in Organizations

Ethical Issues in Organizational Behavior

Abstract

Ethics relates to the moral principles of values. Organizations often decide between profit and moral. Some organizations acquire both, yet ethical issues arise every time. Ethical standards are a way to resolve these issues. Primarily, the task of management is to do business according to the ethical standards. Organizations need to incorporate set standards and be one of the same as an individual. Additionally, organizations have certain social responsibilities that need to be met. Responsibilities include the way they treat customers, employees and society. This paper explores three questions: (1) Why are ethical issues a major concern in organizations (2) what individual influences impact ethical behavior, and how can organizations influence ethical behavior in employees? Additionally, a recent example of ethical issues within an organization will be discussed.

Ethical Issues in Organizational Behavior

The International Business Ethics Institute defines "ethics" as,

"…a form of applied ethics. It aims at inculcating a sense within a company's employee population of how to conduct business responsibly. Because the term "ethics" can pose problems in an international context, i.e., the term does not translate well and it can be difficult to find a common understanding of the term, some organizations choose to recast the concept of business ethics through such other terms as integrity, business practices or responsible business conduct." ("Business ethics primer", n.d., para. 4)

The requirements of day-to-day organizational performance are so compelling that there is little time or inclination to divert attention to the moral content of organizational decision-making. An effective organizational culture should encourage ethical behavior and discourage unethical behavior. Ethical issues can destroy an organization if they are not attacked with a strong approach.

• Why are ethical issues a major concern in organizations?

When an organization speaks about business ethics it usually means one of three things: (1) do not break the law in the course of your work (2) avoid unethical behavior that may bring civil liability to the company, and (3) avoid behavior that may result in damaging the company image. Businesses are very concerned with these issues as they all involve possible loss of money and reputation. Charlotte McDaniel's research points to survey results that support the risk of unethical behavior to an organization:

"Statistics on the behavior of employees ate work are revealing and translate directly into organizational financial outlay. Surveys report that 75 per cent of employees steal from their employers at least once, and between 33 and 75 per cent of employees engage in some type of sabotage, fraud, or vandalism in the workplace. These numbers exclude reports of illicit alcohol, drug, or substance abuse on the job. Another seven per cent of employees report being threatened by physical violence ate work. Harassment and other unethical behaviors often result in exorbitant liability claims. Cost is one reason why instilling ethics among employees is so important. Financial losses raise the central issue regarding the manner in which ethics may be instilled among employees. (McDaniel, 2004, p. 39)

Organizations are also struggling with who is to blame when unethical behavior occurs. Is it the individual who errs or is the organization for whom he or she may work for that is responsible? Although an organization's leadership is accountable for setting ethic standards they do not make all the decisions; leaders delegate therefore decisions will be made according to level of responsibility. McDaniel points to the challenge emerges when a decisions or its resulting outcome fails, incurs an error, or unethical.

"What happens when employees err? Who is at fault? The person? The system? Or Both? The concern naturally arises when result do not go well, or as intended, rather thank when acts are positive or result in the intended outcome. This focuses the nexus of the situation on accountability and correction, perhaps even retribution. The issue is how to assign blame and responsibility for unethical acts in the organization; who is responsible? The parallel question is whether the corporate entity has moral valiancy in the situation, or not? Do we assign blame, and if so to whom or what?" (McDaniel, 2004, p. 47)

Organizations