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Ethics in Business

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What do we as a society consider to be unethical behavior? Is stopping by the grocery store while in the company car considered unethical? How about using the company computer for personal use? In a book titled Business and Society by F.D Sturdivant it states that "Many decisions that managers make require tem to consider who may be affected - in terms of the result as well as the process" (128). Ethics is a term that refers to a set of rules and pricinples that serve to guide us through what is considered to be right and wrong.

Complex interactions that may occur during the moral development stage along with other variables such as a person's characteristics, the structure design within the organization, the organization's culture, and the level of intensity of the ethical issue at hand, all contribute to whether or not a person will act ethically or unethically. A lack in moral sense drives individuals to make the wrong choices. This is especially true when the individual is limited by rules, policies, or a disapproving culture within the workplace. On the other hand, people with a high sense of morale can be easily influenced by a work community that allows or even encourages unethical behavior.

The structure within in a business can easily determine whether or not an employee will behave eithically or unethically. Some organizations are apt to influence their employees by providing strong guidance. On the other hand, other organizations lack and instead create uncertainty and ambiguity. Organizations that lessen uncertainty and ambiguity are those that have established formal rules and policies. These organizations encourage ethical behavior by continuously reminding their employees of what constitutes ethical and unethical behavior. Authors B.Z Posner and W.H Schmidt talk about how research shows that a mangers set the example through their behavior. A managers behavior serves as the most important influence on an employees decision to make a right or wrong decision. (202-216). Employees look at the example set forth by upper management to determine what is considered to be an acceptable or unacceptable practice. B. Victor and J.B Cullen authors of "The Organizational Bases of Ethical Work Climates" refer that the culture within a business influences ethical behavior. A culture within an organization that promotes high ethical standards is one that is high in risk tolerance, control and conflict tolerance. (Victor, Cullen 101-125). This type of culture encourages their employees to be aggressive and innovative. Employees are fully aware that unethical behavior will not be tolerated and will be discovered. Strong cultures within an organization highly influence whereas weak cultures do not. If the culture within an organization is strong and exhibits high ethical standards, then its employees are likely to follow in their footsteps and make ethically sound decisions.

In a school setting, it is not uncommon for friends to share information about what information was on a particular exam. However, these same students would not even consider the notion of stealing the exam straight out of the instructor's office. Similarly, a person in a management position may not concern himself when taking home office supplies from work but might fret over the possibility of stealing money from the company.

Are ethical standards the same all over the world? Absolutely not! There is a vast difference in social and cultural differences between countries. These differences are important factors in shaping ethical and unethical behavior in people. For example, in some countries, it is considered the norm to bride government officials in order to secure a profitable government contract. In the United States, this practice would be frowned upon and considered unethical and even illegal.

When working in foreign countries, it is imperative that managers realize the social, cultural, and political factors that influence that particular country's behavior. It is important to realize what is considered to be ethical and unethical behavior. Businesses that operate globally must establish policies to serve as guidelines as to what is expected of employees when working in foreign counties.

The United Nations Secretary General proposed a challenge to world business leaders to "embrace and enact" upon The Global Compact. The Global Compact is a document that shows exhibits nine principles for conducting business globally. It focuses on the areas of environment, labor, and human rights. Global organizations have been asked to incorporate these guidelines into their business activities. The purpose of this is to form a more sustainable and inclusive global economy. The Global Compact has been adopted by many companies and international labor organizations from all over the world. The belief that the world business community plays an important role in improving economic and social conditions is the reason organizations have made this commitment.

There are many things that can be done by management to reduce unethical behaviors in the work place. Hiring employees that hold high ethical standards, putting in place codes of ethics, leading by example, providing training on ethics are just a few strategies to improve ethical behavior. Social audits and providing support to employees that are facing ethical dilemmas would also contribute to creating an ethically sound environment. Incorporating just one of the above mentioned would not create an impact however; incorporating all or most of the above mentioned into a comprehensive ethics program will drastically improve the ethical climate.

Codes of ethics should encompass a specific set of codes. They should be specific enough to guide employees in the manner in which to do things yet at the same time, allow for freedom of judgment. F.R David conducted a survey of company's codes of ethics. The survey showed that the content of codes of ethics fell into three categories. These categories are (1) to be a dependable organizational citizen; (2) do not engage in activities considered to be unlawful that will in turn harm the company; and (3) always treat customers well.

Upper management sets the ethical example in business. This is because it is management which upholds the values represented and set the cultural



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