Ethics in Business Management

Ethicsin Business Management

Managementethics is a broad subject dealing with situations managers’encounter in their everyday working lives permeated with ethicalcontents. Ethical content includes issues, actions, and decisionsthat are right, proper, fair and just. Business ethics is theapplication of moral ideologies to business behavior. The principlesare applied to control moral or ethical challenges that arise withinthe enterprise environment. They guide behavior both at an individuallevel and at the organizational level. In the recent past, cases ofimmoral management and ethical debacles have become regularoccurrences. Management ethics has become a vital concern to thepublic, as well as, the business community (Importance of workplaceethics, n.d).

Significanceof Management Ethics in the workplace

Thesociety expects managers and their subordinates to be ethical.Ethical management practices may have a significant impact on trust.According to Verstraeten (2000), good business ethics promotes goodbusiness, and one cannot separate competitiveness and ethics. It is aunique source of competitive advantage since it cannot be easilycopied, bought or sold and brings many other benefits. In fact,ethical workplace culture is linked to profit. Researchers claim thatthe culture of an organization is the strongest predictor of themarket value of shares. Evidence shows that positive culture in theworkplace predicts shareholder value by creating a superior sharevalue (Verstraeten, 2000).

Managersand leaders who promote ethical climate lead to ethical culture.Ethics provide a tool for carrying out business more productively andmore efficiently. Consequently, this helps to improve businessrelations and productivity of employees. Moreover, it contributes toattracting and keeping customers, employees, and investors bycreating mutual trust and confidence. Stakeholders get peace workingwith companies assured of cautious utilization of their resources andfunds. Ethical organizations promote a positive public image andgoodwill of the enterprise. Ethics helps to prevent evils in thesociety such as illegal price fixing, starvation and harassment ofemployees.

Shapingan ethical workplace culture

Withouta doubt, strong ethics in an organization are crucial to a successfulbusiness. The ethics of an organization are displayed in its goals,practices and policies. In an ethical workplace, employees genuinelyfeel respected and given attention. They feel empowered and energizedto attain ethical and technical excellence when serving their clientsand customers.Therefore, most managers and leaders should striveto promote an ethical workplace culture. For this reason, mostbusiness owners and managers have built a responsible businessenterprise by designing and implementing a business ethics program. Abusiness ethics program is a formal plan based on the core beliefs ofthe organization. Ethical program assists in fine-tuning the behaviorof employees in agreement with the preferred values of theorganizations. The principal significance of business ethic programis to help achieve particular outcomes such as increased awarenessof ethical issues, reducing misconduct and improvement indecision-making (Importance of workplace ethics, n.d). As a result,this contributes to building a strong teamwork, openness, andintegrity since employees feel strongly aligned with theorganization, thus improves performance. Ethical programs help toavoid penal actions since issues and violations can be detected earlyreported and addressed.

Foreffective organizational ethics, personal moral development, as wellas character, is required. Factors that affect employee ethicsincludes stages of moral development, individual characteristics,structural variables and the content, as well as the strength of theorganizational culture. On the contrary, some business leadersbelieve that ethics initiatives should be inherent from corporateculture, and hiring ethical employees would reduce unethical behaviorin an organization.

Therefore,leaders have a role in fostering ethical behavior in an organization.Managers and other leaders are the role models and primarilyinfluence ethical conduct in an organization. They are responsiblefor the code of conduct and norms guiding other employees’behaviors actions. They should practice Ethical leadership wheremanagers set high ethical standards example by portraying appropriatebehavior, and rewarding employees acting in an ethical way. Besides,whistleblowers or employees who report ethical issues must beguaranteed of their safety and will not risk their career (McNamara,n.d).

Anorganization can take some actions that are explored below to improveethical behavior. One is the use of a code of ethics, which can bedescribed as a formal statement that contains an organization’sfundamental values, and ethical rules all employees are expected tofollow strictly. Additionally, development of decision rules can beused in guiding managers to handle ethical dilemmas in the process ofdecision-making. Moreover, formal protective mechanisms should beprovided to help employees faced with ethical dilemmas to practicewhat is right without fear of reprisal. Secondly, an organization canutilize the process of selection to hire new employees with properattributes. Ethics training in the company should be used toincrease awareness and assist teaching ethical problem solving inaddition to presenting a replication of ethical situation that couldoccur (Peterson, 2005).

Themanagement teams and businesses today are frequently facingsignificant ethical challenges. Numerous business scandal such asEnron, WorldCom have raised public concerns regarding surfacing ofunethical and irresponsible practices in those organizations.Ostensibly, there has been unending cases of corruption in bothbusiness and political world. However, the management of anyorganization holds the sole responsibility to develop and sustainconditions necessary to minimize employees’ misbehaviors. Certainroles that can be used to manage ethics in the organization includean ethical management committee, an ethics offices or an ombudspersonresponsible for coordinating policies and procedures developed toinstitutionalize moral values in the organization.

Unethicalpractices and malpractices can potentially inflict enormous harm onthe community, environment and individuals. Poor ethics includeillegal practices, ignoring procedures and policies, stealing, poorcustomer service, bribes, abusing confidentiality agreements,falsifying information, and making decisions for personal gains. Poorethics results in an undesirable work environment, potential jobloss, stunted growth and productivity, as well as the potentialclosing of the organization (Ahner, 2007).


Inconclusion, efficient management of ethics in an organizationrequires one to know and understand what constitutes ethicalbehavior, as well as what is considered unethical. Ethics shouldpermeate the organization`s behavior, strategy, decisions, andculture. Managing ethics in the workplace is more of aprocess-oriented practice compared to other management practices. Thebest way to handle cases of ethical dilemmas is to avoid themhappening in the first place. Thus, practices of developing codes ofethics and conducts are crucial. In an ethical workplace culture,managers and their subordinates openly speak about how to treat eachother, as well as their customers.

Inbig organizations, the primary task of managing and monitoringethical behavior has been assigned to the Human Resource ManagementDepartment. The ethical manager should realize that most of thedecisions they make have far-reaching consequences. This means it hasan impact on not only the organizations’ stakeholders but also thesociety as a whole.


Ahner,E. C. (2007).&nbspBusinessethics.New York, NY: Orbis.

Importanceof workplace ethics, (n.d). ManagementStudy Guide.Web. Retrieved from

McNamara,C. (n.d.).Complete guide to ethics management: An ethics toolkitfor managers. ManagementLibrary.Web. Retrieved from

Peterson,R. A. (2005).&nbspBusinessethics: New challenges for business schools and corporate leaders.Armonk, NY: Sharpe.

Verstraeten,J. (2000).&nbspBusinessethics: Broadening the perspectives.Sterling, Va: Peeters.