Ethical Issues in Business
Ethical Issues are...
problems, situations, or opportunities
requiring an individual to choose among
actions that may be evaluated as right or
wrong, ethical or unethical
ethical issues arise because of:
– conflict among personal/organizational
values
– conflicts with societal values
What do you see as some of the
causes of unethical behavior?
Causes of Unethical Behavior...
meeting overly aggressive financial or
business objectives
meeting schedule pressures
helping the organization survive
rationalizing that others do it
resisting competitive threats
saving jobs
Influences on Ethical Behavior...
personal values
attitudes/behaviors of supervisor
attitudes/behaviors of senior management
internal drive to succeed
performance pressures
no threat of punishment
friends/coworkers
Why not report organizational
misconduct?
afraid of not being considered a team player
did not believe corrective action would be taken
fear retribution or retaliation from
management
not on else cares about business ethics,
why should I
fear lack of confidentiality
Classification of Ethical Issues...
conflict of interest
honesty & fairness
communications issues
organizational relationships
Conflict of Interest...
exists when an individual must choose whether
to advance his or her own personal interests,
those of the organization, or some other group
must be able to separate personal interests from
business dealings
bribery is a significant concern
Honesty & Fairness
honesty relates to truthfulness, integrity &
trustworthiness
fairness related to being just, equitable & impartial
breaking or bending laws violates trust
business should not be played as a “game”
lack of rules & poor enforcement leads to unethical
behavior
Communications...
issues involved relate to advertising, product
safety, pollution, & employee work
conditions
lying is a major ethical issue with internal &
external communications
false advertising relates to:
– exaggerated claims
– concealed facts & ambiguous statements
– lying
Organizational Relationships...
relate to behavior of organizational members
toward customers, suppliers, subordinates,
superiors, peers & others
plagarism is one ethical issue of concern to
organizations
Ethical Issues Related to
Ownership...
owners have an obligation to society as well
as their employees & customers
– minimize pollution
– compensate workers fairly
– produce safe products
must be sensitive to legal & ethical risks
of their industry & region
Financial Responsibilities...
reporting & use of the companies’ finances
pricing products/services fairly
avoiding any antitrust activities
– price fixing
sensitivity to socially responsible investing
Employees & Management
Concerns...
employee theft, sabotage & competitive intelligence
fear of layoffs
salary plateaus
upward mobility
discrimination
privacy & data access
health & safety
Consumer & Marketing Issues...
Must consider consumer feedback
– safety
– environmental (can lead to boycotts)
– maximize positive publicity & avoid negative
How to Identify an Ethical Issue...
an activity approved by most members of the
organization & customary in the industry is
probably ethical
if the issue withstands open discussion
between groups within & outside the
organization is probably ethical
covert discussion, destroyed or disguised
documents indicate potential problems
