What factors influence whether a person behaves ethically or unethically explain all relevant factors?

Learning Objective Summary

1. Understand what is meant by business ethics.

Ethics is the study of right and wrong and of the morality of choices. Business ethics is the application of moral standards to business situations.

2. Identify the types of ethical concerns that arise in the business world.

Ethical issues arise often in business situations out of relationships with investors, customers, employees, creditors, or competitors. Business people should make every effort to be fair, to consider the welfare of customers and others within the firm, to avoid conflicts of interest, and to communicate honestly.

3. Discuss the factors that affect the level of ethical behavior in organizations.

Individual, social, and opportunity factors all affect the level of ethical behavior in an organization. Individual factors include knowledge level, moral values and attitudes, and personal goals. Social factors include cultural norms and the actions and values of coworkers and significant others. Opportunity factors refer to the amount of leeway that exists in an organization for employees to behave unethically if they so choose.

4. Explain how ethical decision making can be encouraged.

Governments, trade associations, and individual firms can all establish guidelines for defining ethical behavior. Governments can pass stricter regulations. Trade associations provide ethical guidelines for their members. Companies provide codes of ethics - written guides to acceptable and ethical behavior as defined by an organization - and create an atmosphere in which ethical behavior is encouraged. An ethical employee working in an unethical environment may resort to whistle-blowing to bring a questionable practice to light.

5. Describe how our current views on the social responsibility of business have evolved.

In a socially responsible business, management realizes that its activities have an impact on society and considers that impact in the decision-making process. Before the 1930s, workers, consumers, and government had very little influence on business activities; as a result, business leaders gave little thought to social responsibility. All this changed with the Great Depression. Government regulations, employee demands, and consumer awareness combined to create a demand that businesses act in socially responsible ways.

6. Explain the two views on the social responsibility of business and understand the arguments for and against increased social responsibility.

The basic premise of the economic model of social responsibility is that society benefits most when business is left alone to produce profitable goods and services. According to the socioeconomic model, business has as much responsibility to society as it has to its owners. Most managers adopt a viewpoint somewhere between these two extremes.

7. Discuss the factors that led to the consumer movement and list some of its results.

Consumerism consists of all activities undertaken to protect the rights of consumers. The consumer movement generally has demanded - and received - attention from business in the areas of product safety, product information, product choices through competition, and the resolution of complaints about products and business practices. Although concerns over consumer rights have been around to some extent since the early nineteenth century, the movement became more powerful in the 1960s when President John F. Kennedy initiated the consumer "bill of rights." The six basic rights of consumers include the right to safety, the right to be informed, the right to choose, the right to be heard, and the rights to consumer education and courteous service.

8. Analyze how present employment practices are being used to counteract past abuses.

Legislation and public demand have prompted some businesses to correct past abuses in employment practices - mainly with regard to minority groups. Affirmative action and training of the hard-core unemployed are two types of programs that have been used successfully.

9. Describe the major types of pollution, their causes, and their cures.

Industry has contributed to the noise pollution and the pollution of our land and water through the dumping of wastes and to air pollution through vehicle and smokestack emissions. This contamination can be cleaned up and controlled, but the big question is, Who will pay? Present cleanup efforts are funded partly by government tax revenues, partly by business, and in the long run, by consumers.

10. Identify the steps a business must take to implement a program of social responsibility.

A program to implement social responsibility in a business begins with total commitment by top management. The program should be planned carefully, and a capable director should be appointed to implement it. Social audits should be prepared periodically as a means of evaluating and revising the program. Programs may be funded through price increases, reduction of profit, or federal incentives.

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Several researches have been conducted to identify factors that influence individuals’ ethical behaviours. According to the researches, personal, situational, organisational, and external factors influence an individual’s ethical behaviour (Phillips, 2003).

For effective management and leadership in an organisation, managers must comprehend these factors. Extensive comprehension of these factors will aid managers to monitor and control their companies with ease. Equally, leaders should understand how to address issues related to ethical behaviours within their organizations.

Notably, an individual’s personality and background play a huge role in determining whether an individual behaves ethically or unethically. Similarly, an individual’s personality determines his or her acts and traits. Psychologists suggest that our personalities influence how we perform our daily activities.

On the other hand, individuals’ backgrounds can have an influence on their attitudes. Equally, attitude determines whether an individual behaves ethically or unethically. In addition, psychologists assert that both attitudes and backgrounds determine individuals’ behavioural patterns.

Another major factor that determines an individual’s ethical behaviour is organisational factors. Researchers assert that organisational factors such as employees’ behaviour, attitudes, and morals play a huge role in influencing employee’s ethical behaviour. Equally, an organisational decision history can influence ethical decisions among the employees. It is believed that our past decisions influence our current decisions making processes.

According to researchers, socialization, just like the personality and background influences an individual’s ethical behaviour. The people we socialize with affect our attitudes and behaviours largely. Similarly, our age, social class, religion, and nationality determine our ethical behaviours. Another factor that determines the way a person behaves is ethical philosophy.

Ethical philosophy affects an individual in a number of ways. In an organisation, individual rights are largely governed by ethical philosophy. In general, individual’s behaviour in an organisation is determined by both individual and situational factors.

In an organisation, encouraging ethical behaviour among the employees requires a manager with appropriate leadership skills (Brown, 2005). To enhance ethical behaviours, an organisation might be forced to adjust its organisational structures, training processes, and remuneration systems. It is with these reasons that the enhancement of ethics in an organisation is considered as a complex endeavour. In this regard, ethical management initiatives in an organisation depend on the Manager’s leadership skills and commitment.

Primarily, managers should portray ethical behaviours in their daily activities to foster ethical behaviours within their organisations. According to Ranken, an organisation’s ethical behaviour is determined through the Manager’s ethical behaviour (Phillips, 2003). This implies that unethical managers should not expect ethical behaviours from their subordinates.

Therefore, managers should realize that as the leaders of an organisation they are mandated to behave and act as role models. By doing so, they would influence their subordinates to follow suit.

During the employment sessions, managers and those who are involved in the employment processes are expected to screen job applicants to identify ethical behaviours exhibited by their potential employees. For effective screening, managers should adopt the appropriate screening techniques depending on their costs and benefits. Through this process, managers should consider investigating their potential employees’ backgrounds. This can be achieved by contacting their referees or through private investigators.

Similarly, managers should develop and implement logical codes of ethics in their organisations. For an effective code of ethics, its expectations, procedures, and consequences should be realistic. In the same way, every employee within an organisation should understand the intentions of codes of ethics.