Importance of Ethical Behavior Among Employees. Why Do Good People Do Bad Things at Work - Research Paper Example

?Importance of Ethical Behavior Among Employees Introduction An ethical behaviour of an individual is guided by moral principles. In a business enterprise, decisions can be taken by an individual or a team of members. Whoever takes the decision, it is largely influenced by the culture of the company. It is the responsibility of the decision makers to take proper moral perspective of the ethical manner in which they should be behaving that will be favorable for the company at large. To choose the right kind of ethical approach in conducting business activities, it may sometimes be necessary to shift from the path of short term profits. The idea is to maintain balance between what is right and what is profitable which may apparently seem difficult. In order to ensure a sustainable business in the long run, the need is to integrate the ethical principles with the company’s strategy. Lack of ethical behavior and social responsibilities can reduce motivation among employees resulting in poor performance and lower profit. Business ethics and social responsibility can have significant positive impacts on the company. A business conducted in an ethical manner can gain the trust of customers which can result in increased sales and profit. Employees will enjoy favorable working conditions thus encouraging them to remain an integral part of the company which will reduce employee turnover. Aspiring employees will want to work with the company and this can reduce recruitment cost, and also the company will be able to attract the most talented people to join the company. More investors will want to buy shares of the company leading to increase in the price of shares, and this can protect the company from takeover. This paper explores the importance of ethics in employees’ behavior and what motivates them to behave in an ethical manner. Over the last few decades, the growing importance of ethical behavior in business organizations is becoming evident with more and more companies implementing ethics systems in their management. The subject is increasingly being emphasized in course studies of business management. However, there are still organizations that do not recognize the need of ethical behavior, and are still treading the traditional belief that business activities should be focused only on profit maximization. However, general analysis on this subject has concluded that a business organization shoulders the responsibility of ethical behavior, and it does not only entail satisfying the shareholders, but also others who are associated with the business like employees and customers. Implementation of proper ethical management system can lead to an ethical culture among employees thereby improving the overall moral quality of the company. Nevertheless, many organizations still do not consider ethics as important enough to be considered in management systems. These organizations regard ethics as an external factor that has nothing to do with the activities of a business. The fact that business is conducted by human beings and so ethics need to be considered in decision making processes is largely ignored by many organizations (Palomino et al., 2010, pp.16-17). Since business is essentially conducted for making profits, therefore its activities will most naturally focus on profit maximization. Moreover, since business is conducted by human beings, and they are a part of larger society, it is necessary that behaviors of employees have both social and ethical values. In modern times, business is not solely considered as exclusive property of shareholders, but is also considered as a part of society at large. Therefore, the need to project an organization as having ethical values has become very important (Palomino et al., 2010, pp.19). Arguments concerned with business ethics should not be concentrated only on its requirement for competitive advantages, but also should be based on the fact that business is conducted by human beings. If ethics is ignored, then that will inevitably create a de-motivating ambiance which in turn will result in self-destruction among employees and reduced profit of the company (Palomino et al., 2010, p.28). However, even after considering the human aspect of business ethics, it still cannot be ignored that there are limitations to moral reasoning. Business ethics needs to be considered based on “justification and application” (Beschorner, 2006, p.128). As far as justification goes, business ethics should not just focus on profit maximization, but also on moral interests of all parties concerned like shareholders, employees, customers and society at large. In relation to application, business ethics need to provide good reasons for conducting certain actions and preventing others (Beschorner, 2006, p.128). In this era of globalization, it is becoming increasingly important that a business enterprise be projected as an organization providing value to the community. Many businesses have become adept at projecting ethical values into the marketplace. However, most companies fail to convey this message to employees that business activities should focus on, other than profit maximization, larger benefit of the society by providing quality goods and services at reasonable prices. Therefore, employees almost always end up believing that an organization works only for financial benefits. The challenge for companies is to encourage employees to behave in ethical manner that will benefit the organization in the long term, and discourage employees to focus on self-interests. Even a well-intentioned employee will conduct unethical behavior if rewards and remuneration do not match his input. Therefore, to discourage unethical behavior of employees, it is needed that rewards are given for efficient performance, and punishments be doled out to those who give poor performance (Bartlett & Preston, 2000, pp.207-208). Historically, it has been accepted that ethics is a vital matter to be considered in aviation industry, and ethics include corporate social responsibility. Many aviation organizations have specific ethical codes to be followed. It is the court of public opinion that make judgements whether an aviation company is adhering to its ethical codes, and legal courts judge whether or not the company’s activities are legal (Phillips, 2006, p.74). It has however been seen that many aviation companies voluntarily perform activities to help others (Phillips, 2006, p.81). In an organization, it is the responsibility of every member from the owners to the employees to maintain ethics in the workplace. Responsibility is concerned with one’s ability to behave in a certain manner with a person or situation. It also implicitly implies that one has to understand the range of these responsibilities to be able to act accordingly. Just like a parent’s responsibility includes caring and feeding children, similarly a business enterprise is concerned with an employee’s responsibility in relation to the organization’s goals. In case of large businesses, the emphasis is on corporate responsibility rather than individual responsibility. Although responsibility means moral obligations towards concerned people or issues, traditionally corporate responsibility has been based on economic grounds, i.e. responsibility was limited to maximizing profit. The ethical facet of responsibility has been integrated into business management only in recent times (Murphy, 2010, p.245). So far, empirical research has been conducted on the importance of business performance while excluding the need of ethical ambiance for optimum performance of employees. Today, there is growing need of ethics because of increasing number of fraud companies. According to Selvarajan (2006), regular assessment of employee behavior will encourage employees to enhance their ethical conduct in organizations. This argument is based on the fact that if ethical evaluation becomes a part of employee assessment system, then it will induce employees to recognize conduct of ethical behavior as measurement of their role in the organization. This will further cause them to relate ethics with rewards and promotions (Selvarajan, 2006, p.86). Research has shown that those employees receive high evaluation rates who are liked by others than those who are less liked. Therefore, employees with helpful behavior are considered high on evaluation table, and such behavior in turn is influenced by internal factors in the organization like efficient management and favorable working conditions (Selvarajan, 2006, p.91). In a study conducted by Fang (2006), it has been demonstrated that an employee’s concept of favourable outcome of a set of behaviors induces him to take a positive approach towards conducting the behaviors. For the purpose of this study, the theory of planned behavior was taken into consideration. According to this theory, actual behavior is conducted depending on the behavioral intention and therefore both real behavior and intention to behave are considered for ethical decision-making. In some countries like China, mutual attitude of employees in a workplace is largely influenced by the closeness of their personal relationships. It has been concluded that any confusions regarding selecting a mode of behavior in work place is dependent on the relationship between the concerned employees and the people who will be affected by their decisions. In this case, the behavioral patterns of employees can affect the profitability and sustainability of the organization for which they work. The process of making ethical decisions is based on the judgement of justice and rights, and also the fact that such decisions can have a direct influence on others. There is also another factor to consider which is that an employee considers the difficulties he may face whileconducting a certain kind of behavior. If the perception turns out to be favourable, i.e. greater opportunity to conduct the behavior, then the employee will show more inclination to carry out the behavior than those who perceive difficulty (Fang, 2006, p.257). Therefore, it is the management’s responsibility to provide a working environment and technological facilities that will be favourable for ethical behavior of employees. On the other hand, human beings are prone to give more importance to self-interest and interests of those closest to them. Since interpersonal relationships are framed by the social structure, therefore a healthy social system prevents an employee from focusing on self-interest and encourages him to focus on the organization’s benefit at large (Fang, 2006, p.262). It is a disturbing fact that employees tend to behave in unethical manner that can cause harm to the long term credibility of the organization, thus hurting everyone from co-workers to management team to customers. Unethical behavior of employees can range from “lying, cheating, stealing, sabotage, corruption, to hiding or destruction of official documents” (Ugwu, 2011, p.20). Lack of ethics among employees can tarnish the image of the company in the eyes of public thus reducing public confidence leading to economic fall of the company. This will invariably discourage potential investors. One major reason that has been attributed to unethical behavior of employees is existing disparities between labour and rewards. The general understand is that inputs are far greater than remunerations, and this creates lack of motivation among employees. As reaction to such perception, employees often resort to unethical behaviors like misappropriation of funds and pilfering. Although there is legal element attached to unethical employee behavior, not all action is considered illegal. For instance, laziness in workplace can be considered as unethical but not necessarily illegal. Therefore, interpretations of ethical or unethical behavior vary among people. There are a number of variables that induce or inhibit unethical behaviors among employees. In order to maintain sustainability of the organization, management needs to consider these variables for future dealings. There are individual variables which means employees are members of society. Every employee has own set of expectations, demands, prejudices, cultural values and even unconventional habits. The personal experiences of employees play a big role in deciding the moral aspects of their behavior. This means whether or not they will be encouraged to behave in ethical manner depends upon their personal life’s ups and downs. Financial needs of an employee influence to a large extent his decision to behave in ethical manner in an organization. The second category of variables is organizational practices. This indicates the practice of rewarding employees based on their performance level. High salaries and proper remuneration are expectations of all employees. Therefore, if organizations fail in these aspects, then employees may evade legal codes and perform activities without any ethical consideration. The third category of variables is environmental factor. Environmental factors essentially encourage unethical behaviors among employees. Since every company is faced with competition and is governed by government laws and regulations, therefore in order to maximize profits, businesses often behave in unethical manner. Today, crime has become rampant in a society; therefore it is obvious that society will have adverse effect on the performance of employees in an organization. With the growth of criminal activities, many companies find it an irony that ethics should be considered before making decisions (Ugwu, 2011, pp.20-22). In spite of the above discussion on importance of ethical behavior of employees, it is however proven by research that instructional programs on ethics have little impact on increasing productivity of employees related to ethical behavior and awareness. One major reason attributed to this is that there is lack of goals associated with ethical expectations from employees. For instance, programs that instruct on the moral values of ethical behavior may not have any positive impact on employees. The need is to provide information regarding the attached rewards and promotions to ethical behavior. The second reason is that there is debate regarding who should be providing ethics instruction. Traditionally, ethics is a philosophical term and should remain in that framework. However, since business activities are domain-specific like aviation industry, therefore it is necessary to learn how and what kind of ethical behavior can be applied. Therefore, many researchers have concluded that philosophers and business people should collaborate to teach business ethics to employees (Waples et al., 2008, pp.134-135). However, it is not enough that employees are taught about the importance of business ethics. Important thing is to create motivation for the employees to behave in an ethical manner. In current times, many things needs to be considered for decision making like environmental issues, welfare of employee and community, and also interests of other companies. It is very often ignored by organizations to stress on the employees the importance of moral considerations before making decisions. In such cases, lack of acknowledgement of moral aspects of business leads to employees behaving in unethical manner. It is often taken for granted that employees should consider ethics before making decisions. Still, many companies find it extremely difficult to efficiently implement ethical codes and training programs. One such difficulty involves “developing an explicit method to motivate employees to act ethically” (Fudge & Schlacter, 1999, p.295). Conclusion Businesses today are not conducted in the manner only to maximize profits. Although business is primarily conducted in cost-effective manner for sustainability, its social responsibilities cannot be ignored. In order to hold a strong position in the market, it is necessary that an organization’s employees perform in ethical manner in order to project a positive image of the company. There are many factors that contribute towards unethical behavior of employees like lack of motivational factors, financial needs and social environment. If an employee is given proper motivational environment like rewards and remunerations that match their inputs, then the employee will be encouraged to consider ethics before making decisions. In spite of all the ethical considerations, business at the end of the day is a profit making venture. Therefore, profit maximization goal is always a part of all decision making processes conducted by employees. References Bartlett, A. & D. Preston (2000). Can Ethical Behavior really exist in business? Journal of Business Ethics, Vol.23, Issue 2, pp.199-209 Beschorner, T. (2006). Ethical Theory and Business Practices: The Case of Discourse Ethics. Journal of Business Ethics, Vol.66, Issue.1, pp.127-139 Fang, Miao-Ling (2006). Examining Ethical Intentions of Individual Employees of Taiwan from Theory of Planned Behavior. The Business Review, Vol.6, Issue 1, pp.257-263 Fudge, R.S. & J.L. Schlacter (1999). Motivating Employees to Act Ethically: An Expectancy Theory Approach. Journal of Business Ethics, Vol.18, Issue 3, pp.295-304 Murphy, P.E. (2010). The Relevance of Responsibility to Ethical Business Decisions. Journal of Business Ethics, Vol.90, pp.245-252 Palomino, P.R., Banon Gomiz, A.J. & C.R. Amaya (2010). Morals in business organization: an approach based on strategic value and strength for business management. Cuadernos de Gestion, Vol.11, Issue 3, pp.15-31 Phillips, E.D. (2006). Corporate Social Responsibility in Aviation. Journal of Air Trnsportation, Vol.11, Issue 1, pp.65-87 Selvarajan, T.T. (2006). A Cognitive Processing Model for Assessing Ethical Behavior of Employees. Journal of American Academy of Business, Vol.9, Issue 1, pp.86-92 Ugwu, L.I. (2011). Unethical Behavior in Nigerian Organizational Settings. Asian Social Science, Vol.7, Issue 2, pp.20-24 Waples, E.P. et al. (2008). A Meta-Analytic Investigation of Business Ethics Instruction. Journal of Business Ethics, Vol.87, Issue 1, pp.133-151 Read More