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Why ethical standards in business are important
The role of ethics in corporate governance
The role of ethics in corporate governance
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Recommended: Why ethical standards in business are important
Ethical Issues Are Major Concern
Every organization has a set of ethical standards that they abide by. The organization ethical standards purposes: it build the organization confidence in the community , keep the employees uniformed in what the organization strive to have as organizational behaviors and help the employees have guidelines to make ethical decisions that protects the organization.
Every organization also has a profession responsibility to conduct business honestly and ethically. Our readings reported, “Experts estimated that U.S. companies lose about $600 billion a year from unethical and criminal behavior” Kinicki and Kreitner (2009). The organization could avoid having ethical issues by meeting the guidelines of state, federal, and local laws. Ethical issues are a great concern for the organization because it place liabilities on the organization as well as harsh penalties such as:
1. It could be costly for the organization.
2. It can ruin the reputation of the company cause the organization to shut down.
3. Employees will be at-risk of facing incarcerations.
When an organization use ethical practice it builds a strong reputation, increase profits and accomplish long-term standings with their consumers. When the organization use unethically practices the damages to the organization reputation is hard to repair, the company usually have to restructure and repair the internal and external forces of the company. A great example would be the starting of Wal-Mart, it started out with a strong reputation as a respectable organization the stores produce tremendous growth and popular very quickly. Wal-Mart problems and publicity came when the employees complaining of unfair, ...
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...ity on the organization.
Although no organization is 100% protected, the organization can minimize the risk of unethical practice penalties by screening applicants, providing ongoing ethical training, insist that management lead by example, implement reward and appraisal system for employees, and observe the behavior of individual ethics .
Works Cited
Kinicki, A., & Kreitner, R. (2009). Organizational behavior: Key concepts, skills & best practices (4th ed.). New York, NY: McGraw-Hill Irwin. ISBN: 9780073381411
Stephanie Rosenbloom, (2008) Wal-Mart announces new ethical and environmental principles
www.nytimes.com/.../business/worldbusiness/22iht-walmart.4.17172614.html
Danny Weil, 2010 Chronicle of Higher Education
http://dailycensored.com/2010/07/19/14027
Ethics policies are implemented in almost all businesses. Companies search for candidates that will be moral in their actions so they can ensure long-term financial success. Throughout history we have seen businesses fall due to unethical behavior. In recent years the business Enron Corporation is best known for the scandal that led to the bankruptcy of a company with more than 60 billion dollars in assets. We will examine the circumstances that led to the downfall of Enron, how the scandal was realized, as well as the outcome of one of the largest bankruptcies in American history; a case that exemplifies unethical professional behavior.
An organization that lacks a true culture of ethical compliance can create problems with integrity issues with stakeholders and customers. When a major company such as Enron, was structured their approach to ethics on the surface appeared to oppose progressive innovation. The policies and ethics programs were set up to protect the company and its shareholders. According to author Berenbeim, The Enron company had a detailed code of ethics it was not enough the organization needed to incorporate ethics and integrity throughout their corporate culture. Enron had to focus on business ethics issues raised by the conduct of the company’s directors, officers, accounts and lawyers (Berenbeim, 2002).
The organization can set the standards for how employee 's should behave using several methods and guidelines. The organization can utilize formal codes of conduct in document form and can reinforce with in class materials and informal talks to encourage the company 's ethical expectations that is to be adhered too. These will greatly help ensure that it operates both legally and ethically. These ethical decisions will come down to leadership and examples set by co-workers and especially superiors that are looked upon to set the example of the organization 's values. This trickle down effect will vastly effect employee 's in positive or negative ways. Therefore, leadership roles must have clear cut duties and understand the gravity of their responsibilities while also maintaining the standards desired. These leaders should be constantly teaching, intentionally or by example, with fellow employee 's by interaction and keeping track on the individuals underneath them. Many organization 's have mentor-ship programs or with leaders setting clear goals and guidelines for future conduct. By doing so they can positively reinforce in decisions and correct behavior that is not up to the organizational standards (Organizational Ethics,
Importance of ethics in the business world is superlative and global. New trends and issues arise on a daily basis which may create an important burden to organizations and end consumers. Nowadays, the need for proper ethical behavior within
According to Ferrell (2004), “Organizations create ethical or unethical corporate cultures based on leadership and the commitment to values that stress the importance of stakeholder relationships. Establishing and implementing a strategic approach to improving organizational ethics is based on establishing, communicating, and monitoring ethical values and legal requirements that characterize the firm's history, culture, and operating environment” (p. 129). Ethics programs ensure satisfactory relationships with all stakeholders by aligning with all of their demands and needs, and determine conduct with customers and relationships with regulators, shareholders, suppliers, and employees (Ferrell, 2004).
Robbins , Stephen P. and Judge, Timothy, A. Organizational Behavior. Upper Saddle River, New Jersey. Prentice Hall. Pearson Custom Publishing. 2008 Print
An organization needs to adhere to ethics in order to effectively implement its mission, vision, and objectives in a way in which offers a solid foundation to management and their subordinates to properly develop and implement its strategies. By doing so, the organization as a whole is essentially subscribing to one commonality that directs all of the actions of the employees of the organization. Additionally, it assists in preventing such employees from divergence in regard to the proposed strategic guideline. Ethics additionally ensures that a strategic plan is developed in accordance to the interests of the appropriate stakeholders of the organization, both internal and external (Jin & Drozdenko, 2010). Likewise, corporate governance that stems from various regulatory parties makes it necessary for organizations to maintain a high degree of ethical standards; this is done by incorporating ethics within the organization’s strategic plan so as to foster a positive corporate image for the stakeholders and general public (Min-Dong Paul, 2009).
This concern of integrity and organizations like Wells Fargo to do what is right stems from our personal ethical framework. We all have one which helps us decide what is right and what is wrong. It is this decision that is a concern for organizations that must be managed on a day to day basis. Company’s such as Wells Fargo are so big that bad ethical behavior may be overlooked and not dealt with until the damage has already been done. Other organizations need to learn from Wells Fargo and start addressing their own organization ethical framework. This would include the organizational culture, business strategies, employee ethics concerns and the overall ethics and decision-making
The case of Enron involved both illegal and unethical activities which created unethical practices between employees (Petrick & Scherer 2003). Management practices of Enron failed to comply with the dignity ethical principles because the working environment
Kinicki, A., & Kreitner, R. (2009). Organizational behavior: Key concepts, skills and best practices (customized 4th ed.). New York, NY: McGraw-Hill Irwin.
Ethics is so important in business because it gives a company credibility. When a company has credibility the consumers trust the company and will tend to buy from the company more regularly. Employees become loyal and are motivated to drive the business forward. According to Schermerhorn (2004), “an individual that feels secure in a working environment can move on to being more focused on an organization’s goal.” Creditors and investors show their commitment and confidence by funding company development and consumer confidence is positive. Ethical business practices build fundamentals of trust with colleagues, competitors, staff, customers and every other individual and entity. The result of an unethical practices can be declining profits and a loss of market share. However, ethics are cultural specific. “What it is considered ethical in one culture may be considered unethical in another (Chiu,
Ethics are the driving force behind good business. Every ethical choice made by a professional can and will have a much different outcome than any unethical choice. Bad ethics can ruin many aspects of a business and as (Gaye-Anderson, 2007) states how quite easily the lives and professional reputation of the employees can even be severally damaged (para. 3). Everything from morale to motivation can be severely affected by poor ethical choices. Customers will take their business elsewhere. Employees will abandon ship. Other, competing businesses reap the benefits of the bad moral choices. Ultimately, the entire business can be brought down by one poor ethical choice.
Focusing on what is best for the organization as a whole and not self greed, not focusing on short-term profits but the long-term profit goals for the shareholders, investors, and employees would help keep employees ethical (Ferrell, et al, 2009).When an employee is fearful of losing his or her job, unethical conduct can be the result of trying to keep that job (Ferrell, et al, 2009).When pressures are placed on employees to make money quick, fast, and in a hurry, the results could be unethical behavior (Ferrell, et al,
Ethics is central for any organization in treating employees fairly and helping the organization advance its mission. There is no single best way for dealing with ethical challenges, but it is very important for managers to develop ethical policies and procedures for implementation. To minimize possible unethical decisions by staff members, it is important to incorporate written standards grounded in organizational values in the code of conduct.
Ethics and values are very important in guiding employees and management in an organisation. It encourages employees to be accountable and transparent and also in make ethical decisions. In an organisation that ethics are practiced there are less conflicts and there is consistency at all times even when an organisation undergoes difficult times. A code of ethics is established in an organisation to solve problems when the do arise and explains how employees should respond when faced with different situations. Values and ethics are important for employees to get along. Our values tell us what we think is important and that helps us in making right decisions. For example a person who values justice will not be coursing conflicts and will adhere to ...