Ethical Behavior in the Workplace

Ethical Behavior in the Workplace

Ethical and unethical behaviors are the demonstration of social and industry standards for right and wrong behavior. Ethics have so much importance in a business environment that some corporations will institute ethics committees to educate and enforce various codes of ethics. The importance of ethics is such that even the U.S. government has implemented laws and regulations, such as the Sarbanes-Oxley Act of 2002 implemented in the wake of Enron and WorldCom, in an effort to enforce retaliation against unethical and illegal practices.

The issue of unethical business practices can be difficult to combat as businesses vary in size, employee pools, and behaviors of leadership. Any number of leaders or employees may be unscrupulous and hold no regard for the lives of other employees or the company’s reputation. Achua and Lussier (2010) note that the unethical behavior of staff and leadership may impose costs tallying over $20 billion every year and is directly related to the failure of almost one third of businesses. With staggering figures like these it becomes easy to see why values, morality, and ethics are critical to the survival and success of a business.

The ethics within an organization depend not only on the policies and standards that are implemented; but also on the leadership employed to lead the staff population. Neubert (2009) cites multiple sources and states that, “…the ethical climate of the work context is largely shaped by organizational managers” (p. 159); meaning that the demonstrated behaviors of leadership has a direct correlation to the ethics displayed by their subordinates.

Selart (2010) regards the demands of the public for more ethical and responsible behavior as a result of the destruction brought about by lack of ethics displayed multiple corporations spanning multiple goods and service industries. The lapses in ethical leadership in companies like Enron, Adelphia, and WorldCom spurred the creation of the Sarbanes-Oxley Act of 2002 which created a new oversight board tasked with regulating, inspecting, and disciplining firms in their capacity as public corporation auditors. The Sarbanes-Oxley Act came with stiff penalties of 10 years in prison and/or a $1 million fine; with further penalties up to 20 years in prison and/or a fine of $5 million according to 18 U.S. Code § 1350 (LII, N.D.)

There are several attributes mentioned by Achua and Lessier (2010) that directly affect ethical behavior. Most notably, personality traits, moral development, and the dynamics of the situation at hand are listed as the primary forces that determine an individual’s ability to act ethically. If an individual has dubious personality traits and a negative attitude, they may be more likely to engage in unethical behaviors. Likewise for individuals with preconventional moral development; where their behavior is indicative