Unethical behaviours are often found in organizations regardless of the knowledge of the code of ethics. The instances of such practices include an employee falsifying documents or an executive stealing money from the firm. Such methods are harmful to the organization as for one they defile the reputation of the company by losing its credibility. This, in turn, leads to dropping of customers as they lose trust in the firm. Ultimately, the business may continually experience losses and the worst of all its shutting down. The society plays a role in the unethical conduct of an organization, determined by whether it is tolerant to such behaviours or whether it considers the particular behaviour acceptable. Societal context, as well as social changes, have contributed to the specific adoption of norms and conduct by the organizations.
Many firms have their focus on diversity such as ethnicity and age neglecting the homogenous aspect of their businesses. Also, there has been increasing globalization of business operations attributed by fall of international trade barriers. The concept of globalization has caused complexities in tackling ethical issues in an organization. This is majorly caused by diversity in dealing with issues to do with morality across the globe because of a different notion as of cultural morality. The primary source of this confusion is the variation of codes of ethics across different countries. Moreover, social changes have increasingly led to changes of socially acceptable behavior. Additionally, globalization has created many workers in the firm to adopt different cultural norms and behaviours as they work in different countries with diverse cultural standards (Treviño, Weaver, & Reynolds, 2006). This has created uncertainty of what is acceptable codes of conduct. The confusion has often led to the violation of ethical practices in people working in business organizations. However, investors and business managers can opt to drive their employees in working towards prevention of unethical acts in their organizations. The report seeks to explore how unethical behaviour can be avoided in organizations.
Background to the study
Research has been conducted regarding the ways in which unethical conduct has been in practice in organizations. Unethical conduct in a firm entail any behavior that does not comply to the standards of conduct that are employed by the organization. Studies show that in many circumstances such as the relationships between employees, their conduct when carrying out their duties, and the use of company’s resources. Unethical behaviour can also cause breaking of law as well as a violation of human rights.
Unethical behaviour ranges from the straightforward conduct to the complex action. This conduct includes inappropriate use of computer whereby an employee uses it for personal reasons rather than the intended purpose. Also, there might be a misuse of time such as leaving the job before time or skipping the appointment. Additionally, workers may get involved in illegal activities such as embezzlement of company’s funds. Another unethical conduct is bullying or a type of harassment such as sexual harassment; which is a violation of human rights.
Studies indicate that upholding good behaviour in firms can be effective if the issue is addressed by the company as a whole (Gonin, Palazzo, & Hoffrage, 2012). Organizations can adopt norms and cultures that set a pace for the practice of ethical behaviour. Behaviours such as selflessness will help work against the use of unethical behaviours as the individuals who engage in these practices have their motives tailored by selfishness. Also, they can employ regulatory standards that reduce unethical conduct in the organizations.
Studies on ethics suggest that unethical and ethical behaviour in a company results from individual factors and the contextual factors (Treviño et al. 2006). Hence, the practical way to approach the issue of unethical conduct in an organization is to focus on an individual as well as the context of the organization. Individuals can be handled by setting rules, policies, and standards to be followed as they perform their tasks. The workers are monitored to ensure that they support the principles set. Also, firms avoid unethical behaviours by punishing those who violate the established rules and norms as well as rewarding those who continually behave ethically (Piff, Stancato, Côté, Mendoza-Denton, & Keltner, 2012). The business context can be handled by developing acceptable policies, practices, and culture so that the employees can be influenced in a positive way towards behaving ethically. Also, the business managers promote the ethical actions by leading by example as their subordinates imitate them.
The research conducted on the topic shows that organizations promote ethical behaviour by instilling codes of ethics as they train their workers on how to carry out themselves ethically. Most approaches to curbing the unethical behaviours emphasizes the organizational aspect rather than individual aspect (Galperin, Bennett & Aquino 2011). The regulatory element is stressed as it views the dishonest conduct of an individual as a result of external impacts. The factors include the organizational structure, its culture, and environmental factors. Hence, many firms address their structures and cultures so that they can influence positive ethical behaviours of their workers. For this reason, corporate culture is seen to have significant impact in changing the behaviour of the employees. This is why many companies have majored on their cultures in promoting the ethical conduct of their employees.
Many researchers have focused on organization’s culture in the way to promote ethical behaviour of their workers (Treviño et al. 2006). The study has also defined the culture by focusing on the values. This is because benefits are essential components of a firm’s culture. Organizational culture has been described as the shared notions of a firm’s work practice within its units that may have differences from other groups in the same organization. On the other hand, ethical organizational culture has been defined as a general corporate culture with a combination of formal and informal systems of conduct control that work collaboratively to provide guidelines to the workers’ ethical conduct and moral reasoning.
The cultural systems in an organization have the power to influence integrity and ethics to the extent of being supportive (Kulik, O’Fallon, & Salimath, 2008). As it turns out, studies show that ethical organizational culture helps in establishing behaviours that are considered ethical or unethical in a firm and it mainly provides guidelines for the practice of the workers as they conduct their daily activities. Hence, studies on business ethics consider organizational culture as a crucial aspect in influencing ethical conduct in the firm.
Method of study
The study is carried out by evaluation of the online academic sources that have tackled the issue. Peer-reviewed articles are selected and used to find out detailed information on the ethics in organizations as well as ways to avoid unethical behaviour in the firms. Hence, twenty peer-reviewed articles are used in this study.
Ethical behaviour in an organization
According to the studies done by Treviño et al. (2006). and Gonin et al. (2012), ethics entails good and evil conduct or right and wrong behaviour. In organizations, ethics are viewed from the perspective of the acts of the firm, groups of people, and individuals operating in it. Thus, the business ethics comprise of standards, rules, codes, and principles that provides guidelines on what to be done and what to be avoided. Ethical conduct includes adherence to the identified moral norms whereas unethical behavior entails a violation of the standards. The ethical behaviour in a business organization must be acceptable in the community where it conducts its operations (De Cremer, Mayer, & Schminke, 2010). On the other hand, unethical practice in a business comprises the conducts that violate the essential interests. Not only does unethical conduct violate the official and explicit set standards, rules and laws, but also breaks implicit and informal values in the society.
Business managers and employees have a responsibility to act ethically as they carry out their operations. This is because an organization has an engagement in a variety of relationships ranging from individuals, groups, and organizations. As the business stakeholders get involved with an organization so as to promote their interests, the firm should treat them with respect and avoid unethical conduct as much as possible. This is because such relationships create mutual relationships between the parties involved (Pierce, Kilduff, Galinsky, & Sivanathan, 2013). Hence, the firm ought to engage with stakeholders’ interests in an ethically responsible manner if at all they want to maintain the relationship. However, sometimes there exists cases of unethical behaviours from the business operators towards different stakeholder groups such as customers, financers, employees, society, and suppliers.
Ethical and unethical decision making
There are aspects that influence the decision making of individuals, which further determine whether they behave ethically or unethically. The characters include moral judgement, moral awareness, ethical behaviour, and moral motivation. The processes are then influenced by individual and contextual factors.
Moral issue identification or knowledge is the first stage in making decisions. Treviño et al. (2006) explain that in identification of a moral issue, there should be a recognition of an existing moral problem in the situation. It is essential that every individual has the ability to detect a moral issue. This is because this is the necessary step that initiates ethical decision making which in turn is reflected in ethical decision making. On the other hand, there exist individuals who are incapable of identifying a moral issue. Others are able to locate, but they just don’t care about their decisions. For this reason, such individuals end up conducting themselves unethically as a result of making poor choices.
Gonin et al. (2012) expounds on ethical sensitivity as the ability of a person to know that the process of making decisions has ethical aspects and thus choosing the ethical direction. Individuals have a significant role in shaping the moral issue identification. Research shows that issues with high intensity of morals are more likely to be ethical as they gain a person’s attention as they try to decide what is right as well as whatever is wrong. Hence, moral awareness and ethical or unethical conduct have a direct relationship.
A sound ethical judgement results from proper moral understanding. On the other hand, a wicked ethical sense results from bad moral judgement. Hence, tackling the concept of the moral sense is of importance in the knowledge on ethical and unethical decision making. There are people who base their honest view on reasoning about whatever is right depending on their desire to obey the authority and fear of being punished (Galperin et al. 2011). Secondly, other people make a moral decision based on the expectations of other people who seem significant to them. What’s more, other moral judgements are created by determining what is right by taking into account the universally considered principals of justice and rights. Most people lie in the category of making moral decisions based on the view of other significant people and also based on laws and rules (Treviño et al. 2006).
The concept of moral judgement is reflected in behavioural ethics in organizations. The way people think is seen to be majorly influenced by the external impacts. For this reason, it is imperative to manage such conduct properly by focusing on the adoption of norms, beliefs, peer behaviours, culture, and reward system in the organizations. Some researchers suggest that the ethical decision-making model in an organization related to the influences of contextual variables on behaviours and making decisions is dependent on cognitive moral development (Piff et al. 2012). Those with high cognitive moral development are considered to be less susceptible to contextual influences that those with low growth.
Moral motivation concept entails a person’s commitment towards conducting themselves ethically. This is reflected in the extent to which individually take the honourable course, embracing moral values and taking responsibility for the right outcomes. The factors that facilitate moral motivation are the desire to comply with the universal standards and societal norms. Also, people get self-satisfaction when involved in healthful behaviours. This may be a target to achieve, and if that is the case, it motivates people to be moral (Graham, Ziegert, & Capitano, 2015). Moral motivation always leads to ethical behaviours of individuals in an organization.
The framework of decision-making
People working in organizations apply specific normative criteria in making their decisions; whether ethical or unethical. In as much as individual decision making can be described with respect to rational self-interest, it can also be described in relation to emotional commitments and moral ideals.
Homo economicus concept and its influence on people’s conduct in an organization
According to the study by Gonin et al. (2012) the idea of homo economicus defines persons within the economic system as informed, rational, egocentric, autonomous, and utility-maximizing agents. The nature of humanity is associated with self-interest. Some researchers define the concept as a crucial rule for human behaviour. The conducts are seen to be cultivated by instrumental rationality and self-interest. The theories explain that individual decisions are not made blindly and intuitively, instead, they are made on the basis of intentional judgement as well as consideration of costs and benefit. On the other hand, people are self-interested in carrying out their activities, and their principal aim is to optimize self-interest.
The concept assumes that if individuals care only for themselves, they will strive to achieve their needs in one way or another. The acts of defensive selfishness by human beings as defined by this concept can be associated with a difference in conduct by different individuals working in organizations. Some unethical behaviours can be so tempting as they reward the individuals committing them with their desired results. The temptation for selfish gains motivates the unethical practices in the organizations. This is directly contributed by the self— centred perceptions of persons in a firm. Gonin et al. (2012) assert that the framework remains to be the dominant concept on which economic and management depend on the while conceptualizing the rational of human behaviour in organizations. The author further assert that “homo economicus concept has become performative and has gained increasing normative authority over the daily practice in organizations.” (p. 7). The authors further argue that the leading cause of unethical practice in organizations originates from the societal context in which the firm is integrated rather than the individuals performing the act.
Institutional theory encompasses the broader aspects of social structure. It considers ways in which structures become established as guidelines for social behaviour. The compositions include rules, schemes, routines, and norms. Components of institutional theory explain how the elements are diffused, created, adapted, and adopted over space and time and how they are declined for use over time. According to the study conducted by Gonin et al. (2012), standardized notions and behaviours are adopted by individuals unconsciously. Most people assume the practices in order to minimize their efforts for decision making. For this reason, everyday practices and standardized perceptions have a significant influence on how organizations and individuals working in them perceive the world, their roles, and how they come up with solutions for issues.
Institutional theory explains the concept that individual’s decisions are influenced by behaviours of the values acquired by other similar deeds, regardless whether the conduct is irrational or inefficient (Gonin et al. 2012). Any institutionalized behaviour turns out to be standardized as a norm in an organization, which in turn is reflected in individuals. The institutionalization of a norm or a principal is enhanced by the acquisition of justifications that it is socially accepted. Consequently, institutional theory shows the importance of action in which actors in an organization apply and interpret models that are around them.
The connection between business and societal concept
Since back in the time, in the societies where there is a high prevalence of moral decal, the business organizations operating within the community often have many cases of unethical behaviours (Gonin et al. 2012). This is because there is a link between activities that happen within a business and the moral expectations from outside the company. The societal framework has had a normative interpretation of homo economicus concept, hence reducing its impacts on business organizations and the workers. Further, many pro-social values have been incorporated within many organizations, as they have been taken to be specific standards of interaction. Hence, the society within which an organization operates has a significant impact on the behaviours of the individuals working in the firm. Consequently, businesses have been embedded in the societal context which leads to the influence of the society on organization’s and their employees’ conduct (Gonin et al. 2012). Therefore, concepts such as homo economicus have been applied and interpreted in a compatible way with the societal framework.
However, for some years back, there has been institutionalized erosion. The societal model has been made weak by increasing practices of individualization, globalization, and specialization. This has contributed to the high rate of personal freedom for individuals. The three changes have provided to the changes of HE embeddedness in the societal framework to reason-based ethical alternatives. Focusing on globalization, the study by Gonin et al. (2012) describes globalization as related to homo economicus. The study states that globalization disembeds the homo economicus from any binding contextual behaviours and norms. Globalization encompasses intensification of economic and social communication across borders enhanced by political decisions, socio-political advancement, and technological development.
Due to increasing advancement in technology, and ease of communication, globalization has become widespread as organizations now have easy ways of movement of their products across countries. Also, there is the efficiency in conducting their operations around the globe. Through globalization, business organizations acquire new liberties and new powers over nations with geographical limitations (Gonin et al. 2012). If a company does not work under regulation by international laws and guidelines, it can develop its own norms of behaviour as well as a code of conduct without any limitations by the local customs. For this reason, the concept of homo economics does not seem to be civilized by the geographical and societal framework in the concept of global corporation activities any longer. The practice of outsourcing production to suppliers to a diversity of countries, some with low environmental and social regulations has cultivated the tendency of some organizations to get involved in unethical behaviours such as ecological abuse and violation of human rights. Consequently, globalization is seen to be a cause for disembedding of the homo economicus.
The role of specialization, globalization, and individualization in disembedding homo economicus
The three processes have been significant contributors to moral, systemic, and legal disembedding of businesses and their actors from the context of the society and the civilizing norms. Gonin et al. (2012) assert that “on the global context, morality and legal compliance are reduced to simple trade-offs between benefits and risks.” (p. 17). Organizations operating in a state of weak, nonexistent, or contradictory moral or legal institutions homo economicus behaviour exhibits itself. The business operators end up avoiding many legal requirements as there is no much follow up on their conduct. Hence, avoiding rules is used as a weak economic strategy without considering socio-political factors. For instance, a company that operates across nations without legal and social restrictions is more likely to conduct itself in a way that violates human rights as long as the violation does not have an effect on the bottom line operations of the business in a negative way and the local laws. In the same way, most corporations consider environmental issues as mere economic constraints that need to be minimized.
Questionable individual morality in organizations
Egocentric homo economicus concept has been applied widely in organizations. Even though business ethicists suggest that business actors do not only employ rationality for self-interest as in the case of homo economicus but also it helps them to reason beyond self-interest. Such actors make some considerations before executing an action. They consider whether the effect can be universalized and whether it considers humanitarian values and traditions or whether it makes a significant contribution to the highest number (Kulik, et al. 2008). Ultimately, ethical approaches are workable depending on an individual reason to determine their required duty in a particular situation requiring decision-making, the impacts of their actions as well as the acceptability of the case by the community.
Both reason-based ethical approaches and the homo economicus approaches abandon the impacts of routines, social norms, and habits on individual behaviours and decision-making. Often, individuals are unable to adequately assess a situation before deciding on the appropriate ethical solution to take. The three processes of globalization, specialization, and individualization often lead to ethical dilemmas which appear difficult to be solved primarily by a single individual (Galperin et al. 2011). As the three methods have exhibited in today’s organizations, unethical behaviours are more pronounced than in the earlier days. For one, specialization makes it hard for individuals to understand the impacts of their acts for other sections of the society, hence failure to develop effective reasoning. Secondly, individualization causes difficulty in identifying a characteristic value set as a standard that evaluates legitimacy for the other available alternatives (Gonin et al. 2012). Thirdly, globalization leads to the creation of a geographic separation between the actors and the impacts of their decisions and actions which blurs ethical reasoning.
Homo economicus thinking concept is applied in many organizations as compared to reason-based ethical approaches. This is because the latter has a characterization of limitations created by the power of institutions. For this reason, development of a public mindset would do well in the event of an international model which could embed the aspects of life and thus providing guidelines for the conduct of people working in organizations. Apparently, development of such a structure would enable business actors to resist any urges for unethical behaviour
Questionable organizations’ ethics
The three processes of individualization, globalization, and specialization have had impacts on the way firms deal with moral issues. There is a need for corporations to pay attention to ethics within their structures. They also need to embrace the existing compliance programs and use of codes of ethics. Often times, the tools are not utilized effectively hence failing to fulfil their objectives (Baucus, Norton, Baucus, & Human, 2008). What’s more, the developments that are aimed at achieving proper use of ethics often fail as they get confronted by the application of homo economicus concept by many firms. Due to much focus of an organization as small economic structures without political and social dimensions, business actors take any efforts to enhance ethical behaviour for granted and in turn use the tools to optimize their profits through any means possible. Considering lack of application of a paradigmatic model, any efforts that aim at re-embedding organizations into wider normative concept are employed by business managers as tools to achieve their economic aims.
Ways of incorporating business organizations’ ethics into the society
Failure of use of socio-political concepts might be a significant contributor to lousy conduct of business actors. Hence, the enlightenment of socio-political issues and its relationship to their work is key to the actors so as they are able to conduct themselves accordingly within the concepts. Development of an international framework would enhance the understanding of business operations of not being mere economic entities, but instead, they are considered as entities that address socio-political and environmental issues. Business leaders require useful tools that enable them to connect the bridges between the societal contexts while incorporating economic elements in their decision processes as they influence their employees to follow in the footsteps (Treviño et al. 2006). Consequently, the business operations should be multi-faceted in the sense that the actors work in all the perspectives: moral, economic, social, legal, environmental, and political. There should be effective integration of the ecological, social, and ethical issues in the business operations.
Dealing with organizational misconduct and unethical behaviour
These conducts represent those that violate the laws, values, and standards of an organization. Individuals working in a firm often end up involved in a manner that does not meet up to the standards of ethics. Some of these behaviours violate the legitimate concerns of a firm in one way or another (Treviño et al. 2006). In many circumstances, the norms in a firm tend to coincide with societal norms as the companies are easily impacted by the society they work in therefore adapting their behaviors and values. This results due to the role of the community in accepting or rejecting particular behaviours. If the business operators conduct themselves in a way that does not offend the society, then the action is taken to be acceptable. On the other hand, if the business managers and employees do something that is offensive to the community, then the response is termed as an unethical action.
Some researchers define unethical organizational behaviour as intentional conduct by its members, that violates core societal and organizational norms (Treviño et al. 2006 and Gonin et al. 2012). This makes corporate values and standards interconnected with the societal norms. Also, individual behaviour has a role in defining his/her conduct. Therefore, issues like personality, characterization, and cognitive development of a person might influence them to act ethically or unethically. All these factors can be affected by the societal norms and believe in where they are brought up. Hence a society has an integral role in the reflection in either ethical or unethical conduct of the individual. The study by (Treviño et al. 2006). indicate that ethical or unethical conduct are also impacted by the organizational context including fair treatment, moral social norms, and ethical leadership.
Creation of practices, policies and cultures
A critical way to avoiding unethical behaviour in a firm is design and implementation of processes and procedures that will enable in defining, reporting, and identifying ethics violation. Also, there should be rules set to determine the kind of punishment that such individuals will face. The policies can be articulated in the workers’ handbook, and protection should be given to individuals who report cases of unethical behaviour. However, the critical part is not developing the policies but putting them into practice.
A firm can avoid unethical behaviour by the provision of an overview of the kind of behavioural conduct that it expects to its managers and employees. Such a code of conduct clearly defines the acceptable behaviours versus the unacceptable ones. As it turns out, often people are misguided by the desire for individual gains, and they end up forgetting the standard and acceptable behaviour. Hence, provision of a code of conduct will enable the business operators to be able to embrace proper behaviour as they have a guide. Also, the company should also state the actions and measures to be taken for the individuals who will violate the code of conduct so that the employees can take it with the seriousness it deserves.
Building a culture of openness, transparency, and communication will enable a firm to work towards cubing unethical conduct. A culture is defined as the integrated patterns of people’s behaviour, knowledge, and belief, that rely on the capacity to learn and to transmit knowledge (Gino & Margolis, 2011). Business culture is reflected in the practices of the managers and the employees. This behaviour plays a role in determining whether individual conduct themselves ethically or unethically. Business leaders can develop a proper culture for their businesses.
How business owners can develop an ethical culture in their firms
The first step in creating an ethical culture in an organization is to define a clear purpose of the business. This should entail a valuable purpose that is long-lasting. To create an active learning, the business owner should consider why there is a need for the operation and what does the business entails. The answer to the questions should be authentic, aspirational, and inspirational. Secondly, the business owners should define universal values, language, and standards. To ensure specificity of a business, all the people should have a common language and have a typical picture of the benefits desired by the organization. The common language, values, and standards should be understood by everyone in the company; from the leaders to the subordinates. The set values should be the principles under which the firm operates, and the common standards are the guidelines that measures how the policies are upheld (Greenberg, 2014). The cohesive culture has significant impact on the achievement of the end goals. However, the culture created should be malleable enough to accommodate different employees with their diversities and also accommodate the changes that come with changing time.
The third step in developing a workable culture in an organization is to lead by example. The subordinates always look upon the leaders’ behaviours so that they can imitate it. Hence, if the leaders adopt the developed values and standards, the workers will easily adapt to them. Hence, the leaders need to behave in the reflection of the firm’s values while advocating for them. In addition to this, the leaders should exemplify what the company stands for rather than just reciting the mission statement. Leading by example causes the employees to have trust in their leaders, and that is very important. When workers trust their leaders, they are always willing to do as they are instructed because they believe it is for the good of the firm.
The business leaders should then identify their cultural ambassadors. The ambassadors are the people who support their vision and embrace their cultures. These people are the employees. A business leader needs to know the individuals who support them in whatever they do because they advocate for them as they love the firm and its operations (Murphy & Dacin 2011). Such type of employees is precious to the business owners. The ambassadors have a role in helping the business leaders to gauge their cultures and determine whether they should stay at the course or they need to make some adjustments to the current culture as they give their opinions.
To develop an effective business culture, the leaders ought to have excellent communication and truthfulness. By embracing integrity, they must always do good whether they are being watched or not. Then, they should influence the employees to be truthful too in their actions. The leaders should be candid about their weaknesses, strengths, as well as biases. Being able to identify and accept the characters openly makes it easier to adjust to being a better person as the individual confronts the weaknesses and preferences. On the other hand, business leaders must apply good communication skills as they run the business operations. This entails the communication of the firm’s values continuously and explicitly. All the workers must understand the culture well and why it is crucial to keep it, and this will enable them to preserve it.
Ultimately, treating people right will encourage them to embrace the organization’s culture. When people are treated in the right way, they will eventually be willing to comply with the perception being defined. Hence, the business leaders should do the right thing to treat their employees well with respect and dignity if they want their cultures to withstand.
Consequently, business culture has a direct relationship with the avoidance of unethical behaviours in a firm. A wise leader will develop a culture that fosters ethical behaviours rather than unethical conduct. The workers and managers in an organization need to be taught on the ethical practices. This begins by stating the required manner of the firm, followed by ensuring that the standards and values set are developed to the latter. Also, the leaders should ensure that they continually follow up the operations in the firm so as to identify either ethical or unethical conducts after which they take the appropriate actions. Ultimately, setting up a good business culture will prevent cases of unethical behaviours in a firm. Thus, business leaders should ensure that their companies operate within the good cultures.
Managers being on the front line in the fight against unethical behaviours
Leaders in an organization have significant influence to the subordinates. This for sure is reflected by the action of the employees to follow the directions and instructions given by the managers to the latter. Hence, the management team of an organization should use this to their advantage in the fight against unethical behaviour. The leaders can achieve this by making ethical decisions and monitor the individuals working in the top management to ensure they have the same values (O’Fallon & Butterfield 2012). Also, the managers can contribute to preventing unethical behaviours by taking appropriate actions to the employees who are identified having misconduct. For instance, if individual works against the set organization’s principals, the managers should intervene immediately so as to retain credibility with the other workers.
Hiring for values
Most times, the considerations made by business owners when hiring individual are education qualifications and experience. It’s time for that to change if all unethical behaviours are to be successfully avoided. Employers ought to look for far beyond the education level and experience by evaluating the values of the people they hire. Business owners should ensure that their employee’s values working diligently and readily comply with the policies set in the firm.
The business owners should ensure that there are consequences for unethical conduct. This is beneficial in enabling the other workers to work ethically as they will want to evade such witnessed consequences. To ensure the awareness of the employees, they should be well informed on the rules they are working under as well as the effects of breaking such laws and policies. If any of them conduct themselves unethically, steps should be taken to warn or terminate them. On the other hand, loyal workers should be shown appreciation so that they can continue with their excellent work (Greenberg, 2014). Recognition of the loyal employee will enhance their work towards the good of the organization as they will work devotedly. If the work means following the set policies by conducting themselves ethically, then they will rarely get involved in unethical conduct. The appreciation can be done by doing things like giving the workers some time off or giving them bonuses.
Business leaders should cultivate the right culture that supports ethical behaviour while avoiding unethical conduct. The aspect of creating the right culture makes sense in the situation where workers feel free to decline to engage in unethical practices and also as they report unethical cases (Tang & Liu 2012). All the employees should feel practising ethical behaviour as the right thing to do.
Enlightening the employees on the importance of ethical behaviours
Some individuals might lack knowledge on the importance of conducting themselves ethically or the negativities of behaving unethically. Hence, enhancing the understanding of business managers and the employees on the same is of great importance. Business owners can achieve this by creating time for this education (Umphress, Bingham, & Mitchell, 2010). They can invite ethicists to emphasize to people why they need to behave ethically. This will impact the business actors positively, and consequently, they will be very willing to do away with unethical conduct as they know the essence.
Elimination of factors that increase the susceptibility of business operators to unethical behaviour
Employers can decide to do away with the factors that facilitate unethical practices in their companies by replacing them with workable alternatives. For instance, the business owners can replace the use of cash with using cashier’s checks so that it can be difficult for an individual to embezzle the firm’s money. Also, rather than allocating similar activities to one employee, the managers can develop a system of checks and balances. This will eliminate the opportunity for a worker to steal the firm’s time. It is also advisable for business leaders to conduct regular tests on the operations happening in their firms so that they can be able to identify any unethical behaviour that is going on.
Focusing on the three essential dimensions of the organization
There are three critical dimensions of a firm which when focused on can help business managers to eliminate the unethical behaviours. They include: assigning decision rights in the company, structuring the systems that evaluate the performance of individuals as well as business units, and adoption of methods to reward individuals (Treviño et al. 2006). Value-enhancing decisions can be made in a firm by connecting decision-making rights with the required information. However, while assigning the rights to make decisions, business leaders should make sure that the firm’s systems of performance evaluation and reward give the decision makers the required incentives to come up with the necessary value-increasing decisions. The three concepts are interdependent whereby one cannot operate successfully without the other (Kaptein, 2011). Allocation of the rights to make decisions depends on effective performance evaluation system. On the other hand, effective performance evaluation system depends on assignment of power for decision making.
Assignment of decision rights
In most organizations, the rights to make decisions is allocated in a centralized manner. It is majorly assigned to the individuals in the top management of the firm among the executive officers. However, firms can adopt another way of allocation of decision-making rights so that they are able to curb the unethical behaviour effectively. A decentralized system of distribution of these rights entails assignment of the responsibility widely in the organization so as many people are entitled to these rights. This way, even the employees in the lower ranks get the right to make decisions. The decentralization causes comfortable in controlling ethics in the organization (Umphress et al. 2010). As today’s organizations have been working under complex and dynamic extrinsic environment, there is need to adopt this system so that the employees can be equipped to have natural response to the customers and the increasingly changing competitive threats.
The changes in the nature of decision making and the allocation of responsibilities has an effect on the ethical sensitivity and behaviour of the people working in an organization. The employers will most definitely behave more ethically as there is the development of incentives and pressures by performance evaluation and compensation practices (Treviño et al. 2006). The way the workers respond to such incentives is dependent on whether they have the rights to make decisions. In other words, this will help in eliminating any unethical behaviour existing in the individuals. The decentralized system will minimize the chances for business operators to work towards self-gains. Somewhat, it increases the likelihood that individuals with intentions to act unethically will be identified easily before they advance in practice. This is a result of ethical ramifications of the firm’s decisions and provision of opportunities for the workers at all levels to take part actively.
Organizational structure is seen capable of diffusing the responsibility for the impacts of the actions by enhancing the extrinsic definition of responsibility reflecting on a formal description of role, authority jurisdictions and hierarchy. Individuals with no rights to make decisions might avoid guilt by believing that they committed the unethical act for lack of choice, and therefore failing to take responsibility for their actions. Individuals who are denied decision-making rights may feel compelled to act as they do by their managers. They may give a reason of not having the freedom to choose ethical alternatives, thus ending up with unethical conducts (Ford & Richardson, 2013). However, allocating these rights to such individuals will make them take full responsibility for any unethical behaviour they conduct. This will reduce the unethical cases in the long run.
Structure of performance evaluation
Allocation of the decision-making rights to the employees broadens their scope of tasks. This develops the need for performance measures that enable for more discretion while creating the need to constrain the workers’ actions so as to prevent habits of personal benefits (Pendse, 2012). An aggregate performance measure can be employed to complement the choice of delegation by enabling discretion to the workers with information that is crucial for decision making. On the other hand, the aggregate performance measure provides the people without the decision making news with a tool that prevents pursuit of personal gains.
The processes for performance monitory are fundamental determining factors that influence ethical sensitivity and behaviours of the workers. This is because they are perfect means of informing the employees on whatever is expected of them. Hence, the evaluation turns out to be an effective way of avoiding unethical conduct of the workers (Kaptein, 2011). Ethics concerns can be incorporated in a firm’s system for performance measurement evaluation. For this reason, the performance evaluation systems should be adequate enough to detect any unethical conduct in an organization. More prominent establishments should have even more sensitive ethically sensitive performance and evaluation procedures because the firm has complex activities.
The business managers can effectively promote ethical conduct in their firms by making sure that there are active processes for monitory and evaluation of employees which do not raise tension relating to ethics in the company. Such tensions come to be when the business leaders, as well as the policies and standards set, create pressures on the employees to comply with any decisions made by the management team even though they are ethically questionable (Hill, Eckerd, Wilson, & Greer 2009). The performance evaluation processes of the workers must ensure that there is a reinforcement of efforts to avoid unethical behaviour. This happens when the managers state clear guidelines that point out the ways in which employees will attain the company’s goals, while their ethical or unethical behaviours are monitored by the leaders.
Ultimately, ethics control programs can be created as a way of control programs based on propagating rules and employing behavioural monitory and discipline. Further, the management team can influence behaviour by rewarding the workers for regulation compliance and punishing them for noncompliance (Kaptein, 2008). For a firm to effectively implement values and ethics-oriented program, the processes of performance evaluation should entail concerns for fairness and ethics. With the incorporation of the performance evaluation system, most individuals in a firm likely conform to the needs and desires of the stakeholders in the organization. As human behaviour is based on norms and expectations constituted by the individual as well as by other people, setting proper patterns in an organization will booster ethical conduct of the employees.
Employees are most likely to do something that rewards them while avoiding things that punishes them. It is essential for managers to include ethical considerations in the reward systems if they have the promotion of ethical conduct in minds. Provision of rewards for ethical behaviour is likely to promote the conduct. Rewards for ethical behavior might be given in the form of long-term awards including promotions (Gino & Pierce, 2009). Also, the awards might be presented in a symbolic way such as recognition so as the status of ethical conduct is not diminished in the minds of the individual employees being rewards. The main point in the whole reward concept is so that the other workers can feel motivated to behave ethically as they are shown that people of integrity get ahead in the firm.
Rewards can sometimes increase unethical behaviour. Conflicts between the ethical values and the firm’s reward system can yield moral ambivalence, causing the tendency to undermine the business managers’ noble intentions (Treviño et al. 2006). An effective, ethical culture should comprise a reward system supporting ethical conduct while punishing unethical conduct. It turns out to be difficult to measure the extent of ethical behaviour of workers and reward them. This s because typically, ethical behaviour is represented by the absence of illegal conduct. However, firms can connect performance appraisals to the observance of the organization’s code of ethics. Some management teams may reward the employees acting ethically by identifying those who point out unethical conduct in the firm while others pay the workers who have significantly contributed to the community. Ultimately, the business leaders should reward individuals who act ethically in the form of compensation while applying for power and status proportionally in reflection of the goals attained.
Organizations have had efforts to avoid unethical issues in their operations by promoting ethical conduct. Development of programs to perform such roles is useful as it helps the workers to know about legal requirements of the firm, provision of guidelines for the needed practice in the firm, and address of particular concerns. However, even after these efforts, there are still traces of unethical conduct of individuals. This kind of behaviour is majorly attributed to the need for selfish gains by the individual committing it. Hence, the individual ends up violating the norms, set standards, and policies within which they are supposed to operate. A firm can effectively work against unethical behaviour while promoting ethical behaviour. This can be achieved through active participation of the business managers as well as employees in adopting healthy norms that have been acquired through the creation of healthy business culture. Also, the firm’s management team can work towards development and adoption of policies that promote ethical behaviours.
Business managers should be sure to employ the three critical dimensions in avoiding unethical conduct in the firm. Firstly, they should ensure that workers at all levels are presented with the chance to participate in decision-making process of the firm. This will boost their ethical conduct as they will feel responsible for every decision they make. Secondly, the firm should initiate procedures for performance evaluation. This will cause the employees to avoid unethical behaviour as they do not wish to be caught on the wrong side of conduct. Additionally, a firm should ensure that they create reward systems whereby the managers identify the employees who have ethical behaviours and reward them. This act motivates the other workers to embrace ethics. Also, there should be punishment for the workers who violate the set standards and policies. Further, the leaders in an organization should hire individuals who have ethical values rather than only focusing on educational qualification and experience.
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