Ethical practice is essential for success and increased productivity in the business environment. A variety of ethical challenges impact both employees and their organizations. The most important issues are financial impropriety, harassment and discrimination, health and safety, privacy, and social media. Each of the aforementioned issues impacts businesses in specific ways. For instance, unethical business practice hampers the organization’s reputation, limits productivity, and reduces profitability.
It is critical that leaders implement specific measures designed to dissuade unethical behavior. These include the implementation of a code of ethics, ensuring that the work environment is safe, punishing unethical behavior, and leading by example. The effective application of the aforementioned strategies will ensure that the organization grows by maintaining a skilled workforce that is eager to achieve the institution’s goals.
The ethical evaluation of labor relationships with a specific focus on human resource management is based on the duties of employers and employees, fairness, justice, and religious teachings. State and international laws have adopted the aforementioned concepts to craft a framework within which organizations operate. Some of the rights captured in the guidelines include the right to equal and fair treatment, the right to be represented in bargaining, the right to a hazard-free work environment, and the right to free speech.
However, players in the contemporary business environment often disregard employee rights for the sake of profit or to gain a competitive edge. In most instances, employees lack the power to enforce specific rights, some of which are context-dependent. The most important ethical issues in order of priority are financial issues, harassment and discrimination, health and safety, privacy, and social media. Ethical practice is an essential determinant of employee and organizational well-being with regard to growth, social responsibility, and productivity.
Accounting and Finance
Ethical issues regarding the management of organizational finances are a major challenge in a number of institutions. Employees have been criticized for making incorrect entries in an attempt to defraud unsuspecting customers and organizations. Doctored statements, purchase orders, payments, and reports are a common phenomenon in human resource management. Some institutions condone such acts in an attempt to avoid paying taxes or limit the amount of revenue paid out to shareholders.
One recent example is the Enron energy company scandal which was characterized by the production of inaccurate financial statements which were endorsed by the Arthur Andersen auditing firm resulting in the loss of 85000 jobs (Nuseir & Ghandour, 2019). Other ethical issues in finance include asset misappropriation, fraudulent financial reporting, and incorrect asset disclosures. These issues deeply affect businesses and livelihoods if they are not effectively addressed.
Harassment and Discrimination
Harassment on the basis of sexual preference, gender, or race is a serious ethical issue in most organizations. Individuals often face a variety of challenges in the work environment owing to the fact that most businesses are a reflection of the world’s increasingly diverse population. According to the Equal Employment Opportunity Commission, discrimination cases cost American companies 372.1 million dollars in penalties in 2013 (Nuseir & Ghandour, 2019). Despite the presence of laws and regulations governing business practice and diversity, harassment cases remain common in a variety of businesses.
For instance, minority groups are denied opportunities for growth in their places of work while others are openly humiliated by fellow employees who consider them inferior and undeserving of rewards. Individuals who adopt alternative sexual identities are often castigated for their preferences. As a result, contemptuous employees create a hostile work environment for minority groups and individuals that choose not to conform to societal norms.
Health and Safety
The stringent rules imposed by regulatory bodies with regard to employee safety have played a critical role in limiting accidents in the workplace. However, some individuals flaunt the aforementioned rules leading to endangerment. According to the International Labor Organization, approximately two million lives are lost annually as a result of occupational accidents and work-related illnesses (Nuseir & Ghandour, 2019).
It is worth noting that there are approximately 160 million work-related illnesses and 270 occupational accidents reported each year (Nuseir & Ghandour, 2019). The high rate of incidents is a result of failure to institute appropriate measures aimed at protecting employees. According to the Occupational Safety and Health Administration, the top violations in 2016 were the lack of fall protection, poor hazard communication, inefficient respiratory protection, and poor electrical guarding (Nuseir & Ghandour, 2019). Work-related hazards increase the risk of injuries which impact the affected employees’ quality of life.
Technological advancements have numerous applications in business transactions and commerce. For instance, precise video technology allows managers in institutions to monitor employee movement and performance in real-time. In addition, it is possible to scrutinize employee activity by assessing their computers for communication, sites visited, and work completed (Bhave et al., 2020).
Ethical issues arise when employers use electronic surveillance to assess multiple aspects of an employee’s life. While continued video surveillance is a necessary security measure, the increased scrutiny may negatively impact an individual’s mental health (Bhave et al., 2020). Employers must distinguish between ethical monitoring and intrusive observation. Managers must be transparent about the extent to which surveillance is used to monitor organizational activities.
Social media is gaining prominence in the work environment as organizations strive to reach target markets. According to the Institute of Business Ethics, approximately 95% of employees use these platforms for both personal and work-related activities (Nuseir & Ghandour, 2019). As a result, many individuals are incapable of separating their personal lives from work-related activities. The use of social media platforms has increased the frequency with which employees inadvertently disclose confidential organizational information.
In addition, several individuals have been implicated in promoting workplace discrimination using social media platforms. The excessive use of social media sites during working hours is a major human resource challenge owing to the fact that the line between social activities and work is unclear (Stohl et al., 2017). Many organizations are experiencing losses in revenue and employee time because individuals are utilizing organizational resources for recreation.
It is vital to note that imposing bans on social media usage creates a challenge for organizations that are seen as overly restrictive. The apparent infringement of personal freedoms often reduces employee morale in addition to causing high employee turnover. The use of social media poses a significant ethical dilemma as organizations struggle to identify the distinction between work and recreation when engaging in extensive marketing initiatives.
Research Findings: Impact on the Field
Accounting and Finance
Ethical financial behavior is vital when managing scarce institutional resources. Unethical behavior has significant consequences both on the organization and the employees (Tormo-Carbó et al., 2018). It is often the case that the misappropriation of funds leads to the loss of revenue and livelihoods for a number of affected individuals. In addition, it could lead to a damaged reputation and the loss of trust from stakeholders. It is vital to note that altered financial statements have little value. Their inability to accurately define the organization’s position creates challenges when making important financial decisions.
There is an important ethical principle to consider when assessing the impact of financial, ethical challenges. Utilitarianism posits that an activity’s morality is determined by its capacity to bring happiness to a majority of the involved parties (DeTienne et al., 2021). Therefore, the organization must prioritize the maximization of the aggregate happiness of its stakeholders (Jamnik, 2017). It is vital to implement measures designed to protect the organization’s interests, its stakeholders’ investments, and its employees’ livelihoods.
Harassment and Discrimination
Discriminatory behavior has the potential to impact an organization’s reputation as well as the well-being of its employees. This is because affected individuals may experience emotional and mental distress, which significantly limits productivity. A hostile work environment lowers performance, hampers staff morale, and reduces employee commitment. It is vital to note that businesses reputed for discrimination fail to attract qualified and experienced staff, meaning the institution may not experience growth.
Virtue ethics must be applied in institutional situations to ensure that justice prevails (DeTienne et al., 2021). An individual’s morality must be the basis upon which interactions in an organizational context are conducted. Each individual must strive to respect every member of the team regardless of their race, gender, religion, or sexual orientation.
Health and Safety
Health and safety issues may have devastating effects on individuals and the implicated organization. The failure by organizational leaders to create a safe working environment is unethical, seeing as it predisposes employees to unnecessary risk. In the event accidents occur, individuals may suffer injury or lose their lives. This results in reduced productivity owing to the fact that the business may encounter staff shortages. In addition, the loss of revenue linked to protracted legal battles and compensation agreements may negatively impact the organization’s bottom line (Carpenter & James, 2018). Therefore, it is essential to institute measures aimed at promoting safety within the work environment. For instance, businesses must ensure that employees are protected from falls and that effective safety equipment is readily accessible.
The increasing application of technology in business is creating ethical challenges with regard to employee privacy. Businesses now monitor all aspects of an employee’s life while at work. The infringement of the right to privacy could adversely affect businesses by increasing the turnover rate (Bhave et al., 2020). Individuals who find the organization’s practices intrusive may seek other alternatives. As a result, organizations may experience brain drain leading to the loss of skilled personnel. In addition, productivity is likely to drop as employees avoid freely expressing their views for fear of victimization. It is essential that businesses avoid infringing on their employee’s privacy by avoiding excessive surveillance in specific recreational areas within the organization.
Social media has transformed how businesses operate with regard to the application of marketing strategies. There is a fine line between an employee’s personal and professional life with regard to social media platforms. In some instances, individuals may discuss sensitive organizational issues on social platforms. It is vital to note that some of the issues, especially those taken out of context, may cause irreparable harm to an organization’s reputation (Stohl et al., 2017). The ethical issues surrounding employee termination as a result of social media rants are multifaceted and complex.
While individuals who highlight critical work violations to regulatory authorities through social media platforms should be protected, those who are disloyal to their employers should be held accountable. It is vital to note, however, that there is some ambiguity as to the extent to which an employer is allowed to terminate employees on the basis of social media posts. The ethical challenge is to determine whether or not the individual violated organizational as well as the outlined legal framework governing employee conduct.
Recommendation for Future Research: Leadership and Ethics
Ethical issues are an important aspect of business management, seeing as they impact an organization’s success. These issues have the potential to damage an institution’s credibility, which could lead to serious business losses. Leaders have responded in numerous ways in an attempt to stop the spread of unethical behavior in their institutions (Grigoropoulos, 2019). The role of leadership in ethics is an area that requires more research to support the initiatives aimed at reducing unethical practice.
The first solution is the creation of a strict code of conduct. Managers are tasked with enforcing a well-researched and detailed set of rules that outline the behaviors expected within the organization’s premises. It stipulates what constitutes unethical behavior and specifies the measures that will be taken in the event an individual breaches any of the provisions. For instance, an organization with a social media policy may fine, terminate or prosecute an individual who uses social platforms to expose sensitive company information. The code of conduct is an efficient tool in view of the fact that it guides organizational behavior.
Leaders must demonstrate the correct behavior if employees are to follow suit and avoid unethical practices. It is essential to always make ethical decisions with regard to employee welfare, business deals, and corporate social responsibility (Jamnik, 2017). Therefore, an institution’s leadership must ensure that employees have access to safe working conditions, are protected from discrimination, and their privacy is protected. It is vital to make it clear that every member of the organization is subject to the ethical principles outlined in the code of conduct. Leading by example is the most efficient way of ensuring that employees comply with the outlined rules.
It is critical to reinforce the consequences of unethical behavior within the organization. It is vital to hold employees accountable for their actions in the event they engage in unethical behavior. Appropriate warnings and disciplinary hearings must be conducted to stop disruptive behavior and protect other employees from unethical practices. For instance, an employee who falsifies financial records endangers his colleagues’ livelihoods. In addition, an individual engaged in racial discrimination exposes the victim to mental and emotional torture. The appropriate punishments must be administered in accordance with the organization’s code of conduct.
It is essential to appreciate the efforts of employees who demonstrate exemplary behavior within the organization. Leaders must recognize loyal employees in view of the fact that they are less likely to engage in unethical behavior. Giving rewards encourages the entire team to work towards achieving the organization’s goals. Food behavior can also be reinforced by organizing seminars where employees can learn about business ethics.
The application of motivational speaking techniques inspires employees and reduces the incidence of unethical behavior. The aforementioned measures must be supplemented by a system of checks and balances aimed at reducing the incidence of unethical behavior. Conducted audits and assigning tasks to teams rather than individuals are measures that are likely to limit unwanted behavior.
The complex and serious nature of human resource management-related ethical issues makes them difficult to resolve. In many cases, society fails to provide consensus on what constitutes an ethical solution. Most of the issues are part of complex global economic, social phenomena. As a result, the proposed moral solutions may create challenging dilemmas. For instance, specific authorities may deem an organization’s refusal to employ a minority due to poor academic credentials discriminatory, yet it is adhering to the rules of capitalistic business practice.
The most common ethical issues, in order of importance, are financial impropriety, discrimination, health and safety, privacy, and social media use. These issues impact business practice by reducing stakeholder trust, reducing productivity, dampening employee morale, and hampering growth. Leaders must institute measures such as a code of conduct, checks and balances, and disciplinary hearings aimed at ensuring ethical behavior is promoted. Ethical practice is the cornerstone of social responsibility and successful business practice.
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