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Ethical behavior in managerial context

Nowadays ethical behavior in business is starting to become an essential subject. First of all the word ethics comes from the Greek term ˜ethos this means persona. Ethics is a branch of philosophy that addresses questions about morality that is principles of what is right and what is wrong. Therefore ethical behaviour running a business is the effective leadership by the professionals which attaches the moral integrity of a business with a frequent value operating to the public.

So effort to improve ethical behavior must start with top management because works of lower-level employees and works of the company all together when facing honest dilemmas are inspired with what top professionals do, and on the culture the managers establish and reinforce.

Factors of Ethical Behaviour

There are various factors which may be emphasized by the moral culture of organisations. A few of them are; personal self-interest, company profit, operating efficiency, specific friendships, team pursuits, social responsibility, personal morality, regulations and professional codes. So managers must outline the beliefs, attitudes and behavior of the business to be effective and increase competition but at the same time adopt also ethical business practises.

For example Johnson and Johnson, when the infamous Tylenol poisoning took place, the professionals immediately drawn their product from industry regardless of its cost since their ethical framework needed that they action in good beliefs due to communal responsibility. While other organizations may fret more for working efficiency than sociable considerations when similarly difficult decisions are faced. So the actions used by the professionals be based upon the honest culture of the company.

More recent modern day example is Hewlett-Packard Co (HP) faulty notebook computers. This season, in March, a lot of individuals were complaining about faulty laptops which video cards were overheated and cause the laptop to malfunction. Later HP issued an apology and offered an expansion of warranty times for a few laptop models, but it did not react to consumers' obtain a recall of the faulty laptop computers. So in this case HP centered on the companys profit because it was more aware on its costs than to fulfill its customers.

Another example is Toyotas announcement of the technical fix for its sticky gas pedals that could lead to unexpected acceleration problems. Like Johnson and Johnson, Toyota works towards sociable responsibility since reputation is very valuable for the coffee lover. So they recalled more than nine million automobiles worldwide to repair the condition and made certain that something like this is not going to happen again.

Managerial Ethics

Managerial ethics are based on three-way romantic relationships. The first romantic relationship that managers have to provide for is the partnership of the organization to its employees. Managers have to see that there are ethical standards where the firm treats its employees. Such benchmarks may include selecting and firing individuals, pay and working conditions.

The second is the relationship of employees to the organization. Managers also need to look after issues that surround employees like conflicts of interest, integrity, professional privateness, stealing and misuse of entitlements.

The third is the relationship of firm to other financial agents. Managers have to be ethical with customer relationships, fair competition, consumer and investor relationships, fairness and honesty towards suppliers and unions.

For example employees are extremely important internal stakeholder for The Co-operative Group, because they're the key to help the business sustain its customers if indeed they give a good service. So The Co-operative for example provides training programme to help the employees increasing their skills and product knowledge. Also customers for example are cared for well because the firm ensures that the merchandise are labelled with a genuine label to help the people make educated decisions about the merchandise that they buy.

In other words The Co-operative managers are being ethical both with the partnership of the company with the employees and also with the partnership of the company to its customers.

How Managers can enhance the Ethical Behaviour in an Organisation?

Some organisations have formal management for honest behaviour to give a guideline about how to act in particular situation and dilemmas. This formal management includes; committees, codes of ethics and honest training.

The code of ethics is a formal declaration of an organisations primary principles and the ethical rules it needs its employees to follow. While honest training is like the particular Co-Operative offers to its employees i. e. the programme mentioned early.

A director can also improve honest behaviour by hiring people with high ethical expectations, put together job goals and performance diagnosis mechanisms, conduct independent social audits and offer support for individuals facing ethical dilemmas.

Managers must give a good role model when you are ethical and honest all the time, tell the reality, admitting failure and not trying to cover it up, interacting shared ethical principles to employees through icons and slogans, worthwhile employees who react ethically and punishing those who do not and protect employees who bring to light unethical behaviours or increase honest issues.

All these requirements must be attained because it is important that the honest culture of the organisation is clear and positive so that when ethical dilemmas occur there will be no unethical behaviour.

Back to the Co-operative example, managers creates some beliefs that helps those to behave in an ethical manner. This involves understanding, appointment and controlling the needs of its interior and external stakeholders. Although balancing these needs is not always easy and sometimes a conflict of interest arise in the manner a business behaves, running the business enterprise in an honest way can help the company to be sustainable. Nothing like the recent situations of Enron and WorldCom as well as the accounting organization Arthur Anderson. These dramatically illustrate how unethical behavior can lead to a organizations rapid drop. These firms improper actions caused many buyers to lose beliefs in American business and turn from the currency markets, which managed to get difficult for the firms to raise the administrative centre they needed to grow, create careers and promote the current economic climate.

Another example is; Lehman Brothers Holdings Inc. a worldwide financial services firm, which declared individual bankruptcy in 2008, pursuing drastic losses in its stock and devaluation of its resources by credit rating agencies. This was the largest personal bankruptcy in U. S record because it engaged 10 major investment finance institutions that they lost billions of us dollars. So again, this circumstance certainly shows us how negative effect unethical behavior can have on innocent people.

Factors Influencing Managerial Ethics

Figure ; Factors Influencing Managerial Ethics

There are also factors that affect managerial ethics, which these also make the managers job a more challenging one. These factors can be; family influences, religious prices, personal expectations and needs which influence the manager as a person. Guidelines, code of conduct, behavior of supervisors and behaviours of peers are also affects which come from the employing corporation. While government rules, norms and worth of population, and ethical environment of the industry, are influences coming from the exterior environment.

Stage of Moral Development


Therefore a conclusion can be either ethical or unethical because of these factors, therefore the manager has to think before taking any decision.


In a nutshell, ethical behaviour in a managerial framework refers to the values, attitude and the behavior of the managers while running the complete business.

One can also conclude that distributed values are very important because they guide managers for taking decisions and actions, they also condition employee behaviour, affect marketing efforts and finally they build team heart.

Managers positive attitude and behaviour are also important because they'll motivate both departments and the organization. Also motivation increase development, work satisfaction, work and personal understanding, personal commitment and personal value. That is why ethical behaviour is very important for modern businesses because they want to be productively and success.

Since before years there have been many commercial scandals and environmental disasters, it is important for the firms to restore and preserve the trust of the customers and the public in general which can only be achieved by adopting ethical managerial behavior. Therefore with little effort and responsibility, perhaps todays managers can leave the globe in better form for our future decades.

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