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Ethical Issues About Business

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You’re the boss in a predominantly male environment. The presence of a new female employee stirs up conflict because your company has not had a chance to conduct sensitivity training. Some of your male employees make inappropriate remarks to your new employee. She complains to you; in response, you sanction those responsible for the conduct. You also wonder if it would be wise to move your new female employee to another position where she would be less likely to draw attention. Treating your female employee differently based on her gender or in response to a harassment complaint may be considered discriminatory and unethical conduct. Side Deals

You’re a business manager with an employment contract. The contract requires you to work solely for your employer and use your talents to attract new clients to the business. If you begin attracting more clients than you believe your employer can reasonably handle, you may wonder if there would be an ethical issue with your diverting that excess business elsewhere and taking the commission. If you don’t, at minimum, disclose the idea to your employer, you will likely be in breach of both your contractual and ethical duties. Partners

You’re a partner in a business and see a great deal of profitability on the horizon. You don’t believe that your partner deserves to profit from the business’ future success, because you don’t like his personality. You may wonder if you could simply take his name off the bank accounts, change the locks and continue without him. If you proceed with this course of action, you would likely be in violation of your ethical and legal obligation to act in good faith concerning your partner. The better course of action may be to simply buy out his interest in the business. Gross Negligence

You’re on the board of directors for a publicly traded corporation. You and your fellow board members, in hopes of heading off early for the holidays, rush through the investigatory process involved in a much-anticipated merger. As a board member, you have a duty to exercise the utmost care respecting decisions that affect the corporation and its shareholders. Failing to properly investigate a matter that affects their interests could be viewed as gross negligence supporting a breach of your ethical and legal duty of care.

Fundamental Issues
The most fundamental or essential ethical issues that businesses must face are integrity and trust. A basic understanding of integrity includes the idea of conducting your business affairs with honesty and a commitment to treating every customer fairly. When customers perceive that a company is exhibiting an unwavering commitment to ethical business practices, a high level of trust can develop between the business and the people it seeks to serve. A relationship of trust between you and your customers may be a key determinate to your company’s success. Diversity Issues

According to the HSBC Group, “the world is a rich and diverse place full of interesting cultures and people, who should be treated with respect and from whom there is a great deal to learn.” An ethical response to diversity begins with recruiting a diverse workforce, enforces equal opportunity in all training programs and is fulfilled when every employee is able to enjoy a respectful workplace environment that values their contributions. Maximizing the value of each employees’ contribution is a key element in your business’s success. Decision-Making Issues

According to Santa Clara University, the following framework for ethical decision-making is a useful method for exploring ethical dilemmas and identifying ethical courses of action: “recognizes an ethical issue, gets the facts, evaluates alternative actions, makes a decision and tests it and reflects on the outcome.” Ethical decision-making processes should center on protecting employee and customer rights, making sure all business operations are fair and just, protecting the common good and making sure individual values and beliefs of workers are protected. Compliance and Governance Issues

Businesses are expected to fully comply with environmental laws, federal and state safety regulations, fiscal and monetary reporting statutes and all applicable civil rights laws. The Aluminum Company of America’s approach to compliance issues states, “no one may ask any employee to break the law, or go against company values, policies and procedures.” ALCOA’s commitment to compliance is underpinned by the company’s approach to corporate governance; “we expect all directors, officers and other Alcoans to conduct business in compliance with our Business Conduct Policies.” Employee Behavior

From large corporations to small businesses, individuals involved in all types of business often face ethical issues stemming from employee behavior. For example, whether an employee can spend work time checking personal email accounts, how a manager deals with claims of harassment and to what extent a manager can “groom” a certain employee for a promotion are all examples of ethical issues regarding employee behavior. There are legal consequences for some unethical employee behavior. For example, if a supervisor discriminated against an employee based on her gender, religion or ethnicity when making recommendations for a promotion, legal action could be sought. Small business owners can help to prevent ethical problems stemming from employee behavior by drafting a clear, attorney-reviewed set of standards that dictate behavior policies for employees at all levels. Employee Working Conditions

In addition to employee behavior, there are a number of ethical issues business people must consider about employee working conditions. For example, employers must be aware of the safety of their work environment and if they have compensated employees for all the time they have worked. The must also consider if they have required an employee to work an unreasonably long period of time or if they have him doing an unusually difficult task. Just like there are legal consequences for some unethical issues regarding employee behavior, there are also legal consequences for unethical working conditions. For example, an employer who requires an employee to work without pay or who creates an unsafe working environment can face legal action. Supplier/Customer Relations

In addition employees and business owners must consider the ethical issues involved with their relationships between suppliers and customers. Business owners in particular must consider whether it is ethical to do business with suppliers who have unethical practices. When dealing with customers or clients, business people must ensure that they use their information correctly, do not falsely advertise a product or service, and do not intentionally do sub-standard work. Small Business Ethics

Although there are ethical issues like discrimination that apply to all areas of business, each business area has its own ethical concerns. For example, business people who act as consultants must ensure they are giving sound advice. In the area of small business, some major ethical issues result from hiring, firing and dealing with employees. For example, conflicts of interest may cause ethical issues in small businesses, especially if they are family run. When personal family issues interfere with business decisions, this is a conflict of interest and an ethical concern.

Accounting Practice Ethics

In the wake of corporate scandals involving unethical accounting practices from publicly traded companies, including Enron and Tyco, many consumers are justifiably distrustful of investing in businesses. The federal government responded with the Sarbanes-Oxley Act in 2002 to mandate new financial reporting requirements to protect consumers, though with 90 demonstrators arrested during the “Occupy Wall Street” protest in 2011, it would seem to indicate distrust and anger still persists at time of publication, according to the “Financial Times” website. Accountants and financial advisers must avoid skirting ethical boundaries when making financial reports to the federal government and investors to help repair the wide rift between business investment and consumers. Social Networking Ethics

Comments regarding employers or coworkers posted on social networking websites are costing employees jobs across the country. The ethical and legal challenges surrounding the use of social media and its consequences in the workplace affects the business industry as a whole because employers across the nation are setting policies regarding employee use of these websites while working and even what these workers can say when off the clock. According to the Business Ethics website, as of 2010 software developer Cisco Systems Inc. even has a program, Cisco SocialMiner, designed to help employers monitor their employees’ social network site status updates, forum posts and blog posts in real time. The line between an employer’s right to monitor employees and an employee’s right to privacy can easily blur in this climate.

Harassment in the Workplace

Maintaining professional workplace relationships between employees is a continuing challenge for employers regardless of the industry. This challenge can become more difficult when the image companies choose to project has a significant sexual charge. This creates an ethical dilemma about what images companies use to sell products and the conduct expected of employees in the workplace. There’s never an excuse or a justifiable reason for harassment of any kind in any workplace, though a willingness to use sexually charged imagery in advertising may indicate a working climate where harmful behaviors can occur with costly lawsuits resulting from permissive climates, reports the Business Ethics website.

Paying Employees Equally

Even though federal and state laws require workers to receive equal pay for performing similar work regardless of gender, race, age, ethnicity, disability or religion, the problem still persists in many industries. According to the National Committee on Pay Equity, as of 2010 a $10,784 gap in annual salary still persists between men and women nationwide. The ethical dilemma arises when some companies choose to men higher wages than women while at the same time espousing messages of equality and fair play.

Report Issues

At many business meetings, employees are asked to report on the progress of their projects and on successes. As simple as this expectation may be, it can cause an ethical dilemma. Business people may face external pressure to report employee performance as better than it is. For example, a manager and an employee may become friendly, and the employee may ask the manager to report her part of the project as finished even though she still has several days left to go. In another example, an employee on probation may offer to take on extra work if the manager fudges his number of sales. In both of these cases, the manager would exemplify ethical behavior if he reported employee performance accurately. Source Issues

According to the Institution of Business Ethics, one of the most popular issues in business ethics in October 2006 was environmental concerns. Another important issue was how people are treated while at work. For this reason, business owners and employees are concerned with the practices of the companies from which they get their merchandise. Whether business owners should get less expensive merchandise from companies that don’t use environmental practices or have unsafe labor conditions is a question that comes up in business meetings. If a committee meets to discuss where a company’s merchandise should come from, taking into account these ethical issues and choosing source companies that employ ethical decisions, this is an example of ethical behavior in a business meeting.


By law, employers cannot treat employees differently because of their religions, ethnic backgrounds, genders, ages or disabilities. However, discrimination and the harassment that often follows are both examples of business ethics issues. In a business meeting, business people act ethically when they avoid jokes or remarks that may be offensive to some and when they give each person the right to voice her opinion.

Work Safety Issues

Having a workplace that poses a risk to employees is unethical. In business meetings, business people should notify employees of any risks and resolve the risks immediately. If the risks cannot be resolved, employees should be sent home until the workplace is safe again. Thus, if a concern about employee safety is raised at a business meeting, ethical behavior would be immediately assessing the issue and, if the concern is validated, immediately informing employees, removing them from the dangerous area and addressing the situation.

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