The Impact and Influence of Business Ethics
If the employee is in financial crisis at home, they may resort to unethical behaviors of stealing from the company to provide for their family, which they never think to do in normal circumstances. There is a high percentage of people who claim they do not report unethical behavior, and it is known that fear of retribution influences many employees (Kinicki & Kreitner, 2009). Organization leadership is also a strong influence on employees, and employees who see unethical behaviors in leadership may believe that situational ethics is acceptable.Knowing how important strong ethics are to the sustainability of the organization and how difficult it is to control and manage individual ethical choices, how then can the organization positively influence and encourage ethical behaviors in all levels of the employee and management structure? How can leadership encourage ethical decision-making even with all the external forces such as political environment, organization culture, and personal culture? First and foremost, leaders need to be role models of ethical behaviors and decision-making.From the CEO and top management tiers needs to come a specific, detailed, and enforced standard of ethical conduct. Critical importance has been attributed to ethical leadership and high levels of integrity.
Management duties come with an ethical obligation to promote integrity in ethical decision making, to assist and educate employees on this process, and to set a culture of rewarding ethical behavior (Paine, 1994). Management is faced with multiple ethical dimensions every day from how to manage the emotions of the employees (Fulmer &Barry, 2009) to how to manage finances and political constituents.Management needs to lead by example in all these areas if they wish their reports to do the same and if they wish to project and enact a face of ethical importance on the organization. Leaders need to put in writing the organization value statements, corporate credos, and codes of ethics, and then instill these values into the entire organization through education, training, compliance monitoring, and role-modeling (O’Rourke, 2010). Before rolling out change processes or making decisions, leaders should recognize and evaluate any ethical issues and strategize decisions based on the company code of ethics and values.When disseminating the change processes and decision statements to employees, leaders should discuss any ethical implications and how and why decisions were made so that employees can hear and learn the ethical issues that were taken into consideration. “Being ethical takes effort and leadership .
. . it’s important to continually remind ourselves that ethical conduct must always be at the forefront of our thinking, planning, and action” (Soloway & Chvotkin, 2007, p. 12). Take for example, the recent case of Johnson & Johnson addressing ethical issues as described in the Wall Street Journal (Rockoff, 2011, March 31).Johnson & Johnson is the parent company of McNeil Consumer Healthcare that has been troubled with quality and manufacturing issues. These issues have prompted multiple recalls of consumer health items such as Tylenol and baby foods in excess of $900 million and damaging the quality reputation of Johnson & Johnson.
Johnson & Johnson is responding to the ethical disturbance by taking immediate action to repair psychological and financial damages via leadership reorganization, operationalizing a stringent process for quality planning and monitoring, and separating itself from McNeil, which will now be its own organization.Johnson & Johnson also engaged the employees to explain the reasons for all the changes and stated that the goal was to give focused attention to quality and compliance and the reputation of the products. Ethical behavior and values is vital to the health of every organization and needs to be role-modeled from the top down, no matter how difficult the process might be. “Organizational climate, role models, structure, and rewards all can point employees in the right direction” (Kanicki & Kreitner, 2009).