Ethics in Business Organizations


Moral philosophy or ethics is a philosophical branch that deals with questions about morality. This includes concepts that assess right and wrong, virtue, justice or good and bad. On the other hand, morals can be termed as the assumed totality of conduct that depicts a person’s morality-which refers to personal or cultural values that determine right or wrong in a descriptive sense. In the business realm this form of concept assumes the name corporate or business ethics: a branch of what is termed as applied ethics. On professional basis business/professional ethics evaluates principles on morals and ethical issues that occur under the umbrella of business environs. Business ethics pertains to all aspects of conduct of individuals and organizations as a whole in their involvement in business.

Organizational ethics in business relates to how a business organization responds to external and internal stimulus in ethical terms and considerations of its daily running. This greatly depends on the businesses’ organizational culture. Organizational ethics is neither fully considered as business ethics (entails corporate governance and ethics) nor organizational behaviour though; it is akin to both. The organizational ethics of a business show its values to its clients, employees and other entities without consideration of regulatory measures from the government.

While in the process of upholding morals and ethics of a business under business and organizational ethics; the business entities encounter challenges that affect their operations. These challenges usually have moral/ ethical and legal implications that could affect the business’ activities.

 Moral and ethical issues faced by organizations

The ethical and moral issues that face any business organization can be categorized according to which aspect or section of operation of the business they affect. Newton and Ford state that (2008) these categories include issues that relate to customers, employees (human resource), environment and issues that relate to the society at large and societal norms. Customer related issues include the marketing and advertising aspects. At times companies get challenges from customers who claim that their advertisements may be overstated, partially untrue and may negatively influence expenditure and lifestyle. If this is taken from the moral view point, it could be tantamount to lying to the customers and that would against good business morals.

Other customer issues may include the demand by customers that obligates businesses to offer details of a product’s origin and processing steps. This would be argued as a businesses onus to inform the customers about what they consume as a good business moral that increases trust. This requirement is morally based though not legally binding, therefore; most companies choose to forego that moral obligation. This may be attributed to the incremental effect it may have on business operating costs. At times customers may also demand a clear labelling protocol that should entail all contents of a product with explanations of details that pertain to allergens and side-effects. This may not augur well with the companies because at times this process would reduce their sales, though; they clearly know that this is their moral obligation (Newton & Ford, 2008).

The human resource or employee moral issues pertain to harassment at the work place (this may take various forms-sexual or otherwise), discrimination as well as employee termination and e-monitoring. This can be exemplified by the organizations that monitor employees’ e-communication as well as on closed circuit cameras. This breaches the privacy of employees but at times, it is deemed a necessary evil. Therefore, companies may find the decision on how much to monitor a big challenge to the management (Newton & Ford, 2008).

Environmental effects resulting from activities of a business organization at times may also pose a moral/ethical challenge. For example the bottling of water reduces its environmental natural cycle and causes further detriment by the containers disposed after the use of bottled water. However, we can note that this is an indispensable business because it offers essential goods and jobs to people. Thus, this scenario poses a moral challenge to water bottling companies that should seek ways of mitigating the effect of their business on the environment (Newton & Ford, 2008)..

Other issues are basically based on society and societal norms that evoke principles that pertain to human value and religion. An exemplifying case would be the patenting of human genes by pharmaceutical companies. Whereas, this gives them royalties based on their discovery it also compromises ethics and morals held in the norms of society. This would barely mean an individual is not entitled to any genes in their body by the end mapping and patenting.

The relationship between morals/ethics and social as well as legal issues

In a normal society misfortunes occur to individuals; if there is no one to bear causal consequence then the victims have to put up with the misfortune. However, if the misfortune is as a direct result of someone else’s action, then that person bears moral responsibility to help the victim overcome the misfortune. This is however the ideal situation rather than the norm. This is because not all individuals-including businesses-are willing to take up that moral responsibility of correcting their misdeeds. More often than not such unfulfilled responsibility may anger the general public and victims that are concerned. If this be the case, the responsibility may cease to be a mere moral responsibility and become a legal obligation that has to be fulfilled. This happens if the general public changes the responsibility by legislation into a law. Thus, socially all business organizations have basic moral obligations to fulfil in certain circumstances where their actions negatively affect other individuals.

However, not all companies are willing to fulfil their moral obligations (DeGeorge, 2006). Thus, laws are legislated that ensure that companies adhere to the ethics/morals of any business. Therefore, in cases of damages to employees, customers or general public action can be taken in law courts to enforce business moral obligations. However, it has to be proved that the business was aware of its actions and proximate cause has to be cited (Nelson &.Trevino, 2007).

Ethical and legal issues related to hiring and the challenge they pose to the human resource

According to Menzies and Gramberg (2006) hiring should be affair and free process that gives all people a fair chance to all candidates to participate in the interview process. However, many at times this is never the case because of factors that include bribery, nepotism and pay control by companies that would like to higher cheap labor. At times the businesses prefer to hire cheap labor that will be paid less even though it may be incompetent in delivering services. This is at times dictated by the management upon the human resource officers. Therefore, they are forced to hire incompetent individuals that will be paid less. Though, the officer knows it is morally wrong to exclude competent and potential interviewees he will be obliged to hire as the company dictates.

This would however, be morally wrong and the hiring officer should advice the company against such an action and decline to do the hiring because it is morally wrong. Similarly, it legally wrong because incompetent or unqualified staff may deliver poor services as well as endanger customers. It will also be socially wrong to deny deserving individuals a chance to get employment on these grounds.


DeGeorge, T. R. (2006). Business Ethics, sixth edition. Upper Saddle River, New Jersey, NJ: Pearson Prentice Hall Publishers.

Menzies, J. and Gramberg, V.B. (2006). Ethical Decision-making for Human Resource Managers: Juxtaposing ethical egoism, the interests of the firm and employees. Retrieved from,, viewed on 31st May 2010.

Newton, H.L. and Ford, M.M. (2008). Taking Sides: Clashing views in business ethics and society. Avenue of the Americas, New York, NY: McGraw-Hill Publishers.

Trevino, K.L. and Nelson, A.K. (2007). Managing Business Ethics: Straight talk about how to do it right, fourth edition. New York, NY: John Wiley and Sons Publishers.


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