Ethical Issues in Business

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Ethical Issues
The issue of ethical behavior is one of the top challenges facing organizations today. A good definition of ethics includes the thought of doing what is morally acceptable or what is “good” and “right” as opposed to doing what is “bad” or “wrong” (Sims, 1992). But why are these issues a concern for organizations? What can they do to promote ethical behavior from their employees? Organizations should be concerned with ethical behavior for many reasons. Even though ethical decisions are not always black and white, ethical behavior is important to the organization because ethical behavior enhances the corporate reputation, helps attract talented employees, and enhances the corporate image. First, there is evidence that profitability is enhanced by a reputation for honesty and corporate citizenship (Kinicki, Kreitner, 2009). After all, the number one reason for business is to make a profit, thus returning value to its share holders. Consumers are more likely to buy goods or services from a reputable company then one with a reputation for unethical behavior. The Ford Company in the 1970’s was a good example of lost sales due to an unethical decision. When the Ford Pinto was hit in the rear, the gas tank would often explode. Ford was slow to acknowledge the problem. By the time Ford admitted that they had a flawed design, many consumers had stopped buying Fords. Another reason organizations should be concerned with ethical behavior is its ability to attract talented employees. In a recent survey eighty three percent of those polled rated a company’s record as “very important” when deciding to accept a job offer (Kinicki, Kreitner, 2009). Hiring and keeping innovative, creative and talented employees is essential for businesses as they attempt to compete in this global economy. Without talented people, organizations will be at a disadvantage when it comes to competing for future business. Being good corporate citizens is another reason that...
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