The Impact and Influence of Business Ethics

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The Impact and Influence of Business Ethics
Ethics is a vital component of every business, and it is doubtful that a business will survive without having a strong stance and espoused value of ethical behavior. “There has to be two dimensions to leadership: performance and values” (O’Rourke, 2010, p. 61). In his discussion on business ethics O’Rourke (2010) also comments that every company should have a written statement of ethical behavior that encompasses all processes within the organization. Additionally it is also important to have a monitoring and compliance team where unethical behavior can be reported and investigated. Even with these processes in place business ethics can be difficult to manage because there is no universal standard and each employee needs to be personally committed to ethical choices (Kinicki & Kreitner, 2009).

Ethical issues are a major concern in organizations because the impact of unethical behavior can have serious psychological, financial, and legal consequences. Unethical behavior undermines the bottom line of the company and the lack of mistrust that develops from these unethical behaviors can ruin a company’s reputation and in some cases put the business in legal jeopardy. Unethical behavior has been shown to be a contributor of high employee turnover and trust in management (DeConinck, 2011). Once trust is lost, the effects will be seen in all areas of the organization, whether that be decrease in sales, decrease in performance, or in severe cases, imprisonment or the dissolution of the company.

Ethics, defined simply, is the “study of moral issues and choices” (Kinicki & Kreitner, 2009, p. 23). It is essentially the study of how people perceive what is right from wrong. Clearly, defining ethical conduct can be difficult as there are so many individual influences that impact behavior. Kinicki & Kreitner (2009) state that personality, values, moral principles, history of reinforcement, and possibly gender are...
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