An Evaluation of Unethical Behaviors - Research Paper Example

? An Evaluation of Unethical Behaviors The research paper deals with the impact and evaluation of unethical behavior on the business and thesociety. The influence of the environment has a negative impact on the ethical behavior, which can be overcome by providing training. The case study of Bernie Madoff evaluated also gives an inner view of the negative aspects of the unethical behavior. The adherence to uncompromised business standards is highly important to maintain the integrity of the individuals and businesses. Introduction The notion of ethics is concerned with the moral values of the people, their principles and standards which influence their decisions. It is regarded as a worthy behavior. ‘Ethics’ is a branch of philosophy which is concerned with the good deeds of the individual and the society. The word ethics deals with the rights and the responsibilities of the individuals and their influence on the society. Ethics has a lot to do with the culture, human rights and the conduct. Ethics refer to the knowledge, moral judgment of the individual along with principles. There are three different approaches to ethics. Meta ethics deals with the moral judgment. It refers to the question of morality, language and cognitive. Normative ethics provide a framework to the concept of right or wrong and good or bad. The applied ethics refer to many issues such as animal rights and penalty. Ethics is used to regulate the moral values and not the rules (BBC, 2013). The word ethics originated from the Greek word ‘Ethos’ which refers to the “way of living”. Ethics is the reflection of the human being with nature and many other individuals. It depends a lot on the freedom, justice and responsibility of people with reference to the world. The decision making and the action of the individual demonstrates the ethics and values. The ethical codes referred are honesty, integrity, openness, carefulness and objectivity (Treasury Board of Canada Secretariat, 2005; Tang, & Liu, 2012). With these considerations, the paper intends to analyze the dark side of ethics and the behaviors of employees who engage in unethical behavior. I. Childhood Ethics is an important aspect in the life of the people. The lessons that are taught to the children are very influential as it affects the thinking process and their perception. Ethics deals with the moral references which affect the decision making process of the kids. The values which are imbibed in the kids by their parents are to respect their seniors, be courteous and be honest. These attributes make the child to be driven by values which in future help them to be integrated and open towards the world and the society. In the childhood, the students are taught how to judge things and what should be recognized to make a better decision. Children should be made to realize the significance of freedom of expression and the effective use of the expression on the ethical ground, which in turn would enable to direct their psychological development towards acting in the right manner based ethical knowhow (Singer, 1999). The sense of responsibility, self-awareness, along with identifying the needs and values are the key constituents of ethical counseling. The child must be taught to be dignified and respect other individuals if they are doing the correct thing as per their perception. They should be motivated and be ready to help the people in need. The child needs to understand the importance of their strength, competence and their self-importance. Moreover, the children must be made aware of the culture, society and must be capable of analyzing the situation to procure ethical decision with their clear perception of what is right or wrong based on the lesson taught. In the young age, a child learns things from their surroundings and adopts different facets. Thus, it is the responsibility of the parents to make their children understand about the good and the bad (Barblett, Hydon & Kennedy, 2008). II. Review of Literature The execution of unethical behavior at times is driven varied circumstances that drive individuals to abandon the right path and select the wrong path to attain greater benefits for themselves. In this regard, the case of Bernie Madoff can be reflected upon which facilitates to comprehend the impact of the unethical behavior on the society and the individual. Madoff was a stock broker, a financial advisor and non-executive Chairman of NASDAQ. He was found guilty for the unethical conduct and for the fraud done against thousands of investors. Madoff was involved in one of the biggest scams named as Ponzi scheme. The scheme was a fraudulent act wherein the investors were promised of providing high rate of interests within a short span. The scheme enabled Madoff cheat the investors and give them false hope regarding returns. As he was a well-known and a trustworthy person, investors expressed faith on him. Subsequently, he was charged on various grounds such as security fraud, money laundering and false statements, which demonstrated the unethical behavior of Madoff. The illegal behavior of Madoff can be determined from a lack of transparency and abrasive behavior towards the people who wanted to check the records. Moreover, the internal and the external audit done were hidden by Madoff which is an unethical aspect of the business. He exhibited the forged data and reported an unrealistic data or performance of the business in front of the investors to gain their confidence. The Ponzi scheme had a huge effect on the investors who trusted Madoff, this case made every individual to check their ethical values and judgment. Madoff warped the ethics of moral philosophy, universalism and virtue ethics. Madoff’s profound knowledge, awareness and perception of small investors and wish to trust the moral values led to the corruption which earned him 50-65 billion US Dollars. The case of Bernie Madoff exhibits an unmatched moral character and behavior. The unethical behavior forced the staff member to forge the data, inflate revenue and represent a false balance sheet. Madoff indulged in the unethical act by misleading the finances which led to his personal gain and loss for the society. This act of fraudulent was an unethical behavior which hampered the trust of the people and their perception towards the right or wrong (Zarrabi & Lundberg, n.d.). With regard to the outcome of the case, the unethical behavior demonstrated by him was an act of breaking the trust of thousands of investors by misleading the data. The employees who were supporting the task were paid well which is against the ethics and standards of the business. The stockbroker and the financial advisers work on the basis of ethics and on the trust of the investors. This act made the people think several times before investing or trusting any person or business on the ethical ground. Madoff behaved unethically and broke all the laws and gave more importance to his personal need over the welfare of the society. The thoughts of Madoff and his acts were occupied by greed, peer pressure, self-interest and a lack of responsibility. The unethical behavior of Madoff was also driven by the motivation of succeeding amid the prevailing competition along with accomplishing greed and self-motivation of being the best in the industry. The personal desire and the hierarchal needs of esteem drove him towards the unethical behavior. The credibility of Madoff was hampered as the approach taken by him was not fair and transparent and his integrity was at stake (Descartes, n.d.). The case was known to the investors and the subsequently the anger of the public outburst. In the year 2008, he was arrested for his crime of cheating thousands of people. The act had a great impact on the stock brokers. The license of the brokers of the Investment Securities LLC was taken back as they all were found guilty of the unethical behavior. The law regarding the securities and the investors were made stringent to avoid the unethical behavior of the people and support fair ethical behavior (Department Of Financial Institutions, n.d.). III. Reasons for Unethical Behavior There are various factors that affect the behavior of the individuals. The environment, peers and personal behavior are the reasons which influence the behavior of the people. Peer Pressure Peers are of great relevance in influencing the ethical decision making of an individual based on their personal traits. The decision on the ethical ground is based on the cognitive moral development of the individuals (Trevino & Ball, 1992). The moral reasoning, thoughts and feelings of the individuals affect the decision. The peer influence on the decision of an individual can be divided into two stages; the first perception is that the peer behavior has a huge influence on others without considering their own perceptions. Peer pressure can lead to unethical behavior when the individual has no strong perception about the right or wrong. Peer pressure is also influential as people fear of being alone and socially unacceptable. The competition of being better and in order to drive success earlier, individuals tend to engage in unethical behavior. Pressure to prosper, go ahead, and meet expectations and the pressure from co-workers might lead to the unethical behavior (Business & Legal Resources, 2013; O'Fallon & Butterfield, 2012). Greed One of the primary reasons for the unethical behavior is the greed of a person. A person displays unethical behavior to have certain personal financial achievements. In a business environment, individuals have several chances of doing wrong things such as an employee can give discounts to the investor for his personal benefit which might hamper the ethical behavior of the business. Misguided Loyalty This is another reason for the unethical conduct on the job. The perception that lying might increase the loyalty of the individuals towards the business leads to the unethical behavior. At times, the employees hide few policies to attract the investors which might lead to false assurance. The employee perceives that by hiding information, they are assisting their employers (Common Wealth of Learning, n.d.). Unsure of the Right Thing Individuals are at times unable to judge the difference between the right and the wrong deed. They in order to get appreciation and reward take the wrong decision which might lead to short-term profit but in the long run prove to be an unethical approach. The incapability of handling the situation and a lack of perception lead to the unethical behavior. The norms, culture and the behavior influence the decision of every individual (Common Wealth of Learning, n.d.). Self-Interest, Personal Gain The love for more money, the motive of getting personal benefits and self-esteem might lead to the unethical behaviour. The self-interest becomes more important than the commitment towards business which leads to unethical behaviour. In this scenario, there is a lack of responsibility towards the ethical values as an individual gives more relevance to his/her personal commitments and gains (Tang & Chen, 2008). Never Learned There are individuals who have no values or ethics in their personal lives and thus give no importance to business values. They do things which according to their perception are right and give no importance to the business standards, which lead to the unethical behavior (Fraedrich, 1992). Environment An individual performs unethically in business because the managers at times overlook the behavior. For example, traders at Enron did their trades which cost millions of dollars in the payments of electricity. The behavior was unethical but the scenario is common hence it was never interrogated (Business & Legal Resources, 2013; Cojuharenco, Shteynberg, Gelfand, & Schminke, 2012). IV. How to Manage Individuals Ethics Training In order to manage and resist individuals from conducting unethical behavior, they must be provided with the ethical training, which would deal with understanding the ethical judgment philosophies. Wherein, the employees are trained to understand the motives, standards and values of the business by maintaining the ethics of the individuals and the business. The training is done to meet the expectations and the rules of the business. The personal interests are to be kept aside and the moral obligations of the business should be the main concern. The training is given to make the people understand the right way to think, perceive and feel in relation to any problem. The culture practiced in the workplace must be ethical to help the people to make ethical decisions based on the guidelines of the business. The key values inherent under ethical training are to make the people understand the importance of the stakeholders and develop their cognitive thinking (Knouse & Giacalone, 1997). Strict Consequences The management must be strict in their programs and any unethical behavior observed should be punished and strictly handled. The individuals must be given ethical training and they realize the importance of ethics. Any wrong actions, decisions and values should be immediately handled and taken care of (Omolewu, 2008). Micromanagement At the time of hiring the management must be careful and test the perception and the values of the individual to avoid unethical behavior. The right and the wrong of every individual must be observed minutely and addressed at the time of any conflict. V. Consequences of Unethical Behavior Unethical behavior of any individuals causes huge damages to the perception, knowledge and trust of the people. The unethical behavior of the individual might lead to the loss of the investors which might harm the sentiments of the people. The people get hurt and burst into anger due the loss faced of the unethical behavior of the management. The moral dealings, the brand name of the company and the individual are despised because of the mistrust. The rules and regulations, the guidelines, promise of the company along with the individual are broken due to the behavior of the people. The unethical behavior might lead to the loss of respect, loyal customers and the contracts made with others. The image of the business is hampered due to the wrong decision made consciously. The scenarios when individuals cause loss and cheat the investors to get personal benefits can cause legal troubles as was evident in the case of Enron and Bernie Madoff among others. These instances lead to the drop in the share prices and increase the unwillingness of the investors to invest. The integrity, credibility and the image of the company and the individuals are hampered to greater extent (Neighborhood, 2013). VI. Conclusion From the study, it can be concluded that ethical behavior is a key facet of every business. The adherence to ethics values helps a company and the individuals to achieve their goal with complete integrity. The unethical behavior hampers the business and the related stakeholders. The society faces the turmoil of the unethical behavior as people tend to lose their trust, honesty and moral values after such incidence. The implication of the unethical behavior is huge and to overcome it ethics training is an important aspect. The reasons for such behavior are several but the moral philosophies might help people to overcome such behavior and follow ethics. References BBC. (2013). Ethics: A general introduction. Retrieved from http://www.bbc.co.uk/ethics/introduction/intro_1.shtml Barblett, L., Hydon, C. & Kennedy, A. (2008). The Code of Ethics: A guide for everyday practice. Research in Practice Series, 15(1), 2-6. Business & Legal Resources. (2013). Common Reasons for Unethical Behaviour. Retrieved from http://hr.blr.com/HR-news/HR-Administration/Workplace-Ethics/Common-Reasons-for-Unethical-Behavior Common Wealth of Learning. (n.d.). Ethical and Cultural Issues in Counselling. Counselling for Caregivers, 1-50. Cojuharenco, I., Shteynberg, G., Gelfand, M., & Schminke, M. (2012). Self-Construal And Unethical Behaviour. Journal of Business Ethics, 109(4), 447-461. Descartes, R. (n.d.). Bernie Madoff’s Ponzi scheme: Reliable Returns from a Trustworthy Financial Adviser. Case Study, 435-453. Department of Financial Institutions. (n.d.). The State Of Washington. Statement of Charges, 1-6. Fraedrich, J. P. (1992). Signs and Signals of Unethical Behaviour. Business Forum, 17(2), 13. Knouse, S.B. & Giacalone, R.A. (1997). The Six Components of Successful Ethics Training. Ethics Training, 10-13. Neighborhood. (2013). When a Company Breaks the Rules: the Reality and Consequences of Unethical Business Practices. Retrieved from http://www.cfcbe.com/when-a-company-break-the-rules-the-reality-and-consequences-of-unethical-business-practices/ Omolewu, G. (2008). Strategies for Improving Ethical Behaviours in Organizations. Forum on Public Policy, 1-10. O'Fallon, M., J., & Butterfield, K. D. (2012). The Influence of Unethical Peer Behaviour On Observers 'Unethical Behaviour: A Social Cognitive Perspective. Journal of Business Ethics, 109(2), 117-131. Singer, P. (1999). Practical Ethics. United Kingdom: Cambridge University Press. Treasury Board of Canada Secretariat. (2005). What is ethics? Retrieved from http://www.tbs-sct.gc.ca/gui/eth01-eng.asp Tang, T. L., & Chen, Y. (2008). Intelligence Vs. Wisdom: The Love Of Money, Machiavellianism, And Unethical Behaviour Across College Major And Gender. Journal of Business Ethics, 82(1), 1-26 Tang, T. L., & Liu, H. (2012). Love of money and unethical behavior intention: Does an authentic supervisor's and character (ASPIRE) make a difference? Journal of Business Ethics, 107(3), 295-312. Trevino, L. K., & Ball, G. A. (1992). The social implications of punishing unethical behavior: Observers' cognitive and affective reactions. Journal of Management, 18(4), 751. Zarrabi, S. & Lundberg, L. (n.d.). The Madoff Fraud. Financial Risk, 1-8. Read More