The Three Elements of Ethics
Strong ethical principles have become integral part of every organisational strategy. The strategy makers while forming both main business strategies and alternative business strategies have to stick honesty, fairness and integrity. The assignment presents a story of an unethical employee named Ms Baridis who leaked out strategic information about Morgan Stanley Bank to Mr Streich in return of money. The case study shows that lack of ethics can cause serious problem to the organisations due to access to their information by unauthorised persons like Streich. Ms Baridis is an example of an unethical employee holding the position of compliance officer. The story also gives a record of her past unethical actions when she helped Mr Sher in return of money while working with Smith Barney. The study also shows that unethical practices not only harm the organisation but also the employees involved. Mr Baridis was fined and jailed for her act besides losing her job. The case study presents situations when people are faced with ethical dilemmas whether to accept money or not accept it and remain strictly ethical. It can be used as a lesson which shows that the management of the organisations must enforce ethics and curb ethical issues among its employees.
Honesty
The three elements of ethics are informed honesty, fairness and integrity. Honesty and other elements are ethics are defined as objective by certain theory and objective by others. Metaphysics theory of ethics and honesty states that value and morality are objective. The theory further tells that ethics like integrity and honesty have important role in connecting people to their after lives.
Ms Baridis created the ethical issue of honesty by sharing the confidential business data with Mr Streich. She instead of being honest to her employer, Morgan Stanley helped the outsider in an unethical way. Baridis shared confidential trading and merger information of Morgan Stanley with Mr Streich in return of money. Ms Baridis breached the elements of ethics with her dishonest actions. The multinational companies like Stanley Morgan are increasingly opting for cloud computing to share a large amount of business data at a low cost. The technology also places tremendous pressure on these companies to have ethical personnel on board to control the sharing and flow of information. The illegal sharing of information for top personal gain creates legal complications besides doing potential harm to the companies (Dove et al. 2015). The technology must meet ethical issues like it should be able to authenticate the identity of the third party with which it is sharing the data. There are illegal identities and association which gain unauthorised entry into the clouds of companies and extract data by giving proxy and fake codes (World Economic Forum 2017). Ms Baridis should not have shared the information with Mr Streich and Mr Sher. She violated ethics and laws and had to face legal consequences due to her immoral acts.
The Ethical Dilemma Faced by Baridis
The ethical dilemma faced by Baridis was whether she should divulge with the confidential financial information or not. She was faced with the dilemma and chose to be dishonest. The ethical issues faced by the companies today pertain to all business processes including finance, marketing, human resource management and sharing of information. Modern technology like cloud computing enable companies build a globally spread computer infrastructure to integrate and control their operations.
Fairness:
Fairness can be defined as the state of being free from being partiality and biasness. British theorists like Thomas Hobbes in their theory state that human actions are decided by desires to meet self needs. The Fairness Model states that individuals judge fairness by comparing inputs and outputs.
Baridis faced the issue of fairness of being either fair to the company or to Mr Streich, who was an outsider. The next ethical issue pertaining to fairness was when the bank sacked Ms Baridis owing to her unfair act.
The ethical dilemma Baridis faced was pertaining to sharing the information with Streich and Mr Sher. She should have been fair to her position of a compliance officer and not shared the information with these two persons. It was highly unethical and dishonest.
Integrity:
Integrity can be defined as the state of having strong moral principles and moral values. The integrity theory or the psychological egoism theory states that selfish needs are capable of motivating individuals to perform.
The integrity issue faced by Baridis was to maintain integrity and hold on to her principles and not have anything to do with Streich or Sher (Beldad and Kusumadewi 2015). Her position of a compliance officer required her to have strong integrity and moral values.
The dilemma in this case was whether she should have held on to her principles or accepted money from those two characters. She sacrificed her integrity and accepted money from both the men for providing them with confidential information. It must be noted that Baridis has shared information illegally even when she was with Barney. Hence, she lacked integrity and professional values of a compliance officer (Acquisti, Brandimarte and Loewenstein 2015). She committed unfair transaction with Mr Sher while she was employed with Smith Barney. The compliance officers and other employees holding strategic positions should not breach trust and morality. Such actions harms the goodwill of the organisations employing them
The multinational companies like Stanley Morgan are increasingly opting for cloud computing to share a large amount of business data at a low cost. The technology also places tremendous pressure on these companies to have ethical personnel on board to control the sharing and flow of information. The illegal sharing of information for personal gain creates legal complications besides doing potential harm to the companies (Dove et al. 2015). The technology must meet ethical issues like it should be able to authenticate the identity of the third party with which it is sharing the data. There are illegal identities and association which gain unauthorised entry into the clouds of companies and extract data by giving proxy and fake codes (World Economic Forum 2017). Ms Baridis should not have shared the information with Mr Streich and Mr Sher. She violated ethics and laws and had to face legal consequences due to her immoral acts.
The Importance of Institutionalizing Business Ethics
The organisations are often under ethical dilemmas to choose between moral and immoral ways. They are often faced with the dilemmas of following ethical ways of business and following unethical methods to deal with stiff market competition. The management often pressurise the employees to use unethical methods to take advantage of market situations. Some employees may also opt for unethical ways like presenting exaggerated performance report to avail promotions. There are employees who pass on important business data to unauthorised bodies in return of money. The business organisations must deal with this ethical dilemma and adhere to ethical methods of conducting business. It helps them to create trust and goodwill among the customers. The customers prefer consuming products of the manufacturers which upholds trust. Thus, ethical operations enable companies to retain customers and earn persistent profit. This helps the companies to attain competitive advantage and growth in the long run (Pearson 2013). Baridis was faced with the ethical dilemma of sharing and not sharing confidential business data with Mr Streich. She was dishonest and chose to share information in return of money. She should have followed the utilitarian theory of ethical dilemmas which encourages an individual behave impartially to benefit the stakeholders. The Right Based theory says that every individual serves others due to certain rights enjoyed by the party served. Ms Baridis should have followed the codes of ethics while serving the company because the company provided her with salary and other benefits. Thus, Baridis’s case related two theories and both of the theories directed her to act ethically.
The three elements of ethics, ethical issues and ethical dilemmas force the management and the employee to take tough decisions. The companies should form strategies safeguarding ethics and market their goods in ethical manner. The employees of the companies holding strategic positions should share the data ethically. They should not resort to unethical means of sharing data for their personal gains and to earn excess money. Breach of business ethics creates legal issues both for the organisations and the responsible personnel. The company suffer business losses and goodwill depreciation due to data theft (Richards and King 2014). For example, Morgan Stanley suffered loss due to loss of confidential data due to Ms Baridis’s immoral actions.
The management of corporate organisations today define the standards of ethical business to be followed by their employees. Institutionalisation in business refers to the laws, customs and expected programmes that require organisations and their employees to be ethical. This institutionalisation has to a great extent helped in minimising ethical issues in the following ways:
Habits of Strong Ethical Leaders in Building High Ethical Culture in Corporations
The organisational management in order to minimise the ethical issues in the organisation must recruit and hire ethical employees. They should place people who have strong moral and ethical values in the strategic positions to ensure that the important data is not passed to outsiders illegally. The employees should follow the established customs and ethics and hold the reputation of the company above their mean interests. The ethical managers will keep a strong control over their subordinates and prevent them from committing unethical and unfair tasks. These morally strong managers can also take prompt and strong actions against their unethical subordinates. Thus by recruiting ethically strong employees especially in the higher positions, the company can minimise the ethical issues in them (Williams and Horodnic 2015). The companies can monitor their present employees closely to ensure that they keep away from unethical practices. Boyd et al.(2014) state that the managers should share information like strategic flowcharts only with authorised people over the formal communication network like official mailid. This strict vigilance can help in minimising ethical issues in the organisations.
The figure below shows the institutional structure of ethics which includes individuals, enterprises, laws, values and religion. The figure shows that the society and the country have a profound effect on the ethical issues in the organisations. These ensure that the employees work in ethical and moral ways to cater to the needs of the society. The legal actions and penalty are examples of the actions taken by law to punish an ethical person. These two examples justify that institutionalisation of ethics and integration of law, company management and society help in checking ethical issues.
The management of the company should arrange organisational ethical programme to counter ethical issues in the company. They can educate the staffs even, the lowest ones in the rank about following ethics. Such programmes can help the employees to stick tp ethics when they are faced with ethical dilemmas. The programme should be aligned with the core practices of the company and the ethics should be mandatory for all employees (Warren, Gaspar and Laufer 2014).
The management must educate the staff about the need to act in an ethical manner and the benefits associated with it. They must arrange for training sessions like consultants who would make the staffs of all categories aware of the risks associated with unethical practices in future, like Ms Baridis lost her job and was jailed. This will make the employees work in more responsible manner towards the organisations and not commit ethical crimes like passing out data to unauthorised people(like Ms Baridis did to Mr Steich). This education of staffs ethically will help the company curb unethical practices in the company (labourguide.co.za 2017).
The apex management should enforce codes of ethical practices which should abide people of all ranks. The apex management should also pledge to take strong action against a person if proved ethically faltering irrespective of position. This will create an organisational culture which is enforced by the apex management and weaves the various hierarchies into single fabric of ethics (Huhtala et al. 2015).
The top management control over the ethics and moral aspects of the organisations help them to deal with tough situations. The top managers use their managerial competences to ensure that their subordinates act in ethical ways and abstain from all unethical practices. The top executives like the CEOs and the CFOs play active part in framing the ethical codes of conduct and mandate all the employees to follow them. The management board sets the rules of sharing or using information within the organisation and outside it (Bazerman and Sezer 2016). They guide employees directly or indirectly (by referring to the departmental heads concerned) to take decisions which are of ethical and moral significance. This control and guidance of the top management help the employees to deal with tough ethical situations. The top executives illustrate high degrees of personal integrity and social responsible while making strategic decisions. This also guides the subordinate employees to act in ethical ways and tackle challenges like target achievement (Hartman et al. 2014).
The companies especially the global companies today must emphasise on total quality management, strategic planning and diversity management to tackle ethical issues (Polygerinos et al 2015). They must meet the requirements of the customers in ethical ways. For example, Stanley Morgan being a financial institution works under the laws and policies framed by the apex bodies like the Federal Bank in the United States. They also have to abide by the consumer rights during strategic planning and cater to their customers in ethical fashion. Thus, the management of the company ensures that the employees provide the customers with ideal financial solutions ethically to serve their purpose (Morgan Stanley 2017). The employees must first form strategies based on ethics to deal with orders. The managers should ensure that their subordinates act ethically and not indulge in unethical practices like overstating their performances to gain incentives or coercing disinterested customers with products (Morganstanley.com 2017). This way the organisational management can keep ethical issues in organisations in check.
Wang, Cheney and Roper (2016) in their work state that the ethical leaders have certain habits which help them to establish ethical culture in their organisations.
Schaubroeck, Lam and Peng (2016) provide evidence in their work and show that strong ethical leaders have strong personal characters. They are capable of taking decisions to capitalise on the modern business developments ethically. They do not resort to unethical means and ensure that their subordinates follow their suit. The strong leaders are determined to hold up ethics during the fulfilment of their duties. They make their subordinates realise the importance of strong personal character to keep ethical dilemmas at bay. The strong leaders always take care of the customers’ needs and adhere to ethics to maintain customer expectation (Congress 2017).
The strong ethical leaders are very strict about what is right and what is wrong. They are passionate about doing things in ethical and right ways. They have the passion to achieve perfection in their work and encourage others to do so. They deal with ethical dilemmas by sticking to morality and ethics. The strong leaders do not consider any alternative to ethics, morality and accuracy. They are ready to take risks to stick to their passion to do things right in ethical and moral ways. The ethical leaders cannot let the customer expectation go down which is why they are strict about accuracy. They consider customer satisfaction as the ultimate reward for their passion and ethical strength (Ferrell and Fraedrich 2015).
The ethical leaders are proactive and take interest in every operation in their organisations. They are keen on ensuring that their staffs are motivated to work in ethical manners and not forced to do so (Clifford 2017). They do not restrict themselves to decision making and given instructions alone. The go down to the base of their organisational hierarchy to ensure that the decisions are executed to the smallest detail in ethical ways. They are proactive about the decision execution as well and adherence to ethics (Crossan, Mazutis and Seijts 2013).
Ethically strong leaders pay a great propriety to stakeholders’ interest which encourages them to act in ethical ways. The leaders of this category never compromise on ethics and morality and uphold stakeholder trust. They consider stakeholders as the most important people to achieve their business goals. They maintain ethics while conducting business because they are particular about upholding stakeholders’ trust. Lee et al.(2014) in their work state that by following ethical ways of work, the ethical leaders ensure that their organisations respond better to satisfy stakeholders’ demands.
The ethical leaders are the role models for the organisational values and ethics. They form a strong organisational culture based on values, ethics and equality. Ruiz-Palomino, P. and Martínez-Cañas (2014) in their work state that there exists relationship between organisational culture, ethical intent of the employees and organisational citizenship. Strong and ethical leaders do not coerce or force the subordinates to follow ethical methods while making decisions. They instead make them understand the relationship between the three and act as role models. They ensure that their employees understand the value of an ethics based organisational culture which helps the firm to act as a responsible social citizen. The strong leaders stress on formation of healthy organisational cultures which stands on morally and ethically strong workforces. They frame the organisational culture to ensure job satisfaction of all the employees and their career growth following the path of ethics and morality (Yang 2014).
The ethical leaders participate actively in decision making process of the organisations. They ensure that the decisions are aligned both to the organisational needs and ethics (Johnson 2016). They make decisions are transparent to all which ensures that every staff understands them and the need to follow them confirming to ethics. They are very much particular about performance of their organisations and ethics. They are passionate about accuracy and make it clear to their followers or subordinates. They communicate every detail of their business strategy in order to ensure accurate execution. The leaders of this type are open to feedbacks and suggestions from the subordinates (Laurans et al. 2013).
It can be stated that ethical leaders emphasises on communicating with their followers and maintaining a relationship with time based on transparency. Ethical leaders lead their organisations ethically and pay holistic importance to the development of the organisations and not only to profit earning. They consider stakeholders’ satisfaction very important but do not compromise on employee welfare. They are proactive in decision making and decision execution. They have every detail about their employees and their actions. They maintain a holistic view over their organisations to ensure that both performance and ethics are upheld (Malenko 2013).
Conclusion:
It can be pointed out from the above discussion that ethics form an integral part of the organisational operations. The employees must act in ethical and moral ways while carrying out their professional responsibilities. I feel that ethics have evolved from theoretical concepts stated and studied by various authors. Today ethics form the very crux of the entire decision making process. The need to act honestly, fairly and with integrity cannot be understated today any more. The organisations, their management and the employees need to unite to work in ethical ways. The management have to ensure that the ethical issues in the organisation can be minimised by obtaining staff cooperation and providing training to staff in the line of ethics. The strong ethical leaders in the organisations I feel help in minimising ethical issues and curb unethical practices to a great extent. They play integral role of leading their followers ethically towards goals by setting examples through actions. These leaders I think can curb unethical practices of employees (like Ms Baridis) and ensure value maximisations of both the company and stakeholders.
References:
(full-time) 2017. Facebook: number of employees 2016 | Statista. [online] Statista. Available at: https://www.statista.com/statistics/273563/number-of-facebook-employees/ [Accessed 6 Jun. 2017].
Acquisti, A., Brandimarte, L. and Loewenstein, G., 2015. Privacy and human behavior in the age of information. Science, 347(6221), pp.509-514.
Bazerman, M.H. and Sezer, O., 2016. Bounded awareness: Implications for ethical decision making. Organizational Behavior and Human Decision Processes, 136, pp.95-105.
Beldad, A. and Kusumadewi, M.C., 2015. Here’s my location, for your information: The impact of trust, benefits, and social influence on location sharing application use among Indonesian university students. Computers in human behavior, 49, pp.102-110.
Boyd, D.A.N.A.H., Levy, K. and Marwick, A., 2014. The networked nature of algorithmic discrimination. Data and discrimination: Collected essays.
Business Insider. 2017. The brilliant management strategies of Howard Schultz, who just announced a pay raise for US employees of his $82 billion Starbucks empire. [online] Available at: https://www.businessinsider.in/The-brilliant-management-strategies-of-Howard-Schultz-who-just-announced-a-pay-raise-for-US-employees-of-his-82-billion-Starbucks-empire/articleshow/53164167.cms [Accessed 6 Jun. 2017].
Clifford, C. 2017. Why Facebook CEO Mark Zuckerberg’s honest and vulnerable apology makes him a strong leader. [online] CNBC. Available at: https://www.cnbc.com/2017/02/17/why-facebook-ceo-mark-zuckerbergs-vulnerable-apology-makes-him-a-strong-leader.html [Accessed 6 Jun. 2017].
Congress, E.P., 2017. What social workers should know about ethics: Understanding and resolving practice dilemmas. Social Work Ethics, p.1909.
Crossan, M., Mazutis, D. and Seijts, G., 2013. In search of virtue: The role of virtues, values and character strengths in ethical decision making. Journal of Business Ethics, 113(4), pp.567-581.
Dove, E.S., Joly, Y., Tassé, A.M., Burton, P., Chisholm, R., Fortier, I., Goodwin, P., Harris, J., Hveem, K., Kaye, J. and Kent, A., 2015. Genomic cloud computing: legal and ethical points to consider. European Journal of Human Genetics, 23(10), pp.1271-1278.
Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson Education.
Fortune.com. 2017 Facebook releases diversity stats. [online] Available at: https://fortune.com/2015/06/25/facebook-diversity-numbers/ [Accessed 6 Jun. 2017].
Hartman, L.P., DesJardins, J.R., MacDonald, C. and Hartman, L.P., 2014. Business ethics: Decision making for personal integrity and social responsibility. New York: McGraw-Hill.
Huhtala, M., Tolvanen, A., Mauno, S., & Feldt, T. (2015). The associations between ethical organizational culture, burnout, and engagement: A multilevel study. Journal of Business and Psychology, 30(2), 399-414.
Johnson, B.J., 2016. Facebook’s Free Speech Balancing Act: Corporate Social Responsibility and Norms of Online Discourse. U. Balt. J. Media L. & Ethics, 5, p.19.
Kacmar, K.M., Andrews, M.C., Harris, K.J. and Tepper, B.J., 2013. Ethical leadership and subordinate outcomes: The mediating role of organizational politics and the moderating role of political skill. Journal of Business Ethics, 115(1), pp.33-44.
labourguide.co.za. 2017. The South African Labour Guide. [online] Available at: https://www.labourguide.co.za/discipline-dismissal/267-dishonesty-is-a-thorny-issue-to-tackle [Accessed 6 Jun. 2017].
Laurans, Y., Rankovic, A., Billé, R., Pirard, R. and Mermet, L., 2013. Use of ecosystem services economic valuation for decision making: questioning a literature blindspot. Journal of environmental management, 119, pp.208-219.
Lee, Y.K., Choi, J., Moon, B.Y. and Babin, B.J., 2014. Codes of ethics, corporate philanthropy, and employee responses. International Journal of Hospitality Management, 39, pp.97-106.
Malenko, N., 2013. Communication and decision-making in corporate boards. The Review of Financial Studies, 27(5), pp.1486-1532.
Morgan Stanley. 2017. Morgan Stanley. [online] Available at: https://www.morganstanley.com/ [Accessed 6 Jun. 2017].
Morganstanley.com. 2017. Global Quality Fund. [online] Available at: https://www.morganstanley.com/im/en-gb/intermediary-investor/funds-and-performance/morgan-stanley-investment-funds/equity/global-quality.html [Accessed 6 Jun. 2017].
Pearson, S., 2013. Privacy, security and trust in cloud computing. In Privacy and Security for Cloud Computing (pp. 3-42). Springer London.
Polygerinos, P., Wang, Z., Galloway, K.C., Wood, R.J. and Walsh, C.J., 2015. Soft robotic glove for combined assistance and at-home rehabilitation. Robotics and Autonomous Systems, 73, pp.135-143.
Richards, N.M. and King, J.H., 2014. Big data ethics.
Ruiz-Palomino, P. and Martínez-Cañas, R., 2014. Ethical culture, ethical intent, and organizational citizenship behavior: The moderating and mediating role of person–organization fit. Journal of Business Ethics, 120(1), pp.95-108.
Schaubroeck, J.M., Lam, S.S. and Peng, A.C., 2016. Can peers’ ethical and transformational leadership improve coworkers’ service quality? A latent growth analysis. Organizational Behavior and Human Decision Processes, 133, pp.45-58.
Wang, Y., Cheney, G. and Roper, J., 2016. Virtue Ethics and the Practice–Institution Schema: An Ethical Case of Excellent Business Practices. Journal of Business Ethics, 138(1), pp.67-77.
Warren, D.E., Gaspar, J.P. and Laufer, W.S., 2014. Is formal ethics training merely cosmetic? A study of ethics training and ethical organizational culture. Business Ethics Quarterly, 24(01), pp.85-117.
Wieland, J., 2000. An institutional approach to business ethics. In Contemporary Economic Ethics and Business Ethics (pp. 245-255). Springer Berlin Heidelberg.
Williams, C.C. and Horodnic, I.A., 2015. Evaluating the prevalence of the undeclared economy in Central and Eastern Europe: an institutional asymmetry perspective. European Journal of Industrial Relations, 21(4), pp.389-406.
World Economic Forum. 2017. Top 9 ethical issues in artificial intelligence. [online] Available at: https://www.weforum.org/agenda/2016/10/top-10-ethical-issues-in-artificial-intelligence/ [Accessed 6 Jun. 2017].
Yang, C., 2014. Does ethical leadership lead to happy workers? A study on the impact of ethical leadership, subjective well-being, and life happiness in the Chinese culture. Journal of Business Ethics, 123(3), pp.513-525.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
