Managing Ethical Behavior in Business

Last Updated: 05 Jul 2021
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The term ethics is derived from the Latin word ethic which refers to moral philosophy. It is used to refer to the study of customs and values of an individual or a group. It encompasses the analysis and use of concepts such as good and evil and wrong, and responsibility. Ethical norms are the moral standards that help us judge good from bad or right from wrong and living morally. This involves articulating the good habits or character that we should have, the consequences of our behavior on us and others and the duties that we are supposed to follow, (Melloan, 1988).

Business ethics is a form applied ethics that evaluates ethical guidelines and moral issues that can come up in a business environment. The marketplaces during the 21st century have become focused and conscience. Consequently, the need for more ethical business behavior, actions and processes is increasing. As a result, pressure is applied on the organizations to improve their business ethics through laws and refined public initiatives.

The variety and quantity of ethical issues in business shows the extent to which the business is considered to be in line with non-economic values. Over the years, the concept of business ethics accelerated sharply between the 1980s and 1990s within major organizations. For instance, most of the major organizational websites today, emphasize on the determination to the promotion of non-economic and social values under various titles like social responsibility and code of ethics. Corporations have even at times redefined their mission statements in relation to ethical considerations. BP for example uses the phrase beyond petroleum.

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It is however difficult to differentiate between ethical and unethical behavior by senior executives. It is even harder to tell which company complies better than another in ethical standards or which ones are not ethical. Business executives may engage in unethical behavior for a variety of reasons, most of all to increase profits. Some people believe a company can survive only if it places profits above all other priorities.

For others, decline of company reputation or loss of license that can deny as company any should be of utmost priority. However most people believe that a company’s moral responsibility to all its stockholders including customers, employees, shareholders, or even the society determines its moral standing. (Kurowski, 1998)

A company can take the following steps to help its senior Executives uphold ethical standards.

  • Identify the values that produce highly ethical senior executives.
  • Identify the most crucial ethical values that are priorities within the company
  • Design a code of ethics for the business
  • Identify the most crucial ethical values that are priorities within the company
  • Ensure that there are no double standards and that senior executives are the role models by following the code conduct
  • Review constantly, the laws and regulations governing the business
    The US senior Executives are Ethical

I strongly feel that the senior officers in US are ethical. Carrying out business in an ethical way is important to their success in the long run. Their operations are founded on integrity, hard work, and honesty for competitive superiority. In the US organizations, there is always a Business Code of Conduct and Ethics that gives a guideline and summary of the standards that must be followed in every course of action during work. The standards do not cover all the aspects of business procedures and practices that require ethical decisions but they set a philosophy that represents the Company practices and policies.

The following paragraphs clearly show that senior business executives in the US are ethical. Different points have been stated and explanations given supporting the opinion statement.

Compliance with Laws, Rules and Regulations

The business executives are very loyal to carrying out all business affairs with integrity and honesty. They observe the rules, regulations and other valid laws. Every senior executive has the responsibility to safeguard this commitment of obedience. No senior executive is at liberty to commit any prohibited act or even incite others to do so for whatever reason. This is what mostly upholds the integrity of any company.

Trading on Inside Information

The business executives solely use company information for business purposes. Use of Non- public information for personal or family gain is unethical, a fact that the executives keenly follow. Such information is used for business purposes and proceedings and it would be unethical to personify it under any circumstances.

Protection of Confidential, Proprietary Information

Any private proprietary information produce and collect in a business is a valuable organizational asset. The executives as a matter of duty safeguard this information. They are ethical because they treat t with confidence unless the law allows for any disclosure. Information like patents, copyrights, new product plans, and employee medical information, among others is protected by the executives. They keep of any unlawful employment or distribution of information that would infringe company guiding principles.

Variance of interest

It is the responsibility of Senior Executives to operate in the most excellent way for the best interest of the organization. Bearing this in mind, they conduct their personal business and financial affairs as a separate entity from the operations of the company. In so doing, they avoid conflicts, interference and confusion between personal and corporate issues. For instance, it would be unlawful to work for a competitor in any organization while you are at the sometime an employee of the company.

Guarding and using company assets properly

All Senior Executives are answerable over the loss, misuse or theft of company property. Such would result to direct reduction in the profitability of a company. The executives, knowing this appreciate the fact that it can also not be tolerated by the company. The US executives only use company vehicles, equipment and supplies for business in line with the set rules.

Company Prospect

Any time an opportunity for business arises, the executive on behalf of the company is supposed to close the deal. It would be unethical for the executives to take up any opportunities that arise for their personal gain. The US executive does engage in this kind of conduct as it would be competing with the company, (Enderle, 2001).


When conducting any business and dealings with employees, the public, suppliers, competitors, and customers, it is expected that the executives act in good faith, honesty, and fairness and according to the business ethics. Manipulation, abuse of privileged information, concealment, or misrepresentation of material facts is not allowed for any US senior executive. Kickbacks, bribes, or payments of any form directly or indirectly are not allowed for any favors. Such is highly prohibited among US executives and it brings a sense of order to the companies. It is unethical to receive any reward as a senior executive when you are in the line of duty so that you can give favors to any stakeholder.

Quality of Public expose`

It is the responsibility of the company to give information effectively to investors and any other stakeholders so that they are fully aware about the company’s financial position and operating results. Executives who are ethical submit documents and reports that are understandable, timely, accurate, full, and fair. An audit committee usually follows up, monitor and verify such information. This is all in a bid to ensure that the executives are ethical.

Compliance with the code of ethics and reporting any irregularities and cases of unethical behavior.

Executives are expected to be ethical and comply with the prescribed code of conduct. It is usually strictly put into effect and defying of the prescribed code leads to disciplinary action like removal from office or even dismissal. Illegal behavior at all times from senior executives is reported to the relevant authorities. Any executive with information about a possible or suspected breach of the rules, regulations, laws or code is expected to report to the chief legal officer. The audit committee is normally informed on any auditing matters or internal accounting controls. All employees, directors or officers are encouraged to report any suspects through good faith reports of violations. Any concerns and issues by employees are encouraged through open communication without any fears of reprisal or retaliation. The code of conduct applies equally to all.

Waivers and Adjustments

Any waiver of the code of conduct for the executives if need be can only be given by the board of directors and the company investors are made aware of such an amendment. This ensures that at all times senior executives in the US observe the code of ethics. It also ensures that they are not favored and portray a good example to other employees. If the code of ethics for a company favors senior executives, they are likely to mislead loyal employees or even cause controversy in the company. After all, the senior people in any company should demonstrate the workability of the set standards by following it to the dot. This will even encourage the employees to follow in their shoes and not feel sidelined or discriminated against.


 The US business model and executive compensation supports ethical behavior among senior business executives. Ethical standards can even be stronger if companies observe a code of ethics in every day’s operations. The business ethics modeled for an organization and observed by senior executives can take a company to highs of profitability and prevent company scandals. Being ethical is not a guarantee for business success. However, good ethics together with business competence is surely a winning combination.


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Managing Ethical Behavior in Business. (2018, Aug 31). Retrieved from

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