Understanding Ethics in an Organization

Before we begin to understand the importance of ethics in an organization, we should have an understanding of what an organization is. As defined by Daft and Marcic (2015) the formal definition of an organization is “a social entity that is goal directed and deliberately structured” (p. 9). Organizations are designed to meet a certain objective. In addition, organizations are also deliberately structured which means that tasks are divided and the responsibility of performance lies on organizational members. Small organizations are more numerous than larger corporations.  However, all organizations are important to society. Whether for profit or not for profit, the goals can be reached by meeting social satisfaction or meeting a community’s needs.

In the daily operations of an organization, individuals (organizational members) are left with many decisions that can be beneficial or harmful to their workers and society. For this reason, it is extremely important that organizations familiarize themselves with a code of conduct or principles and values that govern the behaviors of a person or group in regards to what is right or wrong. Does this mean that individuals will always do the right thing and that corporate corruption doesn’t exist?  ABSULUTELY NOT!  Just think about the mortgage mess in the United States and this is only one example of how unethical behavior affects individuals’ lives. It might have not started as such, however the outcomes affected millions of Americans. However, there are measures that an organization can take to ensure that they stay on ethical footing.  Daft and Marcic (2015) explain that some primary forms of making sure that companies stay on track are: developing a code of ethics, ethical structures, and methods to safeguard whistle-blowers.

So then, what is a code of ethics? Daft and Marcic (2015) sum it up as a formal statement of what the company stands for. Generally, there are two forms of Codes of Ethics: Principle-based and Policy-based. Principle-based affects corporate culture. These principles outline the core values and responsibilities of the organization, the quality of products or services, and treatment of employees. Policy-based statements outline what protocol will be used in specific ethical situations.  An organization can urge and support ethical behavior by undertaking a number of positions, programs and systems (also known as Ethical Structures). Such structures might include an ethics committee who can oversee all ethics and legal compliance. Furthermore, protecting employees who disclose any misconduct by an organization and encouraging and supporting whistle-blowing as advantageous is the only way this can be effective.  Holding organizations accountable relies heavily on individuals willing to speak up when there is conduct that is illegal or unethical. Unfortunately, some individuals and the corporations that they work for can slide into unethical conduct.

The following are just some examples of corporate scandals: 


http://www.youtube.com/watch?v=RfEwp8Kl2GY 

References

Daft, R., & Marcic, D. (2015). Understanding management (9e. ed.). Cengage Learning.