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Ethical Environment of Business Case Study


Ethical environment of business simply refers to the fundamental principles that businesses should adhere to in the course of their daily operations, in order to successfully achieve their business objectives in an ethical manner.

The ethical environment of a business constitutes of the professional ethics governing the moral behavior of the business in all its functions and operations. Businesses organisations are judged through the manner by which they interact with their consumers and the outside world at large (Raisner, 1997).

In this regard, people would tend to have a certain perspective towards a particular business enterprise, depending on the way the business interacts with its customers and how it associates with other organisations. Every business department would definitely like this perspective to be positive on them, and for that reason, they should conform to the demands of their ethical environments.

However, businesses often face many ethical dilemmas in their day to day activities, and sometimes dealing with such complex situations might prove to be difficult to many business managers. Ethical dilemmas are complex situations where people are faced by a lack of choice between two or more moral imperatives whereby obeying one may result in the transgression of another.

The best way of dealing with ethical dilemmas, is by trying to maintain better moral standards in all business dealings. This report examines the issue of ethical dilemma in business, as it is constituted in the situation facing Kent Graham in ‘A Sticky Situation’ extracted from ‘Ethics and the Conduct of Business’ by Boatright.

Three ethical theories are also discussed in this report with a clear manifestation of how each of them would relate to the situation in the case.

Ethical Dilemma in the Case

As it would be observed from the case, there is a serious ethical dilemma facing Kent Graham, who works as an account manager for Dura-Stick Label Company. On the grounds where the big ethical dilemma comes in, Mr. Kent Graham is contemplating on taking up some unguided move in business, whose outcome may end up breaching the ethical business environment of the entire Label Company.

Despite of him having a good salary and a sparkling compensation plan that befits his job status and experience in business, Kent Graham is still yearning for more money. It is this uncontrolled quest for extra money which drives him to embark on a mission to hunt for a big account, at all possible costs.

Kent’s unguided plans would finally find an opportunity in the unsuspecting thoughts of Jack Olson of Spray-On Inc, who is coerced to give a big order of some kind of multicolor, consumer-type labels to Kent’s Company.

It is apparent from the case that, Spray-On Inc has been Dura-Stick’s esteemed customer for over two decades now, and this long business relationship had actually succeeded in bringing the two firms closer to each other in business-related matters.

For this reason, it would be hard for Jack to have any doubts against the reputed Label Company. Kent Graham must have seen things in this perspective, as he contemplated on his next response to the big deal in front of him.

Even though it was clear that Dura-Stick’s experience of many years only revolved around two-color labels, Kent couldn’t risk losing this once in a lifetime opportunity, and would therefore convince Jack to believe that his company had been producing the needed labels, and that they might be able to handle the latest job his company was offering.

After coming into a conclusive agreement with Jack about the labels deal, Kent left with an assurance to present Jack with the necessary proposal, shortly. Kent was certainly assured of the fact that, Jack would only be willing to work with him if the proposed labels were produced at a facility in his company i.e. Dura-Stick, and nowhere else.

For that reason, Kent went go ahead to influence Marty Klein, the person responsible for costs and prices coordination in his company, in drafting a proposal that constituted of a 20 percent increase on top of their normal rates for labels.

What Jack didn’t know was that, this costly price was inclusive of another firm’s cost that would produce the labels on behalf of Dura-Stick. However, Kent went on to explain that, the extra cost would be worth it, considering the quality of service that Dura-Stick was willing to provide for the deal.

It must have been good news to Kent when finally the business rested on his hands. However, his instant happiness seemed to take another course when Jack eventually told him that, it was only for the fact that the production of the labels would be overseen by Tim Davis that he had granted the business to Dura-Stick.

Tim Davis was the director of Dura-Stick, who settled for nothing less but quality and credibility, and his involvement in the label production exercise would obviously mean a spoiled deal for Kent Graham. The truth of the matter here was that, Kent was planning to have the labels produced in a different company, before being shipped to his own company for final delivery to Jack’s facility (Boatright, 2009).

Kent was faced by a real ethical dilemma here, and would have to base his next move on two crucial options; his own personal interests and the reputation of his company.

Ethical Theories Relevant to the Case

There are numerous ethical theories defined by different principles, which can be used to explain the concept of various ethical grounds. Ethical theories are the significant foundations upon which ethical analysis can be based.

In most cases, these theories are seen as viewpoints from which a perfect guidance on the rightful judgment to a decision could be made. As it would be observed, different ethical theories play a significant role in the decision making process of ethics.

In this context, I will be discussing theories that are relevant to the scenario presented in the above case involving Mr. Kent Graham of Dura-Stick Label Company. The three common theories that can apply in this case are; Divine Command theory, Altruism theory and Consequentialism.

Divine Command Theory

This is the philosophy of religion whose argument is constituted in the fact that morality depends upon God’s will, as it would be observed from various religious platforms (Kurland, 1995). The main is principle behind this theory is that, the foundation of morality is based on the fact that God exists, and that His will and guidance on morality should be observed.

According to this theory, an act would be either morally or wrong solely because God has commanded people to do it or prohibited them from doing it, in a respective manner. In the context provided by this theory, people are able to make the most appropriate judgments and decisions about key decisions.

The ethical principle provided by this theory is relevant in the case in that, it warns against the wrongful act of dishonest which has been manifested in the case. As we can see, there are several cases about Kent telling lies in order to justify his ambitions on the proposed business deal.

For instance, Kent is fast to convince Jack that his company had previously produced multi color labels, which is basically not true. Another example of a dishonest act can be observed in the episode where Kent assures Jack that the ordered labels would be produced in their company’s production facility, while in the real sense they would be produced in a firm in Kansas City.

Judging from the principles of Divine Command theory, there is enough evidence to justify this as an unethical act that should be avoided.

Altruism Theory

This is whereby someone acts for the benefit of another person, rather than for their own good. Based from the principles aligned to this theory, its application in different ethical environments is concerned with motive (Doris, 2002).

This claim can be justified in the sense that, selfless motives would appear to be good or morally right, even if the outcome is bad where as selfish motives would appear to be morally wrong, even if the outcome is good. Altruism theory is relevant in the case involving Kent Graham in that, his selfish motives are guided by altruism more than by anything else.

Even though, Kent is aware of the predicaments surrounding his actions, it is apparently clear that he is doing it for the sake of his wife and two children, who may end up living a disastrous life incase he loses his job at the company. The consequences of this act may be good based on this claim, but this still doesn’t make Kent’s anticipated actions right.


Consequentialism is an ethical theory which observes that an action is morally right if it promotes the best outcomes on any grounds. According to Railton (1984), consequentialists normally care about the end of their intended actions, and nothing else on the way. As it would be observed, the best outcome in this theory is an end in which happiness prevails.

In that case, the situation in the case may be right in that, it would be necessary for the security of his job and also for the well-being of his organisation. Kent may not want to betray the ability of his own company in the production of labels, and for this reason, he would do anything to secure its reputation in business, including traversing the business ethical environment.


Based on the above ethical theories, the situation in the case can be observed from different perspectives. Kent’s intended actions can be judged on the principles provided by each of these theories.

As it would be expected, the ethical environment of business is a key requirement to all businesses, and only those organisations that observe openness in their operations are certain to enjoy the rewards associated with business ethics. Failure to honor the ethical environment of one’s organisation can result to severe consequences to them and also to others, and this could end up tarnishing the name of a business.

The scenario presented in the case involving Mr. Kent Graham appears to be contrary to the good business practices that are certain to bring forth good relationships between an organisation and its customers. Kent’s anticipated plans are against the principles of good practices in a business environment, which include; honest, trust and open mindedness.

Customer preferences and choices for business organizations are always based on the quality of services and products that they get from those organisations. The understanding and practice of this factual statement must have translated into the success of Dura-Stick in the competitive market of labels.

This well deserved reputation however, is likely to go down into flames, if Kent decides to proceed with the selfish plan of benefiting himself unethically, using the company’s name.


Boatright, J. (2009). Ethics and the conduct of business. New Jersey: Pearson Education International.

Doris, J. (2002). Lack of character: Personality and moral behavior. New York: Cambridge University Press.

Kurland, N. (1995). Ethical Intentions and the Theories of Reasoned Action and Planned Behavior. Journal of Applied Social Psychology, 25(4), 297-313.

Railton, P. (1984). Alienation, consequentialism, and the demands of morality. Philosophy and Public Affairs, 13(2), 134-171.

Raisner, J. (1997). Using the” Ethical Environment” Paradigm to Teach Business Ethics: The Case of the Maquiladoras. Journal of Business Ethics, 16(12), 133-134.

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