Ethical Issues Related to the Internal Corruption Term Paper

Ethical problems affect all aspects of business and frequently demand urgent solutions under conditions of high risks and uncertainty. As modern corporations develop, human factors as well as value of labor resources become more significant, making ethical issues an inseparable part of management (Parboteeah & Cullen, 2019). Such problems include corruption and fraud schemes conducted by employees raising the ethical dilemma of justice and mercy or even justice and profitability. It may be considered to be impossible to completely negate corruption under circumstances, which require large amount of human resources to be involved in the workflow of the corporation.

Ethical issues related to corruption are particularly relevant for chain stores and service providers as they represent organizationally complex decentralized systems. It may be not possible to supervise properly massive hierarchic organizations. Such conditions are favorable for an increase in corruption, leading to various fraud schemes and even direct stealing. The problem has a list of ethical elements behind it.

First of all, it is crucial to understand if corruption is caused by some internal management flaws, low salary levels, or unacceptable working conditions. Bribery and fraud may also not have dependence on the above-mentioned issues as any economy has a certain degree of corruption, which is not possible to be reduced to zero. Second, it is significant to determine if, for example, replacing a corrupt employee would not lead to more financial losses than the corruption itself. Finally, various cultural aspects should be taken into account, as for certain nations’ actions, including bribery, may be considered a part of traditional norms.

There are numerous cases regarding to the topic of corruption and related ethical issues. One of the above-mentioned cases refers to a company, which established a network of petrol stations. As the company developed, the owner incorporated diverse risks related to decentralized management system. Such risks included high probability of frauds, corruption, and theft. Therefore, the company hired security guards for each object, who were obliged to prevent suspicious activity. After several years, the extension of the network made the upper management overthink their approach to corruption and remove security guards.

According to the calculations, the security costs exceeded the potential decrease in corruption the system was supposed to provide. Unexpectedly, the decision to abolish security not only led to the decrease of salary costs but also caused rapid increase in profit all over the network. It became clear that the security was the most corrupt subsystem, which did not serve its only purpose. Moreover, the system provoked corruption and represented the main source of fraud and theft.

The case illustrates significant nuances regarding the issue of business and management ethics, and the ethical problems related to corruption in particular. Hong Kong’s government conducted a relatively effective campaign against official’s corruption by increasing the legislative penalties and establishing Independent Commission Against Corruption (Ian & Ting, 2020). However, contradiction of methods used in the fuel company’s case and in Hong Kong, implies that there is no universal decision or solution to the problem. Corruption represents a multifaceted ethical issue, which requires significant amounts of data to be taken into consideration in order to develop an effective approach.

Ethics framework should be addressed in three main dimensions, which include principles, consequences and character. These dimensions may be able to create a proper background for the necessary decision. Principles imply that it is crucial to consider the values and motives of the worker. According to the petrol company’s case, the initial corruption problem was caused by lack of analysis of security employee’s principles. They viewed their positions as an opportunity to abuse their powers in order to enrich. Overall corruption highly depends on principles and may be prevented by proper determination of individual’s motivation.

Another significant dimension is consequences, as evaluating possible risks and benefits in both short-term and long-term perspectives can make important contribution to decision-making process (Herring, 2017). As it was already mentioned, various methods of fighting with corruption may have diverse short-term and long-term consequences. Firing a corrupt person may instantly reduce financial losses, but cause follow-up problems, such as the need to recruit and train a substitutional employee or possible discontent among other workers. Less radical methods of prevention of corruption and reduction of its consequences should be considered.

The last aspect of ethical decision-making is character, which refers to moral and ethical standards of the manager. Making certain decisions may have significant reliance and influence on life values and moral norms of the decision-maker (Rossouw & Vuuren, 2018). In such regard corruption appears to be a considerably controversial ethical issue, as it is closely linked with the aspects of loyalty and trust. In some cases such as Hong Kong’s governmental program, decisions related to corruption problems may imply harm or punishment, which raises the problem of justice and mercy. Conclusively, corruption is an essential issue, which is relevant to the field of business ethics and decision-making, as it represents a complex variety of conflicts and dilemmas between valid rights.

References

Herring, J. (2017). Legal ethics (2^nd ed.). Oxford University Press.

Ian, S., & Ting, G. (2020). Corruption prevention and governance in Hong Kong (1^st ed.). Routledge.

Parboteeah, P., & Cullen, J. B. (2019). Business ethics. Routledge.

Rossouw, D., & Vuuren, V. L. (2018). Business ethics. Oxford University Press.

Research Materials

Armstrong, S. (2016). Corporate corruption. Cengage Learning.

Dessler, G. (2020). Human resource management. Pearson.

Dixit, A. (2018). Anti-corruption institutions: Some history and theory. In K. Basu & T. Cordella (Eds.), Institutions, governance and the control of corruption (pp. 15-49). Palgrave Macmillan, Cham.

Felgate, Y. R. (2020). Human resource management moral competencies. SA Journal of Human Resource Management, 18, 1-8. Web.

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2017). Business ethics: Ethical decision making and cases. Cengage Learning.

Gross, B. (2021). Ethics and people management. All Business. Web.

Herring, J. (2017). Legal ethics (2^nd ed.). Oxford University Press.

Ian, S., & Ting, G. (2020). Corruption prevention and governance in Hong Kong (1^st ed.). Routledge.

Lehmann, O. F. (2019). Project business management. CRC Press.

Lominé Loykie. (2019). Business management. Oxford University Press.

Mladenovic, R., Martinov-Bennie, N., & Bell, A. (2019). Business students’ insights into their development of ethical decision-making. Journal of Business Ethics, 155(1), 275-287. Web.

Nuseir, M. T., & Ghandour, A. (2019). Ethical issues in modern business management. International Journal of Procurement Management, 12(5), 592-605. Web.

Oladinrin, O. T., & Ho, C. M.-F. (2015). Integrating codes of ethics in Hong Kong construction organizations—Pactitioners’ perspective. Asian Journal of Business Ethics, 4(1), 15–33. Web.

Payne, G. T., & Petrenko, O. V. (2019). Agency theory in business and management research. In Oxford Research Encyclopedia of Business and Management. Web.

Parboteeah, P., & Cullen, J. B. (2019). Business ethics. Routledge.

Rossouw, D., & Vuuren, V. L. (2018). Business ethics. Oxford University Press.

Scott, I., & Gong, T. (2018). Corruption prevention and governance in Hong Kong. Routledge.

Sroka, W., & Szántó, R. (2018). Corporate social responsibility and business ethics in controversial sectors: Analysis of research results. Journal of Entrepreneurship, Management and Innovation, 14(3), 111-126. Web.

Vazquez, P. (2016). Family business ethics: At the crossroads of business ethics and family business. Journal of Business Ethics, 150(3), 691–709. Web.

White, J. (2019). What is business ethics? Definition, overview, and example. TheStreet. Web.