The fact that action is carried out in accordance with law does not necessarily imply the ethicality of this action. In a business environment, business ethics is often at issue because most of organizations that adhere to legal principles fail to take responsibilities for their unethical actions.
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Although legal, but unethically justified, is considered a standard business practice, there is a growing tendency in developing a rich organizational culture that influences positively business relations in a global environment.
However, in the majority of cases, business activities are bound by ethics that is framed within legal context. At this point, despite the fact that ethical norms and legal principles are closely associated, ethical responsibilities usually exceed legal duties.
The bright example of legal and ethical dichotomy in business involves failure of executive managers to honor commitments and contributions made by their employees.
Underestimating the importance of ethically driven behavior can have negative implications for company’s legal reputation. Business law and ethics closely relate to each because law is based on social beliefs and human rights whereas irrelevant behavior implies deviating from the established norms.
Nevertheless, managers often manipulate their employees for increasing profits and enhancing company’s position on the market. Thus, employees are often unconscious about the activities they are involved, although some of the issues do not always correspond to their social belief system.
For instance, employees working for a pharmaceutical company could be unaware of the restrictions imposed on the drugs (Cross 2007). Nevertheless, the laws do not prohibit the producers to sell their products at the foreign market.
Being under the pressure of their managers, employees have fears concerning their career perspective, and, as a result, they often ignore the ethicality of action in a business environment.
On the one hand, employees are not obliged to exceed their duties and obligations even though it is required by the employees. On the other hand, employees who strive to be promoted are strongly committed to employer’s requests and tasks in order to receive high appraisal.
However, failure to respect employees’ commitment could not be considered illegal because the act is based on mutual agreement. However, managers often manipulate their workers by promising extra payment, or days off in case the latter accomplish their tasks within a shorter period of time.
At this point, Covey (2007, p. 21) argues, “[employees] are making a personal commitment to perform the best of their ability in carrying out their job responsibilities and adhering to the organization’s policies and procedures”.
Therefore, both managers and their subordinates must respect their achievements and understand the obligations they hold. All these agreements, however, premised on the sense of personal awareness, but it is not bound by law.
Trust and respect shape one of the important facets of business relationships. However, deception and betrayal come to the onset as soon as the priority is given to increasing organization’s profits and performance. Sustaining competition on the market often excludes understanding morale and ethics in the workplace.
At this point, Sears (2008, p. 47) stresses “the threat to …corporate values and organizational lifestyle appears to have influenced the employees’ ability to trust within the institution and affects employee to the core of their being”.
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Hence, although managers strictly observe business law, they often fail to develop an ethical framework encouraging employees working under the pressure.
Failure to reward employees for their achievements and contribution is not a crime, but business managers could face challenges while manipulating workers in future.
What is more problematic is that the intention of employers to accept changes and sustain the global competition could fail as well because of reluctance of employees to make efforts in improving their productivity and performance (Megone 2002).
Successful change, therefore, could happen in case employees have a strong desire to devote their energy and time to reach organization’s new goals (Daft 2009). The three stages of organization change – preparation, acceptance, and institutionalization – can be under the threat due to the inappropriate strategies chosen for managing employees.
Managing business is premised on agreements and cooperation that can often result in failure to achieve the established goals. Such situations occur when managers do not comply with their promises (Tuccille and Stone 2003).
There is misconception concerning the fact that ethics focuses on personal perceptions and belief systems, which implies that individuals involved in business have the right to decide whether the action is moral or not (Chryssides and Kaler 1993).
At this point, ethics should be viewed in the context of social responsibility to evaluate the role of organization in shaping organizational culture.
To prove this theoretical perspective, Weiss (2008, p. 16) asserts, “to argue that ethics related to business issues is mainly a matter of personal or individual choice is to belittle the role organizations play in shaping and influencing member’s attitude and behavior”.
Thus, integrating ethics into business management is as important as developing a strong legal framework.
Unethical, yet legal decision making does not encourage employees to increase their productivity. In response to unjustified actions and inappropriate reveal of public information of business activities, specific emphasis should be placed on enacting business law that premises on the moral minimum, the acceptable norms for ethical behavior in the workplace (Miller 2006).
Managers, therefore, should prioritize human dignity, equality, and freedom before engaging them into business activities. Creating a strong moral foundation can contribute to company’s respectable image and attract valuable human capital (Miller 2006; Megone 2002).
At the same, neglecting the most common principle of moral decision making and ignoring needs and concerns of employees could not be punished by law, but it can have negative consequences for business competitiveness (Trevino and Nelson 2010; Chryssides and Kaler 1993).
Legally focusing on responsibilities of employees and forcing to perform can often be unethical in case manager employ methods of harassment or false rewarding.
Thus, failure to consider and accept ethical constraints leads to serious barriers to company’s overall performance and sustainability. Being unethical does not have legal underpinning, but it can influence significant business losses.
Social enterprises, particularly profit organizations, should not underestimate ethical aspects because they closely relate to business law. The case of failure to respect employees’ commitments and contributes does not impose any legal obligation on managers.
Nevertheless, insufficient rewarding can discourage employees to contribute to the wealth and competitiveness of an organization because their personal needs are not met. Therefore, managers should realize the fact that neglecting business ethics implies putting their enterprise at higher risk of competition.
Instead, developing a rich corporate culture attract greater human resources and improve organization’s image and reputation. Moreover, ignoring basic ethical values reduces the changes of an organization to succeed.
Chryssides, GD, and Kaler, JH 1993, An Introduction to Business Ethics, Cengage Learning EMEA, US.
Covey, A 2007, Workplace Law Advisor: From Harrassment and Discrimination Policies to Hiring and Firing Guidelines What Every Manager and Employee Needs to Know. Basic Books, US.
Cross, FB 2007, West’s Legal Environment of Business: Text and Cases: Ethical, Regulatory, International, and E-Commerce Issues. Cengage Learning, US.
Daft, RL 2009, Organization Theory and Design, Cengage Learning, US.
Megone, C 2002, Case Histories in Business Ethics, Routledge, New York.
Miller, RL 2006, Business Law Text and Exercises, Cengage Learning, US.
Sears, EA 2008, The Impact of Downsizing on the Long-Term Employees’ Self-Concept, ProQuest, US.
Trevino, LK and Nelson, KA 2010, Managing Business Ethics, John Wiley & Sons, US.
Tuccille, J and Stone CD 2003, Corporate Responsibility: Law and Ethics, Bears Books, US.
Weiss, JW 2008, Business Ethics: A Stakeholder and Issues Management Approach. Cengage Learning, US.