Crisis in Business Ethics: The Importance of Ethics

Business ethics is the code or mode of behavior that guides a business in its day-to-day operations with its clients; suppliers; investors; staff members and the general public. The ethics of a given business may be very diverse as it does not only cover its interrelations with the larger society but, also the interrelations between the business and a single customer. These relations either develop the ethical perception of a business from other parties; as some businesses have developed the reputation that they are only for the money motive regardless of the interests of the customer and the ethical aspects expected of it. The ethics of a given business are the product of the attitudes, beliefs, and values of the members forming the business especially the top-most authority.

Recent research has shown that only 9% of U.S business corporations have well-built ethical cultures. A survey carried out on workers also showed that half of the employees interrogated encountered instances of ethical misconduct which they did not report for the fear of victimization or for the assumption that nothing would be done to solve the situation. (Bowie, 1999)

The business ethics crisis situation can largely be argued to exist as a result of; the non-operation of hotlines that are supposed to act as the communication lines through which members of the public report instances of ethical misconduct. These communication lines are important because employees are more at ease when they report these violations to a party they know and can trust. This is because of the fear that they may report the issue to an official who is a part of the issue; which may result in victimization by the executives involved in the given violation. Cases of having or performing business practices that are not harmonious with the values of the business the employee is working with, are becoming common and also amount to an ethical violation. This is because they place the employee in the dilemma of either doing what is right or doing what will generate more profits and revenues. The harsh penalties associated with ethical violations bring about fear of being penalized, even in the process of doing the right thing or trying to correct a violation already committed. The practice of generating business values and posting them on the business records or websites without necessarily cultivating the advocating of the values among staff is bringing about high instances of ethical violation. This can be done in the form of teleconferences; seminars; and workshops among other forms of imposing the ethical culture. (Behrman, 1988)

The business ethics crisis has also developed as a result of the failure on the side of businesses to set up clear values and organizational systems of conduct. This results in the ignorance of employees and other parties due to the lack of definition between what is wrong or right. Often business ethics have been misinterpreted by employees and consequently led to their violation due to the disparity between the intended meaning and the perceived one. In other cases, the violation of business ethics comes as a result of the failure to employ, promote and build up a succession map that is harmonious with the values of the organization in question. The cases of falsification of documents or creation of fake documents are on the rise especially in the banking and mortgage sector, where loan applications of people affiliated to bank officials financially or socially have their mortgage or loan applications illegally approved. The other ethical violation in the same sector is the overcharging of interest on parties who do not qualify for credit or loan access, so as to pocket the overcharge amount. In the Marist poll, 76% of Americans were of the conviction that corporate America was going through a moral decline. In this study, more than 60% of Americans attributed the honesty and ethics of American corporate societies as dropping. In this study, 58% of the leadership was attributed to not being capable of withholding moral standards and obligations. (Bowie, 1999)

On the other hand, the business ethics crisis situation has been justified as not being the case by the Marist poll that gave the following data. To start with, among business executives 94% attributed business success to the advocating of business ethics. Among the general population, 75% were in support of the success of a business run under ethical standards. In a recent study, 72% of Americans believe that the ethical standards of a business help strengthen a company’s advantage over its competitors in the current, short, and long term. In the same study, 93% of Americans agreed that they would be comfortable investing in a business that has a reputation for honesty and ethical conduct. Recent studies have shown that 75% of Americans believe that business ethics is a shared responsibility involving both the employees and executives. The study showed that 26% of Americans believe that a person can hold double standards in business and personal ethics wherein one area upholds ethics and in the other does not. In the area of honesty and ethical conduct among employers, 43% of employees argued they could trust in their employees. This study showed that only 4% of employees would not take personal responsibility to report cases of ethical violations at their workplace. This study showed that 74% of American workers believe that their supervisors would not overlook matters of ethical violation. This study also showed that 73% of Americans are not afraid of victimization on reporting ethical violations. (Behrman, 1988)

As discussed in this paper the business ethics status of the society today is seen to posses both sides of the case. This is because a substantial proportion believes that there is a business ethics crisis while a proportion more than half of the population also believe that business ethics are observed.


Behrman, J. (1988). Essays on Ethics in Business and the Professions. Englewood Cliffs, NJ: Prentice Hall.

Bowie, N. (1999). Business Ethics, a Kantian Perspective. Blackwell Publishing.

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