Ethical Issues in Business

Republic of Yemen

LIU – Aden

BMGT 380

Ethical Issues in Business

By: Osama Gameel

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Ethical Issues in Business

Abstract
The objective of this project is to show the ethical problems that happen in the business field

and during the business process. Moreover, it includes the reasons that cause employees and

employers to be in any unethical act in organizations. Hence the solutions in this project are

according to the interest of the individuals, companies who participate in dishonesty and

unfairness, or any act that goes against the code of ethics. Besides, it depends on certain

studies that clarify the logic of business ethics

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Ethical Issues in Business

Table of Contents

TITLE PAGE…………………………………………………………………………….….1

ABSTRACT…………………………………………………………………………….…...2

TABLE OF CONTENTS……………………………………………………….…………...3

INTRODUCTION……………………………………………………………….……….….4

PROBLEMS & ISSUES…………………………………………………………………….5

REASONS……………………….………………………………………………………….8

SOLUTIONS...……………………………………………………………………………...9

CONCLUSION………………………………………………………………………….…10

REFERENCES…………………………………………………………………………...…11

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Ethical Issues in Business

Introduction

Business ethics is the study of business policies and practices regarding potentially

controversial subjects. In addition, it can be denoted as written or unwritten codes of morals,

values and principles. (Alexandra, 2020)

The most common ethics issues is insider trading, giving and receiving gifts, conflict of

interest, tax evasion, discrimination and bribery. According to Dr. Blake, ethical issues tend

to rise when a code of ethics is ambiguous about particular situation, where there is a clash

between two codes over a specific ethical dilemma. (2020)

The importance of ethics in business is to build a trust between the consumer and

corporations, guaranteeing equal and honest treatment. Moreover, it protects the interest of

employees, shareholders and companies from exploiting each other through unfair trade

practices like cheating and frauds. (Akrani, 2011) A business should adopt an ethical

approach because the market will punish unethical behavior and the government may

.legislate to protect the consumer

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Ethical Issues in Business

Problems & Issues

Different companies and organizations have different ethical issues. Nearly all business has

to deal with ethical concerns at one time and another. Furthermore, this part discusses about

:the most common ethical issues that often occurs in companies or any place of work

Insider trading: it is one of the common ethical issues that occur in business field, it is – 1

also consider as white collar crime. It involves trading in a public company's stock by

someone who has non-public, material information about that stock for any reason. (Ganti,

2020) The law has considered it as illegal action because one party has information that is not

known to the other party

Giving and receiving gifts: in usual daily life, giving and receiving gifts consider as a – 2

legal act. However, in some circumstances, gifts might be considered as an illegal and

unethical act. It depends on the nature of the gifts, the time of giving it, and the person who is

.the gift for

Bribery: according to Cambridge dictionary bribery is " an attempt to make someone do – 3

something for you by giving the person money, presents, or something else that they want". It

increases wealth inequality and supports corrupt regimes. in addition, paying a bribe support

a regime to commits human rights violations, and it is unlikely that the funds will trickle

down to improve the well-being of citizens. (2017)

Tax evasion: in most countries tax is levied on their citizens and business as well. – 4

Examples of such taxes include personal income tax, corporate tax and services tax.

Everyone and every business wants to reduce their taxes. However, there some who would

.try to eliminate tax totally by using certain tax avoidance methods

conflict of interest: in the legal world refers to a situation wherein an individual is in a - 5

position to exploit his professional capacity for his own benefits. (2018) For instance, a

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Ethical Issues in Business

director of a bank is required to reveal any interest in credit facilities granted by that bank to

avoid any conflict of interest. Another example is when a solicitor acts for both the supplier

and the buyer of a goods. As solicitor for the supplier may not wish to revel something but as

.solicitor for the buyer he would be expected to know that same thing

Discrimination: the word discrimination is often used on day to day basis to describe – 6

being treated unfairly for a particular reason. (2019) moreover, there are four types of

:discrimination

Direct discrimination: happens when an employee treated unequally due to certain –

characteristic they have, it might be direct discrimination by association or perception

Indirect discrimination: it an unintended discrimination, it is usually less obvious than –

direct discrimination. It occurs when a rule applied to everyone but it could be unequal for

someone who has certain characteristics

Harassment: it is un wanted act that violates someone's dignity or humiliating his/her –

personality and creating unpleasant environment foe them. Including nicknames, bullying,

gossiping, inappropriate comments and questions

Victimization: it happens when an employee has done or might have done things against –

the company or the organization with no intention in doing it. It includes loss of wage, being

.ignored and denied from promotions

Unfair competition: it is the use of competitor's name in marketing material to give the – 7

consumers a wrong impression about the competitor's product, it includes defamation of a

competitor' misappropriation of their trade secrets, and trademarks infringement

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Ethical Issues in Business

Misleading product information: it occurs when a seller or a company gives a wrong or – 8

not the exact information of their product to the consumer, it usually happens in online

,shopping when a seller shows the product in good condition while it is a low quality product

Unethical leadership: it could be defined as "behaviors conducted and decisions made by – 9

organizational leaders that are illegal and/or violate moral standards, and those that impose

processes and structures that promote unethical conduct by followers.” (Fisher, 2012)

Uncomfortable workplace: every employee has the right to have pleasant environment to – 10

work. However, in some companies, they put their employees under pressure with a bad

condition environment, then the they expect from them a satisfying outcome, which seems

.logically not possible

Unrealistic goals: in some companies, when leaders want to decrease their employees' – 11

salary, they put them under pressure by making unrealistic goals. it is usually happening

when a company wants to downsize its work crew, like expecting them to sell a huge amount

of products with a high a price in short period of time

12 – Embezzlement: it usually involves the falsification of accountant and other records to

hide the misappropriation of found or other property

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Ethical Issues in Business

Reasons

Ethical issues almost occur in every company, and they occur frequently, and it is nearly

impossible to prevent them completely. However, it is possible to reduce them by discovering

.what are the reasons or the motive behind doing any unethical act

In the last years, it has been shown that there are common motives or reason for causing

:ethical concern, hence in this project it will be discussed the main causes

Personal gains: in everyone, there is a desire to make more and more money. – 1

However, this desire might lead to unethical issue in the company or the work place.

In many company, human resource tends to hire people who has less desire than

others. The strong desire to make more personal profit might lead to accept bribes and

.embezzlement

competitive pressure: when a company is in rough competition, it tends to try any – 2

unethical act to win this competition. According to Dr. Taiwo, companies who has

poor financial performers and companies with lower profits are more prone to

commits illegal acts. (2019)

Business goals vs personal values: ethical conflicts usually happen when a – 3

company achieves goals by using certain ways that are not accepted by the

employees. Whistle-blowing might a reason of this act

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Ethical Issues in Business

Solutions

In the previous chapters, we discussed about the ethical issues, and what they are and what

the reasons are. Now in this chapter solutions will be discussed according to recent business

studies. However, in this project, only five main solutions have been chosen due to their

:effectiveness

Honesty and fairness: a successful business starts with an honest treat between both – 1

partners and competitor, using the golden rule (what's yours is yours, what's mine is mine)

Ethical codes: develop or put codes relevant to ethics, make some clear standards, – 2

obligations, expectations and goals. also make an obvious warning about the ones who goes

against the code of ethics in the company

communicate with the staff: engage and train with your workers, also engage your staff – 3

with stakeholders, investors and suppliers. consider their opinions while making decisions.

Make them feel that they are an important part of the company

rewards: if they worked more, give them more. Make them do the best they can for the – 4

sake of the company. Reward and praise the employee in front the others, to create an ethical

challenging environment

Set the tone from the top: senior management teams must show leadership and be seen to – 5

live the organization's ethical values. (2014) when it happens, employee can be sure that the

whole organization has ethical values

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Ethical Issues in Business

Conclusion

To sum up, this work was done according to pre-graduated student knowledge and

some business ethics sources. certain information might be not mentioned and that does not

mean that they are not necessary, only the main point was discussed that are important in

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Ethical Issues in Business

References

Akrani, G. (2011, October 9). Importance of business ethics. Kalyan city life blog. – 1

Retrieved from https://www.kalya-city.blogspot.com/2011/09/need-or-imporatnce-of-

business-ethics.html?m=1

Alexandra, T. (2020, August 28). Business ethics. Investopedia. Retrieved from – 2

https://www.investopedia.com/business-ethics.asp

Blake , D. (2020, August 30). Most common ethical issues . Wisegeek. Retrieved from - 3

https://wisegeek.com/what-are-the-most-common-ethics-issues.htm

Fisher, L. (2019, October 3). Unethical leadership. Leading in context. Retrieved from - 4

/https://www.leadingincontext.com/2012/10/03/what-is-unethical-leadership

Ganti, A. (2020, September 16). Insider trading definition . Investopedia. Retrieved from - 5

https://www.investopedia.com/terms/i/insidertrading.asp

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