The Business Ethics concept has come to mean various things to various people, but generally, it’s coming to know what is right or wrong in the workplace and doing what’s right. Most values that were once taken for granted are now strongly questioned by the people around. It is sad that many of these values are no longer followed. Unfortunately, there is no clear guide to help leaders work through complex dilemmas about what is right or wrong. Paying more attention to ethics in the workplace develops leaders and staff as to how they should act in certain situations. Learning ethics in the workplaces helps ensure that when leaders and managers are struggling in times of crises and confusion, they retain strong moral principles. Ethical behavior in business practice has been developed continuously. In modern time, ethical behavior has been looked as an important aspect of the business success.
A code of ethics is also called a company’s code of conduct or ethical code. This code sets out the company’s responsibilities. A well-written code of ethics should also guide employees on how to deal with certain ethical situations.
Every code of ethics is different and should reflect the company’s ethos, values and business style. Some codes are short. Shortcodes set out only general guidelines. There are large manuals, encompassing a huge variety of business situations.
Companies develop codes for many reasons such as limiting liability in the event of an accident, limiting government initiatives to create new legislation, creating a positive, shared company culture, protecting and enhancing a company’s reputation; and improving staff behavior and corporate social responsibility.
There are lots of theoretical and empirical studies which explain the factors and variables impacting the ethical behavior of the individual in the organization and hence their ethical decision making, ethical behavior is evidenced since human civilization had been evolved.
Individuals as a factor are the most important in behavior. This means that a person’s ethical decision making provides an overall effect. This factor affects the performance of the individual in various complex situations. Individual factors include gender and age. These are the most researched constructs.
Julian B. Rotter introduced the concept, Locus of Control. It refers that individuals believe they can control events affecting them. There are two kinds of locus of control, they are- internal and external. Internals believe that they themselves control their decisions; externals believe that decisions are controlled by environmental factors which they cannot control. A study by Jones and Kavanagh found out that externals were more likely to affect ethical behavior and internal individual less likely to behave unethically.
Value orientation includes value-based theories. In most of the studies, it was found that value orientation effects ethical decision-making process. It was consistently significant and positive. According to Rallapalli, personal values are inversely related to behavioral intention, and intention to behave ethically is affected by teleological evaluation. It was also said that value-oriented individuals are less likely to engage in the unethical behavior. Watson mentioned that idealism led to influence ethical decision making.