UNIVERSITY OF NIGERIA
FACULTY OF BUSINESS ADMINISTRATION
DEPARTMENT OF MANAGEMENT
MANAGING ETHICS IN THE WORKPLACE AND ITS
EFFECTS ON PRODUCTIVITY
COURSE CODE: MAN 830
COURSE TITLE: ORGANISATIONAL BEHAVIOUR
ONUIGWE CHINYERE MARY AN PG/M.Sc/12/62153
BELLO ADAMU DAMBATTA PG/M.Sc/Ph.D/12/61672
ENEH OBIANUJU OKONKWO PG/M.Sc/12/63335
TIMOTHY ESOM PG/M.Sc/Ph.D/12/63272
LECTURER: PROF. JONNY ELUKA
Managing Ethics in the work place holds tremendous benefits for everyone, both moral and
practical. This is particularly true today when it is critical to understand and manage highly
diverse values in the work place. Business Ethics in the work place is about prioritizing moral
values for the workplace and ensuring behaviors are aligned with those values. Whether or not an
individual will be fair in his dealings with others, is determined by his ethical standards.
Accepting gratification to approve the purchase of substandard materials for the organization, the
appropriation of public property to private uses, conversion of employee benefits for other
unapproved purposes, the bribing of government agencies to secure favourable contracts for ones
own organization- all these are clear proofs of a warped sense of values and faulty ethical
standards. Even when the organization stands to reap benefits by unethical conduct, the
immorality in the conduct is by no means diminished. The paper aims to find out the value of
ethics and how un ethical behavior led to negative productivity. Good ethics may be quite costly
in the short run but in the long run it is of great benefit to all concerned. The study also identified
the fierce competitions in business and struggle for survival as the major cause of unethical
business behavior, also organizations goal and employee goals are often in conflict, hence
unethical business decisions.
Key wards; ethics, behavior, Performance, standard
BACKGROUND OF THE STUDY
Ethics has been and continues to be part of human existence. Fredrick et. al.,
(1998) call it a universal trait. Ethics involves learning what is right or wrong and
then doing the right thing. Ethics concerns the obligations we owe people around
us for their healthy existence. Being ethical therefore makes us realize that
Whatever we do must not harm or inconvenience the lives of those around us. As
business became more complicated and dynamic, Organizations realized that they
need to manage a more positive image to the public and also needed more
guidance to ensure their dealings supported the common good and did not harm
others, hence business ethics came to be.
Business faces a lot of dimension in its social environment; these dimensions are
made up of regulatory requirements, knowledge and information, technological
innovations, social values and ethical guides, political forces and events, as well as
international forces and events (Frederick et. al, 1988). Business Organizations
must therefore, consider its involvement and relationships within its environment
to ensure compliance and observance of all rules emaciating from them all. The
businesses owe it as duty to defend the interest of all its "publics" both internal and
external.The effective management of ethics is sound business practice.
Employee's Morale is raised, bottom line performance is improved, your corporate
image is enhanced and customers choose to form business relationships with
companies that adhere to high ethical standard of ethical conduct.
STATEMENT OF PROBLEM
a. What are the ethical issues in the work place?
b. To what extent can these ethical issues be managed?
c. What are the benefits of managing ethics in the work place and its effect on
PURPOSE/OBJECTIVE OF THE STUDY
1. To determine the various ethical issues in the workplace.
2. To determine how the ethical issues can be managed.
3. To assess the effects of managing ethics in the workplace on productivity.
4. To highlight some of the negative effects of not managing ethics in the
5. To, on the basis of study findings, suggest guidelines for managing ethics in
1. How do organizations manage ethical issues in the workplace?
2. How effective are these guidelines in improving productivity?
3. In what ways (if any) do ethical issues affect productivity in work place?
SCOPE OF THE STUDY
The study tries to look at the effect of productivity in the work place as it relates
ethical and un ethics behavior.
This paper is a conceptual research work based on literature review. It is based on
a mono-method qualitative approach which uses secondary sources of data
collection. Secondary data were collected and recorded by a third party researcher
for purpose other than contemporary needs of the researcher.
REVIEW OF LITERATURE
We shall review relevant literature concerning the concept of managing ethical
issues in the workplace. Thus, doing this we start by examining the meaning and
definitions of ethics followed by mentioning some ethical issues in the workplace,
how to manage ethical issues in the workplace, effects of managing ethics in the
work place on productivity and finally guidelines for managing work ethics.
Meaning and definitions of ethics
The Longman Dictionary of contemporary English defines Ethics as moral values
or Principles of behavior for deciding what is right or wrong.
Ethics is the study of moral principles or values that determine whether actions are
right or wrong and outcomes are good or bad (Mcshane and Glinow, 2000)
There are 3 key elements involved in ethics:
1. Questions requiring reflective choice- that is decision problems
2. Guides of rights and wrong- that is, moral principles
3. Consequences of our decisions- that is, the good or bad that flows out of our
What is Business Ethics?
The concept has come to mean various things to various people, but generally it's
coming to know what it right or wrong in the workplace and doing what's right —
this is in regard to effects of products/services and in relationships with
stakeholders. (Wallace and Pekel 2001) explain that attention to business ethics is
critical during times of fundamental change ~ times much like those faced now by
businesses, both profit and nonprofit making. In times of fundamental change,
values that were previously taken for granted are now strongly questioned. Many
of these values are no longer followed. Consequently, there is no clear moral
compass to guide leaders through complex dilemmas about what is right or wrong.
Attention to ethics in the workplace sensitizes managers and staff to how they
should act. Perhaps most important, attention to ethics in the workplaces helps
ensure that when leaders and managers are struggling in times of crises and
confusion, they retain a strong moral compass.
Current Ethical Issue in Business
Ethics and moral obligation are something that we all encounter at one time or
another. Even in a professional setting, all persons should act in a manner that
would uphold the good of society. Why is it that good, ethical and moral behavior
is not always adhered to? Is it because some people do not understand ethics and
what it means to be ethical? To be ethical, one has to decide between right and
wrong, determine what is for the betterment of society and act accordingly. Ethics
have three basic criteria that must be met - obligations, moral ideas, and
consequences (Ruggiero, 2004). Businesses have their own code of ethics and the
individuals within that business have to determine whether or not they will follow
that code of ethics. Ethical behavior in business is consistent with the principles,
norms, and standards of business practice that have been agreed upon by society
(Trevino & Nelson, 2004). At times, however, an individual decides to go against
the code of ethical behavior for personal gain.
One of the most important responsibilities that we place on the leaders of
organizations is upholding the highest standards of ethical behavior. In a nutshell,
this comes down to doing the right thing even when the wrong thing might also
have some attraction. Work-place ethics are most often related to decision-making
processes. Most leaders face the opportunity to choose between alternative courses
of action in their work situations and other aspects of their lives. Work-place ethics
refer to choosing the option that is determined to be the moral or legal "right"
choice, even if the other alterative(s) are very attractive and even if you can "get
away with" the less ethical choice.
How to Handle the Ethical Issues in the Workplace
It's a good idea to prepare to handle ethical issues before they escalate into crises
because when they come up you usually do not have a lot of time to act. Ethical
issues come up with regard to finances, employee relations, discrimination,
religious bias and considerations about whom to promote and how to best allocate
company resources. You can also win the admiration of your coworkers when you
deal with an ethical issue promptly and fairly.
1. Educate yourself on general principles of ethics. When it comes to handling
ethical issues in the workplace, the field is wide and vast. Each discipline
usually has ethical dilemmas that come up again and again, and most come
with regard to purchasing, hiring, firing, promoting and awarding bonuses. It
might not be possible to prepare for every single incident that may arise;
however, it is possible to be aware of situations that can come up and
general methods of addressing ethical dilemmas.
2. Take classes at a local or online university. Many universities offer ethics
classes through their business schools. You can arrange to take one or two of these
courses. If classes are not possible, then you can go to a local library and find
books on ethics in business or your particular field to read.
3. Define both personal and business values. Before beginning work, sit down and
write out what your business' values are. Then write your own personal values and
see where the two do or don't meet. Once you have clarified those values for
yourself, it will be easier to execute them constantly even in the more pressured
environment of a workplace.
4. Role play to effectively prepare for ethical issues in the workplace, imagine
various scenarios that might arise and what your response to them would be. This
exercise will help you to understand and work through your feelings when ethical
dilemmas arise. It will also help you to determine your personal values and make it
easier for you to handle certain ethical situation
The advantages of ethical behavior include:
• Higher revenues - demand from positive consumer support
• Improved brand and business awareness and recognition
• Better employee motivation and recruitment
New sources of finance - e.g. from ethical investors
The disadvantages claimed for ethical business include:
Higher costs - e.g. sourcing from Fair-trade suppliers rather than lowest price
Higher overheads - e.g. training & communication of ethical policy
A danger of building up false expectations.
Businesses and industries are increasingly finding themselves facing external
pressure to improve their ethical track record.
WHY IS IT IMPORTANT TO EXERCISE WORK-PLACE ETHICS?
Leaders are often put in decisions where they must choose among options that vary
in their degree of ethical behavior. One of the reasons why this is a common issue
for leaders is that there are often competing priorities for businesses. On one hand,
organizations exist to generate profits for their shareholders, which may encourage
leaders to act in ways that are less ethical in order to cut costs or increase revenues.
On the other hand, organizations are made up of human beings who have
personally invested in the company and often live in the communities in which
they work. If the individuals are harmed by decisions that maximize company
profitability, then the decision is not an ethical one. Only one stakeholder is
getting their needs met, at the expense of other stakeholders.
According to one theory, leaders may make bad ethical decisions and rationalize
: For example, a leader may tell themselves it is not really illegal or
immoral, or perhaps that it will never be found out or that their bad behavior will
HOW DO I MAKE SURE MY DECISIONS ARE ETHICAL?
If you are worried about how a decision will impact others or how others will
perceive your decision, then chances in ethics are of consideration. You might start
by asking yourself some questions:
- How would you define the problem if you stood on the other side of the
- What is your intention in making these decisions?
- Whom could your decision or action injure?
- Are you confident that your position will be as valid a long period of time as
it seems now?
- Could you disclose without qualm your decision or action to your boss, you
CEO, the board of directors, your family, society as a whole?
SOME BASIC PRINCIPLES TO HELP YOU MAKE ETHICAL
A key reason why decisions that have ethical implications may be difficult for
leaders to make is that they may be encountering situations that they have never
had to deal with before. This lack of experience may be characterized by a great
deal of ambiguity in terms of what to do. Some basic principles may be useful in
helping to guide the ethical decision-making process:
1. Don't allow personal gains to outweigh the good of the organization
2. Recognize all perspectives when making an ethical decision
3. Respect people and their rights
4. Keep promises and honor contracts
5. Use feelings to help decide morale dilemmas
6. Get all the facts
7. Treat all people fairly
8. Define who you are, your company & personal values
9. Always challenge your decision to be in line with your values, beliefs and
10. Never compromise your integrity
11. Ethical decisions must use fair procedures and account for unjust action
12. Don't choose the easiest answer; consider all the options (don't just go for a
13. Don't overstep the bounds of what outsiders will tolerate while balancing
company's & outsider's interest
14. Consider the risk of setting & trying to achieve overly ambitious goals
15. Communicate that all employees have a responsibility to keep the company's
moral & ethical standards in check
16. When in doubt, don't
17. Instill proper checks & balances of ethical behavior that don't create
18. When possible seek the input of effected individuals at a moral crossroads
Guidelines for Managing Ethics in the Workplace
1. Recognize that managing ethics is a process.
Ethics is a matter of values and associated behaviors. Values are discerned through
the process of ongoing reflection. Therefore, ethics programs may seem more
process-oriented than most management practices. Managers tend to be skeptical
of process-oriented activities, and instead prefer processes focused on deliverables
with measurements. However, experienced managers realize that the deliverables
of standard management practices (planning, organizing, motivating,
controlling) are only tangible representations of very process-oriented
practices. For example, the process of strategic planning is much more important
than the plan produced by the process.
The same is true for ethics management. Ethics programs do produce deliverables,
e.g., codes, policies and procedures, budget items, meeting minutes, authorization
forms, newsletters, etc. However, the most important aspect from an ethics
management program is the process of reflection and dialogue that produces these
2. The bottom line of an ethics program is accomplishing preferred behaviors
in the workplace.
As with any management practice, the most important outcome is behaviors
preferred by the organization. The best of ethical values and intentions are
relatively meaningless unless they generate fair and just behaviors in the
workplace. That's why practices that generate lists of ethical values, or codes of
ethics, must also generate policies, procedures and training that translate those
values to appropriate behaviors.
3. The best way to handle ethical dilemmas is to avoid their occurrence in the
4. Make ethical decisions in groups, and make decisions public, as
This usually produces better quality decisions by including diverse interests and
Perspectives and increases the credibility of the decision process and outcome by
reducing suspicion of unfair bias.
5. Integrate ethics management with other management practices.
When developing the values statement during strategic planning, include ethical
values preferred in the workplace. When developing personnel policies, reflect on
what Ethical values you'd like to be most prominent in the organization's culture
and then design policies to produce these behaviors.
6. Use cross-functional teams when developing and implementing the ethics
It's vital that the organization's employees feel a sense of participation and
ownership in the program if they are to adhere to its ethical values. Therefore,
include employees in developing and operating the program.
7. Value forgiveness.
This may sound rather religious or preachy to some, but it's probably the most
important component of any management practice. An ethics management
program may at first actually increase the number of ethical issues to deal with
because people are more sensitive to their occurrence. Consequently, there may be
more occasions to address people's unethical behavior. The most important
ingredient for remaining ethical is trying to be ethical. Therefore, help people
recognize and address their mistakes and then support them to continue to try
8. Note that trying to operate ethically and making a few mistakes is better
than not trying at all.
Some organizations have become widely known as operating in a highly ethical
manner, e.g., Ben and Jerrys, Johnson and Johnson, Aveda, Hewlett Packard, etc.
Unfortunately, it seems that when an organization achieves this strong public
image, it's placed on a pedestal by some business ethics writers. All organizations
are comprised of people and people are not perfect. However, when a mistake is
made by any of these organizations, the organization has a long way to fall. In our
increasingly critical society, these organizations are accused of being hypocritical
and they are soon pilloried by social critics.
Consequently, some leaders may fear sticking their necks out publicly to announce
an ethics management program. This is extremely unfortunate. It's the trying that
Counts and brings peace of mind — not achieving a heroic status in society.
Key Roles and Responsibilities in Ethics Management
Depending on the size of the organization, certain roles may prove useful in
managing ethics in the workplace. These can be full-time roles or part-time
functions assumed by someone already IN the organization. Small organizations
certainly will not have the resources to implement each the following roles using
different people in the organization. However, the following functions points out
responsibilities that should be included somewhere in the organization.
1. The organization's chief executive must fully support the program.
If the chief executive isn't fully behind the program, employees will certainly
notice and this apparent hypocrisy may cause such cynicism that the organization
may be worse off than having no formal ethics program at all. Therefore, the chief
executive should announce the program, and champion its development and
implementation. Most important, the chief executive should consistently aspire to
lead in an ethical manner. If a mistake is made, admit it.
2. Consider establishing an ethics committee at the board level.
The committee would be charged to oversee development and operation of the
ethics management program.
3. Consider establishing an ethics management committee
Would be charge with implementing and administrating an ethics management
program, including administrating and training about policies and procedures, and
resolving ethical dilemmas. The committee should be comprised of senior
• 4. Consider assigning/developing an ethics officer.
This role is becoming more common, particularly in larger and more progressive
organizations. The ethics officer is usually trained about matters of ethics in the
workplace, particularly about resolving ethical dilemmas.
5. Consider establishing an ombudsperson.
The ombudsperson is responsible to help coordinate development of the policies
and procedures to institutionalize moral values in the workplace. This position
usually is directly responsible for resolving ethical dilemmas by interpreting
policies and procedures.
FINDINGS AND RECOMMENDATIONS
Our findings as follows:
A. This study has identified that there are some vital ethical issues in the
• B. The study also identified the fierce competitions in business and struggle for
survival as the major cause of unethical business behavior.
C. The organizations goal and employee goals are often in conflict, hence unethical
D. The external environment, as well as the internal environment of business,
contributes immensely to the mismanagement of ethics in the workplace.
E. It is revelation of this study that ethical issues should be managed in the
workplace to improve performance. This goes to suggest that the management of
ethics in the workplace enhances productivity.
Some recommendations were proffered based on the above findings:
1. It should not be forgotten that business exists to serve the public
2. Management should introduce ethical programs for both managers and staff
3. Organizational goals and individual goals should be in harmony.
We cannot rule out the fact that ethical issues exists in the workplace and should be
managed effectively so as to enhance productivity.
This study is not claiming to have the final solution to the problem of the study. It
only identified its existence and magnitude. It is expected that further study be
made on how best to manage ethical issues that arises in the workplace.
Gellerman, S.W. (1986). Why good managers make bad ethical choices. Harvard
Business Review. 1 -7.
Nash, L.L. (1981). Ethics without the sermon. Harvard Business Review. 79-89.
Nnabuife and Ikon (2008): Business Ethics. El* Demak Publishers Enugu
Sberwin, D.S. (1983). The ethical roots of the business system. Harvard Business
Osisioma and Osisioma (2002): Management Practice, J.B.H Publishers Enugu