1

Ethical
Behavior
in
Organizational Behavior
1. NOEL NIÑO F. VALLE
2. NENALYN TAYONG
3. LEANCEL MAE VILLAMOR 10-05-24
4. MORALINE TORRENUEVA

Group 3
 Guess what kind of behavior
(ethical or unethical) is being
depicted in each image and what
specific ethical issue or principle it
relates to.
ethical or unethical

ethical behavior related to worker safety

ethical or unethical

unethical behavior—corporate fraud

 ethical or unethical

ethical behavior—corporate social responsibility

ethical or unethical

unethical behavior—bribery
ethical or unethical

ethical behavior—fairness in hiring

 Objectives:
Understand the concept of ethical Identify key principles and theories
behavior in organizations. related to ethical behavior.

Analyze the impact of ethical and unethical Evaluate case studies and propose ethical
behavior on organizational outcomes. solutions to workplace dilemmas.
 Definition 1

Ethical behavior in an organization refers to actions that are

aligned with
morally right societal norms

professional legal
standards frameworks

Introduction
 Key Ethical 1
Principles
It encompasses principles like

honesty accountability

integrity
fairness actions

Introduction
 1
Why is it important?
fosters trust It builds prevents
among employees, customers, a positive organizational
and stakeholders. culture legal issues

enhances
a company’s
reputation
Unethical practices, on the other hand, can lead to scandals, financial
Introduction
loss, and long-term damage to the company’s brand.
 2
Ethical Theories
Deontology

Utilitarianism Virtue Ethics

Theoretical Frameworks
 2
Ethical Decision-Making Models

The Four-Component
Model by Rest

The PLUS Decision-

Making Model

Theoretical Frameworks
 2

The Four-Component Model by Rest

James Rest (an American psychologist specializing in moral

psychology and development) developed a four-component
model of moral development.

• Moral Sensitivity
• Moral Judgment
• Moral Motivation
• Moral Character

Theoretical Frameworks
 2

The PLUS Decision-Making Model

• Policies
• Laws
• Universal principles and
• Self-values

Theoretical Frameworks
Ethical Behavior
EXAMPLES & IMPACT
Here are a few examples of ethical behavior in an
organizational setting:
Transparency in Communication: Open and honest communication is a
cornerstone of ethical leadership. When leaders are transparent, they build trust
with employees, fostering a healthy work environment. Transparency ensures
that employees know the company’s direction, decisions, and potential
challenges. This openness reduces misunderstandings and creates an inclusive
culture where employees feel respected and informed. For instance, a manager
who openly discusses both successes and setbacks with the team reinforces a
sense of shared responsibility and trust.
Fair Treatment: Ethical behavior involves treating all employees equitably, regardless
of their background, rank, or characteristics. This includes ensuring that policies
related to hiring, promotions, and pay are unbiased and inclusive. When companies
actively promote diversity and create equal opportunities for all, they contribute to
an environment of fairness and respect.
Accountability: Taking responsibility for one’s actions is an integral part of ethical
behavior. Employees and leaders who admit their mistakes and take corrective action
set a powerful example for others. It encourages a culture where learning from
failures is valued over hiding or denying mistakes. When accountability is prioritized,
it helps create a transparent, blame-free environment that supports continuous
improvement and strengthens team dynamics.
Environmental Responsibility: Companies and employees who minimize their
environmental impact demonstrate ethical behavior. This can include reducing
waste, recycling, and using sustainable resources
Respect for Intellectual Property: Respecting intellectual property (IP) rights is
essential to maintaining ethical standards. Using or distributing copyrighted
material without permission can lead to legal issues and damage the company’s
reputation. By ensuring that all software, data, and resources are properly
licensed and credited, companies demonstrate respect for creators and
innovation. Ethical organizations establish clear policies on IP use and educate
employees on respecting these rights. This protects the company from legal risks
and promotes a culture of integrity.
Impact of Ethical Behavior on
Organizations
Positive Impact
◦ Builds trust among stakeholders (employees, customers, investors).
◦ Enhances brand reputation and loyalty.
◦ Encourages employee morale and retention through a positive workplace
culture.
◦ Results in compliance with regulations and avoids legal issues
Unethical Behavior
EXAMPLES & IMPACT
Here are a few examples of unethical
behavior in an organizational setting:
Taking Credit for Someone Else’s Work:
This unethical behavior undermines the value of collaboration and
trust within an organization. When an employee takes credit for a
colleague’s ideas or efforts, it not only demotivates the colleague but
also disrupts team dynamics. It can lead to a toxic work environment
where employees feel hesitant to share ideas for fear of exploitation,
stifling innovation and creativity.
Misleading Communications: Providing false or misleading information to clients or
stakeholders is highly unethical. Whether it involves exaggerating product features or
omitting critical details, misleading communications damage a company’s credibility and
reputation. This behavior can lead to customer dissatisfaction, legal consequences, and the
loss of business relationships. For ethical businesses, transparent communication is key to
maintaining long-term trust and fostering loyalty with clients and suppliers.
Falsifying Records: Altering financial records or operational data to present a more favorable
image is a serious ethical breach. Whether it involves falsified sales figures, manipulated
performance metrics, or inflated expense reports, this behavior compromises the accuracy of
financial reporting and decision-making. It can also lead to legal liabilities and regulatory
sanctions. Internally, falsifying records creates a culture of dishonesty that can spread to other
areas of the organization, diminishing accountability.
Discrimination: Discriminatory behavior, whether in hiring, promotions, or daily
interactions, is unethical and illegal in many jurisdictions. Discrimination based on
race, gender, religion, age, or other protected characteristics creates an unfair work
environment that limits opportunities for certain groups. This harms individuals and
weakens the organization by reducing diversity and inclusion, which are critical
drivers of innovation and employee engagement.
Confidentiality Breaches: Breaching confidentiality by sharing sensitive company or
customer information with unauthorized parties can lead to severe consequences,
including financial loss, legal action, and damage to the company’s reputation.
Whether intentional or unintentional, leaks of proprietary information or client data
compromise trust with stakeholders and may result in significant harm to the
organization’s competitive advantage or client relationships.
Consequences of Unethical Behavior
o Leads to Legal Consequences
o Damages Company Reputation
o Causes Low Employee Morale and High Turnover Rates
o Results in Financial Losses
ETHICAL/UNETHICAL
BEHAVIOR
Sample Cases & Solutions
CASE 1
CASE 1: PERSON A – Supervisor; PERSON B – Teller; PERSON C- friend
of supervisor
In a bank, there once a supervisor (PERSON A) who had a friend
(PERSON C) who called for a favor to deposit PHP 50,000.00 to his
account in advance to which the money to be deposited will be given
to PERSON A hours later.
So as a good friend, despite knowing that it is not allowed
to credit an amount to a certain account if there is no
money received, orders his teller (PERSON B) to credit PHP
50,000.00 to PERSON C’s account immediately.
At the end of the day, during balancing period, PERSON B incurred a
shortage of PHP 50,000.00. Upon noticing this transaction, she
remembered that it was PERSON A who ordered to credit the
amount in advance. So, PERSON B asked PERSON A for the money.
However, the money didn’t arrive. So, PERSON A ordered PERSON B
to reverse the transaction but the reversing process failed because
the funds are already withdrawn…
 Question
• Who among the two have shown unethical
behavior? Which part?

• Who among the two have shown ethical

behavior? Which part?
 ANSWER
• BOTH OF THEM SHOWED UNETHICAL BEHAVIOR.
• BOTH THE SUPERVISOR AND THE TELLER
BYPASSED THE STANDARD OPERATING
PROCEDURES.
• NON-COMPLIANCE ON THE BANK POLICY.
 CONSEQUENCES
• The supervisor may be suspended or
reprimanded based on the degree of the act.
• Despite knowing the bank policy, the teller
failed to insist and still followed the order, so
she may be subjected to a punishment.
 SOLUTION
• The supervisor should’ve let his friend
understand that they have a bank policy
to follow.
• The teller should’ve insisted as to conform
on bank policy and guidelines.
• Respect to authority but don’t obey
blindly.
CASE 2
We all know that we have certain performance indicators in our
work. Let’s use PERSON A again. This time, directors are now asking
for performance data from all supervisors in the company. Knowing
this, PERSON A is thinking to have their data submitted “in favor”
with their performance indicators, so he ordered his subordinates to
prepare the data which aligns in his interest…
 Question
• Which part of the case shows unethical
behavior?
 ANSWER
• MANIPULATION OF DATA TOWARDS THEIR
INTEREST.
• TRANSPARENCY PROBLEM!
• HONESTY, INTEGRITY ,TRUST AND CONFIDENCE
ISSUE!
 CONSEQUENCES
• The supervisor may be asked for supporting
details and will not be able to provide;
resulting to a certain punishment.
• The directors will also lose trust and
confidence on the supervisor and will entail a
bad image to him or worst, dismissal.
 SOLUTION
• The supervisor should have adhered or commit to
TRUE and ACCURATE data as to appraise correctly
their performance thus promoting growth,
improvement and transparency of output in work.
CASE 3
In a certain manufacturing company, there was a team lead by
PERSON A. Now they are currently undergoing an audit. The auditor
reviews all the documents and found out multiple non-conforming
outputs. PERSON A then received the comments from the auditor
and was asked for an explanation. PERSON A however, pointed out
subordinates that committed the mistakes leading to this non-
conforming outputs..
 Question
• Which part of the case shows unethical
behavior?
 ANSWER
• Failure of the supervisor to speak for the team, as a
team and the act of blaming his subordinates for
the team’s failure.
• ACCOUNTABILITY PROBLEM!
• TRUST AND CONFIDENCE ISSUE!
 CONSEQUENCES
• The subordinates’ performances might worsen due to
loss of trust on their supervisor.
• This will cause high employee turnover.
• The supervisor’s act might become an addition to the
findings found by the auditor.
• From all of these, the company’s image will be
affected.
 SOLUTION
• The supervisor should speak for the team and be
one with the team. Instead of using “I”, speak
“We”.
• As a supervisor, the failure of a subordinate must
be treated as a failure of the team. Instead of
promoting blame culture, promote teamwork.
Thank you for
listening!
GROUP 3 ( Ethical Behavior )
NOEL NIÑO F. VALLE
NENALYN TAYONG
LEANCEL MAE VILLAMOR
MORALINE T. TORRENUEVA