Ethical Issues In

Business
Learning Outcomes
• Recognize the ethical issues in business context
 Ethical Issues In Business
1. Discrimination
One of the biggest ethical issues affecting the business world is
discrimination. Discrimination is not just unethical; in many cases, it is also
illegal. There are statutes to protect employees from discrimination based
on age, gender, race, religion, disability, and more. Nonetheless, the
gender and race pay gaps show that discrimination is still rampant. Other
common instances of discrimination include firing employees when they
reach a certain age or giving fewer promotions to people of ethnic
minorities.
 Ethical Issues In Business
2. Harassment
The second major ethical issue businesses face is harassment, which is
often related to racism or sexism. This can come in the form of verbal
abuse, sexual abuse, teasing, racial slurs, or bullying. Harassment can
come from anyone in the company, as well as from customers. In particular,
it is an ethical issue for the business if a supervisor is aware of harassment
from a client and takes no action to prevent it.
In addition to causing a toxic workplace, harassment can cause employees
to leave the company prematurely — a second reason why some
businesses lack diversity. Harassment can have a long-term impact on
employees: psychologically, in terms of earnings, and even impacting a
person’s entire career path.
 Ethical Issues In Business
3. Unethical Accounting
Publicly-traded companies may engage in unethical accounting to appear
more profitable than they actually are. In other cases, an accountant or
bookkeeper may change records to skim off the top.
4. Health and Safety
Another type of ethical issue that is often protected by law is health and
safety. Companies may decide to cut corners to reduce costs or perform
tasks faster. As well as injuries, failing to take workers’ safety into account
can lead to psychosocial risks (like job insecurity or lack of autonomy),
which can cause work-related stress.
 Ethical Issues In Business
5. Abuse of Leadership Authority
Abuse of power often manifests as harassment or discrimination.
However, those in a leadership role can also use their authority to pressure
employees to skip over some aspects of proper procedure to save time
(potentially putting the employee at risk), punish workers who are unable
to meet unreasonable goals, or ask for inappropriate favors.
In addition, abuse of authority can extend beyond the workforce.
Managers can use their position to change reports, give themselves credit
for the work of a subordinate, misuse expenses, and accept gifts from
suppliers or clients.
 Ethical Issues In Business
6. Nepotism and Favoritism
Nepotism is when a company hires someone for being a family member.
Favoritism occurs when a manager treats an employee better than other
workers for personal reasons.
Not only are nepotism and favoritism unfair, they are also disheartening to
employees. Workers often find they have to work much harder to receive a
promotion or other rewards.
 Ethical Issues In Business
7. Privacy
Employees have recently found that the distinction between work life and personal
life has become less clear. This is mainly due to the advances in technology.
For one thing, employers may punish for posts on social media, particularly if they
complain about work conditions or the company as a whole. Employers may even
fire workers who post controversial statements that go against company values.
Another ethical issue surrounds the use of devices belonging to the company.
Employers can now monitor all worker activity on laptops and cellphones.
Whereas this is supposed to check that employees are sticking to work-related
activities during the business day, some employers take it further, tracking
keystrokes and reading emails. The question is where to draw the line between
monitoring and spying
 Ethical Issues In Business
8. Corporate Espionage
The opposite to the above can also happen: workers can misuse company
data. An employee may steal intellectual property or provide a competitor
with information about a client. Usually, this is for monetary purposes, but
it can also help an employee secure a position at another firm.
 Ethical Issues In Business
9. Social Media
One of the more current ethical issues in business is the question of employees’
personal behavior on social media outside of work hours. Granted, there’s still
quite a large gray area of situations that may or may not make it ethically
justifiable to fire an employee for their social media conduct.
When it comes to employee etiquette on social media, the bottom line for most
businesses is that the employee can be justifiably fired if the activity is deemed
disloyal or financially harmful to the company. Of course, neither company nor
employees would want to get to a point like that –
so what can be done to minimize ‘bad’ employee
behavior on social media?
 Ethical Issues In Business
10. Health & Safety
There are few ethical problems in business that are more serious than the
health & safety of your employees and customers. Besides the obvious ethical
implications of people getting hurt or sick while working for your business,
there’s also the huge risk to your business’s financial stability and reputation.
11. Environmental Responsibility
Environmental responsibility in business may seem like it’s targeted at big oil
companies, lumber businesses, farming, and other businesses that have a more
direct impact on the environment. But that’s not the case! Even if business
operates entirely within the confines of an office building, environmental
responsibility is still on the list of ethical issues in business that you should pay
mind to.
 Ethical Issues In Business
12. Accounting Practices
This is one of the more ‘classic’ ethical issues in business and comes along
with some very serious legal implications as well. Manipulating a
business’s financial data to make the company look more successful –
also known as “cooking the books” – is the most well-known form of
accounting misconduct (and is a crime). Beyond the legal boundaries that it
crosses, the ethical dilemmas in business related to bad accounting
practices can put innocent people in harm’s way.