ETHICS AND ORGANIZATIONAL CONTEXT

Organization

An organization is formed when individuals from different backgrounds and varied interests
come together on a common platform and work towards predefined goals and objectives.
Employees are the assets of an organization, and it is essential for them to maintain the
decorum and ambience of the workplace.

An organization is a group of people who work together, like a neighborhood association, a

charity, a union, or a corporation. You can use the word organization to refer to group or
business, or to the act of forming or establishing something.

Organizational Ethics

The way an organization should respond to external factors refers to organizational ethics.
Organizational ethics includes various guidelines and principles which decide the way
individuals should behave in the workplace. It also refers to the code of conduct of the
individuals working in a particular organization.

It is also known as business ethics – are the values, principles, and standards that guide the
individual and group behavior of the people in an organization.

Business ethics are set up to steer and manage activities and business situations to proactively
avoid harmful behavior. They are often laid out in a code of conduct, which establishes the
moral and ethical requirements that employees and the organization must follow.

Business Ethics in different organizational context

 Small
In the case of a small firm, ethical issues occur among employees who are treated like
slaves by their high-level personnel.

Furthermore, employees may not be motivated, and they are not involved in the
organization's decision-making process. The situation described above is one of the
 most pathetic in the industry, and it can only be addressed by adhering to business
ethics.

 Large
Large companies can dramatically improve their integrity by implementing effective
ethics and compliance programs to reduce employee misconduct and improve every key
measure of workplace behavior. On average, large companies (90,000 or more
employees) with effective programs face half of the rules violations as those without
effective programs. Their employees experience less retaliation for blowing the whistle
on rule-breaking and feel less pressure to compromise standards.

Ethical Issues

 Partners
Suppose you are a partner in a business and see a great deal of profitability on the
horizon. You don't believe that your partner deserves to profit from the business's future
success because you don't like his personality. You may wonder if you could simply take
his name off the bank accounts, change the locks, and continue without him. If you
proceed with this course of action, you would likely be in violation of your ethical and
legal obligation to act in good faith concerning your partner. The better course of action
may be to simply buy out his interest in the business.

 Gross Negligence
Suppose you are on the board of directors for a publicly traded corporation. You and your
fellow board members, in hopes of heading off early for the holidays, rush through the
investigatory process involved in a much- anticipated merger. As a board member, you
have a duty to exercise the utmost care respecting decisions that affect the corporation
and its shareholders. Failing to properly investigate a matter that affects their interests
could be viewed as gross negligence supporting a breach of your ethical and legal duty
of care.

 Just Wages
Wages are the price that workers receive for their labor in the form of salaries, bonuses,
royalties, commissions, and fringe benefits, like paid vacations, health insurance, and
 pensions. Wages differ among nations, regions, occupations, and individuals.

The policy in setting minimum wage rates considers the needs of workers, employers’
capacity to pay, and requirements for socio-economic development. The following
factors should be taken into consideration in determining the wage and salary structure
of workers (Camilar-Serrano, 2016):

1. External market factors: This refers to the supply and demand for labor and so-called
economic conditions and underemployment.
2. Laws and regulations: Workers must be paid with reference to the laws and
regulations of the government. It obliges that employers pay no less than the
minimum wage.
3. Cost of living: The cost of living relates to essential maintenance needs, and it must be
fatally considered in the preparation of wages.
4. Existing industry rate: Some alleged that paying workers the average of what other
companies are paying for identical jobs results in a fair wage.
5. Organizational factors: Evaluation of what nature of the industry the organization
operates, the size of the company, and the organization’s profitability to justify its
ability to grant fair wages to its workers should be considered.
6. Job factors: The kind of job itself entails the formulation of a just wage. Duties,
responsibilities, and the skill requirements of the job are the most substantial
determinants of a fair wage.
7. Individual performances: The trend implies that individual performance or productivity
ratings influence the determination of wage/salary increases.

 Sexual Harassment
Sexual harassment includes unwanted sexual advances, requests for sexual favors,
direct or indirect threats or bribes for sexual activity, sexual innuendos and comments,
sexually suggestive jokes, unwelcome touching or brushing against a person, pervasive
displays of materials with sexually illicit or graphic content and attempted or completed
sexual assault. It varies depending on the situation and the people involved. Sexual
harassment is not restricted by gender. Anybody, male or female, can be a victim of
sexual harassment (Camilar-Serrano, 2016).
 There are two (2) forms of sexual harassment (Camilar-Serrano, 2016):

1. Quid pro quo (an employment decision): Like in a promotion, an assignment, or

even keeping one’s job is based on submission to sexual harassment. Unwanted
sexual advances, requests for sexual favors, or other verbal or physical behavior of a
sexual nature comprise quid pro quo sexual harassment when:
a. Giving in to such conduct is made whether openly or implicitly a term or condition
of employment; or
b. Giving in to or refusal of such conduct is used as the source for employment
decisions.

2. Hostile work environment: Sexual harassment makes the workplace environment

frightening, intimidating, or offensive. All verbal or physical conduct of a sexual nature
constitutes a hostile environment. Sexual harassment in this form has the intention of
unfairly meddling with an employee’s work performance. The law considers some
factors to establish whether an environment is hostile, including:
a. Whether the behavior was verbal, physical, or both.
b. How often it was done again.
c. Whether the behavior was hostile or obviously unpleasant.
d. Whether the supposed victim was a co-worker or supervisor.
e. Whether others connived in committing the harassment; and
f. Whether the harassment was aimed at more than one (1) individual.

 Employee Promotion
A promotion is a move up the organizational ladder. There are two (2) major promotion
tracks: one based on accomplishment, the other on the competition.

Accomplishment promotions are those scheduled for workers attaining specific,

predetermined goals. For example, in an office of stockbrokers, that money under their
direction may automatically be elevated. An account executive could become a vice
president of accounts after he’s gathered more than 99 clients or has garnered accounts
valued at more than a million pesos. Along with the new title, there will be pay raise and
additional benefits.

Competitive promotions, on the other hand, are those situations where workers within a
 group are not only teammates working to attain the organization’s goals but also
competitors contending for that one slot that comes open on the hierarchy’s next level
up. In this situation, the ethics of trying to get the promotion comes into play (Camilar-
Serrano, 2016).

 Employee Termination
Terminating employees is one of the most feared tasks for human resources managers.
Unless there is a definite cause to terminate the employee from the company, the
decision to stop the employment relationship is a hard one. In an ordinary situation,
when a human resources manager removes an employee, the lives of not just the
employee but the employee’s family as well are affected. Employee terminations also
have an effect on existing employees. It is for these reasons that a human resources
manager charged with terminating an employee will struggle with the ethical dilemmas
about termination.

Ethics factor comes in whether an employee should rightfully be terminated for grounds
connected to employee performance. When an employee’s performance is mediocre,
the instruction given to human resources may be to terminate the employee. In contrast,
a human resources manager may consider mediocre performance could be enhanced
through a structured improvement program. The choice to spend on an employee’s
performance or just terminate an employee is a foremost ethical dilemma for numerous
human resources professionals (Camilar-Serrano, 2016).

Organizational Ethics

 Uniform Treatment of all employees

One example of organizational ethics is the uniform treatment of all employees. Small
business owners should treat all employees with the same respect, regardless of their
race, religion, cultures or lifestyles. Everyone should also have equal chances for
promotions. One way to promote uniform treatment in organizations is through sensitivity
training.

Some companies hold one-day seminars on various discrimination issues. They then
invite outside experts in to discuss these topics. Similarly, small company managers
 must also avoid favoring one employee over others. This practice may also lead to
lawsuits from disgruntled employees. It is also counterproductive.

 Corporate Social Responsibility

CSR refers to a person’s obligation to consider the effects of his decisions and actions
on the whole social system. Businessmen apply social responsibility when they
considerthe needs and interests of others who may be affected by business actions. In
so doing, they look beyond their firm’s narrow economic and technical interests.

There are state and federal laws that protect people from unethical environmental
practices. Business owners who violate these laws may face stiff penalties. They may
also be shut down.

Corporate social responsibility (CSR) is a self-regulating business model that helps a

company be socially accountable to itself, its stakeholders, and the public. By practicing
corporate social responsibility, also called corporate citizenship, companies can be
conscious of the kind of impact they are having on all aspects of society, including
economic, social, and environmental.

 Financial and Business Ethics

Business owners must run clean operations with respect to finances, investing and
expanding their companies. For example, organizations must not bribe state legislators
for tax credits or special privileges. Insider trading is also prohibited. Insider trading is
when managers or executives illegally apprise investors or outside parties of privileged
information affecting publicly traded stocks, according to the Securities and Exchange
Commission.

The information helps some investors achieve greater returns on their investments at the
expense of others. Executives in small companies must strive to help all shareholders
earn better returns on their money. They must also avoid collusive arrangements with
other companies to deliberately harm other competitors.
 Taking Care of Employees
A small company's organizational ethics can also include taking care of employees with
mental illnesses or substance abuse problems, such as drug and alcohol dependency.
Ethical business owners help their employees overcome these types of problems when
possible. They often put them through employee advisor programs, which involves
getting them the treatment they need.

Employees may have issues that lead to these types of problems. Therefore, they
deserve a chance to explain their situations and get the help they need.