Organizations around the world are facing drastic changes.

According to Brimmer (2017),

these changes are reflected in the integration of global businesses, the cross-border flow of
capital, ever-changing technology, fierce competition, the frequent ups and downs of business
cycles, only to mention a few. To deal with these changes, organizations have developed a
series of adaptation mechanisms, such as cost reduction through layoffs and organizational
restructuring (Bolman and Deal 2017). They also often replace older technology to improve
operational efficiency. According to Ayolio and Gardner (2015), the complexities of
organizational, regulatory, and technological change faced by most organizations made
organizational change and adaptation a central research question in the last decade of the 20th
century. Typically, the change process is initiated by material forces such as technology,
markets, and economic development, but when material changes occur, they must be
accompanied by non-material changes for the process to be effective. Chasin et al (2020)
asserts that when material aspects of an organization change, they challenge the current set of
moral norms and beliefs or trigger new challenges that were previously unrelated. Therefore,
change situations require a moral and ethical analysis to implement the change in an
organizational context. According to Drucker (1985), organizational ethics are the policies,
procedures, and culture of doing the right thing in the face of difficult and often controversial
problems. The purpose of this presentation is to critically analyze the role of ethics in change
management and to identify potential ethical challenges that may arise during the change
process.

Effron (2017) stipulates that in today's competitive world, ethics is neglected by some
organizations in almost all business. Some unethical practices have increased in
organizations. Some corrective measures will be taken to adopt ethical values, as they are
very important, especially in the change management process. Organizations struggle to
strike a balance between profitability and belief systems when going through change. Most
people take the shortest unethical route to success in less time during change management.
Success without ethics lasts a long time, but it lasts less time. Leaders at the top must
embrace ethical principles and must encourage employees to follow the organization's code
of ethics to achieve successful change at work. According to Hannan et al (2016), there are
various benefits of ethics during the change management process and these include building a
positive corporate culture; boosting consumer confidence; reduces financial liabilities; and
minimizes potential lawsuits.
Building a positive corporate culture

Hoch et al (2018) asserts that corporate culture is often clouded during the change
management process. A bad company culture can be caused by a variety of factors. This is
often due to leaders creating a poor communication environment, focusing on profit (rather
than employees) and excessive competition, micromanagement or bullying during and after
change management. Other consequences of a negative culture include gossip, low employee
engagement, high absenteeism and attendance rates, lack of empathy, lack of flexibility, and
high employee turnover. According to Frynas and Mellahi (2015), negative corporate culture
results from an organization that ignores ethics in the change management process. An
organization that invests resources in developing policies and procedures that encourage
ethical behaviour can build a positive corporate culture (Kish-Gephart et al 2020). Team
morale improves when employees feel protected from retaliation for their personal beliefs.
When implementing organizational changes, management must also ensure how their actions
affects non-discrimination rules, open door policies, and equal opportunity growth activities.
Managers need to ensure that when changes are implemented, employees feel good about
their jobs and the overall sentiment of the organization is more positive. This fosters
organizational loyalty and productivity as employees feel good about going to work.

Boosts Consumer Confidence

Child (2015) stipulates that an organization must study and satisfy the ethical concerns of
society and avoid developing products and advertisements that provoke bad consumer
behaviour or confuse or mislead customers or hurt their personal or cultural sensibilities. That
being said, any organization making change should be sure to consider ethical issues, as an
organization can quickly lose consumer trust with a few negative changes, for example, an
organization trying to change with unethical and insensitive content. Advertising online can
get negative reviews online which can seriously damage consumer trust in a particular brand.
Organizations must maintain consumer loyalty through ethical practices that begin with fair
and honest advertising methods and continue throughout the sales process. Brimmer et al
(2017) asserts that one area where organizations can lose consumer trust is breaching
guarantees or negative handling of complaints during the change management process. This
is why consistent policies and employee training must be employed during change
management. A company must instruct employees on how to treat customers in accordance
with its core values. When an organization takes the time to determine what is important to
consumers and its target market, it is better able to develop value statements and agreements
to meet higher ethical standards (Child 2015). For example, a coffee distributor focused on
fair trade and sustainable agriculture has created a brand that supports environmental and
social responsibility.

Reduces Financial Liabilities

According to Ayey et al (2012), companies with a strong moral identity tend to maintain
higher levels of stakeholder satisfaction, which positively affects the financial performance of
the company. Interested parties include customers, employees, vendors and suppliers, and
investors and these stakeholder will be pleased about being ethical. Therefore, Ferrrell (2016)
notes that being ethical and considering ethical issues in the change management process can
help reduce financial liability. Organizations that do not have an ethical standards policy may
incur financial liability and the first liability is decreased sales. For example, if a real estate
development company's development reduces the size of an animal sanctuary, it may lose
customer interest and sales. That does not mean companies have to give up growth. Finding a
morally responsible middle ground is essential to shift public opinion from corporate greed to
environmental responsibility. Conversely, a lack of personal and professional ethics can lead
to negative financial results. Risky lending and questionable business practices have left
many banks and insurance companies in a precarious position (Chassin et al 2020). Ensuring
the ethical behaviour of a company helps to improve the economic performance of your
company.

As people become more aware of the impact companies have on the environment, they want
to do business with companies that reflect their values (Ferrell 2016). For example, if a
company's production processes pollute water, management may run the business profitably
in the short term, but public opinion and pressure to improve its environmental impact may
actually diminish in the long term. Therefore, Child (2015) asserts that organizations must
first act responsibly to implement changes and avoid these situations, as they may have
financial implications. Companies with high customer satisfaction tend to generate higher
levels of customer loyalty, repeat customers, and greater market share in the long run. Clients
may refuse to do business that causes suspicion and fear. Businesses that contribute to their
communities and maintain good relationships with government authorities and other
businesses tend to be more successful in the long run. These companies are not distracted by
unnecessary lawsuits and other activities that affect the production of quality products and
services that result in positive financial performance for the company.

Minimizes Potential Lawsuits

No organization is immune from disgruntled employees or customers who claim they have
been discriminated against. Sexism in the workplace is costing managers, politicians and
celebrities their livelihoods because they fail to properly handle allegations and reports of
harassment (Frynas and Mellahi 2015). Organizations must maintain policies and procedures
to address various types of harassment and discrimination during change management.
Without business ethics, a company may be at risk of litigation, which can be costly both
financially and in time. Therefore, companies that behave unethically should strive to change
behaviour through change management to avoid lawsuits. According to Eryman (2017)
companies must ensure that ethical behaviour is followed in the change management process.
Additionally, organizations must be consistent in enforcing policies for handling complaints.
This helps reduce frivolous lawsuits that can bankrupt small organizations. Lawsuits can also
damage an organization's image, causing other side effects.

As seen above having ethics in business conduct has advantages, however the process of
behaving ethically is not straight forward but has challenges that companies might face
especially when implementing change management. Navigating ethical difficulties in the
company is one of the most challenging tasks for any management. While some ethical
difficulties in business are regulated by legislation, others have more unclear standards.
Despite researchers writing about indicators of ethics effectiveness, actually, there are many
challenges in the implementation of ethics in the organization (Brimmer 2017; Child 2015;
Chassin et al 2020). It involves a lack of enforcement, organizational culture, poor leadership,
whistleblowing and lack of ethics training.

Lack of Enforcement

Today, compliance is seen as a factor that increases the effectiveness of codes, but it must be
seen through the lens of traditional theory, which includes not only sanctions but also
incentives (Brimmer 2017). A person's willingness to engage in ethical or unethical
behaviour may affect the behaviour recorded. Therefore, the ability to detect unethical
behaviour is a better predictor of behaviour than society or beliefs. Employees have been
shown to work harder to understand and follow top management's ethical values and
strategies if organizations reward those who follow good ethical standards and punish those
who behave unethically. Examples of incentives for ethical behavior are recognition,
appreciation, recognition, and money. Human resources departments have these direct and
indirect control mechanisms, and organizations with equitable reward systems that promote
ethical behavior and implement consistent compliance processes can have a positive impact
on ethical attitudes and behaviors (Bolman 2017 ). Brown et al (2015) assert that establishing
and enforcing a code of conduct or code of ethics will help create an organizational
environment that encourages ethical behaviour among people, however, it has been found
that it can strengthen ethics in organizations, especially where resources are limited in a
change management process.

Organizational Culture

Organizational culture can be defined as the beliefs and behaviors that contribute to the
characteristic social and psychological climate of an organization. For his part, Brimmer
(2017) affirms that organizational culture represents the system of assumptions, values and
shared beliefs related to the way in which people behave in the organization. Organizational
culture is one of the strategic assets that improve the performance of an organization. It is
also concerned with an organization's goals, values, philosophy, and beliefs that bind it
together and are expressed in its self-image, internal functioning, public relations, and
expectations for the future. It is based on shared attitudes, values, customs, and written and
unwritten rules that have developed over time and are current (Business Dictionary, 2019).

In fact, for ethical decision making and coding assistance, organizational culture also plays a
role. Previous research has shown that an ethical organization with high morals and based on
its image, its employees will behave appropriately and responsibly (Effron 2017). Corporate
culture as a multidimensional phenomenon can be challenging and often requires combining
perceived indicators of the quality of one's organizational culture with indicators of value
alignment. If an organization has an unfavourable organizational culture, trying to implement
an ethical culture will be difficult because people will get used to the wrong things over time.
Therefore, when assessing the impact of an organization's corporate culture on ethical
decision-making, it is not enough to simply ask to judge the perceived strength of the
corporate culture. There is also a need to capture data on the alignment of individuals' values
with those of the organization in that culture and the pressures they may face. Organizational
stressors are closely related to incentive structures. Although originally intended to represent
external organizational factors, such as market control and resource scarcity, compliance
pressure is a potential result of an ethical conflict when an employee's personal business
ethics are inconsistent with the ethical standards of the organization.

Bolman (2017) also stated that differential association theory suggests that a person tends to
follow the behaviour and beliefs of the person with whom they communicate, depending on
the personal contact relationship. They also concluded that without internalizing group
standards, individuals may act in response to group pressure. Several additional institutional
approaches have been proposed to improve the ethical environment and promote the
principles of social elements, such as improving employee screening processes, conducting
ethics reviews, protecting whistle-blowers, improving strategic planning for judicial
committees, and ethics education. In addition to the Code of Ethics as a means to
institutionalize ethics, the organization has made systematic and organizational
improvements, such as the introduction of an Ombudsman Code of Ethics, an Ethics
Committee and an Ethics Bulletin (Ayey et al 2012).

Poor Leadership

Leaders' understanding of and responses to ethical codes have been mediators affecting codes
and their enforcement, and research strongly supports the conclusion that moral philosophy
and management principles have a significant impact on ethical choices and behaviours of the
employees (Bolser 2021). Perceived unethical behaviour by employees depends on the
organizational environment, especially the direct actions of managers and colleagues.
Consequently, managerial positions have been extensively studied, demonstrating that the
perceived attitudes and behaviours of direct reports and senior managers can be significantly
influenced by unethical decisions by employees (Brown et al 2015). Hannah et al (2016)
notes that leaders are especially a great source of ethical instruction for employees, and
demonstrates moral responsibility for the ethical development of organizations..

Given the significant impact of corporate governance on both ethical and unethical
behaviour, despite all the good work that goes into creating rules, it seems that they can be
relatively easily undermined and improved due to the attitudes and behaviours of managers
and members of the organization during change management. It is therefore not important to
rely on the code itself in order to achieve ethical results since its effect can be mitigated by
countering the prevalence of senior positions ' views and actions (Eryman 2017). The senior
view and action will influence the employee action especially on ethical and unethical
behaviour. Inappropriate modelling organizational leadership, setting unrealistic and
unattainable target, lack of trust within organization, support unethical act within
organization and weal of legal and policies related with ethics is some factor that contribute
towards unethically conducted by the organization leadership (Bolman and Deal 2017). Other
than that, unethical business leader also use one set of standard in work place while applying
another set of standard for personal profit even though the legal system will prosecute person
who found guilty and unethical misconduct (Child 2015). These is some of the character of
unethical leader who character possess unethical behaviour. So, Bolman 2017 state it is
necessary to strengthen the moral reasoning and reinforcing character in assisting the leader
who wish to be better people and also who wish other people to be ethical leadership.

In conclusion, ethics is important because it meets basic human needs when every employee
wants to be and work for a fair and ethical organization in their practices. An organization
considered to be motivated by moral values is respected even by those in society who may
have little understanding of the job and the business or organization. His workers also respect
a value-driven organization. These are the typical human resources on a single network that
puts workers and decision-makers. This goes a long way to achieving a common goal or
mission of matching behaviours within the organization. Besides that, organizations driven
by ethics and values are long-term efficient, although they may seem to lose money in the
short run. Ethics is also working to protect society by legislation. As a silent observer, the law
system is often found to be behaving, unable to save community and the world. Technology,
for instance, is growing at such a rapid pace that they will have a new technology and new
human resources that will replace the older one when the rule comes up using change
management processes. In short, ethics tries to create a sense of right and wrong in
organizations, and often when the law fails, it is the ethics that can prevent organizations
from harming society or the environment.
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