Ethical Conflict and Unethical Behaviour


Ajit Kumar AJIT KUMARWISDOM IAS, New Delhi.

Ethical conflict
An ethical conflict is a complex situation that often involves an apparent mental conflict between moral imperatives, in which to obey one would result in transgressing another. This is also called an ethical paradox since in moral philosophy, paradox often plays a central role in ethics debates. The term dharmasankat is used in Indian philosophy to represent a moral or ethical dilemma. Etymologically, dharma can mean morality, sense of justice, code of conduct, law and other similar concepts; sankat implies a trouble or problem.
   Ethical conflicts arise when someone has to make a choice between violating or abiding by one or more of their moral principles, leading to a paradox where neither choice leaves the individual satisfied. For example, ethical conflict lies at the heart of situations in which a father steals food to feed his starving family or an employee keeps quiet about someone else’s misconduct in the workplace in order to save his own job. Ethical dilemmas often have potentially negative consequences for the decision-maker, especially when it involves work.
     There are many types of ethical conflicts in the workplace, however conflicts usually deal with the following categories: fraud, confidentiality, finance and honesty. Fraud occurs when a company knowingly presents information that is incorrect to employees or the public. For example, the energy company Enron fraudulently modified its income statement to appear as if the company was performing better than it actually was. A confidentiality ethical conflict occurs when information is viewed or accessed by a party that should not be privy to that information. Financial conflicts typically involve stealing, either in small or large amounts. For example, taking office supplies from the company supply closet is unethical behavior.
Resolving ethical conflicts may be as simple as a discussion with the party engaging in unethical behavior, or, in extreme circumstances, legal intervention. Ethical conflicts can be prevented in the workplace by using a two-sided approach. One approach is by educating employees about what is considered an ethical conflict. Second, company leaders must set an example for lower-level employees.
Reasons for Unethical Behaviour
The reasons for which unethical behavior might arise in the organization are:
A. Over Emphasis on Short Term Profitability: Manipulating accounting entries to show better profitability (window dressing) to raise further capital from the market.
B. Ignoring small unethical issues: Companies need to develop an environment where small ethical lapses are taken seriously so that they do not recur in the future.
C. Economic cycles: when the company is doing well, no one is bothered to understand its actual financial position. However, when the economy takes a downward turn, finance and accounting managers may take decisions by compromising over the established principles . To prevent disclosure of unethical problems in times of depression, companies need to be careful and vigilant also during prosperous time periods.
D. Market complexity: In the era of globalization and massive cross border flow of capital, accounting rules have become more complex. The complexity of principles and rules and the difficulty associated with identifying abuse are reasons which may promote unethical behavior.
E. Money - Mindedness: Most business organizations try to display better financial condition by window dressing. Following such a principle towards “showing profits” rather than “earning profits” leads to unethical accounting and financial practices.
Consequences of Unethical Behavior
Unethical behavior has adverse effects on organization. Moreover, working for an unethical, deceptive, unfair or dishonest organization requires one to take unethical or compromised decisions which also takes a toll on physical, mental and emotional health of individuals. Firstly , if a company is unethical, the word spreads fast, and the reputation and goodwill of the company is at stake. Such impact can be of a permanent nature destroying the company’s reputation possibly forever. Secondly, unethical behavior can also have a detrimental impact on the productivity of an organization due to mistrust and lack of faith among the employees. Thirdly, unethical behavior can, not only cause a company to lose good and valuable employees, but also it can be quite difficult to find new employees. Moreover, indulgence in unethical behavior shall not only be instrumental in expediting the cost of training of new employees in terms of money, but also loss of valuable time which could be spent in production. Such disruptions or
slowing down of production will result in greater customer dissatisfaction and fewer new customers. It is proved that good ethics carries many benefits , and its violations – penalties, and therefore refraining from unethical behavior should be the sine-qua-non consideration for an organization.

Tuesday, 22nd Oct 2013, 10:01:33 AM

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