Introduction to management Essay Example

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Summary of ethical issues in the five companies

The ethical issues in the five companies failed due to the poor management of the ethical behaviour in the organization. The management in the companies failed to make sure that an ethical organizational culture is adopted in the management of the business affairs. The ethical issues illustrate the necessity of having transparency and also auditing in an organization. Moreover, it is the responsibility of the executive management to provide the aspect of transparency in their organizations to the stakeholders (Remley and Herlihy, 2007). However, even though the executive management may have the decision of serving well the company interests, they may also have other motives apart from benefiting the organization. The main reason as to why companies require transparency is to be at a position of reporting any unethical activity that occurs within the organization. Also, ethical culture of an organization is usually part of the general organizational culture.

Where responsibilities lie when it comes to managing ethical behaviour

Management has the responsibility of managing the ethical behaviour in an organization. The organizational management is expected by the company stakeholders to ensure ethical culture in the company is developed. The authoritative positions which are usually held by the managers make them be responsible for maintaining ethical behaviour in their respective organizations by dealing with various unethical issues which are reported to them by their subordinates. Moreover, the managers can conduct this responsibility by creating awareness in their organizations concerning the aspect of the ethical code and also enlightening the employees about various ethical issues. In addition, the managers always monitor the workers` behaviour so as to ensure that it is in accordance with the ethical code of an organization. Also, it is the responsibility of the managers to reduce the effects of various ethical violations. Importantly, the managers should provide guidance as well as counselling to the workers in a situation when they are in an ethical dilemma. The management in any organization has the role in developing an environment that ensures that the employees are ethical in their operations.

Besides, the managers have the duty of ensuring that the ethical standards adhere in any actions which are taken in an organization. Apart from maintaining the ethical codes of an organization, the managers always have the obligation to separate the code of ethics according to the professional role, training and also responsibility. For instance, the Fiduciary duty is a very good example of the managerial roles, which forbids a manager from benefiting in his or her position unless it is in accordance with the consent of the organization principle. In addition, the managers should interact freely with their external stakeholders who include; the society representatives, government officials, suppliers and also customers among the others (Christensen, et al., 2007). In some situations, managers are usually required by the management of an organization to explain about a certain action or even a decision according to the ethical considerations. However, the main interest of the stakeholders is to receive information concerning how an organization puts into consideration various ethical issues, and therefore it is the responsibility of the manager to provide information on behalf of the company. Moreover, it is the duty of the managers to create and also implement various changes in the ethical codes of an organization which provides a guideline to the employees. However, these changes in the ethical codes may be implemented in an organization in order to respond to the internal determination of the employees.

Using one example in the examples profiled in the case study identify what caused breaches of ethical conduct. Consider management styles and organizational culture.

The example I can use from the case study to explore causes of ethical conduct breaches is Enron. In the year 2001, the Americans came to understand various unethical practices which were used to be performed by the employees as well as the leaders of the Enron Company. Moreover, the company utilized different deception methods in order to seem more profitable than the reality. For instance, the Enron Company established off-the-book entities where the company transferred its debts. However, when this scandal was revealed, and the company was declared bankrupt, the Enron`s stock declined from 90 dollars to less than 1 dollar which led to a devastating impact on several investors as well as employees. Also, the public was quite shocked by the several unethical financial practices which the Enron Company engaged into. These unethical practices of the company were caused by the greed of the company executives, and also they lacked the focus of working for the benefit of the company but not for their benefit.

The executives of the company and also the managers resulted in the direct effect on the ethical direction of the Enron Company. This is because when the company executives act ethically, there is more possibility of the employees to be ethical since always tend to emulate the behaviour of their leaders. Therefore, this is a clear indication that the various unethical practices which were witnessed in the Enron Company were as a result of the poor leadership which misled the employees. The Enron Company was less concerned about the warning signs of the unethical behaviour since the actions were actually in accordance with the goals as well as the beliefs of the company (Zadek, Evans and Pruzan, 2013). Consequently, the company executive omitted almost 27 billion dollars in the balance sheet, which eventually resulted in the collapse of the company.

Some organizations promote corporate culture as one that supports ethical behaviour. Using any organization of your choice as example explain strategies that are in place to prevent inappropriate and unethical decision making from occurring

The management can develop the necessary strategies that can help in making sure that a corporate culture necessary for supporting ethical behaviour is developed in an organization. It is the duty of the management of a given organization to provide effective training to the members concerning the ethical issues to avoid unethical practices and also increase the aspect of productivity in the organization. Some of the strategies that can be used in organizations to promote a culture that can support the necessary ethical behaviour can include:

  1. Training employees on benefits of being ethical in their operations.

For the employee staff to be in a position of acting ethically, they should be provided with training concerning the code of ethics of the company as well as about the significance of that code of ethics. Moreover, the much training provided to the employees, the more likelihood of them to act according to the code of ethics.

  1. Rewarding the ethical behaviour in an organization

In order to promote ethical behaviour in an organization, provision of rewards to the employees who are acting ethically is the most appropriate way. This is because the more the employees are provided with various rewards, the more likelihood of the workers following the suit and also other employees will get encouraged to act ethically.

  1. Leading by providing an example of how to be ethical

The management executive of an organization should serve as a role model so that the employees in that organization can emulate their behaviour. Also, the managers should have high standards of ethics to encourage the staff members to act similarly (Sonenshein, 2007). In addition, the management team should be holding regular meetings with their employees to tackle various ethical issues.

  1. Taking disciplinary actions towards the employees who are unethical

In case an employee is caught in unethical behaviour after they have been trained about ethics, it is necessary to take the appropriate disciplinary actions on them to correct them. Therefore, the management of an organization is required to decide on the disciplinary actions which should be taken on the employees who violate the code of ethics.


Christensen, L. J., Peirce, E., Hartman, L. P., Hoffman, W. M., & Carrier, J. 2007. Ethics, CSR, and sustainability education in the Financial Times top 50 global business schools: Baseline data and future research directions. Journal of Business Ethics73(4), 347-368.

Remley, T. P., & Herlihy, B. 2007. Ethical, legal, and professional issues in counseling. Pearson Merrill Prentice Hall.

Sonenshein, S. 2007. The role of construction, intuition, and justification in responding to ethical issues at work: The sensemaking-intuition model. Academy of Management Review32(4), 1022-1040.

Zadek, S., Evans, R., & Pruzan, P. 2013. Building corporate accountability: Emerging practice in social and ethical accounting and auditing. Routledge.