What Is the Role of Ethics in Organizational Behavior? 3 Facts

A company’s viability and prosperity depend on a number of factors, including productivity, commercial acumen, and a supportive corporate culture. 

Organizational success and longevity may be attributable, in part, to its members’ commitment to a set of ethics principles that define appropriate behaviors and promote an environment of trust and responsibility.

Individual and societal ethical considerations must be considered when examining the role of ethics in organizational conduct.

What is the definition of ethics in the workplace?

The term “ethics” is used in the business world to describe a code of conduct that workers are expected to adhere to while making decisions. Moral judgments at work require taking into account not just one’s own interests but also those of people who may be impacted in some way.

What Is the Role of Ethics in Organizational Behavior?

The second definition draws attention to the fact that many employees struggle to act ethically while on the job. Equally as important, the company’s actions should indicate a commitment to ethical standards.

What Is the Role of Ethics in Organizational Behavior?

Ethical behavior happens when one acts in line with one’s moral ideals, however the specific concept of “moral correctness” may vary among companies.

In general, a company’s code of ethics exists to establish a culture in which workers conduct themselves in a way that benefits the corporation, its clients, and the surrounding community.

Organizations can profit from developing a work environment that conforms to a stringent code of ethics in a variety of ways.

Workplace ethics strengthens an employee’s belief in fair treatment and encourages continuous personal accountability.

Making ensuring that everyone is given a decent wage that is commensurate with their talents, experience, and value to the organization is an example of an ethical ideal having far-reaching personal repercussions.

What Is the Role of Ethics in Organizational Behavior?

Ethical codes may help build a reliable workplace by outlining each individual’s obligations, such as avoiding misrepresenting expenses or abusing sick days. If workers have faith in their bosses and are respected by their peers, they are more likely to remain loyal to the company and enhance productivity.

The ethics of an organization may have far-reaching effects on how it is run. If the company as a whole acts dishonestly, then it may not matter how ethically its employees act individually.

For example, if managers are allowed to get away with sexual harassment or insider trading, the entire system may become a hostile, dangerous environment that can erode loyalty and lead to more problems, even if all mid-level employees in an office act fairly and morally toward one another.

One way to promote a healthy work environment is to ensure that everyone follows the same set of guidelines.

Making sure the company is a good neighbor both inside and outside the office is another important ethical factor for businesses to keep in mind. It is normal for a firm’s detrimental acts to have consequences within the organization.

If, for example, a newspaper article shows that the firm uses sweatshop labor to make its items, customer and staff loyalty might fall.

Maintaining a favorable public profile through philanthropy boosts customer loyalty, attracts higher-caliber employees, and creates new opportunities for expansion.

What Is the Role of Ethics in Organizational Behavior?

Builds a Positive Corporate Culture

A firm with a healthy culture is one that puts forth effort into developing policies and procedures that encourage employees to act ethically. Having the assurance that they would not be punished for voicing their personal beliefs at work does wonders for morale.

Anti-discrimination policies, open-door policies, and equal opportunities for advancement are all examples of the kind of rules that fall under this category.

When employees are fulfilled in their work, they contribute positively to the atmosphere. People who like going to work are more loyal to their employers and produce better results over time.

Boosts Consumer Confidence

Some unfavorable internet remarks may quickly harm a company’s brand and drive away clients. Businesses that wish to maintain their consumers must use ethical business methods, beginning with accurate advertising and continuing until the deal is closed.

A business might lose consumers’ confidence if it fails to deliver on commitments or address customer concerns in a timely manner.

This highlights the need of establishing and enforcing consistent policies and ensuring that all employees have received enough training. When teaching employees how to interact with consumers, a firm should keep its core values in mind.

When a corporation takes the time to identify what is important to its consumers and target market, it may better design value statements and procedures to attain greater ethical standards.

A coffee distributor, for example, that encourages ethical labor practices and ecologically sound farming processes may portray itself as a socially and environmentally concerned company.

What Is the Role of Ethics in Organizational Behavior?

Reduces Financial Liabilities

If businesses don’t have policies to ensure employees adhere to ethical standards, they might end up spending more money than they save.

The greatest threat is a drop in revenue. For example, if a real estate development project calls for the reduction of an animal sanctuary, the general public may lose interest in the developer’s work, and the developer may suffer a decline in sales.

A corporation need not forego expansion as a result of this. To shift public opinion away from corporate greed and toward environmental responsibility, an ethical middle ground must be found.

Minimizes Potential Lawsuits

Second, you might potentially face financial consequences if legal action is taken. Every company runs the risk of having an unsatisfied employee or customer file a discrimination claim.

When sexual harassment and discrimination claims are handled poorly, high-profile figures like CEOs, politicians, and celebrities can lose their jobs.

Every company must have a set of systems and policies in place to deal with the many types of workplace discrimination and harassment.

What Is the Role of Ethics in Organizational Behavior?

Furthermore, businesses must be consistent in how they implement their regulations addressing complaints. This reduces the amount of frivolous lawsuits that might bankrupt firms.

Why Ethics in Organizational Behavior?

The success and reputation of every business is dependent on its employees’ willingness to abide by a code of ethics. Employees must follow the company’s policies and procedures to ensure that their job is done in an ethical manner and that business objectives are accomplished.

When a company’s employees are recognized for their ethical behavior in the workplace, morale and productivity grow.

A company’s reputation and longevity may both benefit from enforcing a code of conduct. That’s why it’s so important to set firm guidelines for what is and isn’t tolerated in the workplace.

This should begin at the start of a worker’s stay with your organization, when they are employed, and continue throughout their whole onboarding process. Policies can be established by including them in an employee handbook or detailing them in a job description, which offers a summary of the expected conduct.

The guidebook can include issues like as language, harassment, and dress code. Disobedience of the emphasized norms of behavior may result in disciplinary action, such as, but not limited to, verbal and written warnings and even termination.

The long-term health of the organization is dependent on a commitment to maintaining a working culture of honesty and integrity. Employers frequently disregard candidates’ integrity, honesty, and forthright manner in favor of their skills and productivity.

What Is the Role of Ethics in Organizational Behavior?

When workers are praised for their honesty and forthrightness, they perform better. The human resources department sets the tone for hiring ethics by emphasizing the need of honesty during the selection process.


The study of workplace ethics is known as “organizational behavior,” and it focuses on how people interact and are encouraged to collaborate in businesses. Whatever we do or do not do has ethical ramifications in business and in life.

Ethical standards assist us in distinguishing between good and wrong conduct. Essentially, studying ethics teaches us how to make smart judgments and act morally.

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Pat Moriarty
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