What Causes an Ethical Dilemma in Conducting Business?

In a perfect world, businesses and their employees would always do the right thing. Unfortunately, in the real world, ethical dilemmas are a common occurrence in the workplace. An ethical dilemma is a problem where a person has to choose between a moral and an immoral act. Employees must deal with pressures to perform and help the company succeed as well as deal with personal temptations to take the easy way out. In the end, workers will likely face many dilemmas in their careers; companies should provide training and information to assist them in making the right decision.

Pressure from Management

Each company’s culture is different, but some companies stress profits and results above all else. In these environments, management may turn a blind eye to ethical breaches if a worker produces results, given the firm’s mentality of “the end justifies the means.” Whistle-blowers may be reluctant to come forward for fear of being regarded as untrustworthy and not a team player. Therefore, ethical dilemmas can arise when people feel pressured to do immoral things to please their bosses or when they feel that they can’t point out their coworkers’ or superiors’ bad behaviors.

Examples from the business world are legion. Enron’s management aggressively steered its employees and consultants towards a misleading form of accounting that greatly inflated company profits. Wells Fargo pressured account executives to open bogus accounts and services for customers who never requested them. GMAC Mortgage, along with other financial firms, were fined millions of dollars for “robosigning”, a practice that had mortgages approved without the careful review normally given. Engineers at Volkswagen designed software to provide misleading results for automotive emissions tests.

Ambition and Discrimination

Individual workers may be under financial pressure or simply hunger for recognition. If they can’t get the rewards they seek through accepted channels, they may be desperate enough to do something unethical, such as falsifying numbers or taking credit for another person’s work to get ahead.

Though diversity is an important part of business, some people may not be comfortable with people from different backgrounds and possibly be reluctant to treat them fairly. This kind of discrimination is not only unethical but illegal and still remains common.

Used as Negotiation Tactics

While these factors can cause ethical dilemmas for workers within their own companies, doing business with other firms can also present opportunities for breaches. Pressure to get the very best deal or price from another business can cause some workers to negotiate in bad faith or lie to get a concession. Negotiators may also try to bribe their way to a good deal. While this is illegal in the U.S., it still sometimes happens; in other nations, it is more common, and sometimes even expected, which can put negotiators in a difficult position.

Value Ethical Behavior

These ethical dilemmas can be difficult for workers to grapple with, especially if they don’t know what the company’s official guidelines are. Therefore, it is in an organization’s best interest to provide ethical training to its employees, to help them identify unethical behavior and give them tools with which to comply. Every company should have an ethical policy that spells out its penalties for infractions. Moreover, management must lead by example, showing that the company takes ethics seriously and that violators will be punished according to the organization’s policies, including possible suspension or termination.