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The Importance of Ethics in Business


Is Formal Ethics Training in Organizations Merely Cosmetic?

Formal ethics can be understood as Ethical principles and its study which is based on the golden rule of “Treat others the way you want to be treated”. It is also based on the ethical theories of Kant and Hare. It involves the concepts of racism, moral education and many other social concerns. In many countries the government is providing firms with the funds to develop formal ethics so that it can ultimately promote the ethical culture of the organisations and to decrease the offenses and crimes at the workplace. But this is often criticised by many of the authors that these kinds of ethics programs are merely cosmetic (Webley and Werner, 2008). It means that these programs do not solve the purpose but are the show-off.  Ethics are the actions and standards which influence humans to act well and make a difference between right or wrong and ethics in business is something which influences the practices, methods and interactions with each other at the workplace. The essay will include the study about the formal ethics program in different organisation and its results. The impacts of the formal ethics program on the culture of organisation are evaluated to see whether it actually make any sense or it is merely cosmetic. The findings of the essay will be based on the study of theories, concepts and practices which raise the formal ethical behaviour in the organisations.

Ethics is all about the fair and good practices followed in the personal and professional life. Ethics is developed at the workplace and in the personal life through theories and experience. There are different factors which affect business ethics and their influence. These factors include the individual characteristics of the employees, intensity of the issues created in the organisations and the development of the country. There is even the relationship between ethics and law. On one hand, where law establishes minimum standards, ethics extends the minimum domain. There are certain business activities which are legal but are unethical and vice versa (Johnson, 2015).

Ethical training is the concept used in the organisations which helps in training the individuals to take decisions in any given situation. As per Dobrin (2012), ethics and law are not same but they are different and interconnected with each other. The legal considerations always affect the ethical decisions of the individuals. Ethical training and education is must for the companies. It does not only help in building up professional etiquettes but also helps in facing the trouble. There are many associations which formulate the professional code of conduct and help the employees in understanding the professional codes which they should follow in their routine activities. But is not so easy to deal with the ethics education that means it is not easy to implement these set of values. There are number of reasons behind it (Richardson, 2014). The foremost reason is that it is tough to make people believe that they lack in ethics and they need to be educated for it.  Another reason is that the people who are given this training are the busy professionals who need real and immediate solutions for the practical problems at the workplace. Ethics is a long term benefit program in which immediate actions is not always gained. The take away benefit from the ethical training program is not always instant rather it is time taking procedure.  It is not easy for people to deal with the values and related training. They might fear with the controversy they might face while getting engaged with the ethical training programs but there are some way outs through which the ethical training can be a success (Rossouw, et al., 2010).

Factors Influencing Business Ethics

Ethical decision making is essential in business which is done with the consensus of everyone in the organisation. Also, the ethical decisions making is affected by the personal variables like personal values, characteristics, character or identity, also by the situational variables like culture of the organisation, climate and the industry. So basically, both the individual characteristics and the organisational characteristics are the influencers of the ethical decision making in an organisation. Ethics are the principles of human conduct and it determines how an individual should react or behave in an organisation. Ethics are relevant to the professionals and so do ethical training (George, 2011).

There are some theories which support the training and involvement of formal ethics in the organisations. There are different ethical theories like Virtue ethics, Duty ethics, Right ethics, Utilitarianism and other theories which show how it is so helpful in determining ethics at the workplace. Different theories are discussed here as under to show their relationship with the use of training in the professional world.

Virtue ethics:  Virtue ethics can be understood as an approach which highlights the character of an individual.  It is the oldest theory which started with Aristotle. The theory suggests that people certainly do the right thing because they have developed various habits. It focuses on the characteristics like responsibility, honesty, competence and loyalty.  This theory suggests that the intentions of the person should be good in in good spirit which ensures moral actions from them. The training given to people can be success if the virtues of the employees support them (Abdullah and Valentine, 2009).

Duty ethics: Duty ethics can be understood as an approach which focuses on the right or wrong actions of individuals as compared to the right and wrong of the actions of the individuals. Here the moral duties are fundamental and ethical actions are considered as the duty which includes respect for all. The theory suggests that when an individual realises his own duties, there are obvious ethical actions. The person in this theory is considered as a rational person who has no self-interest and has knowledge about the society and human psychology. The theory is basically based on two principles, the first one is that every person is allowed to have liberty without restricting others and one can be more beneficial for society and economy than others.

Right Ethics: Right ethics is an approach to the ethical theory in which is it believed that humans have the right to life and property.  The theory suggests that the humans have right to show the concern for other people and they also have basic community rights. There are some negative and positive rights. Negative rights is when a person gets an entitlement to be left alone and get privacy and positive rights is when an individual gets right to attain something like right to education or medical facilities (Abdullah and Valentine, 2009).

Different Ethical Theories

Theory of utilitarianism: In this theory, it is believed that the theory examines each and every action whether its good or bad, or is creating good for a huge no of people or not. It is all about maximising the goodness for people. It tries to make a balance between the good and bad results and pay attention on the society as a whole instead of focussing on the individuals. Utilitarianism is in different forms which are Act Utilitarianism & Rule Utilitarianism,  Act Utilitarianism focuses on the actions of the individuals and it suggests that the rules can be broken if it’s for the good of most of the people. Rule Utilitarianism is when adhering to the moral rules is most important and it is believed that it will lead to the maximisation of benefits for all. It can be considered as rigid in which the rules are to be followed by the people (Secchi, 2007).

Through all these theories, it is clear that moral values and the ethics aim at one single thing which is maximising the benefit for all. In the organisations, the formal ethics training also aims at making everyone attentive for following ethics. It can also be evidenced from some of the examples where it has been proved that the formal ethics training is beneficial for good decision making and for creating ethical workplace (Gilman, 2005).

As per the survey conducted by Johnson (2015), a question was asked that is the formal ethics program effective in inserting the ethical values in the culture and behaviour of the organisation. It is found that the impact of training programmes is different in different countries. This may be because it depends on the individual characteristics and perceptions. The main findings suggest that in the formal ethics programs has brought a change in the employee honesty and integrity at the workplace (Meinert, 2014). This shows that the practice of ethics training has grown over the years. The survey shows that the employees are aware of the ethics awareness programmes taking place in the organisations. In Britain, the survey showed that the organisations where the employee ethics training program took place have shown positive experience of ethics at the workplace. It has shown improvement in the management behaviour, communication, business conduct, enforcement of business standards and better decisions making (Randall, 2012). It is also found that the younger employees are more in expectation of the ethical conduct from the business organisations than the older and experienced employees. This shows that the employees of the age group (16-34) are more aware of the employee ethical training programme (Robinson, 2007).

Formal Ethics Training and Education

There are surveys which indicated that the training programmes for formal ethics are effective and they play a significant role in giving a positive effect to the decision making in the organisations. Recently, the number of organisations who adopted the training programs on ethics has been increased but only few of the employees believed that it made any difference. Most of the employees were of the view that it is merely a formality which is to be done by the organisations to prove it ethical. For an individual it is harder to be ethical all the time because it creates a pressure to face everyone and the pressure of competition but ethical training can create a culture which is followed by all and is understood by all (Ermongkonchai, 2010).

Ethical training at the workplace may not be the best way to approach people and to make them familiar to maintaining ethics. There are other factors which help the employees to follow ethics and to maintain a good and supportive environment at the workplace. There are many factors which are against the support of training for maintaining ethics at workplace. These factors are motivation at the workplace and employee retention (Brink, Cereola & Menk, 2015). It is often seen that Motivation given to the employees brings the moral sensitivity in the employees from different perspectives. Motivation includes providing performance reviews, regular meetings, rewards and recognition to the employees, open discussions, regular feedbacks, etc. which enhances the motivation level of the employees and helps in enhancing the moral sensitivity in them. This could generate a feeling of evaluating the own actions in the employees and sharing with others. This also increases the alertness in the employees to handle the issues in the routine decisions of the organisations (Nafei, 2015).

Another factor is retention of employees in which the employer/ leaders or managers could practice such methods which drive commitment in the employees and make them responsible for their own actions (Ahmad, et. al., 2014). The organisation could regularly provide the growth opportunities and rewards to the employees which ultimately help in retaining the employees at the workplace. This also creates a feeling of working together as a team and with a positive attitude. If the employees are committed and are strong enough to make a difference between right or wrong, there will be no need of training the employee for formal ethics at the workplace which is time taking and involves cost as well (Arulrajah, 2015). Ethical behaviour requires the consensus of all individuals and welfare of the employees at the workplace which can be gained with the help of motivation methods and practices and the employee retention programmes. This is difficult as making choices between right and easy is difficult but once, the employees get this feeling of choosing right from within, it becomes easier for them. Ethical framework is established to review the systems and actions systematically for having a long term perspective and for positively affecting the stakeholders (Morais, et al, 2014).

Effectiveness of Formal Ethics Programs

It can be concluded that formal ethics is the one which promotes the culture of making decisions between right or wrong. It is the practice which reduces the number of offences and wrong actions in the organisation. The essay discusses that formal training for the ethics is the method through which the ethics can be maintained at the workplace but it is also criticised by some of the authors.  Ethical training and its concepts are discussed in the essay with different theories of ethics which shows that how ethical training is essential for the benefit of the employees and the organisation as a whole. It is criticised that official ethical training is not so effective because people do not take these trainings seriously and they are not in the habit of accepting the good habits because of training and coaching.  The statistics are also collected and discussed that how training has helped people to adopt ethics at the workplace.

At last, two factors have been discussed i.e. motivation and employee retention practices which against training helps in driving the employee commitment and ultimately helps in establishing ethics at the workplace. The essay discusses that how these factors can work better than the ethics training. I would prefer going with training because the ethics and compliance programs cultivate the ethical culture at the workplace which becomes a part of routine life of the workers and become permanent.


Abdullah, H and Valentine, B 2009, ‘Fundamental and ethics theories of corporate governance’, Middle Eastern Finance and Economics, 4(4), pp.88-96.

Ahmad, S A Yunos, R M, Ahmad, R A R and Sanusi, Z M 2014, ‘Whistleblowing behaviour: The influence of ethical climates theory’, Procedia-Social and Behavioral Sciences, 164, pp.445-450.

Arulrajah, A A 2015, ‘Contribution of human resource management in creating and sustaining ethical climate in the organisations’, Sri Lankan Journal of Human Resource Management, 5(1).

Brink, A G, Cereola, S J & Menk, K B 2015, ‘The Effects of Personality Traits, Ethical Position, and the Materiality of Fraudulent Reporting on Entry-level Employee Whistleblowing Decisions’, Journal of Forensic & Investigative Accounting, Vol. 7, Issue 1.

De George, R T 2011, Business ethics, Pearson Education India.]

Dobrin, A 2012, ‘Ethics Training Isn't Useful When Taught By Lawyers’, Psychology Today.

Ermongkonchai, P 2010, ‘Understanding reasons for employee unethical conduct in Thai organizations: A qualitative inquiry’, Contemporary Management Research, 6(2), p.125.

Gilman, S C 2005, ‘Ethics codes and codes of conduct as tools for promoting an ethical and professional public service: Comparative successes and lessons’, Washington DC.

Johnson, D 2015, ‘Ethics at Work’, Institute of Business Ethics.

Meinert, D 2014, ‘Creating an Ethical Workplace’, Society For Human Resource Management.

Morais, U P, Pena, J, Shacket, K, Sintilus, L, Ruiz, R, Rivera, Y and Mujtaba, B G 2014, ‘Managing diverse employees at Starbucks: Focusing on ethics and inclusion’, International Journal of Learning and Development, 4(3), pp.35-50.

Nafei, W 2015, ‘The Influence of Ethical Climate on Job Attitudes: A Study on Nurses in Egypt’, International Business Research, 8(2), p.83.

Randall, D M 2012, ‘Leadership and the use of power: shaping an ethical climate’, The Journal of Applied Christian Leadership, 6(1), p.28.

Richardson, F W 2014, Enhancing strategies to improve workplace performance (Doctoral dissertation, Walden University).

Robinson, P 2007, ‘Ethics Training and Development in the Military’.

Rossouw, D, Van Vuuren, L, Ghani, A H A. and Adam, M Z A 2010, Business ethics, Oxford University Press Southern Africa.

Secchi, D 2007, ‘Utilitarian, managerial and relational theories of corporate social responsibility’, International Journal of Management Reviews, 9(4), pp.347-373.

Webley, S and Werner, A 2008, ‘Corporate codes of ethics: Necessary but not sufficient’, Business Ethics: A European Review, 17(4), pp.405-415.

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