Consequences of Unethical and Illegal Conduct

Introduction

There are many decisions and choices that a person must make in the workplace as well as in life. Understanding one’s views on ethical issues, moral behavior, and legal responsibilities is important, and a milestone to career development. As individuals, we consider what is personally ethical; however, we also have to consider what is legally ethical. The rule of law is based on the foundation of ethics. Personal ethics are of course not mandatory. Individuals have different personal ethics based on family upbringing, cultural beliefs, etc. Personal ethics are based on an individual’s sense of right and wrong. For example, there is no law that says a person who drives by a burning house must stop and offer assistance. However, a person may feel a moral obligation to stop and offer or call for assistance.

Federal, state, and local governments enact our laws to ensure citizens conform to the law. Breaking our laws can result in legal actions and consequences. Administrative policies and procedures established by businesses and professional organizations are often based on law and are used in practice as a form of ethical code. Businesses and professional organizations mandate the administrative policies and procedures for employees to follow as a part of the organizational structure. Individuals who do not follow these practices could be subject to a number of negative consequences. In this lesson, we will take a look at the impact and consequences of unethical and illegal behavior in the business environment.

Unethical Business Conduct

Our federal, state and local governments offer a framework of rules and procedures of how a business should legally run and operate. Successful businesses and organizations practice similar administrative policies and procedures within their operations based on strong, sound ethics. A lack of ethics in the business environment can have a negative impact on the operations of a business as well as on the employees and other stakeholders involved in the business.

Unethical business practices continue to be wide-spread, regardless of actions taken to try and revert this type of behavior. Some of the primary categories of unethical business conduct are:

Below are six examples of ways businesses are impacted by lack of ethics in operations.

Company Policy

Employers have the right to expect employees to behave according to company policy and to abide by the law. To disregard company policy is unethical because it has the potential to harm the company, employees, and future business.

Below are a number of ways employees may act unethically on the job and negatively impact a business:

Unlawful Conduct

Employees may act unethically on the job through unlawful conduct such as:

Taking office supplies
Taking from petty cash
Sharing unregistered software products
Padding expenses with items that are non-business

Dishonor

Employees may act unethically on the job through dishonorable activity such as:

failing to honor commitments
sharing of a company's confidential information

Deliberate Deceptive Acts

Employees may act unethically on the job through deliberate deceptive acts such as

Taking credit for someone else’s work
Calling in sick when not sick
Misrepresenting a product to increase sales

Let's Review!

Take a moment to participate in the following activity to practice your understanding of the topics in this module. Reach out to your instructor if you have any questions.

Final Thoughts

In an effort to prevent unethical behavior, businesses should set realistic goals for employees. A process should be in place to consistently monitor employee performance. There should also be a process in place to effectively train employees. Checks and balances should be in place for managers and executives to ensure operations run smoothly and to decrease the possibility of unethical behavior. We may never be able to completely eliminate the unethical or illegal conduct that takes place in our work environments. However, through legislation such as the Sarbanes-Oxley act, there will be stronger consequences for those that continue to conduct unethical business practices.

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