Four Common Ethical Problems

The phrase business ethics draws a predictable reaction from cynics. They insist that it's a contradiction in terms. However, that's simply not true. Senior managers in a vast majority of businesses believe it's important for employees to act and think ethically. These businesses set standards of conduct to help employees recognize ethical problems and respond appropriately.
Companies that set ethical standards often formalize the standards in a code of ethics. A company's code of ethics addresses the ethical dilemmas its employees face most often. Codes created by different companies may describe vastly different ethical dilemmas.
However, a wide variety of dilemmas spring from the following four common ethical problems:

1. Absence of transparency—Everyone affected by a decision should have all relevant information about the decision maker's possible gain, obligations, and relationships. When relevant facts are hidden from one or more parties, the decision is made in an absence of transparency.
2. Unwarranted gain—Important business decisions are usually intended to cause a gain for the decision maker's company and possibly for other companies. When decision makers seek an improper or unearned benefit for themselves or others, that's an unwarranted gain.
3. Lack of impartiality—In an ideal world, decision makers use rational criteria to make decisions; they don't favor one party over others for personal reasons. However, decision makers may let family relationships, friendships, or other biases influence them. When they do, the decision makers lack impartiality.
4. Nonperformance of obligation—Employees have an obligation to perform the required duties of their jobs. They also have an obligation to act according to the company's principles of conduct. When employees fail to meet their obligations or when they cause others to fail, that's nonperformance of obligation.

Employees in organizations—like other groups of people—behave according to the values shared by members of the business. Common ethical problems create unethical behaviors that threaten those shared values.