Paper Example. Ethics Failures in a Business

Published: 2023-03-27
Paper Example. Ethics Failures in a Business
Type of paper:  Essay
Categories:  Problem solving Organizational behavior Business ethics Strategic management
Pages: 6
Wordcount: 1520 words
13 min read

Ethics refers to the moral values and principles that are vital to be followed by employees of any business organization. Business ethics of any organization is a determining factor in the success of any business. Business ethics play a key role when it comes to the strategic decision-making process of any business organization (Meyers, 2004). The article by Woodward (2004) provides an overview of the financial and ethical abuses of the energy conglomerate Enron. It offers significant information concerning the behind-the-scene image of the current world dysfunctional corporate institutions. Woodward (2004) argued that there was a lack of human and corporate ethics by the company hence resulted in bankruptcy, loss of pensions and jobs for its employees, criminal indictments of major officers as well as the suicide of one of its key officers. The author claimed that Watkins, who happened to be a high profile whistleblower, emerged as a person of the year upon her courageous disclosure of secrets of the company. Watkins was able to face her bosses via meeting and internal memos, though her condor only got revealed after her memos were discovered to CEO Ken lay by the news media. Woodward (2004) argued that Watkins recorded the abuses related to the Enron story, but does so not only because it was unethical but because it was bad for the company as well. Woodward (2004) further claimed that the company created a corporate environment that was out of control, ne that gave minimal attention to economic and ethical realities. Berenbeim (2002) claimed that the culture of excess characterized Enron's corporate world; incredible bonuses, big salaries, numerous company expense accounts, and a workforce endowed with talented young employees who got inspired to adopt the notion that the company that makes rules and thus has not to follow the rules. Enron's business deals involved hundreds of millions of dollars being leveraged or spent. Berenbeim (2002) argued that the company ignored ethical behavior in as much as there was an increase in the profit margins and stoke process. The most significant weaknesses of Enron emanated from ethics, or more succinctly lack of ethics in conducting its business affairs. The focus of this paper is to examine laps in ethical integrity that is dominant in the news as well as discussing whether such problems may happen in small businesses and how they may be prevented from occurring.

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Whether Lapse in Integrity Can Occur In Small Businesses

Most of the surveys indicate that small businesses are prone to ethical issues than large and established businesses. Berenbeim (2002) argued that just like Enron, aspects of ethical problems in small businesses prevail among employees who are subjected to harsh treatments by their seniors. Furthermore, employees in small businesses may not be motivated, or they may not be given opportunities to take part in the decision-making process in matters of the organization.

Woodward (2004) argued that it is common knowledge that small businesses violate rules in most cases. They do this by failing to adhere to some business legislations as well as misinforming their customers with their marketing advertisements. Such small businesses find themselves involved in prohibited business morals to help them make some extra money or to boost their reputations (Meyers, 2004). In some scenarios, small businesses may make away with their unethical conduct, but after a while, somebody may "blow the whistle," therefore making them crash down and completely collapse in some cases.

Woodward (2004) maintained that it is easy to figure out the vital role that business ethics plays for business success, reputation, and well-being in its long-run operations. However, Woodward further noted that small businesses, in most cases, flout business ethic through their usage of social media platforms. It is from the social media platforms where most small businesses camouflage to the customers with the intention of boosting their reputations. Woodward (2004) further noted that small businesses as well make use of social media platforms as a basis of providing false information to their clients via the ads with the main intention of increasing sales. He further claimed that in small businesses, top management might encourage decisions and activities that are unethical by supporting the notion that ethics doesn't matter, just like the case of Enron Company. Berenbeim (2002) further noted that on a routine basis, some small businesses also engage in unethical practices by deceiving their clients that that is how they operate.

Most ethical practices in small businesses also revolve around the usage of money. In most cases, small businesses involve in unethical financial practices to evade taxes as well as line pockets of internal shareholders, an action that may make the company underperform (Meyers, 2004). In some scenarios, small businesses fail to take part in green-friendly initiatives due to costs associated with using or acquiring production processes, which is an unethical culture that enhances earnings above all else results in corner-cutting. Meyers (2004) further argued that most employees and managers of small businesses portray bad ethical behaviors since the business has failed to provide a vivid model of ethics. An ethical business code of conduct or manual mostly displays ethical standards as well as the associated consequence for breaching the prescribed code of conduct. Despite this, McEvoy (2011) claimed that some small businesses lack formal policy documents and thus provides no guidance to employees and management. Moreover, some businesses may have policy guidelines that are vague, unclear, or inconsistently enforced. This does such businesses to go against the conventionally expected code of conduct hence making them underperform.

Moreover, a business's culture plays a significant role in ensuring that its employees and management adhere to the prescribed ethical standards. Influenced by human resource initiative and managers and cascading down via frontline management ranks, the ethical nature of a business developed into from the fabric nature of its culture.

Berenbeim (2002) noted that in most businesses, peers require high ethical standards among colleagues. For small businesses where bad ethics is exhibited on a routine basis, employees may either move along with such bad ethical decisions or condone them. The level of seriousness that a business gives to its prescribed ethical standards will determine has well its employees will adhere to its code of conduct (Meyers, 2004). Small businesses may, therefore, breach ethical standards either due to lack of clear guidelines and merely lack of seriousness in the implementation of the prescribed code of conduct.

How to Prevent Ethical Failures from Occurring

Ethical failures have become a prevailing issue in most small businesses. However, the business owner has to come up with a stringent measure that ensures that both the employees and the management conform to the required business code of conduct. Meyers (2004) argued that the best way small businesses can adhere to a code of ethics is by inculcating corporate culture. It worth noting that corporate culture is a significant element in the success of any business.

Furthermore, another way that small businesses can deal with ethical failures is by dealing with issues related to ethics honestly and immediately (McEvoy, 2011). This should be done by ensuring that every business employees report to the supervisor any issues. This will help in figuring out the appropriate solutions to the problems without subjecting the reputation and integrity of the business to compromise. Once an ethical issue is spotted, it is good to consult legal advice where necessary. This would ensure that any wrongdoing is corrected in accordance with the legislation. After the solution to the problem has been found, it is prudent to explain to the employees the related ethical issues. Doing so would assist the employees in knowing how to avoid such kinds of issues in the future.

Moreover, the business should come up with clear policies and guidelines that govern its operations as well as the associated consequences if one flouts them. The employee then needs to be subjected to training on subjects and possible dilemmas they may encounter (McEvoy, 2011). This would ensure the all the business operations are done with due diligence and within the accepted standards of ethics.


Ethical failures have become a common narrative in most business settings. Business owners thus need to put a stringent measure that ensures that management and the employees conduct all the business operations within the accepted ethical standards. Businesses should accomplish this by ensuring that putting down clear policies as well as training staff on various ethical aspects.


Berenbeim, R. (2002). Improper Corporate Behavior. Vital Speeches of the Day, 68(10), 305. Retrieved from

McEvoy, S. A. (2011). Toying with Safety: A Regulatory and Ethical Failure of Governments and Business. International Journal of Interdisciplinary Social Sciences, 5(12), 61-67.

Meyers, C. (2004). Institutional Culture and Individual Behavior: Creating an Ethical Environment. Science & Engineering Ethics, 10(2), 269-276.

Woodward, J. J. (2004). Power Failure: The Inside Story of the Collapse of Enron (Book). Public Integrity, 6(3), 263-265. Retrieved from

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