How to Change Unethical Behavior in Business

What's socially acceptable isn't always ethical.

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Defining what encompasses ethics is a matter that engenders significant thought and debate. It's not defined only by the law or religion; it's not about a person's beliefs. Instead, a person who behaves ethically is following a standard of right and wrong when it comes to society, fairness and rights. The ethical person who follows these standards employs honesty, compassion and loyalty, according to Santa Clara University's Markkula Center for Applied Ethics website. When co-workers behave unethically in the workplace, often the best remedy is to set a high standard of ethical behavior yourself. Step 1 Practice what you preach. The best way to influence others is to behave ethically yourself. That involves treating others with fairness and respect, and following the standard of behavior your workplace demands. This can be as simple as getting to work on time, not fudging your hours and delivering your work in a prompt and high-quality manner. You'll also need to demonstrate

integrity, caring and teamwork. When others can rely on you to behave honestly, you're well on your way to influencing others' behavior. Step 2 Identify a short-term solution in your workplace. For example, if your place of business has a high rate of employee theft because employees are allowed to rummage through inventory unseen, perhaps it's time to consider putting a lock on the storage room or installing a security camera. If you opt to install a security camera, consider alerting your staff ahead of time. Step 3 Identify the cause of the unethical behavior. What is the behavior's root cause? Are employees stealing ideas or not sharing credit? They may be feeling the need for more feedback from you -especially if you're stingy with praise. People need to feel appreciated and part of a dynamic environment. Forcing staff to jockey for your attention is demoralizing. It also causes resentment. Step 4 Establish procedures that encourage ethical behavior. Consider implementing pre-employment personality tests that determine a candidate's capacity for wrongdoing, and be sure your business's plan clearly states that unethical means do not justify the ends. Discourage cheating and idea-stealing by instituting a zero-tolerance policy for those who break the rules ... and walk the talk by implementing the policy's resulting action. Step 5 Praise good ethics publicly. Thank employees whose behavior is a model you'd like others to follow. Provide an incentive, if necessary, such as a financial bonus or a comp day.

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Small Business Business & Workplace Regulations Employee Behavior Factors in the External Environment That Influence Employee Behavior

Factors in the External Environment That Influence Employee Behavior

Employee behavior can be affected by factors external to the work environment.

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The goal of a small business is to grow and make money. To do that, it is important that all employees are on board and that their performance and behavior contribute to the company's success. Employee behavior, however, can be affected by external factors outside the business. Small business owners need to be aware of these factors and to watch for changes in employee behavior that could signal trouble.

Organizational Culture
The overall culture of a company impacts how employees conduct themselves with co-workers, customers and suppliers. More than just a work environment, organizational culture includes management's attitudes towards employees, company growth plans and autonomy/empowerment given to employees. "Tone at the top" is often used to describe the organizational culture of a company. A positive tone can help employees be more productive and happy. A negative tone can lead to employee dissatisfaction, absences and even theft or vandalism.

Local Economy
An employee's view of his job is impacted by the state of the local economy. If jobs are plentiful and the economy is booming, employees are happier overall and their behavior and performance mirror that. On the other hand, when times are tough and unemployment is high, employees can become fearful and anxious about holding their job. This anxiety leads to lower performance and lapses in judgement. In some employees, however, fear of job loss can be a motivating factor to perform better.

Reputation of Company in Community

Employees' perceptions of how their company is viewed by the local community can impact behavior. If an employee is aware that her company is considered to be underhanded or cheap, her actions may also be that way. It is a case of living up to expectations. However, if a company is seen as a pillar of the community with lots of goodwill, employees are more likely to exhibit similar behavior because customers and suppliers expect that from them.

Competition in Industry
The degree of competitiveness in an industry can impact the ethics of both management and employees, especially in situations where compensation is based on revenues. In a highly competitive environment, ethical behavior towards customers and suppliers may slip downward as employees scramble to bring in more work. In a stable industry where attracting new customers is not an issue, employees are not motivated to lay their internal ethics aside to chase money.

3 Types of Unethical Behavior in a Business

by Mary Strain, Demand Media

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Unethical business behavior can be loosely defined as that which can get you investigated, fired or sent to jail. In 2002, Congress passed the Sarbanes-Oxley Act, which established new laws to protect investors against rampant corporate fraud. However, as subsequent events made clear, hearing the law isn't the same as obeying the law. Dozens of possible categories of unethical business conduct exist, but most fall within three broad areas.

Sarbanes-Oxley
Congress passed the Sarbanes-Oxley Act in 2002 in response to public outrage over the corporate scandals that rocked the nation at the time. The overall intent of Sarbanes-Oxley, or SOX, was to protect investors and to make it harder for corporations to get away with financial fraud. SOX applies to all publicly traded companies in the U.S. It requires CEOS and CFOs to sign an attestation that they have read their quarterly and annual reports and personally vouch for their accuracy; requires businesses to establish a code of ethics or explain why they have not; and established the Public Company Accounting Oversight Board, which now regulates auditors and accounting firms.

Mistreating Employees
Many examples exist of unethical corporate conduct toward employees or other workers in the supply chain. Many U.S. corporations used Third- World sweatshops to produce their goods;

some have even been found to use child labor. Every year, lawsuits are filed against employers who are accused of sexual harassment or discrimination against their employees. Some employers have been sued for threatening or firing whistle-blowers, or employees who point out illegal practices or safety violations in the workplace. Some U.S. businesses use undocumented workers because they can pay them less than minimum wage.

Financial Misconduct
Examples of financial misconduct include price-fixing, or an illegal agreement between industry competitors to "fix" the price of a product at an artificially inflated level; physicians who refuse to treat non-insured patients, or perform unnecessary procedures to make more money; tax evasion; tax fraud; and "cooking the books" to make the company look more profitable than it is. Other possibilities include paying unjustifiable salaries and bonuses to top officials regardless of work performance -- sometimes in spite of it -- and chasing short-term profit by placing investor's money in questionable investments.

Misrepresentation
Corporate misrepresentation can take many forms. It can be as simple as a salesman who lies about his company's products, or it can be false or misleading advertising. Misrepresentation can involve a coverup of illegal workplace conditions or transactions; falsified data in a shareholder report; lying to a union about corporate profits; or hiding or denying safety problems with a product. Other examples include corporate board members with conflict of interests, doctors who push the most expensive drugs rather than the most effective ones, and brokers who recommend stocks that they own in an effort to drive up the price.

Ways to Prevent Unethical Behavior in the Workplace

by Miranda Brookins, Demand Media

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Unethical behaviors can plague a workplace, whether an executive steals money from the company or an associate falsifies documents. Unethical behaviors can damage a company's credibility, causing the business to lose customers and ultimately shut down. However, business owners and their management teams can work with employees to prevent unethical behaviors.

Create a Code of Conduct

A written code of conduct provides employees and managers with an overview of the type of conduct and behaviors the company expects. It outlines what behaviors are unacceptable and what measures are taken if an employee violates the code of conduct.

Lead By Example
Employees look to business owners and managers for direction on how they should conduct themselves. As a business owner, make ethics-based decisions and monitor the individuals you put into leadership roles at your company for the same values.

Reinforce Consequences
Business owners must hold their employees accountable when they act unethically. Start by informing new employees of the rules during their orientation sessions. If an employee acts unethically, refer to the code of conduct and take the necessary measures to warn or terminate.

Show Employees Appreciation

Loyal employees feel that a company values the hard work they put into accomplishing tasks on a daily basis. A loyal employee is less likely to act unethically. Show appreciation to the employees for work well done on a regular basis to encourage loyalty.

Welcome an Ethics Speaker

Schedule an ethics trainer to visit your work site to discuss ethical behavior and explain why it is important in organizations, regardless of the size or industry. Ethics trainers use role-playing, motivational speaking, videos and handouts to illustrate the importance of ethics in the workplace.

Create Checks and Balances

Rather than putting related responsibilities in the hands of one employee, create a system of checks and balances to minimize the opportunities for unethical behavior. For example, a sales associate rings up customer purchases, while an accountant balances the books to ensure that all payables are received and documented.

Hire for Values

When business owners hire employees, many seek to bring on individuals who have the education and experience that prove they are skilled workers, capable of handling the tasks at hand. Employers who want to prevent unethical behavior also look at candidates' values to ensure they mesh with the company's culture.

Examples of Unethical Behavior in an Organization

by Chris Joseph, Demand Media

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Unethical workplace behavior can include unauthorized computer use.

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Unethical behavior in the workplace can be defined as any action that does not conform with the standards of conduct established by the organization. Unethical behavior can occur in the relationships between employees, in the way an employee goes about his business or how he uses company resources. Unethical behavior can even break the law in some situations.

Inappropriate Computer Use

Employees may use company computers to engage in unethical behavior. For example, an employee who is not permitted to use the Internet for personal reasons commits an unethical act by shopping online while at work. Random Internet surfing takes away from the time she spends on work-related activities. Employees sometimes use company email to spread inappropriate websites or videos to co-workers, some of which could be deemed offensive by the recipients.

Time Misuse
Unethical behavior can include "stealing" time from the company, as the company is compensating employees and receiving no productivity in return. In addition to time spent on aimless Internet surfing, time misuse can consist of extending breaks beyond the allotted time, congregating around the water cooler or engaging in lengthy gossip sessions during working time, falsifying time sheets, coming into work late or leaving early and running personal errands while traveling on company business.

Sexual Harassmen and Bullying

An employee could commit unethical behavior by sexually harassing co-workers. This could involve making lewd comments, touching inappropriately or making unwanted sexual advances. Bullying typically involves attempting to intimidate a co-worker by making demeaning comments about him, spreading gossip or even making verbal or physical threats. In general, a bully attempts to make the workplace as uncomfortable as possible for a co-worker. In some cases, ongoing bullying can escalate into violence in the workplace.

Illegal Acts
Some unethical acts can also be illegal. For example, an employee who has access to a company's financial records, such as a bookkeeper or accountant, could use her access and expertise to embezzle company funds. An employee having access to personnel files, such as a human resources representative, could commit identity theft and use employees' Social Security numbers to raid bank accounts or fraudulently obtain credit cards. In cases such as the 2001 Enron scandal, top company executives used questionable accounting practices to manipulate the company's stock price for their own financial gain.