What is Ethical Behavior?

Definition: An ethical behavior is the application of moral principles in a given situation. It means to behave according to the moral standards set by the society which we live in.

What Does Ethical Behavior Mean?

Ethical behaviors can be identified in both individual relationships and work relationships. The concept can also be applied to corporations as entities. It evaluates the moral implications of actions being taken on each of the previously mentioned contexts. An ethical behavior is essential for a society to function properly. Individuals that behave unethically will normally loss other people’s confidence and their unethical behavior should be also punished by the law.

On the other hand, ethical behaviors can also be evidenced in work relationships. Co-workers should maintain an ethical standard between each other to ensure a healthy work environment. This behavior is evidenced by certain values and principles maintained within the relationships, such as integrity, transparency, honesty or fairness. These are ethical standards that should be respected between the parties to maintain an ethical environment.

Finally, business and corporations should also maintain an ethical behavior towards their clients and stakeholders. Transparency with shareholders, punctuality when it comes to payments and a fair treatment towards their employees are desired ethical behaviors for companies.

Example

A company called Shady Sunglasses LLC is a company that manufactures and distributes a brand of sunglasses called Radiant. The company is currently going through a difficult financial situation since the costs of its raw materials increased by more than 20% and their gross margins are declining fast.

The company was supposed to pay its employees their salaries at the end of the month but since they had negative cash flow they decided to postpone the payment to the 5th day of the next month. This prompted employees to file a complaint with the government work’s authority of the state and the company was accused of acting unethically towards its employees.

This unethical behavior caused a fine of $15,000 for the company and an interest payment plus additional compensation for the employees as compensation for the late payment.