What are Ethical Issues?

Definition: Ethical issues in business is a situation where a moral conflict arises and must be addressed. In other words, it is an occasion where a moral standard is questioned.

What Does Ethical Issues Mean?

Ethical issues occur when a given decision, scenario or activity creates a conflict with a society’s moral principles. Both individuals and businesses can be involved in these conflicts, since any of their activities might be put to question from an ethical standpoint. Individuals are subject to these issues in their relationships with other individuals or in their relationships with organizations and same goes for organizations.

These conflicts are sometimes legally dangerous, since some of the alternatives to solve the issue might breach a particular law. In other occasions, the issue might not have legal consequences but it might generate a negative reaction from third parties. Ethical issues are challenging because they are difficult to deal with if no guidelines or precedents are known. For this reason, many professional and industry associations have ethical codes that are discussed and approved by key participants to provide a useful framework for companies and individuals to make adequate decisions whenever they face one of these conflicts.

Business Example

Mr. Pollard is a Regional Sales Manager at a company called Synthetic Fabrics Co. He currently overseas ten different states within the U.S., supervising more than 50 sales representatives. He travels very frequently to visit each of these states to meet with clients and help representatives to close deals. As part of these assignments he receives a sum of money for all his travel expenses. He has to report his actual expenses after the trip has ended and he has to send back the remaining money to the company.

Some of his colleagues, other regional managers, often tell him about how they cheat the system to keep the remaining money. This is a practice that is not considered illegal but it breaches the company’s Code of Conduct. For Mr. Pollard, this is an ethical issue that he must address. He could do what his peers do and make some extra cash or he could be ethical about it and send back what’s left.

Using the Code of Conduct as reference, Mr. Pollard decided to make the ethical decision of reporting the right amount, therefore, avoiding future conflicts that may arise because of the issue.