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Impact of ethics on management Essay


The following paper seeks to explain and illustrate the effect of ethics on management. In order to adequately achieve this goal, the content entails the description of ethics and its various uses in management. The paper will also document the various areas in which ethics impact management, and the process that the effect of ethics goes through in order to realize tangible results. 


            The term ‘ethics’ refers to moral guidelines that govern or influence an individual’s or organization’s behavior. ‘Behavior’ in the case of organizations will be the organization’s actions during its operations(Berenbeim, R. E.2002).  Therefore in organizational management, which is our main focus in this paper, ‘ethics’ govern the operations and functions of the organization. Ethics involve a synchrony of rules and regulations that guide the day-to-day operations, and the vision, mission and objectives of the organization. Therefore, for ethics to adequately guide the operations of the organization, they must be in line with the vision, mission and objectives of the organization(Berenbeim, R. E.2002).

            Ethics in organizations are conveyed by the codes of conduct or the code of ethics documents. These documents are developed by the founders of the organizations who are the vision carriers in the organization(Deborah, B.

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2001). However, in big organizations that have been in the market for a long time, ethics can be crafted or modified by the directors of the organization who bare the weight of the organization on their shoulders, subject to the approval of the shareholders or the owners of the organization(Buchholz, R. A. 2001).

Organizational ethics are crafted in order to ensure that employees of the organization work within a set of guidelines. These laid down ethics ensure the well-being and protection of the organization against criticism and bad reputation from the internal and external environments that the organization operates in. Contravening these outlined ethics is punishable by the organization’s board of directors(Berenbeim, R. E.2002).

            Codes of ethics impact various areas/departments in the organization. These impacted areas include shareholders/owners, management, clients, industry, government and the community in which the organization operates in. these impact areas are affected by the organization’s ethics in various ways and at various degrees. Codes of ethics are mainly developed for the use of the internal members of the organization (shareholders/owners, management, employees and clients). However, since the organization affects the external members also (community in which it operates, the industry in which it operates and the government that regulates the industry), the code of ethics will affect these external members although at a different degree as compared to the internal members(Buchholz, R. A. 2001). With regards to the external environment of the organization, the code of ethics guarantees trust from the external member while at the same time it guarantees honesty and transparency to the external members from the organization.  This paper focuses on the impact of ethics on management and therefore that will be the subject of discussion.

Impact of Ethics on Management

            The code of ethics impacts management in various areas: decision making, operations, employer-employee relationship, employee-employee relationship and conflict resolution. Ethics impact management in these areas since these are the main functional areas of management.

Decision Making

            Ethics impact decision making in the organization since it is through the code of ethics that the process of decision making is implied. This decision making process entails factors such as who makes the decisions, the channel of communication, how junior workers are compelled to follow those decisions and the reward or punishment methodologies of abiding by the decisions or going against the decisions. The code of ethics clearly dictates the chain of command in the organization. Therefore, it provides for the organ or office that makes the decisions and the channel through which that decision will be communicated to the rest of the organization.

            In most organizations, it is the board of directors or the owners of the organization who make decisions. It is their moral obligation to make decisions in terms of laying out the targets of the organization and the strategies to be used to meet the targets. Should the directors fail to make decisions, then they will be contravening the code of ethics and are therefore liable for punishment by the relevant authorities. The board of directors is consequently obligated to make decisions by the code of ethics(Berenbeim, R. E.2002). The channel through which the decisions are to be communicated to the rest of the organization is also obligated to perform the duty by the code of ethics. The code of ethics guarantees this by compelling junior officers to follow the decisions and order of the directors.

            Junior officers in the organization are compelled to follow the direction of the organization as outlined by the directors by the code of ethics. The code of ethics, as established above, gives the directors the obligation to make the decisions. Therefore, the strategies to meet the decisions made are to be executed by junior officers in the organization. This provision is guaranteed by the code of ethics which stipulates that junior members of staff will abide by the orders of the senior members. Should junior members fail to comply with the orders of the senior members, the code of ethics outlines the channel of retribution against the non-compliant employee (Berenbeim, R. E.2002).

Through these provisions of decision making, channel of communication and compliance with the laid down decisions, the code of ethics indeed impacts management at the decision making level to a great extent.


The code of ethics impacts the operations of the organization by providing the duties of each employee, the strategy of execution of the duties and the chain of command in performing the duties(Deborah, B. 2001).

In the code of ethics, each employee is mandated to perform their duties subject to the direction of the board of directors. These duties are not documented in detail, in the code of ethics. However, the course of the execution of duties is regulated by the code of ethics. Deborah, B. The code of ethics outlines the parameters in which the operations by the various officers in the organization will be carried out. This restriction guarantees the controlled and consequently transparent actions by the officers(Deborah, B. 2001).

            The code of ethics also outlines the chain of command. This provision is necessary for the execution of duties because it ensures that decisions and orders are followed to the latter, and it also ensures that feedback is received from the client to the board of directors and therefore the organization knows the areas in its operation that require improvement.

The code of ethics as seen above, impacts management by guaranteeing the constant continuation of operations by ensuring that every organ of the organization plays its part.

Employer-Employee Relationship

            The code of ethics in the organization guarantees a healthy employer-employee relationship. This is achieved in the code of ethics through allowing respectful co-existence where the reasonable demands of the employer are met and the reasonable demands of the employee are met. Through the code of ethics, the employer demands for punctuality, hard work, respect and proper conduct from the employee. The code of ethics will however not communicate that it is the employer demanding for the outlined factors; it will on the contrary communicate to the employee that that is what is expected of him/her. The code continues to provide for actions to be taken against an employee who goes against these requirements. Therefore the code ensures compliance from the employee(Berenbeim, R. E. 2002).

            Through the code of ethics, the employee demands for good working conditions, reasonable pay and respect from the employer(Deborah, B. 2001). The code guarantees these provisions by compelling the management and directors to act in the best interest of the organization which includes the employees. As seen from the above provisions, the code of ethics impacts management by ensuring good working relationship between the employer and the employees.

Employee-Employee Relationship

            The code of ethics guarantees good relationship amongst the employees by providing for respect as the underlying foundation of the co-existence. The code also obligates all employees to act in the best interest of the organization. Therefore, all the employees will be focused on meeting a common goal which is one of the basic recipes for good co-existence. Through respect of each other and their property, employees will be able to work in harmony hence ensuring organizational growth(Deborah, B. 2001).

Through the code of ethics therefore, management is impacted with regards to employee-employee relationship. The code guarantees that management has an easy work when it comes to inter-personal conflict since the code will have minimized the occurrence of conflict to a possible minimum.

Conflict Resolution

            Through the code of ethics, conflict resolution arises at minimal instances. The code, through its DOs and  DON’Ts ensures that conflict hardly arises. However, should conflicts arise, the adequately code provides for the conflict resolution channels which entails the chain of command, organizational operations and the best practices. All these constituents of conflict resolution are addressed by the code of ethics(Deborah, B. 2001). The code provides for the supremacy of the chain of command, and therefore whatever the board of directors agrees on will be regarded as the solution and therefore followed. If the contentious issue in the middle of the conflict regards the operations of the organization, then the best practices that are in line with the organizational goals will prevail. An example where the code of ethics comes into play is with regards to euthanasia. In this case, reasonable action comes in the way of ethical obligations. This matter always arises in various medical organizations and it’s usually resolved with regards to the ethical code of the organization(Buchholz, R. A. 2001).


 Ethics forms the foundation on which management is administered. Therefore, ethics have a very significant impact on management. The impact of ethics on management is witnessed in the formation, operation and composition of any management system(Deborah, B. 2001).


Berenbeim, R. E. (2002, Spring). “The Corporate Ethics Test”. Business and Society Review.             London:SAGE.

Brenner, S. N. (2002). “Ethics Programs and Their Dimensions”. Journal of Business Ethics,     11,391-399.

Buchholz, R. A. (2001). “Fundamental Concepts and Problems in Business Ethics”. In Madsen,            P., & Shafritz, J. M. (Eds.) (1990). “Essentials of Business Ethics”. New York: Penguin           Books.

Carroll, A. B. (2000). “Principles of Business Ethics: Their Role in Decision Making and in        Initial Consensus”. Management Decision, 28(8), 21-23.

Dean, P. J. (2002). “Making Codes of Ethics ‘Real’.” Journal of Business Ethics, 11, 285-290.

Deborah, B. (2001, January/February). “Asking for Help: A Guide to Using Socially        Responsible Consultants”. Business Ethics Magazine, pp. 24-29.


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