Importance of Business Ethics in Organizations

This report analyzes the importance of business ethics in organizations and recommends measures to resolve issues arising from business scandals. It highlights the significance of ethical leadership and the need for transparency, accountability, and ethical conduct. The report examines two business scandals, Equifax Data Breach Scandal and United Airlines Scandal, and suggests mechanisms to handle such risks. The report recommends adequate training of employees, periodic appraisals, and the adoption of digital processes to ensure transparency and accountability.

Running head: BUSINESS ETHICS
BUSINESS ETHICS
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction......................................................................................................................................2
Business Scandals............................................................................................................................2
Equifax Data Breach Scandal......................................................................................................2
United Airlines Scandal...............................................................................................................3
Ethical leadership.............................................................................................................................4
Recommendations............................................................................................................................4
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Introduction
The aim of the report is to critically analyze the importance of business ethics in the organization
and assess the need of transparency, accountability and employee ethical conduct in the
organizations. It intends to recommend certain measures that could be undertaken in order to
resolve the issues of the organization as a consequence of the business scandals. The report
scrutinizes that mechanisms which can be put in place to ensure such issues can be handled
better through a reinforced team of expertise. Business ethics indicates to the contemporary
standards of organization, set of principles, values and other norms which the individuals need to
follow to conduct the operations of the business. These set of practices ensure the activities of
the business is undertaken ethically and every action is taken responsibly. However, amidst the
cut throat competition with the industry rivals, sometimes they falter in their practices when
business ace for profit maximization (Crane and Matten 2016).
Business Scandals
Equifax Data Breach Scandal
The credit rating firm called Equifax faced a major data breach when personal and sensitive
information was out in the public domain thereby affecting over 145 million people in United
States. This scandal compromised on the privacy of the individuals, transparency of the business
processes as it was revealed that Equifax had the knowledge of the flaw in the systems which
hackers make the most to it for a considerable time period. When the systems were hacked,
Equifax revealed the data breach after two months. The Justice department also accused the top

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executives of the Equifax were engaged in inside trading where over 1.8 billion worth of share
were sold before disclosing the data breach. This scandal not only highlights the non-existence of
transparency in the whole scandal but also depicts the unethical conduct on part of the executives
which sold the shares before the data breach was in the public domain (Trevino and Nelson
2016). The scandal highlights the inefficiency of the people at the highest level of organization to
take the immediate responsive actions against the data breach which could result in huge
financial losses for various companies. It also shows the irresponsible and lack of business ethics
when handling of some crucial personal and financial data further not tackling of the risks
immediately after the systems were hacked (DesJardins 2014). This kind of action is a clear
reflection of the deficiency of some necessary actions which could be taken to avoid losses in
other parameters of business linked to it.
United Airlines Scandal
The recent fallout of United Airlines when two security officers had forcibly removed a bloodied
passenger from overbooked flight. The video footage had gone viral and consumers were
terrified by the incident hence calling an immediate boycott. In this incident, a 69 year old
passenger was manhandled and dragged out of the airline who started bleeding from his nose.
After the tragedy, the United Airlines issued a statement that flight was overbooked and the
passenger was asked to leave the flight. Further, on his denial the law enforcement personnel had
to remove the passenger. This shows the unethical behavior of the security workforce as the
United Airlines in the ace of selling the tickets to the customers despite limited seats reflects the
insensitive attitude of business operations when dealing with its customer (Rossouw and Van
Vuuren 2017). The airline could have managed excess passengers in other flights and handled

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the whole situation differently. This disrespectful aspect of the airline officials displays how
necessary ethical conduct is necessary when the fault is not on the part of passengers but great
mishap on the part of the management.
Ethical leadership
The leadership needs to devolve a considerable amount of ethical beliefs and values which
essential for dignity and rights of the customers, stakeholders, investors and others. This infuses
an essence of truth and confidence, motivate to perform better and simultaneously increase their
capability (Pearson 2017). Infusing values of trust, fairness, charisma, sincerity and honesty
allows the leaders to evolve and work efficiently towards the goals and objectives of the
organization. It helps the employees to grow and simultaneously contribute in the development
of the organization. An organization is known for its ethical workforce and how they conduct
their business. In the absence of such moral base, the pedestal of the huge organization may fall
anytime. Hence, in order to tackle some emergency situations and handle organizational risks
which can crop at any time, it is essential for the organization to have a reinforced team to handle
such risks (May, Luth and Schwoerer 2014). Business scandals smother the fundamental
foundations of transparency, accountability and ethical employee conduct. Business ethics lies as
the core principle on which leadership and management works as this enthuses trust and
confidence in the workforce to increase their productivity and perform better.
Recommendations
Amidst rising scandals from every corners of the world, it is essential for the adequate training of
the employees of the work culture in consonance with prior ethics of the business operations.

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The personnel, specialist, expertise can conduct mock exercise in dealing some complex
challenges and their immediate response to such issues (Giacalone and Promislo, 2013).
Similarly, PA and their professionals can be trained and periodic appraisal on the basis of the
performance can motivate their work in the right direction. Through assessment of the
performance of the employees, the energy of the workforce can be channelized in the right
direction. PA should adopt periodic training in dealing with the potential customers, handling
with their queries and giving regular update on the movement of their goods. This whole process
can go digital where the agency could provide tracking of their deliveries when they dispatched
and other details so as to enthuse a mutual trust and confidence among its customers (Floyd,
Atkins and Caldwell 2013). In these scandals, it can be assessed that business scandals occur
when there is acute deficiency of transparency and accountability mechanisms. These loopholes
must be fixed where every action is tracked in gauged in a logical and reasonable light. This will
not only bring transparency on the part of officials. The security officers need to be trained to
handle such mishaps when there is falter in overbooking and limited supply of the service
(Baden 2014). The PA should also train their professionals to deal with such situations when the
demand of the product exceeds the supply. It should not take orders when their s limited demand
or it should adequately maintain its supply stock and avoid any such crisis in case of over
booking of the product or service. Similarly, Equifax should maintain adequate mechanisms
where the data and other crucial financial information in secured in doubly locked (Stanwick and
Stanwick 2013). The systems should be updated to avoid any kind of leakage of the financial
information. In recent spate of events of data breach, the PA should ensure their systems are
secured enough to avoid any kind of compromise in preserving crucial financial information.
Further, in case of any circumstance of data breach if detected, the authorities must be well

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versed with the adequate mechanisms that could be set in place prior to the uncertain events
(Abend 2014). The PA should have trained cyber security management team and relevant
expertise to maintain a secured system of information and communication technology.
Conclusion
A business functioning on a strong base and foundation of ethics so as to have an adequate
expertise in dealing with emergent situations. In order to run the business ethically it is necessary
to have a workforce who are committed and dedicated which is necessary for the long term
sustainability of the organization. An organization can grow and achieve its ends, short term and
long term goals on the set of values, principles, rules and regulation. Further, the organization
should adhere to certain values which would not only provide job satisfaction to its employees
but also ensure that they are become proficient in their domain. It is only possible when the
organization is transparent in its operations, accountable for its responsibilities and all the
employees have an ethical conduct while delivering their services to the customers and various
other stakeholders.

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References
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Princeton University Press.
Baden, D., 2014. Look on the bright side: A comparison of positive and negative role models in
business ethics education. Academy of Management Learning & Education, 13(2), pp.154-170.
Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
DesJardins, J.R. and McCall, J.J., 2014. Contemporary issues in business ethics. Cengage
Learning.
DesJardins, J.R., 2014. An introduction to business ethics. McGraw-Hill/Irwin.
Floyd, L.A., Xu, F., Atkins, R. and Caldwell, C., 2013. Ethical outcomes and business ethics:
Toward improving business ethics education. Journal of business ethics, 117(4), pp.753-776.
Giacalone, R.A. and Promislo, M.D., 2013. Broken when entering: The stigmatization of
goodness and business ethics education. Academy of Management Learning & Education, 12(1),
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May, D.R., Luth, M.T. and Schwoerer, C.E., 2014. The influence of business ethics education on
moral efficacy, moral meaningfulness, and moral courage: A quasi-experimental study. Journal
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Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the
idea of dialogue. In Public relations theory (pp. 111-131). Routledge.
Rossouw, D. and Van Vuuren, L., 2017. Business ethics. Oxford University Press.
Stanwick, P. and Stanwick, S.D., 2013. Understanding business ethics. Sage.
Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do it
right. John Wiley & Sons.