Ethical System, Decision-Making, and IBM's Employee Conduct Report

This report delves into the significance of ethical systems and ethical decision-making within the business environment, using IBM as a focal point. It examines the challenges IBM faces in maintaining ethical conduct, particularly in a global context, including issues like bribery and adherence t...Read More

Running Head: ORGANIZATION AND BUSINESS MANAGEMENT
organization and business management
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ORGANIZATION AND BUSINESS MANAGEMENT 1
1. Ethical System in the Business Environment
The ethical system in the business environment relies on the principle that an attitude and
behavior in the company should be understood by interrogating the interaction of various forces
and factors and should not look for bad and good employees. IBM is one of the most reputed
companies in the world but the company is facing some ethical issues, and the biggest challenge
for the IBM is to maintain the ethical conduct. As the IBM is a global company, employees are
facing difficulties in the various practices and standards in the other countries. As IBM was
charged by the officials of the bribing government and the commission of Securities and
Exchange, the company should file the report on the monthly basis in order to show their effort
for the avoidance of violations of the act of foreign corrupt practices. Therefore, the advantage
for IBM is trust and integrity among employees but sill the company is facing the issue in
maintaining the ethical system.
An ethical system is very important in the organization as it helps in gaining competitive
advantage and the business value with the minimum wastage of resources and money. The
ethical system helps in developing the good reputation of a company. If the system in unethical
then it will impact the company badly and the huge cost and the chances of theft of ideas and
products will maximize. The ethical system in the business environment helps in maximizing the
productivity by doing the activities in an ethical manner. The ethical system helps in reducing the
rough attitude and behavior of employees towards their colleagues (Ciulla, J. B. 2014). The
ethical system helps in increasing morality and regularity among the employees. The
organizations also conduct the programs for managing the ethics. In the programs, the various
activities are conducted in order to test the morality of the employees and are given training
accordingly in order to improve. Under this program, the ethical charter is created which
includes the various attributes of the employees like honestly, faithfulness, secrecy,
independence, integrity, consistence, etc. Further, these attributes are compared among the
employees, and this helps to identify the level of morality among the employees. Today, most of
the organizations are focusing more on the management of the ethical system in order to improve
their moral and legal responsibility. The ethical system impacts the decision-making a process of
the company positively in order to satisfy the mission and vision of the company. The ethical

ORGANIZATION AND BUSINESS MANAGEMENT 2
system improves the relationship between the internal and external environment (Cohen et al.,
2014). As a result, the employees and clients are treated faithfully.
Therefore, the ethical system in the critical requirement for the organization and they should
consider the ethics as the social responsibility as they are obligated to it. Hence, the best
companies will grasp the opportunities which make ethic as a priority by developing relational
expectations which will work effectively for everyone. The culture of value-based should be
created in the organization in order to develop the trust and integrity among the employees.
2. Ethical Decision-Making Procedure
The procedure of ethical decision making pertains to the process of appraising and selecting
among the given alternatives in an etiquette coherent with the principles of ethics. In ethical
decision-making, it is important to sense and eradicate the various options which are unethical
and choose the best alternative which is ethical (Thiel et al., 2012). There are some attributes
which are important in the process of ethical decision making like the commitment- the urge to
perform the right and correct thing/job regardless of the incurred cost. Consciousness- the
observance to act or perform consistently and pertain the convictions of morality to the attitude
and behavior. Competency- the capacity to gather and evaluate the information, create
alternatives and anticipate the potential risks and consequences. The decisions made by the
organization should be ethical and effective in order to survive in the competitive market for a
longer period of time by satisfying the long-term strategic goals (Hartman et al., 2014).
In order to support the evaluation of ethical decision-making process, being an individual, I
would like to take an example of a manufacturing company where I worked for two months in
order to gain some experience. The company was following both ethical and unethical code of
conduct since the company came into existence. While I was working there, I found that the
company is making new policies in order to follow the complete ethical code of conduct and the
eradication of unethical activities. The company started the procedure of ethical decision making
in order to find the unethical issue and eradicate it. The steps of the ethical decision-making
procedure were:
 Identification of the problem-

ORGANIZATION AND BUSINESS MANAGEMENT 3
The manufacturing company realized the specific situation which was ethical. The company
found that they were doing overpricing of the products. Further, they identified more information
related to the overpricing of products from the past records and reports of the company. The
company gathered the information and analyzed them in order to evaluate them.
 Identification of the potential issues-
After the identification of the problem, the manufacturing company identified the potential issues
like they found that the customers were getting affected because of the overpricing of the
products as some of them were not able to afford it, and the target market was narrow. The
company understood that if they do not solve the issue as soon as possible, then they might lose
their customers.
 Identified the relevant regulations and the laws-
The company identified from the gathered information and the policies that there was no rule and
regulation for the overpricing of the product and the problem was considered as an ethical issue.
At this step, the company made an ethical rule and policy for the pricing of products.
 Obtained consultation-
The company took advice from the other manufacturing companies which were following the
complete ethical code of conduct in order eradicate the issues of unethical practices from the
company.
 Considered possible courses of action-
The top management of the company conducted an activity of brainstorming in order to know
the views and suggestions of the employees and managers to eradicate the unethical issue of
overpricing of products.
 Listed the consequences of courses of action-
When the company prepared the list of solutions, then they made a list of consequences both in
positive and negative aspect so that they would not repeat the same problem in future and the
company would be able to follow an ethical code of conduct.
 Decided the best course of action-

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At the end, the company came up with the skimming strategy. They decided that firstly they
would keep the price of a product high and gradually the price would decline because in order to
sustain in the competitive world it is very important to retain the customers and provide them
innovative and productive products and services.
Therefore, the above example of real life situation helps in understanding that how the procedure
of ethical decision-making process takes place in an organization. The unethical issue can be
easily eradicated with the help of an ethical decision-making process. The organizations should
follow ethical decision-making process only while solving the ethical or unethical issue as this
will further help the company is achieving business value and competitive advantage. The
organization will be able to sustain for a longer period of time by satisfying long-term strategic
goals. The outcomes of the process of ethical decision making are cost effective and also the
available resources are optimized. The ethical decision-making procedure also increases the
productivity of the organization.
3. IBM can Promote Ethical Conduct by its Employees
IBM is facing an issue in maintaining an ethical code of conduct as it is a global company and its
employees are facing difficulties in various practices and standards in other countries. IBM can
promote ethical conduct by its employees by performing the given below suggestions:
 Changing the norms-
IBM should change the norms according to the ethical practices of abroad, as it will help the
IBM to maintain the ethical conduct efficiently and effectively. The change in norms will help in
reducing the chances of indulging in corruption and bribery. And the IBM should clearly define
the norms to the employees and make them aware of ethical practices and standards of other
countries. The employees will be able to work more ethically if there will be the change in the
norms according to the various practices and standards in different countries. Further, this will
help the IBM to promote the ethical conduct by its employees.
 Providing training to the employees-
The employees should be given adequate training in order to follow the ethical conduct. The
hypothetical scenarios should be given to the employees, and the managers should observe that

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how the employees react in the given scenario whether it is ethical or unethical. This will help
the employee to become more familiar with the different practices and standards of the other
countries. The training will help the employees to increase efficiency and productivity, and the
company will be able to maintain the ethical conduct. Therefore, IBM can promote the ethical
conduct by its employees.
 Rewarding the ethical behavior-
The IBM should reward the ethical behavior of the employees in order to increase their morale
and integrity towards the company. If an employee puts 100 percent in order to achieve the
strategic goal of the company in an ethical way, then he/she should be rewarded in monetary or
non-monetary aspects. This will help in increasing the efficiency among the other employees as
well as they will remain motivated and will work more productively in an ethical manner.
Further, the employees will be able to work ethically with the different practices and standards of
other countries. Therefore, IBM can promote the ethical conduct by its employees.
 Considering the balance of work-life-
The IBM should consider the aspect of the balance of work-life of the employees. The company
should make sure that the employees are able to balance their work-life. If the employees are not
able to balance then, there will be more chances of unethical conduct. So, it is very important to
balance the work life as it will further help the employees to work more ethically and will help in
maximizing the efficiency and effectiveness. Further, IBM will be able to maintain the ethical
conduct and can promote it by its employees.
 Promoting the benefits-
The IBM should promote the benefits of the ethical conduct at the workplace. This will help the
employees to become aware of the ethical conduct and will be aware of the safety and health,
equal opportunities of employment, etc. Further, this will help the employees in increasing
efficiency and effectiveness, and they will be able to give more productive results, and the
company will be to maintain the ethical conduct effectively. This will help in maximizing the
morale, it will guide the employees about what is right and wrong. Promoting the benefits will
help in improving the day-to-day activities, and this will further help in promoting the ethical
conduct by its employees.

ORGANIZATION AND BUSINESS MANAGEMENT 6
 Inviting the external review-
The IBM can invite the team of external review in order to audit the work. The team of external
review will help the company to know whether the company is following the ethical conduct
adequately or not. The team of external review will help the company to ensure that the decided
course of action is appropriate or not. Further, this will help the employees to become aware of
the ethical code of conduct, and this will help in increasing their efficiency and effectiveness.
Therefore, the IBM will be able to promote ethical conduct by its employees.
Further, IBM can promote the ethical conduct by living up to its own ethical code of conduct.
The above-given suggestions will help the IBM to promote the ethical conduct, and the company
will be able to resolve the challenge of maintaining ethical conduct. The employees will be able
to work according to the practices and standards of the other countries effectively and efficiently.
4. Situation where Company or Employees Require Moral
Courage to Forgo Bribery
There are various companies which indulge in the bribery and corruption in order to get benefit
from the big sale. The companies get involved in the various activities like insider trading as the
person gets an access to the information which is not available to the public, the misuse of the
position as the person takes advantage of the position for the own benefit, conflicts of the interest
between the company and the employees, lack of loyalty of employees towards the company for
one’s benefit, etc. (Neubert et al., 2013). Let us take an example in order to do analysis on the
dilemma of company or employees to forgo the bribery at a risk of losing the big sale.
I worked in a company of FMCG sector for a period of two and half months in order to utilize
the holidays. During that time the company was preparing for a big sale which occurs twice a
year. During the time of big sale, I have observed that some of the employees of the various
departments were misusing their official position for their own benefit. The employees were
indulging in the activities of insider trading as they were assessing the information which they
were not supposed to do. Some of the employees were thinking about their own benefit, and they
were not working for the company in order to achieve the strategic goal. The conflicts were

ORGANIZATION AND BUSINESS MANAGEMENT 7
rising among the employees as they were thinking about their own benefit. The other employees
who were loyal to the company were not able to do anything as they were pressurized by their
seniors as they were misusing their official positions. The employees were performing the
various activities and operations unethically, and there was no ethical code of conduct. The
employees were given bribery so that they can do the work unethically for the customers in order
to get some benefits.
Some of the employees who were loyal to the company required moral courage in order to forgo
bribery even at the risk of losing a big sale. They wanted that company should follow ethical
conduct only even if the huge cost occurs. The loyal employees tried to convince other
employees to think about the company’s benefit and not for one’s own benefit. Otherwise, this
would create a problem for the company in the long run. The employees were not ready to do so.
Then, the loyal employees showed the moral courage and complained to the top management
about the unethical activities which were conducted in the company. The top management
believed in the ethical code of conduct, and they took strict action against those employees who
were taking bribery from the customers and were involved in other unethical activities. The
employees were punished as they were performing unethical activities and as a result, the
company was not able to get the expected benefits from the big sale and also lost some
customers. Therefore, the loyal employees took the risk of losing the big sale, but they wanted
that company's brand image should not be impacted because of the some employee's unethical
conduct as the company believed in the ethical code of conduct.
The company conducted various programs in order to train the employees to follow an ethical
code of conduct. The employees were given various hypothetical situations, and they were being
observed by the trainers. The employees were supposed to act in a given scenario, and this
helped in knowing the level of attributes of the employees like how loyal and courageous they
are towards the company. The employees were given training in order to take ethical decisions
with a team. They were told to take decisions in a team and should not think about the own
benefit and should focus on achieving group target by satisfying the strategic long-term goals of
the company ethically.
Therefore, the organizations should conduct such activities in order to boost the moral courage
among the employees so that they can take a stand against the unethical activities. The

ORGANIZATION AND BUSINESS MANAGEMENT 8
employees should develop the competency of emotional signaling as this will help them to not to
ignore or sublimate the feeling which is negative. The employees should develop the competency
of reflective pause as they will be able to analyze the pros and cons before implementing a
course of action. The employees should develop a competency of self -regulation as they will be
able to manage and control their own feelings and they will be able to work more efficiently and
effectively for the organization in order to give productive results. The employees should
develop a competency of moral preparation because this will help the employee to work ethically
as they will believe that they are moral agents of the company and they are committed to their
organization only (Ruiz-Palomino et al., 2013).
This section showed a real life situation of a company in which the employees required moral
courage to forgo the bribery and unethical activities of some employees at the cost of losing a big
sale. Further, the company took some measures in order to solve the issue of unethical conduct
by providing training to the employees to follow the ethical code of conduct, and the company
also helped the employees in order to develop some competencies of moral courage so that they
can take a stand for the unethical activities. Therefore, it is very important for every organization
to follow and maintain the ethical conduct as this will help the companies to maximize business
value and gain a competitive advantage in order to survive in a competitive world for a longer
period of time.

ORGANIZATION AND BUSINESS MANAGEMENT 9
REFERENCES
Ciulla, J. B. (Ed.). (2014). Ethics, the heart of leadership. ABC-CLIO.
Cohen, T. R., Panter, A. T., Turan, N., Morse, L., & Kim, Y. (2014). Moral character in the
workplace. Journal of Personality and Social Psychology, 107(5), 943.
Hartman, L. P., DesJardins, J. R., & MacDonald, C. (2014). Business ethics: Decision making
for personal integrity and social responsibility. McGraw-Hill.
Neubert, M. J., Wu, C., & Roberts, J. A. (2013). The influence of ethical leadership and
regulatory focus on employee outcomes. Business Ethics Quarterly, 23(2), 269-296.
Ruiz-Palomino, P., Martínez-Cañas, R., & Fontrodona, J. (2013). Ethical culture and employee
outcomes: The mediating role of person-organization fit. Journal of Business Ethics, 116(1),
173-188.
Thiel, C. E., Bagdasarov, Z., Harkrider, L., Johnson, J. F., & Mumford, M. D. (2012). Leader
ethical decision-making in organizations: Strategies for sensemaking. Journal of Business
Ethics, 107(1), 49-64.