Analysis of Ethical Issues in Business Operations Report

This report delves into the realm of business ethics, emphasizing its significance in contemporary business operations. It outlines key ethical principles such as integrity, honesty, fairness, responsibility, competence, and reliability. The report then explores ethical decision-making models, including the REFLECT and ETHICS models, providing a framework for addressing ethical dilemmas. It identifies major stakeholders affected by unethical situations, such as employees, financial accountants, and the company itself. The report highlights specific ethical issues, including non-inclusion of employees in formal payroll, non-payment of minimum wage, and absence of formal employment contracts. It concludes by examining the functions of a financial accountant in addressing these issues, emphasizing the need for accurate wage calculations, payroll management, and ensuring formal employment contracts. The report underscores the importance of ethical conduct for business success and compliance. This report is available on Desklib along with past papers and solved assignments.

Running head: ETHICS
Ethics
Name of the Student
Name of the University
Author’s Note

1ETHICS
Table of Contents
Introduction......................................................................................................................................2
Overview of Ethical Principles........................................................................................................2
Review of Ethical Decision Making Models...................................................................................3
Major Stakeholders..........................................................................................................................4
Ethical Issues...................................................................................................................................5
Function of the Financial Accountant..............................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

2ETHICS
Introduction
In today’s business world, ethics is considered as one of the major pillars of success as
the companies are required to comply with all the ethical code of conducts. Business ethics refers
to the applied ethics or professional ethics that helps in providing the solutions of various ethical
problems arises from the business operations (Hartman, DesJardins and MacDonald 2014). All
the business organizations become majorly beneficial by complying with all the ethical
principles and code of conducts like the increase in productivity, retention of clients and others.
At the same time, business entities have to face great difficulties while non-complying with the
required ethical principles. It needs to be mentioned that the business entities can solve different
kinds of complex issues with the help of ethical decision making models (Crane and Matten
2016). The main aim of this report involves in the analysis and evaluation of different aspects of
business ethics to solve the ethical issues in the provided case.
Overview of Ethical Principles
As per the above discussion, the Australian business entities are required to comply with
the major ethical principles while conducting the business operations. The following discussion
provides the overview of these ethical principles:
Integrity: As per this principle, business entities are required to be honest and straightforward
while conducting their business operations; in addition, they need to be truthful towards the trust
of the employees and the key stakeholders like investors, customers, creditors, lenders and others
(Pearson 2017).

3ETHICS
Honesty: As per this principle, it is the responsibility of the business entities not to involve in
any dishonest code of conduct in the business operation that can mislead the key stakeholders of
the businesses. In this process, businesses are required to provide accurate and complete
information about various business activities (Hartman, DesJardins and MacDonald 2014).
Fairness: Fairness is considered as another crucial ethical principle that puts the obligation on
the business entities to treat all of their employees in equal manner. At the same time, they are
needed to be fair towards their key stakeholders (Werhane 2014).
Responsibility: As per this principle, business entities are needed to be responsible enough to
discharge their business duties in the honest manner. At the same time, they are required to be
committed towards fulfilling the needs of their stakeholders (DesJardins and McCall 2014).
Competence: According to this principle, business entities are needed to have the required
competence to fulfil the needs and demands of the customers and other stakeholders. For this
reason, the employees of the companies are required to have required competency, innovation
and experience in order to live up to the expectations of the customers (Werhane 2014).
Reliability: As per this principle, business organizations are required to gain reliability from the
customers by providing them with superior quality of products and services (DesJardins and
McCall 2014).
Review of Ethical Decision Making Models
Different types of models are there for making effective decision in order to avoid any
unethical situations in the workplace. The following discussion provides an overview of three of
them:

4ETHICS
REFLECT Model: REFLECT model is considered as a crucial model for ethical decision-
making. Six specific steps can be seen in this model for solving any unethical situation. The first
step is the recognition of potential issues or problems. The next step is to find the relevant
information. The third step is to consult with the peers and supervisors in the company. The next
step is the evaluation of the available options. The next step is to arrive to the decision. The last
step is to take time to reflect (Ford and Richardson 2013).
The ETHICS Model: As per the above, six specific steps can be seen in the ETHICS decision
making model. Evaluation of the ethical dilemma is the first step. To think about various
outcomes is the second step. To receive help is the third step. To consider all the relevant
information is the fourth step. Fifth step is the risk calculation. Selection of an action is the last
step (Craft 2013).
These are two of the major ethical decision making model used by most of the business
entities to solve different types of unethical situations in the workplace.
Major Stakeholders
Every unethical situation has their negative effects on some of the specific stakeholders
in the business organizations and there is not any exception of this fact in case of the provided
scenario. In this situation, the stakeholders are the employees, financial accountant and the
company. The following discussion shows the effects of this unethical situation in the mentioned
stakeholders:
Employees: As per the fairness principle of ethics, it is the right of the employees to receive fair
wages from the companies. However, in the provided situation, the employees are being
deprived from getting minimum wage that affects their financial situations. In addition, it is the

5ETHICS
obligation on the companies to keep the records of formal employment contract. In the absence
of this, there is not any guarantee of employment for the employees (Lienert, Schnetzer and
Ingold 2013).
Financial Accountant: It is the responsibility of the financial accountants of the companies to
ensure the correct calculation of the salary and wages of the employees so that they can receive
the correct amount of salary. There can be violation of the ethical as well as professional
principles in case the financial accountant does not put attention to this matter. In this process,
he/she can lose the job by not fulfilling the professional responsibility (Lienert, Schnetzer and
Ingold 2013).
Ethical Issues
In the provided situation, there are some major ethical issues and they are discussed in
below:
Non-inclusion of Employees in the Formal Payroll: As per the provided situation, it can be
seen that the company has not included a significant number of employees in the formal payroll.
As per the ethical principle of responsibility, companies are required to discharge their
responsibilities in the most correct manner. Thus, in the situation, the company has failed in
discharging its resomnsbilty that has contributed towards the ethical issue (McMurrian and
Matulich 2016).
Non-Payment of Minimum Wage: As per the honesty ethical principle, it is the responsibility of
the business entities to provide the employees with the minimum wage as per the regulations.
However, in the provided situation, it can be observed that the company does not pay the

6ETHICS
minimum wage to their employees. Thus, this whole situation has created an ethical issue by
violating the honesty ethical principle (Strobel, Tumasjan and Welpe 2015).
Absence of Formal Employment Contract: It is the obligation on the management of the
business entities to provide the employees with the formal employment contract as a proof of
their employment in the company. However, as per the provided situation, it can be observed that
the company has not provided the employees with formal employment contract that leads to the
breach of ethical principle like integrity, honesty and responsibility. Thus, this whole scenario
has created a major ethical issue (McMurrian and Matulich 2016).
Function of the Financial Accountant
In this context, it needs to be mentioned that financial accountants have different types of
responsibilities in the business organizations. It is the responsibility of the financial accountant to
ensure proper maintenance and classification of company’s financial records. For this reason, the
financial accountants are required to be organized and analytical to maintain the reporting of
company’s financial statements (Michalos 2017). There is not any exception of this fact in case
of the provided situation.
As per the provided scenario, the first major responsibility of the financial accountant is
to make sure that the computation of minimum wage is done in the correct manner. At the same
time, the financial accountant needs to check that whether the company has complied with the
regulation of Australia for the computation of minimum wage payment. If not, the financial
accountant needs to take the matter to the senior management for solution (Nica 2013).
After that, the financial accountant needs to make sure that all the employees have been
included in the formal payroll of the company. In this process, the financial accountant is

7ETHICS
required to check the financial control related to formal payroll so that any deficiency in the
system can be discovered (Michalos 2017).
Lastly, it is the responsibility of the financial accountant to make sure that all the
employees have records of formal employment contract. In this process, the financial accountant
needs to contact with other personnel like the Human Resource Manager for the enrolment of the
employees informal employment contracts (Nica 2013).
Conclusion
From the above discussion, it can be observed that ethics play an integral part in the
business organizations and all the companies are required to comply with all the required ethical
principles like honesty, integrity, responsibility and others. In addition, companies can use
different types of ethical decision making model for solving ethical issue in the companies; like
REFLECT Model, ETHICS model and others. In the provides scenario, violation of ethical code
can be seen that leads to the development of ethical issues in the workplace. For this reason, the
financial accountant is required to take some steps to solve these issues; like the correct
computation of minimum wages, enrolment of the employees under formal payroll and others.

8ETHICS
References
Craft, J.L., 2013. A review of the empirical ethical decision-making literature: 2004–
2011. Journal of business ethics, 117(2), pp.221-259.
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.
Ford, R.C. and Richardson, W.D., 2013. Ethical decision making: A review of the empirical
literature. In Citation classics from the Journal of Business Ethics (pp. 19-44). Springer,
Dordrecht.
Hartman, L.P., DesJardins, J.R. and MacDonald, C., 2014. Business ethics: Decision making for
personal integrity and social responsibility. New York: McGraw-Hill.
Hartman, L.P., DesJardins, J.R. and MacDonald, C., 2014. Business ethics: Decision making for
personal integrity and social responsibility. New York: McGraw-Hill.
Lienert, J., Schnetzer, F. and Ingold, K., 2013. Stakeholder analysis combined with social
network analysis provides fine-grained insights into water infrastructure planning
processes. Journal of environmental management, 125, pp.134-148.
McMurrian, R.C. and Matulich, E., 2016. Building customer value and profitability with
business ethics. Journal of Business & Economics Research (Online), 14(3), p.83.

9ETHICS
Michalos, A.C., 2017. Issues for business ethics in the nineties and beyond. In How Good
Policies and Business Ethics Enhance Good Quality of Life (pp. 197-212). Springer, Cham.
Nica, E., 2013. Social Responsibility, Corporate Welfare, and Business
Ethics. Psychosociological Issues in Human Resource Management, 1(1), pp.9-14.
Pearson, R., 2017. Business ethics as communication ethics: Public relations practice and the
idea of dialogue. In Public relations theory (pp. 111-131). Routledge.
Strobel, M., Tumasjan, A. and Welpe, I., 2015. Do business ethics pay off?. Zeitschrift für
Psychologie/Journal of Psychology.
Werhane, P.H., 2014. Moral imagination. John Wiley & Sons, Ltd.