Workplace Ethics: From Accounting to Employee Conduct

Introduction

Employees face ethical requirements throughout their workday that must be met with knowledge and a trained attitude. Workplace ethics is one of the most crucial elements of organizational life, whether the person involved in an ethical dilemma is a high-level manager or an entry-level employee. An ethical stance is important because it guides the interactions that employees have with one another, with management, and with the customers who patronize their products. It is equally important that business leaders maintain both an internal and external ethical stance, so that the culture generated within the company promotes positive ethical practices.

This paper begins by discussing how business leaders view the external world of ethics through accounting practices and dealings with other companies. The discussion then moves inside the company, examining how management treats its employees. Employee-to-employee interactions and employee-to-company interactions are addressed next, followed by a look at how company employees should treat customers. This is a comprehensive examination of workplace ethics — from its history to its relationship with every rung of the corporate ladder.

Overview of Business and Workplace Ethics

Over the years, workplaces around the globe have changed dramatically, and the issues affecting those on the job have shifted accordingly. People go to work for someone else because they expect to be paid a decent wage, have a safe place to work, and be treated with respect. Unfortunately, this has not always been the case. Until governments began legislating workplace practices, employees had to accept whatever executive management decided to pay them, often worked in unsafe conditions, and frequently endured open contempt from owners. Because of regulations and unionization, much of this has ended, and workers are now treated in a manner that fosters mutual respect. These improvements are tied not only to what companies are required to do under labor agreements and government legislation, but also to the ethical stances that govern each person in a workplace. Many companies express these ethics in a values statement or incorporate them into the corporate mission, and it has become increasingly common for organizations to attract employees by striving to maintain an ethical workplace.

Business ethics is not a new topic, but it is one that expanded significantly in the twentieth century. Before that time, many businesses operated via a totalitarian method that guaranteed employees a job as long as they complied with company requirements — often meaning long hours, little pay, and questionable safety. These conditions have been well documented in works by writers such as Upton Sinclair, whose writing helped stem the tide of worker oppression.

The ethical stance a particular company takes reflects the culture it seeks to generate and the values of the corporation (Embse, Desai, & Ofori-Brobbey, 2010). However, business ethics and workplace ethics are two distinct fields of study. Business ethics concerns how a company conducts itself as an organization — an outward-looking stance meant to demonstrate financial standing and the manner in which it deals with other companies. Workplace ethics, by contrast, concerns the internal workings of the company: specifically, how employees are treated and how they are expected to treat one another and the organization. Every company sets ethical guidelines for its employees, and most also make clear what employees can expect from the company in return.

Company Ethics: Accounting and External Conduct

The ethics a company articulates for its employees usually encompass how the company will act externally, how it treats employees, and how employees must treat customers and fellow workers. The external and internal dimensions speak to the larger culture a company is trying to establish. For example, Southwest Airlines lists its core values as: "Follow The Golden Rule, Adhere to the Principles, Treat others with respect, Put others first, Be egalitarian, Demonstrate proactive Customer Service, Embrace the SWA Family" (Southwest Airlines, 2012). This is a message intended not just for Southwest employees but for the airline itself to follow. Much of the research on a company's responsibility in workplace ethics highlights two prominent areas: financial accounting and employee safety.

Accounting principles may not seem like an obvious topic within workplace ethics, but how a company deals with the external world reveals a great deal about how it manages employees and internal matters. Enron was widely regarded as a great company, as was WorldCom — yet when accounting irregularities were uncovered, it became clear that the executives had treated their employees just as harshly as they had treated investors (Klimek & Wenell, 2011). During the Enron scandal, many employees lost retirement savings exceeding one million dollars. Because of these and similar scandals (including HealthSouth), Congress enacted the Sarbanes-Oxley Act, which "created new standards for corporate accountability as well as penalties for noncompliance, including imprisonment for up to twenty years" (Klimek & Wenell, 2011). These measures made the workplace safer and more ethical for employees by reducing the likelihood of accounting fraud and helping ensure greater job security.

Another role companies play is ensuring that business partners are treated ethically. This bridges business ethics and workplace ethics, and reflects the firm's actual organizational culture. A company that acts ethically when entering into a contract — and expects ethical conduct from its partners — is more likely to maintain an ethical internal workplace (Klimek & Wenell, 2011). While this is not always guaranteed, ethics functions as a system that flows throughout an organization from the top executive to the newest hourly employee.

Conclusion

Ethics is not a simple concept within the workplace. There are many layers within a company, and all of them involve some form of ethical responsibility — regardless of position within the organization or external to it. Executives bear a responsibility to employees to make ethical decisions regarding finances and dealings with other companies; managers must follow company guidelines when interacting with subordinates; and employees must treat one another, their managers, and customers with the same ethics articulated in the company's values statement. Without these guidelines, it is impossible to establish a workplace that responds ethically to all situations.

People must be given clear guidelines and held accountable through the disciplinary actions outlined in the ethical code. Such guidelines create a workplace capable of responding to challenges and cultivating a culture in which all members are treated fairly and with respect.

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