History of Workplace Ethical Dilemmas

Abstract

 The history of ethical dilemmas is far spread and can sometimes feel overwhelming. Focusing on the United States business of old and new we will go through many different topics in the history of ethical dilemmas throughout this essay. Starting with the most common unethical behavior in today’s workforce. Followed by the evolution of the ethical practices in business throughout American employment history. Then touching on the financial meltdown of 2007-2008. Finally, we will finish with a discussion about diversity and discrimination, and corporate outreach and volunteer programs. This paper will give an insight on the overall history of ethics.

Historical Ethical Dilemmas

 The history of ethical dilemmas is extremely important to any student studying management and/or human resources, as well as anyone who wants to take on a managerial role in their career paths. Understanding how to manage employees effectively and how to build a safe and ethical work environment, must begin with understanding how organizations got to where they are today. In order to find out this information, we must start by discussing what today’s most common unethical behaviors in the workplace are and how we got here.

Most Common Unethical Behavior in the Workforce Today

  One of the most common unethical behaviors in the workforce today would be the misuse of company time. Employees may not even realize if or how often they are misusing the organizations time, but may ways include misuse of the office computer for shopping online or maybe the employee has friends visit and sit in the office during office hours. Misuse of company time is anytime in which an employee is conducting “personal business” while on the clock. Another common unethical behavior in the workforce today is the abuse of power that managers of supervisors may use. One other common unethical behavior in today’s workforce is employee theft and dishonesty. “one out of every 40 employees in 2012 was caught stealing from their employer. Even more startling is that these employees steal on average 5.5 times more than shoplifters ($715 vs $129).” (Schwartz, 2015) Dishonesty however is also a two-way street, employees may lie and steal but the owners, managers, and supervisors have also been known to lose trust by lying to their employees.

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To help minimize the ethical misconduct in any organization the owners, managers, and supervisory staff in any organization must be on the watch out for unethical behavior. In addition to looking out for employees who are portraying unethical behavior, it is also important that the managerial staff not create a workplace of tolerance for the behavior either by looking the other way when unethical behavior is presented, or by leading the employees in unethical ways. Each member of the managerial staff in an organization needs to really take an honest look at themselves, other leaders, and employees and establish a strong foundation and culture for integrity and an ethical workplace environment. Keeping a focus on the mission and values of the company, and how to bring those into the everyday vision in respectful and ethical ways. While simultaneously sticking to a strict procedure for disciplinary actions on employees and managers who use unethical practices. “Promoting ethics in the workplace creates a positive culture for managers and employees, as well as a successful business.” (Neese, 2017)

Have Businesses Seen Ethical Evolution

 Most modern-day businesses have seen ethical evolution. While not all businesses today share the same vision, value, and ethical code of conduct as the rest, the majority of business have tried to keep up with the changing times. “The 1960s brought the first major wave of changes in business ethics. Cultural values were shifting, with individualism and fierce dedication to social issues such as environmentalism and world peace.” (DePersio, 2018) In the 1960s young workers were thought to have a lacking work ethic and drive and the use of drugs was spiking. The new focus on individualism in the 1960s also played a part in the working relationship between employers and employees, as many young employees thought their employers to be lacking care. The 1960s was the first decade to start building Human Resource Departments and establishing a set Code of Conduct for their businesses. In addition to the organizations taking things into their own hands, the government had passed the Equal Pay Act in 1963 as well, allowing for more ethical treatment of women.

The 1970s and 80s were not lacking in their changes either. Most of the changes made in the 1970s and 1980s were government initiated. Arguably one of the most important Labor Laws passed was the Occupational Safety and Health Act in 1971. This government action forced all employers to provide safe working conditions for all their employees. This was a huge step to obtaining more ethical workplaces. Another was he Consolidated Omnibus Budget Reconciliation Act of 1985, or COBRA as most know it. This act was crucial for a fair and ethical way of laying off employees. COBRA is the Federal law that provides rights to temporary continuation of group health plan coverage for certain employees.

This type of government influence, as well as the more social responsibility that the aging in working population felt, allowed for even more ethical work laws and general principles to be born into the 1990s as well. Starting in the 2000s and continuing today we see the age of the online world exploding. Business ethics had to adapt accordingly. Most dilemmas have changed into cybercrime and privacy issues. The changes that businesses make today are more focused on those issues.

Today’s companies are governed more strictly on providing ethical work environments, and in turn have also started governing their employees more closely to ensure ethical behavior. Therefore, yes, there has been ethical evolution forced in by all parties involved; the government, the employer, and the employee.

Financial Meltdown of 07-08

The financial meltdown in our 2007-2008 financial markets was a failure of our capital market processes. In the 1980s it was discovered that US mortgages were not being tapped for their full investment capabilities, or so it was thought. During transition into the 21^st century there was a big demand in issuing bonds backed by mortgages, known as MBSs. This is securitization, the sharing of debt and then issuing assets based on that debt. After awhile there was fewer and fewer new mortgages to securitize and the banks began to repack the MBS’s. “In theory, pooling different mortgages reduced risk and therefore these assets were pretty safe, but the reality is that the most of the securitized mortgages were of poor quality. The ratings agencies who rated the MBSs and CDOs overestimated the benefits of diversification in the housing market and, as a consequence, many of the MBSs and CDOs were rated AAA” (Razvan-Ovidiu, 2016) This had the banks thinking they had more assets than they really did and caused them to borrow large amounts of money at low rates to fund investments. Once the banks gave hundreds of US billion dollar mortgages to people with average or low credit ratings the problem took off from there. This began to cause distrust between all parties, the banks in the AAA and the investors in the banks and the people borrowing the money began to have issues paying back loans as well. The crisis was identified in June of 2007 when one of the largest investment banks in the US announced large losses in a few of its hedge funds. Some business began to have manic ups and downs due to the crisis. Some losing or gaining up to 40% in one trading day. Overall the process became confusing and overwhelming and caused some businesses to shut their doors. The effects of this crisis are still being felt by many today.

Diversity and Discrimination

  Diversity and discrimination are probably the two most important ethical factors to consider when attempting to manage a workforce. Not only for the obvious reasons, that it is simply wrong and socially and professionally frowned upon to discriminate for any reason such as age, sex, religion, and more; but also for the legal ramifications that come with discrimination. By discriminating in the workplace you also could be hurting your company professionally, as a diverse workplace allows for diverse problem solving and diverse innovation that could really provide your organization with a great edge.

There are many examples of how mismanaging these issues can have an impact on an organization but one that really stands out is Kraszewski v. State Farm Insurance Company. This was a statewide gender discrimination class action case. This case was litigated for over 15 years on behalf of women who were rejected or deterred form applying for positions within State Farm. “After plaintiffs prevailed at trial, the parties negotiated a consent decree that provided extensive injunctive relief that dramatically increased the number of female State Farm agents.  The parties subsequently resolved the claims for monetary relief for $250 million.”
(Goldstein, Borgen, Dardarian & Ho) The legal ramifications to discrimination in the workplace can be extensive. Federal laws, and the laws of most states, prohibit discrimination on the basis of race, color, national origin, sex, religion, disability, age, and genetic information.

It is important to have a frank and detailed conversation about diversity and discrimination with all staff in an organization, not just managers or employees. The discussion must include what discrimination is, how it may feel or look, and what to do if you feel like you have been discriminated against. The organization should have an extensive process that includes meeting with the human resources department to make a claim as well as to go as far as make a claim with the EEOC, Equal Employment Opportunity Commission, and how to get ahold of the EEOC to do so. It is important to also highlight why diversity in the workplace is a positive and what the company’s standing and mission is when it comes to creating a diverse workforce. This may include listing all the positives that can happen when you bring people in who come from different cultural backgrounds, such as different viewpoints on problem solving certain issues with in the company.

Outreach and Volunteer Programs

Corporate outreach and company sponsored volunteer programs are a good idea for organizations to implement. There are many reasons why corporate outreach and company sponsored volunteer programs are a good idea, but the main reasons are the idea of giving back to the community in which they serve and the idea of building team skills and spirit. Wes Gay writes of four ways that company sponsored volunteer programs are a good idea; improved collaboration between the team members involved, increased self-awareness by the individuals who attend, impact on revenue by creating more productive employees, and important to millennials who are the current up and coming workforce. All of those should be considered when a company wants to start an outreach or volunteer program. For all of these reasons, I would choose to implement a program myself form a managerial standpoint. I would want the most effective and helpful team, who feel respected and elevated about what matters to them and the company they work for.

Conclusion

 In conclusion, it can be seen that ethical dilemmas can still be seen today. However, they have come a long way from what they used to be. After reviewing the history of ethical dilemmas and viewing some specific examples, it is obvious that there have been strides made to improve the ethical practices in today’s businesses. As well as improve the ethical outlook outside the office as well by more companies implementing outreach and volunteer programs. Overall organizations today are in a better standing, ethically, than ever before; and I hope that trend continues upward.

References

• Bureau of Labor Statistics. (2015, October). Labor Law Highlights, 1915-2015. In BLS. Retrieved from https://www.bls.gov/opub/mlr/2015/article/pdf/labor-law-highlights-1915-2015.pdf
• DePersio, G. (2018, November 18). How Have Business Ethics Evolved Over Time. In Investopedia. Retrieved from https://www.investopedia.com/ask/answers/022615/how-have-business-ethics-evolved-over-time.asp
• Gay, W. (2016, November 3). 4 Reasons Why A Corporate Volunteer Program Is A Smart Investment. In Forbes. Retrieved from https://www.forbes.com/sites/wesgay/2016/11/03/4-reasons-why-a-corporate-volunteer-program-is-a-smart-investment/#5501d033364b
• Goldstein, Borgen, Dardarian &Ho. (2018). Kraszewski v. State Farm Insurance Co. In gbdhlegal. Retrieved November 29, 2018, from https://gbdhlegal.com/cases/kraszewski-v-state-farm-insurance/
• Neese, B. (2017, April 4). Managing Ethics in the Workplace. In Alvernia University. Retrieved from https://online.alvernia.edu/ethics-in-the-workplace/
• Razvan-Ovidiu, O. (2016, April 8). The financial crisis of 2007/2008 – causes,solutions and expectations. In LinkedIn. Retrieved from https://www.linkedin.com/pulse/financial-crisis-20072008-causessolutions-oros-r%C4%83zvan/
• Schwartz, A. (2015, January 26). The 5 most common unethical behaviors in the workplace. In BizJournals. Retrieved from https://www.bizjournals.com/philadelphia/blog/guest-comment/2015/01/most-common-unethical-behaviors-in-the.html