What are three factors that might affect good ethical conduct in accounting?

Business leaders today are well aware of the ethical issues and hence they want to improve the ethical standards of the business. Self-regulation is, of course, better and produce impressive results. Besides, there are also a number of factors, which significantly influence the managers to take ethical decisions.

Image: Factors influencing business ethics

Some of them are

1. Personal Code of Ethics

A man’s personal code of ethics that is what one considers moral is the foremost responsible factor influencing his behavior.

2. Legislation

It is already stated that the Government will intervene and enact laws only when the businessmen become too unethical and selfish and totally ignore their responsibility to the society. No society can tolerate such misbehavior continuously. It will certainly exert pressure on the Government and the Government consequently has no other alternative to prohibit such unhealthy behavior of the businessmen.

3. Government Rules and Regulations

Laws support Government regulations regarding the working conditions, product safety, statutory warning etc. These provide some guidelines to the business managers in determining what are acceptable or recognized standards and practices.

4. Ethical Code of the Company

When a company grows larger, its standard of ethical conduct tends to rise. Any unethical behavior or conduct on the part of the company shall endanger its established reputation, public image and goodwill. Hence, most companies are very cautious in this respect. They issue specific guidelines to their subordinates regarding the dealings of the company.

5. Social Pressures

Social forces and pressures have considerable influence on ethics in business. If a company supplies sub-standard products and get involved in unethical conducts, the consumers will become indifferent towards the company. Such refusals shall exert a pressure on the company to act honestly and adhere strictly to the business ethics. Sometimes, the society itself may turn against a company.

6. Ethical Climate of the Industry

Modern industry today is working in a more and more competitive atmosphere. Hence only those firms, which strictly adhere to the ethical code, can retain its position unaffected in its line of business. When other firms, in the same industry are strictly adhering to the ethical standards, the firm in question should also perform up to the level of others. If the company’s performance is below than other companies, in the same industry, it cannot survive in the field in the long run.

Factors affecting business ethics

The business executive working as a professional manager has to decide what is ethical or unethical. Many factors influence this decision. In part, what is ethical is based on:

Image: What affects business ethics?

1. The individual’s personal code of behavior: The personal Code of Behavior is the result of the complex environment that influences one’s life.

2. The ethical standards imposed on a manager by his superiors also influence him in his decisions as to the morality of behavior. If the superior condones unethical activities such as padding expenses accounts, the subordinate is encouraged to look upon this activity as an acceptable practice.

3. The policies of the company also influence the determination of ethical conduct. Standards of behavior in an industry are often influenced greatly by the dominant firms in that industry. The authors of the company policy obviously have an effect that is decisive.

Garrett puts this idea when he says:

The best protection is the example presented by the conduct of top management and the atmosphere it creates, when leaders are scrupulous, the employees know what is considered right. When example is supported by explicit policy, the followers have a clear idea of how to translate the example of leaders into action. When policy is enforced and enforcement reinforced, the employees know that honesty is the best policy in this company.

According to the University of Redlands, business ethics are the standards that define morally right and wrong business conduct. Most colleges and universities offer business ethics courses, and they all likely cover the three factors that might affect good ethical conduct. This set of guidelines serves as a starting point for understanding the importance of ethical business behavior.

Three Factors That Might Affect Good Ethical Conduct

Experts agree upon the three main categories that might affect good ethical conduct. However, beyond these three main categories, it is worthwhile to understand a more generalized explanation of ethics that offers a good starting point. In general, ethics are principles, codes of conduct and values that govern fundamental behaviors of humans. Basic examples of ethical behavior include respect, honesty, accountability, good communications and responsibility. However, the specific aspects of ethics differ from person to person; what one person thinks is ethical might be highly offensive to another.

People interpret ethics in various ways and apply their interpretations to their personal and work lives. Writers at the University College Cork point out three factors that might affect good ethical conduct: family influences, school/education and cultural/societal values. Family influences start developing in early childhood and include personal conscience, religious beliefs, loyalty, friends/acquaintances, political views and the desire for money, power and influence.

The Importance of Business Ethics

School and education teach people to develop professional ethics and can create a desire to enhance and preserve status. Cultural/society values are most often based on legal constraints, the concern for legal, religious or professional enforcement of laws and guidelines, and influence from the media. One person who grew up with strict parents might believe in the importance of getting to work 10 minutes early every day, and someone who grew up estranged from family members might not feel much empathy for a beleaguered colleague.

The writers at Limestone University explain that a robust set of business ethics will guide a company through critical decision making about negotiations and deals, corporate social responsibility and finances. The importance of business ethics cannot be understated, and with everything going on in the world, a sound moral obligation to society is more critical than ever. Companies that display a lack of ethics are criticized by their employees and the public and have fewer chances for short- and long-term success.

Why Businesses Might Not Act Ethically

Why do businesses not always act ethically, though? According to the , one person at an organization can tip the apple cart by making an unethical choice driven by self-interest. An environmental factor, such as a company-wide contest to earn the most commissions in a sales quarter, could encourage poor or unethical practices. Thirdly, a situational factor like not wanting to take preventative measures to ensure data safety for one project could be an unfortunate group decision.

Appropriate business ethics ensure stakeholders, employees and consumers that a company is basically doing the right thing across the board at all times. Brand reputation is tricky, and 42 percent of consumers will take their business elsewhere if they believe that a company’s stance on a social issue conflicts with their own. Ethics also set the tone for employee behavior, encourage partnerships with other businesses, and impact that all-important bottom line.

What are the three main factors that affect ethical behavior in the workplace?

The three individual factors influencing ethical behaviour are: Values, Beliefs and Referent others (role models/influencers). Overall a Leaders behaviour was identified as having the biggest impact on ethical behaviour in organizations.

What are the three 3 basic levels of ethical issues?

Philosophers divide ethics into into three different levels, which range from the very abstract to the concrete: metaethics, normative ethics, and applied ethics. Understanding these levels is a good step toward grasping the breadth of subject.

What are three factors that might affect good ethical conduct quizlet?

Individual factors, social factors, and opportunity. What are some individual factors affecting ethical behavior?

What are 3 characteristics of ethical behavior?

Ethical behavior includes honesty, fairness, integrity and understanding. There are several ways to encourage an ethical workplace culture, including establishing a company-wide code of ethics.