Ethical Dilemma Reason 2
Profit Pressures
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Ethical dilemmas arise for a variety of reasons in this business world. Four of the most common
reasons are as follows:
1. Selfishness and personal gain
2. Profit pressures
3. Business standards conflicting with personal values
4. Cultural differences in global settings
People often act unethically due to the constant pressure to increase profits. They either try to
beat competitors or cooperate with competitors through unethical practises. This pressure is
worsened by pressure from senior executives or business owners to show greater profits.
Investors are wondering whether the intense pressure on CEOs to show profits every quarter, the
pressure on their deputies to increase profits compared to previous quarter or previous year, the
pressure on accountants and consultants and analysts to help these executives show us the
reported money—whether all of this pressure has inflated the value of their investments artificially.
Arthur Levitt, former SEC chairman, Arthur Levitt was quoted as saying "Fierce competition in the
marketplace is healthy, but we've seen that the corporate race to beat analyst projections can
breed disdain for investors' interests and the law."
Instead of selling products and services on their merits, some people engage in false or misleading
statements and innuendoes about competitors, their products or their services. Such unethical
conduct invites disrespect from clients and even complaints from competitors. It is therefore
imperative that all comparisons to competitors and their products and services are substantiated,
and that they are complete, accurate and not misleading whenever they are made.
Some businesses have been known to pressure suppliers to lower prices below market value.
Such practice may provides short-term benefits, may lead to longer term disadvantages because
their supplier may not provide as a good service since the profit margin is low and the incentive to
maintain the client may not be great.
Discussion with competitors on pricing policy, contract terms, costs, inventories, marketing and
product plans, market surveys and studies, production plans and capabilities is not only unethical,
can be illegal as well. Companies also sometimes engage in price fixing, in which they collude with
competitors to set high prices for their products.
Although individuals must make ethical choices, it is also true that they often make these decisions
in committees, group meetings, and through discussion with colleagues. Ethical decisions in the
workplace are guided by the organization’s culture and the influence of others, such as coworkers,
superiors, subordinates. In fact, more ethical misconduct is done to benefit organizational
performance rather than to satisfy personal greed.
Very often, it is the peer pressure or a superior’s direct request for unethical behavior that causes
the start of an unethical business practices. For example, Betty Vinson, an accountant in WorldCom
was asked to inflate quarterly earnings by shifting operating expenditures into capital expenses.
However, such a one time request was continued and it later became a mountain of misallocated
expenses and bogus accounting entries totaling more than $3.8 billion. As a consequence, she was
sentenced to five months in prison and five months of house arrest
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Courses on Ethics
Here are some of the useful courses on Ethics that you may wish to consider signing up for:
Corporate Governance and Ethics
This online course on Corporate Control and Governance employs a stakeholder management
framework, emphasizing business' social and ethical responsibilities to both internal and external
stakeholders. A twin theme of business ethics demonstrates how ethical or moral considerations
have to be included when dealing with the public issues facing organizations and during the
decision-making process. This novel and innovative program teaches companies and professionals
how to lessen fraud losses as well as how to effectively eliminate future frauds. This ethics course
offers comprehensive coverage of fraud detection, fraud warning signs, technological fraud
detection tools, investigation techniques (especially useful to auditors, security personnel, and
managers), financial statement screening, fraud risk in e-commerce, pro-active fraud risk and much
more.
Ethics and Values - for Social Workers
There are questions of values and ethics everywhere in life. Each of us has his or her views of what
is right or wrong, or what is of greater inportance, hence having higher priority. We usually do not
consider ourselves as beginners when we deal with this topic of what we consider as right or
wrong. This course is an introduction to the topic, but new questions and dilemmas related to
ethics and values will arise in every piece of work you undertake as a social worker.
Business Ethics
The functions of an ethics program are stated, ethics defined, and general characteristics of the
ethics program listed. Identify ethical standards for fairness and honesty, precise record keeping,
and complying with antitrust regulations. Identify ethical standards for giving and receiving gifts,
gratuities, and entertainment with customers and suppliers, government and non-government
personnel, and foreign officials. Identify standards for managing conflicts of interest, financial
standards, including preservation of assets, restrictive trade practices, intellectual properties, and
employee relations. Recognize the duty to comply with and report suspected ethical violations,
what disciplinary action could result from failure to comply with or report violations, and how to
raise ethical concerns and seek additional counsel. Recognize the relevanc of ethics principles
through learning from case studies.
Ethical Issues for Bankers- for financial service professionals
Ethical Issues for Bankers prepares students to meet the ethical standards expected of financial
services professionals. Students will learn the general guidelines that determine banking ethics,
gain the knowledge and skills needed to perform ethical decision-making, and be prepared to
observe their institution's code of conduct and Federal laws. Students will also explore typical
ethical dilemmas that tend to occur in financial institutions, and learn how to apply a thoughtful
three-step approach to such dilemmas."
Ethics - Standards of Professional Conduct - for Engineers and other professionals
Many organizations, particularly smaller businesses, do not have a written set of standards to
provide guidance to their employees on ethical matters related to their job duties. While each job
title, company and industry deals with unique circumstances, there are some standards of
professional conduct for engineers that are considered the norm across a broad range of job titles,
companies and even industries. In matters such as conflicts of interest, use and protection of
employer's assets, and disclosure of proprietary information, there are universal standards of
accepted conduct for engineers working for employers based in developed countries (although the
detailed policies may vary between companies).
The American Society of Civil Engineers (ASCE) has developed a document titled "Standards of
Professional Conduct" for its members. In addition to the aforementioned examples of ethical
issues, the ASCE's standards cover issues such as maintaining accurate and complete records,
outside employment/activities, acceptance of bribes or kickbacks and whistle blowing. The ASCE's
standards serve as an excellent model for companies seeking to provide guidance to engineers on
ethical matters related to their position and the performance of their work tasks. It also provides a
universal set of principles to guide individual engineers on ethical matters in the absence of an
employer policy.
In this course, the student will be directed to ASCE's website to review the ASCE document titled
"Standards of Professional Conduct".
The student must take a multiple-choice quiz consisting of fifteen questions at the end of this
course to earn PDH credits.
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Brought to you by Jacob Gan, PhD (Michigan)
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