In any business organization, ethics is of the utmost importance.
Business ethics is what helps members of an organization – from c-suite and executive level players to entry-level employees – determine whether an action is positive or negative for the employer.
But, unethical managerial behavior is an issue that can irreparably harm an organization, both internally and externally.
Which are the drivers of unethical managerial behavior?
Everyone has a reason for doing what they do, and unethical business practices are often perpetrated for some type of personal gain.
Some of the drivers of unethical managerial behavior include:
Profit – Some managers engage in unethical business behaviors for financial gain beyond their compensation. Or, they engage in this behavior to increase their financial gain, as in promotions or bonuses.
Prestige – A manager might engage in unethical business behavior to achieve a promotion, or take credit for work they didn’t do to improve their standing in an organization.
Power – In many cases, a manager will engage in unethical business behavior to fulfill a need for power. This is evident in situations where employees believe a manager is punishing them or not rewarding them “to prove a point”.
What to Do With Unethical Managerial Behavior
Perhaps the most important step to dealing with unethical managerial behavior is determining the damage done.
By understanding the impact of an instance of unethical managerial behavior, you can better understand the solution.
Financial Impact – Did the manager’s unethical actions cause financial impact to the business? If there was money stolen, then employers are often required to terminate the employee and report them to the authorities.
Moral Impact – Did the manager’s unethical actions cause a loss of moral in your employees? If valuable employees experienced punishment or a loss of bonuses and rewards for their hard work, they may decide to move to another organization.
The loss of valuable employees cannot be misunderstood. Managers are entrusted with not only maintaining productivity and profit goals – good managers are leaders, and good leaders improve on the investment your organization puts into the best employees.
Productivity Impact – Did the manager’s unethical actions cause a loss in productivity to your organization? This type of loss can impact profit directly, and employee moral indirectly.
Was Your Manager Breaking the Law?
Along with organizational impacts such as profit, moral, and productivity, the question of whether a manager broke the law while engaging in their unethical business practices is of utmost concern.
If a manager broke the law, it is a top responsibility of his superiors to use the necessary channels to report them. By not reporting a lawbreaking manager, the employer risks potentially being culpable in the eyes of the law.
How Valuable Is Your Manager?
In all business decisions, good leaders will add up all factors. Whether the law was broken and the level of organizational damage are both important considerations.
In some cases – like breaking the law – there is no way to retain a manager after unethical business practices. Those situations are out of the hands of their superiors.
But, unethical business practices can be a learning opportunity, especially if it will retain a specific benefit presented by the manager.
This is a last-ditch effort, and should only be considered in extreme cases. It should also be only considered in cases where a new or repaired relationship between the manager and other employees is possible – this is not always the case.
Regardless of whether or not you choose to retain a manager who engaged in unethical business practices, the choice you make is one that should be honest, thorough, and inclusive of as much evidence and insight as possible.
Some organizations hold focus groups with impacted employees to better understand what a work environment might look like.
For instance, in nearly all cases of sexual misconduct, a victimized employee might never feel comfortable working with a manager ever again. This is an important factor not only ethically, but legally. Failure to act on sexual misconduct charges on the part of employers is a common organizational legal battle in these types of cases.
Think Like A Good Leader
Above all, good leaders need to do what is right – for their organization, their employees, and the communities their organization serves.
Taking a hard look at what stakeholders are involved will guide any good leader in the right direction.
Common categories of stakeholders a good leader will consider in a situation of unethical managerial behavior include:
- Communities (both local and international)
- Potential Customers
- Current and Future Markets