Analysis of the impact of unethical policies and practices on employees

Abstract

In this day and age, how much does it pay for an organization to be ethical? Most firms are in business to make money, but reports of unethical or illegal behavior abound (Alleyne, 2013). People in the industry need to be ethical in doing business because practicing businesses ethically and being socially responsible will help their organizations secure a positive business performance and attain sustainable business growth (Gökmen, 2012). The practices, policies coupled with employees create the culture of an organization. It is fair to assume that its employees are also affected by these policies. So far, ethics researchers have failed to examine the effects of unethical behavior (i.e., fraud, conflicts of interest) of top leaders, with a particular focus on how corrupt organizational practices affects employees. As a result, evaluating employee reactions to unethical practices at the hands of top leaders serves a useful purpose for increasing our understanding of the human costs of unethical behavior and how organizations can best deal with the aftermath of an ethical scandal. The organization’s unethical culture that results from leaders’ unethical practices may have severe implications for employees who are not directly involved in the scandal but experience repercussions simply because they are members of the organization. If unchecked, these repercussions can, directly and indirectly, affect organizational and employee outcomes such as organizational commitment, absenteeism, performance, and turnover intentions.