Immoral behavior: signs, causes, types, differences in different countries. How unethical behavior becomes a habit


Ethical or unethical? - This is the subject of controversy for philosophical discipline - ethics. In everyday life, we usually talk about morality and moral criteria for human behavior, about good and evil, based on the traditions and rules that have developed in society. And when scandals erupt in the business environment, sometimes turning into the subject of world discussion and condemnation, experts, and we ourselves are trying to determine the degree of morality or immorality of the management of a company.

Most often, scandals erupt in connection with corruption, financial fraud, tax evasion, falsification of information, attribution of personal expenses to economic items and a number of others. All of them are in the nature of an economic offense, but the reason that generates them is always associated with behavioral components.

Descending road

“The surest road to hell is the one along which they descend gradually, the road is gentle, soft, without sudden turns, without signposts,” noted writer and theologian Clive S. Lewis. In business, everything also begins with petty theft and fraud, the “innocent” use of office supplies brought from work in the home. Studies conducted by Harvard Business School showed that about 75% of the employees surveyed said they had witnessed the unethical and sometimes illegal behavior of their colleagues.

The problem of unethical behavior is compounded by the fact that, noticing the unethical behavior, many employees tend to “ignore” the immorality of actions, considering them a trifle. The role play in the course of the study, which reproduces the audit, clearly demonstrated that the "auditors" did not report a gradual and insignificant overstatement of the reporting data, and they reported the "accountants" immediately prescribing a large number.

Unethical leadership

Experts note that leaders at all levels of the corporate hierarchy are characterized by excessive self-esteem, sometimes leading to a separation from reality and pushing for permissiveness. And this is at a time when their ethics, values \u200b\u200band behavior have a direct impact on the attitudes and behavior of those they lead, i.e. on organizational culture. This effect can be positive or negative.

Ethical leadership behavior should be specific enough to remain within the boundaries of leadership behavior and decision-making based on justice and morality. The concept of “unethical leadership” is broad enough and includes many ways to “prove yourself”.



The “moral” standards of an unethical leader can be defined as illegal behavior, actions and decisions that violate moral standards, including contributing to the unethical behavior of subordinates. A leader, in order to be ethical and effective, must confront.

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Moral behavior is the totality of actions, actions of people that meet the standards of morality, consciousness, order, formed in society, or to which it is directed.

In the process of entrepreneurial and managerial activity, there are cases of deviations from social norms, that is, unethical behavior, it can be due to various factors:

1. competition;

2. the pursuit of large profits;

3. inept incentives for managers for ethical behavior;

4. underestimation of ethical standards in society;

5. an attempt to achieve the goal and realize the mission of the organization at all costs;

6. unethical behavior of partners;

7. conflict, stressful situations in the organization;

8. unsuccessful selection and inept application of leadership styles;

9. A complex system of development and decision-making in the organization.

To ensure ethical behavior, modern management offers the following measures:

The introduction of ethical standards that reflect the system of common values, social preferences, rules of conduct for employees of the organization;

Creation of ethics committees;

The use of incentive mechanisms that counteracted unethical behavior and actions;

Implementation of social audits to determine the influence of social factors on the organization;

Organization of ethical behavior training for managers and all personnel:

Constantly informing employees about cases of highly ethical behavior;

Holding meetings, conferences, symposia, etc. on issues of ethical behavior.

The prevailing moral standards are the result of a long-term process of establishing relationships between people. Without observance of these norms political, economic, cultural relations are impossible, because it is impossible to exist without respecting each other, without imposing certain restrictions on yourself.

Faced with the problem of ethical choice, managers usually rely on a normative point of view, that is, certain norms and values, in accordance with which decisions are made.

The normative ethics distinguishes several approaches to the description of value systems and, accordingly, the adoption of ethically complex decisions that can be applied in management practice: a utilitarian approach, an individualistic approach, a moral and legal approach, and the concept of justice.

The utilitarian approach.  The basic principles of the utilitarian approach are based on the fact that the behavior corresponding to the norms of morality brings the greatest benefit to the greatest number of people. The decision-maker must consider the impact of each of his options on all interested parties and choose the option that brings the most people pleasure.

An individualistic approach.  It suggests that a person’s actions that are beneficial to her in the long run are morally acceptable. Self-control is considered the main driving force, and all external forces that limit it should be stopped. Each person chooses for himself the most advantageous solution in the long run, on the basis of which he judges the quality of his decisions. Individualism comes down to behavior that is beneficial to other people, that is, the actions of a person begin to correspond to the norms desired by society. One of the features of this approach is that it involves (if necessary) the individual’s actions aimed at acquiring personal short-term benefits that do not correspond to social norms in a row.

The moral and legal approach.  The moral and legal approach claims that a person is initially endowed with fundamental rights and freedoms that cannot be violated or limited by the decisions of other people. In the decision-making process, the following moral rights may be considered:

1. The right to freedom of consent.

2. The right to privacy.

3. The right to freedom of conscience.

4. Right to proper treatment.

5. The right to life and security.

Justice concept.  There is distributive justice (equal - equal), procedural justice (compliance with the rules), compensatory justice (redress).

In the world economy, there are seven main mechanisms by which standards can be put into practice. These include:

1) ethical codes;

2) ethics committees;

3) training;

4) social audits;

5) legal committees;

6) services, consider claims of citizens on ethical issues;

7) changes in the corporate structure.

The most commonly used mechanism is the code of ethics. It is developed by a specially created body - a committee, commission, and the like. About 90% of foreign companies have implemented ethical principles using such codes. They can be developed for the company as a whole and contain rules of ethics common to all.

In the global economy, many companies are currently creating units or hiring individual employees to develop codes of ethics: measures are being taken to familiarize managers with the provisions of these codes; a system of encouraging managers is also being created, provided they take ethical issues into account when making decisions and their official conduct complies with the ethical standards set forth in the codes.

When monitoring the performance of employees of the company, they use tests on lie detectors, drug tests, etc.

More productive, according to managers of many companies and their owners, is the way to hire graduates of educational institutions, where there was a large and extensive program of training in the basics of ethics. In this case, ethical standards are laid down in the consciousness (and subconscious mind) of the future employee as part of the worldview complex and, one might even say, as unshakable axioms, are not subject to appeal. Then the cumbersome and expensive system of developing company codes, training employees in ethical standards for monitoring compliance with ethical requirements is largely unnecessary.

To reveal the essence of the problem - this means to carry out its substantive analysis and understand the system of main contradictions. Identifying the nature of the problems requires knowledge of the functional and aggregate structure and values \u200b\u200bof the parameters of the control object during its normal functioning. “When we formulate problems or discuss them, we always thereby form a specific program and plan of our actions.” We always evaluate and select problems, characterizing some of them as very important and significant, while others as unimportant. Thus, we determine and predetermine our future actions.

One of the problems of journalism is the "yellow press" spoiling the reputation of the profession as a whole, but with all this it is one of the most read. Then thoughts involuntarily arise that the press is not to blame, but the reader, who himself is ready to pay money for such information, “for every viewer there is an actor, but a consumer for the consumer”. “People have the right to know,” but the form in which they learn it is also of great importance. The problem here is that if you simply state the facts, you can’t see the journalist; if you embellish the events so much, then nothing will remain of the fact, but only the distorted imagination of the journalist. Indeed, the work of a journalist is an act of indirect communication with readers, radio listeners, and viewers. This is a communicative act.

Information is an intermediary between a journalist and an audience; it is a tool that journalists of all ranks operate on. The very essence of journalism lies in the search, collection, processing, interpretation and dissemination of information.

Some of the actions of journalists violate not only the Code of Professional Ethics, but also the laws, so the Komsomolskaya Pravda newspaper published an article entitled “Mikhail Kozakov’s Secret Diary: I gave my wife Anya everything I earned! And you can’t trust her in anything! ”Which included excerpts from the artist’s personal diary (Appendix B). This publication violates the twenty-third article of the constitution of the Russian Federation - “1. Everyone has the right to privacy, personal and family secrets, protection of his honor and good name. 2. Everyone has the right to privacy of correspondence, telephone conversations, postal, telegraphic and other communications. The restriction of this right is allowed only on the basis of a court decision, ”also article twenty-four, paragraph one,“ Collection, storage, use and dissemination of information about a person’s private life without his consent is not allowed. ”We conducted a survey (Appendix D, survey No. 1) in which was asked the question “do you think it possible to call the behavior of the journalist (s) publishing excerpts from the diary of the People's Artist of the RSFSR Mikhail Mikhailovich Kozakomv not ethical?” 50% of the respondents considered the behavior of journalists to be unethical and unlawful, 28.57% considered it not ethical, but not violating the laws and 21.43% of respondents found the behavior of journalists acceptable.

There are journalists who are happy to try on the role of the arbiter of human destiny, as journalist Alexander Nikonov in the broadcast of the “clinch”, the radio station “Echo of Moscow”, said that “extra people should be killed” An extra person, in his opinion, is the one who cannot take care of oneself independently, cannot support himself. For cover, the word euthanasia is used - it is nevertheless necessary to observe decency: killing is bad, and euthanasia is humane. Nikonov lives with confidence that things like love, like pity do not exist. Rather, they just came up with. It is impossible to rationally explain pity and love - which means that the right to exist does not deserve, as, indeed, children with disabilities. Save the sick children of their mother. After all, they are driven by the maternal instinct, and this is unconsciously, at the level of instincts, so to speak. So you need to help them realize that they are mistaken. From his point of view, then they will only say thanks.

We conducted a survey (Appendix D, survey No. 2) in which we asked the question "What do you think can be called ethical statement by Alexander Nikonov" on the use of euthanasia for children with disabilities immediately after birth? and 18.92% considered it to be ethical, 51.35% considered Nikonov’s statement not ethical, and 29.73% considered the behavior not ethical, but taking place, since each person has the right to express his point of view.

Some journalists do not hesitate to even bury healthy and healthy people in their articles. The news of the death of Jackie Chan became one of the most readable on the Internet (Appendix E) On March 28, 2011, there was information on social networks and Internet news that the famous actor Jackie Chan died, fans started to condole on Facebook, but it turned out that the actor is alive. The rumor about Jackie Chan's death from a heart attack was launched through the microblogging service Twitter 10 days before the actor’s 57th birthday.

We conducted a survey (Appendix D, survey No. 3) in which we asked the question “Do you think it was ethical to disseminate on the Internet unverified information about the death of Jackie Chan (Jackie Chan)?” The majority of respondents 85.71% believe that this is not ethically, but there were people whose opposite opinion was 14.29%. We were also interested in how the fans of the artist think who could spread such rumors (Appendix G survey No. 4), according to the survey it turned out that the majority of respondents 39.28% believe that this could be done by people who wanted to make money from disseminating this information or just to draw attention to themselves, 25% of the respondents thought that these were enemies and ill-wishers of the artist, and 17.86% scored answer options: This is just a thoughtless joke, this could be done by the PR specialists of the artist himself to draw attention to him.

Surveys have helped us learn about people's attitudes to this type of information. Most of the respondents relying on their moral principles, believe that in general, according to these situations, journalists acted unethical in relation to the heroes of their articles. But if you imagine that all journalists would act, as the code stipulates for journalists, would this profession be so interesting? And would the situation of information hunger then arise? It’s well-known to transcend the bounds of decency, but in our world of double standards there is no other kind of journalism.

Why are high ethical standards so important for the investment industry and investment professionals? As the 2008 global financial crisis showed, seemingly unimportant individual decisions, such as approving loans to individuals who are unable to provide evidence of a stable income, together can accelerate the market crisis, which can lead to economic difficulties and job losses for millions of people. In an interconnected global economy and market, each participant should strive to understand how his or her decisions and unethical behavior, as well as the products and services that he or she provides, can affect not only the short, but also the long term.

The investment industry serves society by comparing those who provide capital or money to those who are looking for them to finance their activities. Consider those who provide capital - investors and those who seek it - borrowers. Borrowers can seek funds to achieve long-term goals, such as building or modernizing factories, schools, bridges, highways, airports, railways, or other facilities. They may also seek short-term capital to finance short-term goals and / or support their daily operations. Borrowers can be enterprises, schools, hospitals, companies and other legal and physical persons. Some borrowers will turn to banks or other lending institutions to finance their activities; others will turn to stock exchanges to gain access to the funds they need to achieve their goals.

In exchange for providing capital to finance borrowers, investors expect their investments to return, offsetting their use and the associated risks. Before providing capital, diligent and disciplined investors will assess the risks and benefits of providing capital. Some risks, such as a slowdown in the economy or a new competitor, may adversely affect the return on investment. To help assess the potential risks and benefits of investments, investors conduct research, assess the capabilities of the borrower, conduct a competitive analysis, read official statements, examine the management’s business plan, research reports, and industry reports. Responsible investors will not invest their capital if they do not trust that their capital will be used to their advantage. Investors and society benefit from the movement of capital for borrowers who can bring the most benefit from capital through products and services.

Cash flows are more efficiently distributed between investors and borrowers when financial participants are confident that all parties will behave. Ethical behavior builds and strengthens trust, which has advantages for individuals, firms, and society, as opposed to unethical behavior. When people believe that a person or institution is reliable and acting in accordance with their expectations, they are more likely to accept the risks associated with these people and institutions. For example, when people trust their own, they are more likely to invest their money and take the risk of short-term price fluctuations, as they may reasonably believe that their investments will provide them long-term benefits. Entrepreneurs are more likely to accept the risk of expanding their business if they believe they can attract investors with the necessary funds to expand at a reasonable price. The higher the level of confidence in the financial system, the more people are willing to participate in financial markets. Wide participation in financial markets allows the flow of capital to finance the growth of production of goods, the provision of services, and infrastructure. All of this benefits society with new and often better built hospitals, bridges, manufactured products, services rendered and jobs created. Wide participation in financial markets also means that the need and demand for investment professionals is increasing, as a result of which the job opportunities for those who want to use their specialized skills and knowledge of financial markets are also increasing.

Ethics always matter, but ethics are especially important in investments because the investment industry and financial markets are built on trust. Unethical behavior repels, ethical behavior - attracts. Trust is important for the whole business, but it is especially important in the investment industry, for several reasons. Reasons may be: the nature of customer relationships, differences in knowledge, and access to information, as well as the nature of investment products and services.

In relations with clients, investors entrust their assets to financial firms to intermediaries to provide intermediary functions and help preserve their capital. If the company and its employees cannot protect the assets of customers, this can have serious consequences for all participants in the process. Without trust and ethical behavior, intermediary firms would have no business.

Those who work in the investment industry have specialized knowledge, and sometimes better access to information. Having specialized knowledge and better access to information is an advantage in any undertakings that give one side more power. Investors believe that they hire will not use their knowledge to use it to the detriment. They rely on an investment specialist who uses specialized knowledge to serve the interests of the client.

Another reason why trust is so important in the investment industry is related to the nature of the products and services. In other industries, such as transportation, industry, technology, retail, or the food industry, they produce products and / or provide services that are tangible and / or clearly visible. We can hold a tablet in our hands and check it. We can use the software, dine in restaurant chains and watch movies in movie theaters. We can judge the quality of a product or service based on many factors: how well will they fulfill their intended function? How effective is it? How long is it? How attractive is this? Is the price reasonable or appropriate for the product or service?

In the investment industry, many investments are intangible and appear only as numbers on a page or screen. Without tangible products to verify and without any guarantees to protect the product or service to fulfill, as expected, investors should rely on the information provided about the investment - both before and after the purchase. When they contact their financial advisor and request an investment report, they receive either an electronic or a printed statement with a list of transactions. They believe that the information is accurate and complete, and they trust the investment professionals with whom they defend their interests. The globalization of finance means that investment professionals are likely to have business opportunities in new or unfamiliar places. Without trust and ethical behavior, financial transactions, including global transactions, are less likely. Unethical behavior can scare off the interaction of contractors from different parts of the world.

Due to these factors. This trust is created, supported by the ethical actions of all persons who work and / or precinct in the markets, including those who work for companies, banks, investment firms, sovereign companies, rating agencies, accounting firms, financial consultants and planners, as well as institutional and retail investors. When market participants are ethical, investors and others can trust that the numbers on the screen or report pages are accurate representations of information and make sure that investing and participating in financial markets will be beneficial. The ethical behavior of all market participants can lead to greater participation, protection of the interests of customers and greater opportunities for investment. Ethical behavior of firms can lead to higher levels of success and profitability for both firms and their employees. Customers are attracted to companies with a reliable reputation, which leads to business growth, higher incomes, and greater profits.

There is another - unethical behavior. Unethical behavior is an act that goes beyond what is considered morally right or right for a person, profession, or industry. Individuals can behave unethically. Entrepreneurs, professionals, and politicians may also behave unethically. Unethical behavior in the investment industry poses more threats than in any other professional field. And a number of factors contribute to this.

At the microeconomic level. Firms with ethical behavior may also have lower relative costs than unethical behavior, as regulators are less likely to initiate costly investigations or impose significant fines on firms where high ethical standards are the norm.

At the macroeconomic level. Unethical behavior erodes and can even destroy trust. When customers and investors suspect that they are not receiving accurate information or that the market is not a game field, they lose confidence. Low-confidence investors are less willing to accept risks. They may require a higher return on the use of their capital, prefer to invest in another place, or prefer not to invest at all. Any of these actions will increase costs for borrowers seeking capital to finance their activities. Without access to capital, borrowers may not be able to fulfill their tasks of constructing new factories, bridges or hospitals. Reduced investment can harm society through job cuts, growth, and innovation. Unethical behavior ultimately harms not only customers, but also the company, its employee and other persons, one way or another connected by the investment process. You can read an example of unethical behavior of a company in an article.

Decreased confidence in the markets can reduce the growth of the investment industry and tarnish the reputation of firms and individuals in the industry, even if they did not engage in unethical behavior. Unethical behavior inhibits the ability of markets to channel capital to borrowers who can create the most value from capital that promotes economic growth. Both markets and society suffer when unethical behavior destroys confidence in financial markets. For you personally, unethical behavior can cost you your work, reputation and professional growth and can lead to fines and, possibly, jail. The unethical behavior of the company poses a threat both to the person / company that has undertaken such behavior, and to entities that are not directly involved in the process.

Questions for consolidating knowledge after reading the article “Unethical behavior in the investment industry”

Question 1

Which of the following statements is most accurate. Investment professionals have a special responsibility for ethical behavior, because:

A) The industry is highly regulated.

B) they are entrusted with protecting clients' assets.

C) the profession requires compliance with its code of ethics.

Solution 1:

B is the correct answer. Investment professionals have a special responsibility, as clients instruct them to protect clients' assets.

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