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A List of The 4 Most Common Ethical issues In Business Right Now

As your business expands and your staff grows, it’s a given that you will eventually experience new challenges. One of the biggest challenges business owners face as their company grows is creating a safe and productive environment for all employees. The biggest threats to reaching that goal are common ethical issues that all businesses deal with.

The business ethics concerns that affect companies are similar to the ones we deal with in everyday life. What makes them different, of course, is when they occur inside your business it becomes your responsibility.

Companies with ethical issues face some problems that can be corrected, the misuse of company time. Other moral issues, like harassment and employee theft, are much more serious. The best way to prepare and prevent your company from experiencing one of these scenarios is to learn more about them.

To help you navigate the current ethical issues in business, we put together a list addressing the nature of these problems so you can stop them from happening in the future.

  • Misusing Company Time

    Any hours your employees are being paid to work is defined as company time. The misuse or abuse of this time occurs when an employee isn’t being as productive as they can because they are distracted or using their time to work on personal tasks.

    While employees can be distracted by a variety of things, the number one culprit is smartphones. According to a report by Udemy Research, 36% of employees under the age of 35 admitted to spending two hours or more checking their smartphone during the workday. It may seem innocent at first but employees pulling out their phones between tasks to scroll their Instagram feed can turn into an hour of distracted work.

    In addition to the distractions employees face, many of us spend more time at our job during the week than we do at home. This makes it hard to accomplish some of the personal tasks and goals we’ve set for ourselves. That’s why many employees feel the need to either work on personal tasks or decompress during work hours. This is the number one issue on our list of current ethical issues in business because it happens often and can sometimes be hard to identify.

    How You Can Reduce the Misuse of Company Time

    • Make your internet and cell phone policies clear
      Forbidding the use of phones at work will not solve your problem.
    • Set a good example
      Constantly being on your phone or distracting your employees sends the wrong message.
    • Engage your employees
      Reprimanding your workers for their phone use will have the opposite effect and could further unmotivate. Try engaging your employees with work-related questions to get them back on track.
  • Harassment

    The second common ethical issue on this list is the most damaging to a company’s work environment and its employees. Harassment in the workplace can make it uncomfortable for your employees to come to work, nevermind work productively. Avoiding harassment in the workplace starts with understanding what it is.

    Harassment isn’t just an act committed by management. Harassment can be committed by co-workers, managers and even clients. Anytime a person’s actions affect an employee’s success or comfort level, that is harassment. Remember that these matters can be extremely sensitive so it’s crucial you handle these cases with care and investigate them thoroughly. In some situations, you may need legal advice. The safety of your employees is your number one concern.

    There are two types of harassment in the workplace; sexual and non-sexual. Let’s review the differences:

    Sharing inappropriate sexual images or videos Using racial slang, phrases or nicknames
    Sending suggestive notes or emails Ridiculing and employees religious beliefs
    Making inappropriate sexual gestures Sharing inappropriate images, videos, emails or notes
    Inappropriate touching Wearing offensive clothing

    How to Avoid Harassment In the Workplace

    • Putting the right policies in place
      You can proactively prevent harassment in the workplace by crafting policies and procedures making it clear there will be no tolerance for any ethical misconduct.
    • Training your employees
      Training your employees to recognize harassment in the workplace is an important step in preventing it. Use up-to-date training videos and other engaging material to convey your point.
    • Working together
      Speak with your human resources department or other managers and work together to create an effective training program and distribute important takeaways to employees and management via email or memo.
  • Employee Theft

    All business owners are aware theft is their number one threat to loss prevention. What business owners haven’t accepted is who is stealing from them. According to CBS News, companies can lose 5% of its annual revenue to employee theft and fraud. As a business owner, this can be maddening to think about.

    The best way to eliminate employee theft is to first educate yourself on the different ways employees steal.

    Let’s take a look at some of the items subject to employee theft:

    • Money
      Stealing money is the most common type of theft in the workplace and can be committed by anyone.
    • Time
      Most employees don’t realize they are stealing company time. However, being paid to work 9 hours and only being productive for 3 is indeed theft and should be treated as such.
    • Supplies
      Another common type of employee theft is stealing supplies like paper, pens, technology and other company property.
    • Inventory
      Inventory theft is common among retail stores, occurring when an employee steals merchandise the company sells to make a profit.
    • Information
      Product designs, trade secrets client information and contact lists are just some of the information employees can steal from their employers for their own benefit.

    Preventing Employee Theft

    Preventing employee theft starts with your interviewing process. Ask the right questions, be observant and don’t hire someone who you feel is untrustworthy. Be clear on company policies and put the right checks and balances in place to remove any temptation your employees may face.

  • Poor Leadership

    Not all unethical behavior in business is committed by lower-level employees. Owners and employees in managerial roles find themselves at the center of ethical business issues as well, and more often than not it, it stems from poor leadership.

    Bad leadership can happen in a number of ways but it starts with not following your own rules. If an employee sees management disregarding the policies they put in place, they won’t feel the need to follow them either. As the leader for your business, you need to hold yourself to the same standards you hold your employees to or you risk creating a double standard.

    Treating your employees fairly means giving credit when it’s due, taking the blame for your own mistakes and avoiding favoritism. Nothing is more damaging to an employee’s ego than their boss receiving praise for their work with no gratitude. Denying your employees the credit they deserve or deflecting blame can cause even your most loyal employees to turn bitter.

    Favoritism can also affect your employees. You may find yourself more fond of certain employees on a personal level but that should never become apparent in the workplace. Favoritism causes internal conflict with your employees, turning your team against each other if they think someone is being gifted more opportunities to succeed than others. It can also create bad habits. If an employee you have a personal relationship with starts to feel like they can do less to get by than other employees, you have a serious ethical issue on your hands.

    How to Be a Better Leader In the Workplace

    • Lead by example
      Be the worker you want your employees to be. We’ve all had a boss we worked harder for because they worked just as hard if not harder than we did. That’s the type of leader we should all strive to be.
    • Make realistic policies
      If the policies you enforce in your company are difficult for you to follow yourself, it’s time to consider revising them. For example, if you have a strict no cellphones policy, but you’re on your phone every other minute, you may want to consider changing the policy or leaving your phone in your office.
    • Be fair
      Giving your employees their credit when it’s due can go a long way towards helping them succeed. Everyone likes to be told they’re doing a good job so don’t be afraid to share your praise. Even deferring your own praise to the work of your employees can build chemistry in your office and motivate your employees.

The Final Word on Reducing Ethical Issues in Your Business

The best way to minimize harassment, theft and the misuse of company time is with better leadership skills and clear, plain-speak policies. If you know how to create and participate in a morally-sound work environment, your employees will follow your lead.

Running a safe and proper workplace should be every business owner’s goal. Everyone likes to have fun and make jokes, but the fun stops when someone starts to feel targeted. Make sure your employees know the boundaries and don’t be afraid to reprimand those who are constantly pushing the limit.

The moral issues in business we’ve discussed here are far from the only ethical concerns you’ll encounter as a business owner. We hope this list prepares you and your company for the ethical concerns that come your way and encourages you to take the appropriate steps towards preventing them.


Tyler Sousa

Tyler Sousa

Content Writer at Fast Capital 360
Tyler Sousa is a Content Writer who specializes in business and finance writing. Born and raised in Central New Jersey, his journalism background and personable writing style make him a detail-oriented author as well as a great storyteller.
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