What defines an unethical situation?

6th February 2018 by Flagship Consulting

Webster’s dictionary defines ‘unethical’ as not conforming to a high moral standard, something which is morally wrong or illegal. It applies to any action that falls outside of what is considered morally right or proper for a person, a profession or industry.

How do you know if you are facing an unethical situation?

Firstly, think about what prompted you to decide that the situation was unethical. It is important to take a step back and analyse the situation, understand what exactly is taking place, what makes it unethical and what are the potential consequences to all concerned? Ask yourself what the outcome would be from not doing the right thing?

The best way to gain perspective and decide if something is unethical is to think about how you would feel if it became public knowledge, or if your friends or family found out. And in serious situations how you would feel it if was splattered across newspapers and on TV. Would you be proud or ashamed of your involvement? Just because a situation is technically legal, or you may not get caught, does not make it ethical. And if the situation was illegal, then you have a lot more to lose then your reputation.

Why do people act unethically?

Within business, people can act unethically for a number of reasons and motivations, going against social mores designed to maintain the fairness and morality of a situation.

Greed is one of the main causes of unethical behaviour, with people choosing to act immorally for personal financial gain. Within a business environment, there are lots of opportunities for employees and employers to exploit the system by doing the wrong thing. For example, you may encounter someone who is discounting their services in exchange for a kickback. Or you may discover evidence of an employer selling his shares in their company when he has inside information about a drop in profit.

Sometimes, a team of people can act unethically because their behaviour is in line with the way it is always been done, with no one thinking to question it and new employees not knowing any different. For example, in the late 1990s, traders at Enron conducted trades that cost California millions of dollars in electricity payments. This was unethical, but the behaviour was so common on the trading floor that it was never questioned.

A person can also act unethically because they believe it can help progress their career. An unethical act could be trying to impress a superior by hurting the career of a colleague. For example, a person may sabotage their colleague’s project as a means of making them look better in comparison.

Examples of unethical behaviour

Mistreating Employees

There are many examples of unethical corporate conduct toward employees or other workers in the supply chain. Many corporations have or still use sweatshops in the developing world to produce their goods; some even use child labour. Other examples include employers who are accused of sexual harassment and employers who threaten or fire whistle-blowers.

Financial Misconduct

Examples of financial misconduct can include price-fixing such as making an illegal agreement between industry competitors to fix the price of a product. Tax avoidance schemes, while legal, are definitely unethical; as is accounting fraud to make a company look more profitable than it is. Other examples include paying enormous and unjustifiable salaries and bonuses to executives regardless of work performance and going after short-term profit by placing investor’s money in risky investments.


Corporate misrepresentation can be as simple as a sales person who lies about their company’s products, or a false or misleading advert. It can also involve a cover up of illegal workplace conditions, fabricated data in a shareholder report or hiding or denying safety problems with a product. Other examples include corporate board members with conflict of interests and brokers who recommend stocks that they own in an effort to drive up the price.

So what should you do if you find yourself in an unethical situation?

  1. Be sure you understand the situation

Make sure you have all the facts before taking action, try to avoid a knee jerk reaction based on emotions. Ask for clarification of the request being asked of you and take time to assess if you believe it is unethical.

  1. Document the incident and find witnesses

It is important to gather evidence and document ever possible detail; ask questions to find out more information. You should try to find witnesses who can support your accusation. By having a witness to the unethical situation, you will have a better argument for your case.

  1. Once you have determined that a situation is unethical, report it immediately to your direct manager

Your manager should be the first person you reach out to when coping with an unethical situation. Make sure you provide management with all the details they need to know to address the situation. If you believe that your manager is also involved, then go to the next level above them.

  1. Be patient

While you may feel there is a sense of urgency, the appropriate person, team or committee needs to gather the facts and investigate the issue. Change does not take place immediately and coming to an incorrect determination is not a solution.

  1. If matters do not improve, be prepared to move

Occasionally management may choose to overlook the unethical situation. If this affects your ability to work you may have to change job. Employees deserve the right to work in an environment that does not compromise their values or ethics. It is always important to protect yourself and your reputation.

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