---
title: Ethical behavior | Formula, Calculator and Example
description: Ethical behavior is behaving well under the values and moral principles set by a society.
---

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**[Home](https://www.carboncollectiveinvesting.com/) > [Sustainable Investing](https://www.carboncollectiveinvesting.com/sustainable-investing) >** Ethical behavior

# Ethical behavior

![](https://www.carboncollectiveinvesting.com/hubfs/Brooke%20Tomasetti.png)

 Written by Brooke Tomasetti  |  Reviewed by [Subject Matter Experts](https://www.carboncollectiveinvesting.com/subject-matter-experts)

Updated on October 1, 2024

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### Table of Contents

Ethical behavior is behaving well under the values and moral principles set by society. As simple as we call it in our daily lives, following good etiquette and acting in good interest marks ethical behavior.

## Definition

*“Ethical behavior refers to the application of moral and good values and fair principles in any given situation.”*

It means to behave in a good way according to the standards set by the society in which we live. Ethical behaviors must be practiced in personal and professional life both. One must be ethical in his personal and work relationships. 

An ethical outlook at the workplace includes being vigilant, communicating effectively, taking responsibility, observing punctuality, accountability, professionalism, respectful behavior, and trust. Offering your maximum productivity level at work is also a part of professional etiquette.

When talking about work-life, ethical status most importantly refers to being true and fair in your dealings and sticking to what is right in all kinds of circumstances. One may have to face several such situations, where he can escape the checks and go against the rules and regulations for his benefit. Avoiding any such situation is very important to establish an ethical professional behavior.

## Examples

1. SSC is a Consultancy firm. It usually pays the salaries to its employees by the 2nd of the following month. However, the last month due to some delays in payments from the clients and other extra expenses, the firm was short on cash. 

They, thus, decided to defer the salary payments until the cash flow is stabilized. The employees had to work for two months without being paid. Such a behavior is not at all professional, but unethical. Also, in the case of complaints by the employees, such a behavior can trigger legal implications.

1. Hannah and Nancy work at LUMP (Pvt.) Ltd. Both of them are great friends and help each other at their work. LUMP operates a logbook policy to regulate the incoming and outgoing times of its employees.

Each employee has to log in the time of entry into the office manually on the logbook i.e. 8:30 am and report the exit time as well i.e. 5:00 pm. Hannah had to go out for some work before office timing and so she asked Nancy to mark her attendance at 8:30 am so that she is not charged with a short leave.

Marking false attendance for yourself or your colleagues is unethical.

## 4 Common Ethical Principles

The study of human behaviors suggested the following four ethics to be the most important i.e. Respect, Beneficence, Justice, and non-maleficence. In different situations, each of these principles may be perceived, applied, analyzed, and weighed differently. However, each of these four principles is substantial and makes an important part of the code of conduct at any place.

1. Respect

Respect must be a crucial element of every act and every word of ours. Any act or statement devoid of respect is unethical and condemnable. Respect for people comes off with two other ethical principles as well.

- Autonomy

This principle requires offering all the necessary flexibility and respect to those who are capable of deliberation. Their capacities and decisions should be respected.

- Protection

In contrast to autonomy, those who are subordinate or dependent upon others must be protected from any kind of harassment, abuse, or harm.

1. Beneficence

Beneficence is a moral obligation of being fair and sincere in your efforts to maximize profits and minimize losses. This principle further triggers the need for in-depth research to mitigate the risks and amplify the benefits. This requires the researchers to be competent, motivated, and most importantly well-aware of their ethical responsibility towards their employer.

1. Non-maleficence

The term means ‘Don’t harm’. This ethical principle holds a substantial value to avoid such acts, words, statements, comments remarks, and decisions that might be hurting anyone around.

1. Justice

Justice demands fair treatment for all. The cases that are alike must be treated alike. Further, the cases that are different must be treated such that the difference is properly addressed and acknowledged.

Within an organization this refers to the equal and justified division of work among employees; no favored or disproportionate treatment based on race, color, creed status, or any other feature, and effective arbitration strategies in case of any conflict. In addition to all these, any other situation that demands justice must be dealt with fairly.

Injustice creates a hostile environment and demotivates the employees leading to a downturn in their performance.

## Common Unethical Practices at Workplaces

To understand which actions make your behavior ethical and which of them are morally and ethically inappropriate, let us look into the following:

1. Misuse of official hours

One of the major unethical practices at almost all workplaces includes misusing office hours. This misuse marks all the unethical activities – filling in false timesheets (adding hours wrongly for which you haven’t worked), logging in the false time in attendance sheets (arriving late or leaving early but marking the official entry and exit time), marking attendance for colleagues, or using the official hours for your tasks (managing any side business, chatting with colleagues or family, using unnecessary cellphone, etc.).

All of these acts are unethical. While signing the employment contract you commit to serving the organization between the stated official hours. Deferring official tasks and investing time in anything else is unethical. 

1. Employee burglaries

While the title might leave you a little shocked, this is one of the fastest-growing crimes in America. Little acts that are sometimes rationalized or ignored as being of nominal value, are unethical. Employment develops a relationship of trust between the employer and the employee. However, when this trust is breached, it is called as employee burglary or theft.

A common example is that of a salesperson who might conceal some sales to a pocket in money, an account manager who might manipulate accounts in his interest, a petty cash manager who might overstate the expenses and move away some cash etc.

1. Mistreating Employees

Employees are mistreated in many organizations across the world. This mistreatment not only includes being harsh and abusive with them, but this also includes over-burdening them with work or being unfair to them.

Deferring salary payments or hindering their bonuses is also unethical. Committing for bonuses vide employment contracts and not paying them later can trigger legal charges. Even if the employer has not formally committed the bonus payments but has casually promised about them or the past practices of the company establish a bonus payment trend, a constructive obligation to pay the bonus is created. Not paying bonuses in such circumstances is, thus, unethical.

1. Misusing the company’s internet

Another big yet neglected ethical issue is the misuse of the organization’s internet. Surfing across the web during office hours is not right. One of the biggest problems at workplaces is that the employees navigate to irrelevant sites while working which keeps their attention diverted and they are less focused on work.

Surfing Facebook and commenting upon how your friend looks like in his corporate Tuxedo or scrolling through the new discounts and offers at Amazon – An organization’s internet is its property and employees must only use it for official work. Any side activities are unethical.

1. Deception

The term deception can include several unethical practices at the workplace. This can include taking the credit for a colleague’s work, coming in late and reporting the wrong time, acting sick to get a day off, misrepresenting or flattering the products or services of your department to increase sales, etc.

From an employer’s point of view, it can include deceiving the employees by asking them to work after office hours without paying them the promised overtime amount, not allowing them the promised perks, benefits, etc.

In either case, deceptive behavior can undermine the trust of the subject person. Such unethical behavior leads to fights, conflicts, bad reputation, and in the worst cases; lawsuits.

## Principles of Ethics for Accountants

Within the corporate sector, a set of ethical principles are laid down by the corporate governing standards. These standards guide the behaviors and actions of accountants, auditors, directors, and other members of key management in different situations. Compliance with these ethical standards is necessary and any breach can lead to serious legal implications, charges, penalties, and other actions.

A company holds in the investments of many people and has a wide range of stakeholders. Compliance with these standards is therefore important to safeguard the interests of the external stakeholders by making sure all the company dealings are fair.

The following are the 4 main ethical principles laid down by the ‘International Code of Ethics for Auditors and Professional Accountants”.

1. Integrity

This principle bounds all professionals to be straightforward, fair, and honest in their work, professional, and business relationships. Integrity requires all accountants to observe truthfulness and fairness in their dealings. An accountant or anyone in an authority role should not believe or knowingly stay associated with any kind of misleading or false information. He should outrightly highlight the problems without thinking of his benefits.

Example:

- The salesperson working under your supervision suggests an idea to artificially inflate the sales to represent a better performance of their department. Such an idea or information should be disregarded as it breaches the ethical principle of integrity.

1. Objectivity

This principle imposes an obligation on all the accountants to never compromise on their business or professional judgments due to any dispute, conflict, fear, personal benefit, or influence of others.

There can be several situations where a person is faced with the fear of losing his job, or he would want to favor his friend or relative, or where he acts disproportionately towards others due to any previous disputes, where he can decide for his benefit, or he is under the influence of others. In all these situations, a person in authority can likely pass a judgment that is not very fair.

The ethical principles require accountants to deal with all such situations carefully and never let their judgments or decisions to be influenced because of any of these issues.

Example:

While working upon the revenue records of her company, Mary found certain figures intentionally over-stated. She reported the fact to her manager who asked her to stay quiet and approve the records or else she will not be awarded the upcoming promotions.

In such circumstances, the principle of objectivity demands Mary to reach out to the higher authorities and to bring the fact to light as soon as possible.

1. Professional Competence and Due Care

The principle of professional competence and due care requires the professionals to keep their knowledge updated at all times. The laws and standards keep changing from time to time. It is the responsibility of all the professionals to keep in touch with the changes. 

The maintenance of professional competence requires an ongoing awareness and a sound understanding of relevant professional, technical, and business developments. In addition to that, it is necessary to exercise due care and diligence in the application of these standards.

1. Confidentiality

This principle imposes an obligation to maintain the secrecy and privacy of the information concerning your workplace. Professionals should refrain from disclosing the information obtained as a result of employment or business or professional relationships within the organization. 

Information and data are one of the most important assets of a company and the leakage of them outside the organization can bring on serious problems for the employer. Every established organization takes the confidentiality of its data very seriously and has proper rules and regulations in place to protect their data from malicious access.

Employees should respect their employer’s policies in this regard. Gossiping here and there or spreading false information is also unethical.

## Conclusion

- Ethical behavior requires you to behave good and comply with the moral principles and good etiquettes set by the society that you live in. In a work environment, it can stretch out to refrain from certain acts that are regarded as unethical.
- The general ethical principles followed around the world include respecting the people around you, being fair and sincere with your work and organization, not having any harmful intentions for anyone, and being fair and just in all your dealings.
- Common unethical practices at workplaces include misusing office time, not being truthful about your official hours, not observing punctuality, employee thefts, abusive behavior or language, etc.
- The ethical principles laid down, particularly for accountants include Integrity (to be fair and straightforward in your dealings), objectivity (to be unbiassed and uninfluenced in your dealings and judgments), Professional competence, and due care (being updated on all the relevant curriculum changes and bringing your knowledge in use for good), and confidentiality (refraining from disclosing confidential data outside the organization).

## FAQs

### 1. What is ethical behavior?

Ethical behavior requires you to behave good and comply with the moral principles and good etiquette set by the society that you live in. In a work environment, it can stretch out to refrain from certain acts that are regarded as unethical.

### 2. Why is ethical behavior important in business?

Ethical behavior is important in business because it is one of the essential foundations of a successful and prosperous organization. When the people working in an organization behave ethically, it builds trust among them and with the customers or clients. This in turn creates a positive work environment and encourages productivity.

### 3. What are examples of ethical behavior?

Some examples of ethical behavior in the workplace include being truthful about your official hours, not abusing office time, not spreading false information, and being punctual. These might seem like small things, but if everyone follows them, it can make a big difference to the overall work culture.

### 4. How can ethical behavior be improved in the workplace?

There are a few things that can be done to improve ethical behavior in the workplace. One is to have clear and concise policies in place that everyone is aware of and agrees to abide by. Another is to create an environment where employees feel comfortable speaking up if they see someone behaving unethically. Finally, it is important to educate employees on the importance of ethical behavior and what it entails.

### 5. What are the main principles of business ethics?

The main principles of business ethics include respect for people, fairness, and honesty in dealings, not having any harmful intentions for anyone, and being fair and just in all your dealings. These principles are based on the general ethical principles that are followed around the world.

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