1.1 Background of the Study
According to Shaw (2005), the word ethics comes from the Greek word ethos, which means character or custom. Today, the word ethos is used to “refer to the distinguishing disposition, character, or attitude of a specific people, culture, or group.” Luthans (2001), asserts that ethics involves moral issues and choices and deals with right and wrong behavior, and has become one of the major dynamic realities facing modern organizations. Dolgoff, Loewenberg and Harrington (2005), define ethics as a branch of philosophy that concerns itself with human conduct and moral decision making. Ethics has also been called the study and philosophy of human conduct, with an emphasis on determining right and wrong. One difference between an ordinary decision and an ethical one is at the point where accepted rules no longer serve and the decision has to be made by weighing values and making a judgment in a situation unlike any that the person has been in before (Ferrell, Fraedrich and Ferrell, 2008).
Business ethics, according to Ferrell et al (2008), “comprises the principles and standards that guide behavior in the world of business.” What is right or wrong in business actions is often determined by the perceptions of the stakeholders of a business, comprising of its investors, employees, customers, interest groups, the legal system, and the community. Shaw (2005) defines business ethics as “the study of what constitutes right and wrong, or good and bad, human conduct in a business context.”
An ethical issue is a problem, situation or opportunity which requires thought, discussion, or investigation in order to make a decision, and requires an individual, group or organization to choose among several actions that must be evaluated as right or wrong, ethical or unethical. An ethical issue is not easy to recognize, yet is important for organizations to recognize. At the same time, an ethical issue may not mean unethical behavior...