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The Role of Ethics In 21st-Century Organizations

Joni Dougherty Doctor of education coursework college paper ideas samples
The Role of Ethics In 21st-Century Organizations

The Role of Ethics In 21st-Century Organizations

Joni Dougherty

The challenges of 21st century organizations are unique, with far-reaching implications in organizations. Leaders in organizations are required to ensure that the best decisions are implemented at all times in organizations (Cardinal et al., 2017). The shift in demographics that have resulted in a transformation in the type of services and products consumers require becomes an issue of concern among stakeholders (Young et al., 2018). There is need also to ensure that business aligns with legal provisions governing their practices. In such instances, ethics have become important for 21st century organizations (Chen et al., 2020). Failure to embrace appropriate ethical guidelines and code of conduct may lead to losses, reduced performance, and lawsuits against an organization (Cardinal et al., 2017; Parker et al., 2018). Ethics are relevant and important for 21st century organizations in the following ways.

First, ethics are important in 21st century organizations for legal compliance. Leaders must be in a position to ensure that their organizations operate within the prescribed laws. For instance, ethics are important because they dictate how an organization should operate its activities within the legal framework (Cardinal et al., 2017). For example, ethics provides guidelines on products to be produced, quality standards, and distribution modes (Chen et al., 2020). In addition, ethics bound organizations to comply with legal provisions such as employees’ rights recruitment procedures and their duty to pay taxes to the government (Kvalnes, (2020). Organizations have an ethical role in ensuring that they comply with all legal and social requirements.

Ethics are also important as they govern the social responsibility of an organization. Cooperate social responsibility refers to the duty that an organization has to take to improve the welfare of society as a whole and support organizational goals. For instance, ethics are important in 21st century organizations because they help managers to make key decisions regarding their role and contribution to society (Young et al., 2018). Consumers and other stakeholders have a changed view towards organizations' role in society and hold such institutions to the highest levels of accountability. For instance, ethics are likely to guide managers in organizations to initiate policies that will protect the environment (Chen et al., 2020). Climate change is a key issue in the 21st century, and companies must have a social responsibility to contribute to climate change policies (Cardinal et al., 2017). Ethics are important in such organizations because leaders need to balance economic gains and the social environment in which they operate (Young et al., 2018).

Ethics are also important in the 21st century because they help the public to have faith in business. Business scandals related to corruption and the downfall of key principles and values across businesses have necessitated the urgency for ethics to be incorporated in cooperate practices (Kvalnes, 2020). More than ever before, the public demands organizations to be transparent and accountable for their actions (Martínez et al., 2021). Such high standards require leaders who prescribe specific codes of ethics that go beyond reproach. Ethical leaders are necessary for organizations to help leaders make appropriate decisions about their businesses' current and future sustainability (Chen et al., 2020). In such instances, leaders require ethics that will help them make conscious decisions relating to their practices.

Ethics are also important in 21st century businesses because they govern workplace practices. Given the need to support affirmative actions in firms, business leaders require ethical guidelines and a code of conduct in the recruitment and retention exercises (Kvalnes, 2020). For instance, companies are encouraged to embrace diversity in workplaces (Chen et al., 2020). The aim is to reduce discrimination and underrepresentation of a particular group of people in the workplace (Cardinal et al., 2017). Therefore, there are legal provisions that mandate institutions to reorganize recruitment processes towards diversity. Leaders in 21st century organizations are required to apply such an ethical code of conduct in their workplaces (Chen et al., 2020). Failure to apply such a code of ethics could lead to labor lawsuits that threaten the sustainability of businesses.

Ethics are also crucial in 21st century organizations because they help to attract investors. Organizations that uphold the highest ethical standards are in better positions to attract investors (Young et al., 2018). For instance, investors are concerned about the activities that an organization engages in and the extent to which they can be held accountable for financing an ethical practice (Cardinal et al., 2017). Therefore, to attract more investors, company leaders in the 21st century need to uphold key ethical practices, including embracing social investment practices that support the community and the sustainability of the environment.

Ethics also play an important role in improving job satisfaction and performance among workers. Researchers have shown that employees are motivated to work in businesses that uphold ethical guidelines. For instance, employees require organizations to offer equal opportunities for growth to workers despite their racial backgrounds (Young et al., 2018). Organizations characterized by ethical conduct such as discrimination, unequal pay, discriminatory promotion, and racial discrimination may result in job dissatisfaction among employees, leading to poor performance. Therefore, ethics play an important role in 21st century organizations by improving job satisfaction among employees for higher performance (Chen et al., 2020). Organizations that have well-established ethical conduct are likely to retain skilled employees. Researchers report that skilled employees at all levels of organizations require to be fairly compensated for their work and commitment. Such employees also require career advancement opportunities without discrimination or favoritism (Cardinal et al., 2017). Employees are also required to be part of an organization whose team communicates about possible layouts in organizations (Parker et al., 2018). Organizations that have fair and open dealings with employees have a better chance of retaining highly qualified employees.

Ethics are important in 21st century organizations because they help organizations build customer loyalty. Kvalnes (2020) noted that consumers’ loyalty is based on the extent to which the organization upholds ethical guidelines in the workplace. For instance, companies with a poor reputation or are characterized by workplace malpractices such as fraud, accounting scandals, and discrimination may cause distrust among customers (Chen et al., 2020). Therefore, to maintain their loyalty, 21st century organizations need to embrace ethical codes that govern workplace relations (Cardinal et al., 2017).

Upholding ethical guidelines may help organizations promote their reputation. Kvalnes (2020) noted that an organization’s reputation for ethical behaviors might help it create a positive image in the market. A positive image can attract new customers through referrals. However, a reputation for unethical practices may dent an organization’s public image (Cardinal et al., 2017). Such a negative reputation may be a significant barrier for organizations to attract new customers or motivate the current customers, especially when the customers are dissatisfied with the current unethical code of conduct (Young et al., 2018). However, ethics are important in the 21st century organizations because it helps the company enhance good reputation, create strong customer loyalty, retain skilled employees, create a conducive or positive work environment, and avoid possible legal fees or fines by relevant watchdogs for failing to comply with legal provisions.


Young, J. A., McLeod, D. A., & Brady, S. R. (2018). The ethics challenge: 21st century social work education, social media, and digital literacies. The Journal of Social Work Values and Ethics, 15(1), 13-22.

Cardinal, L. B., Kreutzer, M., & Miller, C. C. (2017). An aspirational view of organizational control research: Re-invigorating empirical work to better meet the challenges of 21st century organizations. Academy of Management Annals, 11(2), 559-592.

Chen, A., Kim, J., Lee, J., Tomova, T., & Villamor, I. (2020). Ethics in organizations: leveraging organizational practices to promote ethics. In Academy of Management Proceedings (Vol. 2020, No. 1, p. 17615). Briarcliff Manor, NY 10510: Academy of Management.

Kvalnes, Ø. (2020). Digital dilemmas: exploring social media ethics in organizations (p. 85). Springer Nature.

Martínez, C., Skeet, A. G., & Sasia, P. M. (2021). Managing organizational ethics: How ethics becomes pervasive within organizations. Business Horizons, 64(1), 83-92.

Parker, L., Williams, J., & Bero, L. (2018). Ethical drug marketing criteria for the 21st century. Bmj, 361.

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