managerial ethics explanation

Managerial Ethics: Meaning, Definition, and Importance At Workplace

What is Managerial Ethics?

Managerial ethics is the standard of social norms and values, truth, and justice that is accepted by the manager in the decision-making process. It is the moral principles and rules of conduct that are applied in the business. Where ethics is the set of moral principles and rules guiding an individual’s behavior.

Ethics is the foundation of deciding what is wrong or what is right in a given position. It is an individual’s personal beliefs and perceptions while taking decisions. A moral standard or code of conduct determined by society defines how ethical an individual is.

Managerial ethics is the set of standard behavior that guide the individual manager in their work to make managerial decisions. Making ethical choices can often be difficult for managers. It is compulsory to obey the law about ethics but acting ethically goes beyond mere compliance with the law.

Ethics is derived from society and the norms, values, beliefs, culture, and standards of society determine it. A manager or businessman is a part of society and he has to make business ethics accepted by society. Business ethics is the moral behavior of a businessman. An ethical businessman can promote goodwill and reputation in society, gain benefit in the long run, and promote uniform growth of the business.

A simple difference between ethics and managerial ethics is that ethics determines wrong and right in our daily social life, in informal nature and managerial ethics is based on the periphery of the organization, follow the standard rules of making decisions. In other words, ethics is related to individual personal life and managerial ethics is related to organizational life.


According to Decenzo and Robbins “Ethics commonly refers to a set of rules or principles that defined right and wrong conduct.”

According to Webster’s Dictionary, “Ethics is defined as the discipline dealing with what is good and bad with moral duty and obligation.”

According to Verne E. Henderson “Ethics commonly refers to principles of behavior that distinguish between what is good, bad, right and wrong.”

According to Ricky W. Griffin, “Ethics is an individual personal belief about whether a behavior, action or decision is right or wrong. Managerial ethics are the standard of behavior that guides individual managers in their work.”

According to Clarance D. Walton, “Business ethics is concerned with truth and justice and has a variety of aspects such as expectation of society, fair competition, advertising, public relations, social responsibilities, consumer autonomy and corporate behavior in the home country as well as abroad.”

From the above definitions, it may be concluded that ethics is the personal beliefs of an individual about right or wrong. Similarly, managerial ethics is the standard of societal norms and values that is accepted by the manager in the decision-making process. Manager’s behavior is humane or wrong is subject to many factors such as a person’s morality, values, personality, and experience.

Importance/Significance of Managerial Ethics at Workplace

Following are some major importance of management ethics;

  • Promotes Goodwill and Image
  • Helps to Maintain Good Relations with Stakeholders
  • Less Interference from Government
  • Promotes Fair Competition
  • Promotes Social Responsibility
  • Improves Working Environment
  • Helps to increase Market Share

Let’s understand above the importance of management ethics;

#1 Promotes Goodwill and Image

Goodwill and image are gained through the trust of society towards the organization. The supply of goods and services by considering quality, quantity, time, and price expected by the customers facilitates gaining their trust.

#2 Helps to Maintain Good Relations with Stakeholders

Stakeholders are all the parties who are directly or indirectly related to the organization such as employees, customers, suppliers, lenders, government, etc. Ethical behavior helps to maintain relations with them. An ethical manager always tries to meet their requirements.

#3 Less Interference from Government

In case a business is not unethical, violates the government rules, will attract interventions of government. But an ethical businessman never performs any business activity by violating government rules and regulations.

#4 Promotes Fair Competition

Business ethics helps to promote fair competition among business firms. It discourages businessmen to involve in unfair trade practices like an artificial shortage, black marketing, adulteration, obsolescence, etc.

#5 Promotes Social Responsibility

The manager performs business in society to fulfill his economic objectives. Business ethics guide managers to involve in social welfare programs like participating in education, healthy sports, environmental protection, etc.

#6 Improves Working Environment

It guides a manager to develop a better working environment in the organization. He tries to motivate employees by introducing a feeling of justice, equality, freedom, belongingness, a sense of responsibility, and ownership.

#7 Helps to Increase Market Share

By gaining prestige and reputation in society, in long run, helps to increase the market share of a business firm.

Leave a Comment

Your email address will not be published. Required fields are marked *

%d bloggers like this: