COLLEGE OF SUBIC MONTESSORI INC.
“Shaping Lives, Intellects and World Views”
ORGANIZATIONAL CRISIS IN BUSINESS: THE IMPACT OF UNETHICAL
AND ILLEGAL MISCONDUCT OF EMPLOYEES WIHIN THE BUSINESS
ORGANIZATION
A BUSINESS RESEARCH PROPOSAL SUBMITTED TO THE HIGHER
EDUCATION DEPARTMENT OF THE COLLEGE OF SUBIC MONTESSORI
INC, DINALUPIHAN, BATAAN
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
COURSE BUSINESS RESEARCH FOR
BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION
BY:
RICA MAE C. SATOC
SEANNE D. PEÑAFLOR
JAMES MATTHEW A. LAZARO
BSBA 301- MAJOR IN FM AND HR
OCTOBER 2020
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COLLEGE OF SUBIC MONTESSORI INC.
“Shaping Lives, Intellects and World Views”
Chapter 1
TITLE: ORGANIZATIONAL CRISIS IN BUSINESS: THE IMPACT OF
UNETHICAL AND ILLEGAL MISCONDUCT OF EMPLOYEES WITHIN THE
BUSINESS ORGANIZATION
INTRODUCTION
Of the recent trends in business industry, the ethical conduct of managers is one of the
most challenging tasks facing business enterprises. This research identifies major themes in
order to understand reasons for employee misconduct. This research indicate that the main
reason of employee misconduct was identified with personal or financial gain. The main
themes of misconduct are identified as social norms, process loopholes, small scale dishonesty
and pressure for performance. The qualitative research findings identify emerging patterns of
reasons for employee misconduct consistent with agency theory and psychological contract
theory.
Cheating, deception, organizational misconduct, and many other forms of unethical
behavior are among the greatest challenges in today’s society. As regularly highlighted by the
media, extreme cases and costly scams are common. Yet, even more frequent and pervasive
are cases of ‘ordinary’ unethical behavior — unethical actions committed by people who value
and care about morality but behave unethically when faced with an opportunity to cheat. A
growing body of research in behavioral ethics and moral psychology shows that even good
people (i.e., people who care about being moral) can and often do bad. Examples include
cheating on taxes, deceiving in interpersonal relationships, overstating performance and
contributions to teamwork, inflating business expense reports, and lying in negotiations. (Gino,
2015)
Business ethical conduct is a vital part of Corporate Social Responsibility (Carroll, 1991).
As an integral part of the community, business has the moral responsibility to conduct
business activities that are accountable to stakeholders, such as shareholders, customers,
suppliers, government authorities, employees, and the public (Jones & George, 2008). If the
firm fails to do so, it will find itself encountering survival threats while facing severe penalties
or damage to the firm’s reputation. Examples of such include the bankruptcy of Enron and
WorldCom in the U.S. (Anand, Ashforth, & Joshi, 2004), customer boycotts (Nash, 1981), high
employee turnover (Veiga, Golden, & Dechant, 2004) and public disaster (Gellerman, 1986).
Researchers have concluded that most humans are capable of behaving in profoundly
unethical ways. Not only are they capable of it, but without realizing it, they do it all the time
(Kelaris et al, 1991). It’s possible that certain cognitive frames make humans blind to the fact
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“Shaping Lives, Intellects and World Views”
that they are confronting an ethical behavior at all (Spiegel, 2012). A business frame
cognitively activates one set of goals- to be competent, to be successful, while ethical frames
triggers other goals (Tenbrunsel and Messick, 2004). Once one is in this frame of mind, they
become focused on meeting these goals, and other goals can completely fade from view. That
some goals take the forefront and others become suppressed highlight that we aren’t aware of
our unethical behavior (Spiegel, 2012). It’s not the character that makes one unethical, but
instead the situation and frame of mind they are in.
STATEMENT OF THE PROBLEM
Unethical Behavior is the reason for the following situation:
Discrimination, however, takes several other important forms (e.g., unfair promotion
and demotion practices, firing, and harassment)—forms that predominate official
discrimination claims and that happen, for the most part, after hiring occurs (EEOC 2019).
Employment Discrimination which happens when an employee or job candidate is treated
unfavorably because of age, disability, genetic information, national origin, pregnancy, race or
skin color, religion, or sex. In addition, federal laws against discrimination protect workers
from retaliation for asserting their rights to be free from employment discrimination.
Employee thefts are crimes committed by employees for the purpose of personal gain.
The issue of employee theft is considered an important one that deserves serious attention
from organizations. According to Omar et al. (2011) and Weber, Kurke, and Pentico (2003),
employee theft affects approximately 95% of all businesses and costs them billions of dollars
each year. While much research suggests that the magnitude of employee theft in
organizations is on the rise. Theft is defined as any stealing, use or misuse of an employer’s
assets without permission. The term employer’s assets are important because it implies that
employee theft involves more than just cash. In many industries, there are much more
important things than cash that employees can steal from a company which may cause a
great loss in an organization.
Recent research has suggested that relationships characterised by rude and uncivil
behaviour may be becoming increasingly common in the workplace (Pearson & Porath 2003).
According to Cortina, Magley, Williams and Langhout (2001) 71 percent of workers have been
insulted, demeaned, ignored, or otherwise mistreated by their co-workers and superiors. Much
of the research in this area has examined direct aggression with a clear intent to physically
harm (for reviews of workplace violence see Griffin, O’Leary-Kelly & Collins 1998; Leather,
Brady, Lawrence, Beale & Cox 1999). There has also been some work with a focus on
psychological aggression, or behaviours that inflict psychological, rather that physical harm
(Campion et al 1993) Imbalance Relationships may define as Inequality in a relationship
which refers to an imbalance of power between partners.
Insubordinate employees can have a significant impact on your business. They can
incite dissent among colleagues, underperform their duties and impair customer relationships.
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“Shaping Lives, Intellects and World Views”
Employees who refuse to follow directives can also lower morale in the workplace and create
an inequity in the distribution of the business’s workload. Insubordination which refers to an
employee's intentional refusal to obey an employer's lawful and reasonable orders. Such a
refusal would undermine a supervisor's level of respect and ability to manage and, therefore,
is often a reason for disciplinary action, up to and including termination, and lastly
Breaking Confidentiality also known as breach of confidentiality which occurs when the
data or information of employees, customers, client or user have been disclosed to a third
party intentionally for the use of illegal act. Failure to properly secure and protect confidential
business information can lead to the loss of business/clients. The disclosure of sensitive
employee and management information can lead to a loss of employee trust, confidence and
loyalty. This will almost always result in a loss of productivity.
The Researcher conclude question to form a survey that may help in determining the cause of
employee’s unethical behavior.
Name:
Gender :
Business or organization employed:
1. What do you think the main reason, why an employee commit unethical action(s)?
2. What will be the impact in the business if the managers or his employees continuously
conduct unethical behavior?
3. Based on your experience and background, did you commit any form of action(s)
intentionally or unintentionally that exhibit an unethical behavior? If yes, what it is?
4. In the 5(five) Unethical Behavior below. Which of these is commonly appears in the
business or organization you are in?
UNETHICAL BEHAVIOR

Workplace Discrimination

Employee Theft

Imbalance Relationship

Insubordination

Confidentiality Breach

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“Shaping Lives, Intellects and World Views”
5. As an Employee do you think Rules and Regulation of company can affect the
individual’s decision making which induce them to commit unethical behavior?
6. How do you take measure to avoid doing or experiencing unethical behavior in the
workplace you are in?
7. In what position in the Business or Organization unethical behavior commonly arose?

Position

Top(CEO, Shareholders, Top manager)

Middle(Managers Below the Top Managers)

Lower( Supervisors, Employees, Security Staff)
SCOPE AND DELIMITATION
This research paper composed based on the factors affect the behavior of employee
which held them to commit an unethical behavior. The researchers conduct a survey to
various individual whose are employed to the following businesses or organization: Arkeytech,
Kazama Grameen, and Visa Incorporation.
The survey consist of questions that may recognized different reason why an employee
conduct unethical action(s) intentionally or unintentionally. Also this survey will not adhere any
important personal information of the Respondent(s) that may use in fraud or any evildoings.
SIGNIFICANT OF THE STUDY
The purpose of this study is to understand the reasons for employee unethical conduct
with high impact to organizations that develop organizational crisis. In order to improve ethical
conduct in organizations, there is a need for managers to understand reasons for employee
misconduct. This study aims to obtain the necessary information useful for organizational
leaders and human resource managers to understand employee misconduct and to design
preventive and corrective measures against misconduct. In addition the researcher conduct
this research paper to determine the impact of an unethical behavior towards an organization.
This research study may help and benefits the following:
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“Shaping Lives, Intellects and World Views”
Future Researcher
The ideas presented may be used as reference data in conducting new researches in or
testing the validity of other related findings. This study will also serve as the cross-reference
that will give them a background or an overview in the topic they choose.
Community
For they also play a vital role in the business and as well as the consumers. As this
research would give them the idea of what are the types of impact acquired in a business if
such employee emit an ethical behavior inside the business.
Business Owner, Managers as well as Future Business Man
This research may help to Business Owner, Managers, and Future Business Man as this
would gave them such basis on creating business ethics, rules and regulation and other
policies which they apply to their employees, this may help them to determined such
misconduct or unethical behavior and prevent them before they arise in the business or
workplace.
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