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Ethics: Individuals and the Organisation


Rational organisations are those wherein the activities of a number of people are coordinated for the accomplishment of some common explicit purpose or goal, through the division of labour and function along with a hierarchy of authority and responsibility. In a rational model, ethics focus on the contractual obligations of the employer and employees.

Political organisations, seldom look merely at the formal lines of authority and communication within the organisation. They do not behave in a purely rational way and do not accept that rationality is sacrosanct in achieving the business goals and objectives. These organisations view business as a system of competing power and formal and informal lines of communication for coalitions. In a political model, the central ethical issues are guided by the constraints of morals or laws of the land.

Co-existence of Political and Rational Organisation

Caring organisations are not engaged in the pursuit of profits and personal gains, but are involved in caring for those for whom the organisation has been designed, with whom it interacts, and the people in the organisation itself.. In a caring organisation, the employers may grow closer to their employees and seek the ways to serve and care for whom they exist, e.g. employees, customers, society, stakeholders, etc.

Moral and ethical issues of individuals in an organisation are influenced by, and dependent on, the nature of the organisation and its work culture.


In business, ethical behaviour and the obligations of individuals are mutual relationships based on the model of organisation, the law of the land, contractual duties and obligations, work environment, and codes of general ethics that are acceptable as moral and rational to general public. Employees at all levels are obliged (duty-bound) to the company to behave ethically as a part of their contracts and the relationships outlined by what is commonly called the law of agency. Law of agency specifies the legal duties of employees (agent) towards their employers (principals) and prohibits the agent (employees) to act in conflicts of interests with those of the principal (employer).

In India, the Industrial Disputes Act, 1947 and other labour laws have been enacted to protect trade union rights and the rights of individuals in employment. These laws are quite explicit about the duties and obligations of employees and employers as well.


An organisation has the responsibility of designing ethical policy and programmes with a holistic view such that they serve and complement each part of the business organisation. Individuals, in turn, have the responsibility to follow and abide by the policy direction and programmes in their respective areas of work and responsibility. Ethics management mechanisms provide the people of the organisation with the moral power more commonly known as whistle blowing to prevent any kind of wrongdoing.