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Ethical Assessment

Write a paper on an ethical assessment of a business issue.
Topics in paper must include:

  1. Analyze a company’s approach to an ethical issue.
  2. Answer questions associated with an ethical dilemma to help clarify business decisions.
  3. Analyze the role of leadership in promoting ethical behavior.




Ethical Assessment-A4

Organizational ethics determines the manner in which organizations respond ethically to the
entire internal and external stimulus that impact the nature of their operations. Corporate ethics
expresses the values of an organization to other entities, consumers, and employees irrespective
of regulatory and governmental laws. This paper conducts a study on an analysis of a Chipotle’s
unethical behavior that saw the Mexican eatery engage in insider trading to raise funds for its
joints. Secondly, the paper will answer questions associated with an ethical dilemma in a
company to clarify an organization’s business decision and the role of leadership in promoting
ethical behaviors.

Company’s Approach to an Ethical Issue

A fast-casual Mexican food chain also known as Chipotle over the past years faced
ethical problems that tainted the name of its operations in the hospitality industry. According
toDonaldson (2017), Chipotle’s chief executives enriched and fattened their pockets by inflating
the eateries stock price by overpaying themselves with the firm’s shares of the over-valued stock.
A more serious allegation was the company’s co-CEO’s efforts in selling close to 108.0 million
worth of the company’s stock and an inflated price through insider information that resulted in
the fall of the price. Insider trading has received several connotations and definitions which
include its legal and illegal activities. Insider trading is inferred to as the trading of a company’s
bonds, stocks, securities, and stock options by individuals who have access to non-public
information regarding a company.

However, insider trading can occur lawfully, especially when trading is done by
corporate insiders such as directors, officers, employees and the stakeholders in buying or selling
stocks to their company if this trading approach does not take advantage of non-public
information and is conducted within the boundaries of the organization’s policies governing
trading (Figar & Đorđević, 2016). In understanding the unethical aspect of insider trading, the
practice engages insider parties that trade on non-public information that is gained through the
performance of the insider obligation an organization, an issue that violates other relationships of
assurance and faith especially when non-public information is stolen from an organization as
evident in the case of Chipotle.
The managers of the company acknowledged the need to play roles in shaping the ethics
of the organization and in seizing every opportunity in the creation of an effective environment
that strengthens the reputation and relationship of the organization on which success lies. The
firms approach detailed the need of a strategy based on integrity that required the organization to
embrace robust standards (Figar & Đorđević, 2016). In as much as compliance remains rooted in
negating sanctions, organizational integrity articulates the concept of self-governance in
accordance with the organization’s guiding principles as defined in the code of ethics. From a
perspective of integrity, Chipotle needed to have inhibited an ethics management approach that
would help the organization in defining and giving life to its guiding values in a bid to create an
environment that supports sound and ethical behaviors, hence instilling a sense of shared
accountability in the company. The inclusion of an integrity strategy characterized by the
conception of ethics plays integral roles in deriving ethical behaviors within an organization.

Questions Associated with Ethical Dilemma

What is the Nature of the Ethical Dilemma?

Allegation on the company’s co-CEO’s efforts in selling close to 108.0 million worth of
the company’s stock and an inflated price through insider information that resulted in the fall of
the price indicate the nature of the ethical dilemma (Remišova et al 2014). In determining the
nature of the ethical dilemma within the organization defining the nature of the dilemma through
the application of principles and frameworks in understanding and resolving complex and moral
dilemmas in Chipotle.
What actions would lead to a greater good for the greatest number?
The primary reason why several investors invest in capital into a company’s stock market
remains in the fact that particular organizations mandate honest, fraud-free, and fair transactions
in their stock market in a bid to uphold their image and integrity. The company needs to play a
level field by holding company executives to their fiduciary practices (Remišova et al 2014).
This approach allows the company executives the privilege and freedom of acting inside
information in a bid to benefit themselves from such positive information, an aspect that reduces
the amount of financial loss that may be incurred from negative information.
Analyze the Role of Leadership in Promoting Ethical Behavior
An organization’s ethics as alleged by Taub (2014) remains as good as its leaders. To
create an effective organizational culture in Chipotle that supports and embraces ethical conduct
and personal responsibility, the organization’s leaders need to ensure they serve as role models
for employees. Leaders on the other hand need to foster an ethical culture that requires every
individual within the firm to account for any conduct. This would consequently play an integral
role in guiding individual behavior within the organization. Leaders need to incorporate actions
that guard the organization’s reputation and long-term success through the consideration of
responsible and ethical conduct. The leaders are required to show trust through accountability

and transparency, with this behavior effective in supporting ethical conduct and truthfulness in
the organization.


As established in this paper, organizational ethics infers to responsibilities that
organizations undertake in conducting their business functions in a transparent, respectable, and
honest manner. An organizations ethical climate has the capacity to improve employee morale
and in enriching the organizations commitment, hence fostering the involvement and retention of



Donaldson, T. (2017). Donaldsonian Themes: A Commentary. Business Ethics Quarterly, 27(1),
Figar, N., & Đorđević, B. (2016). Managing an Ethical Dilemma.Economic Themes, 54(3), 345-
Remišova, A., Lašakova, A., & Bučio Va, Z. (2014). Ethical-Economic Dilemmas In Business
Education. Business, Management & Education / Versa, VaidyaRiStudios, 12(2), 303-

  1. Taub, S. (2014). The Morning Brief: Martoma Defense Rests in SAC Insider Case; Jury up Next.
    AR Magazine, 6(1), 49.
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