Ethics in Business
Senior 3 · Entrepreneurship
Ethics in Business
Lesson 2 of 4
23 min
Gasana has worked honestly as a cashier at a hardware shop for three years. This month his child’s school fees are due and he is short of money. He notices that the owner never checks the day’s sales against the receipts. He tells himself he will “borrow” Frw 20,000 from the till and put it back next month; after all, he thinks, the owner underpays him. Gasana and the shop are illustrative.
Gasana is not a criminal by nature. Three things came together: a pressure (the fees), an opportunity (no checks) and a rationalisation (an excuse that makes the act feel acceptable). The criminologist Donald Cressey called this the fraud triangle. It shows that ethical behaviour depends not only on the person, but also on the situation the business creates.
How people rationalize fraud, a TED-Ed lesson by the forensic accountant Kelly Richmond Pope. Watch for the three sides of the fraud triangle, and the excuses people use to make cheating feel acceptable.
Definition
Ethical behaviour: acting in a way that matches accepted principles of right conduct, such as honesty and fairness.
Fraud: deliberately deceiving someone to gain money or another advantage unfairly, such as falsifying accounts or stealing from a till.
Organisational culture: the shared values, habits and unwritten rules of a workplace: “the way things are done here”.
| Group | Factor | How it works |
|---|---|---|
| Personal | values and upbringing | what family, school and community taught as right and wrong |
| religion and beliefs | faith teaches honesty and fair dealing | |
| education and knowledge | knowing the law and the effects of an action | |
| personal pressure | debts, needs or greed can push a person to cut corners | |
| Organisational | leaders’ example | workers copy what managers do, not what they say |
| code of conduct and training | clear rules show what is expected | |
| targets and rewards | impossible targets or rewards for results “at any cost” encourage cheating | |
| controls and supervision | receipts, audits and checks remove opportunities | |
| External | laws and their enforcement | punishment that is likely deters wrongdoing |
| competition and economic conditions | hard times and fierce rivals tempt firms to cut quality or avoid tax | |
| culture and social norms | what society accepts or condemns | |
| customers, media and public opinion | firms behave better when unfair practices are exposed and punished by buyers |
Important
Religious teaching on fair trade. Both Christianity and Islam condemn cheating in trade. The Bible says: “A false balance is an abomination to Yahweh, but accurate weights are his delight” (Proverbs 11:1, World English Bible). The Qur’an says: “Fill the measure when ye measure, and weigh with a right balance; that is meet, and better in the end” (Sura 17, verse 35, in Pickthall’s translation of 1930). For many Rwandan traders, faith is a strong reason to give honest weight.
Tip
Memory hook: P-O-R. Pressure, Opportunity, Rationalisation. A business cannot remove every pressure on its workers, but it can remove opportunities (checks and receipts) and excuses (a clear code, fair pay and leaders who set the example).
Worked example 1: breaking Gasana’s triangle
| Corner | What the owner could do |
|---|---|
| Pressure | offer a salary advance scheme for school fees, so a worker in need can ask openly |
| Opportunity | check each day’s cash against the receipts from the billing machine; have two people count the till |
| Rationalisation | pay fairly and on time; write and explain a code of conduct; treat theft consistently |
Lesson: removing any one corner makes fraud much less likely; removing opportunity is usually the cheapest.
Worked example 2: which factor?
| Situation | Factor | Personal, organisational or external? |
|---|---|---|
| Sales staff are paid a bonus only if they sell 100 phones a week, so some lie about the phones’ features. | targets and rewards | organisational |
| A market trader refuses to adjust her scale because her faith forbids cheating. | religion and beliefs | personal |
| After a radio programme exposed fake honey, sellers began labelling theirs honestly. | media and public opinion | external |
| A new manager refuses all gifts from suppliers, and staff begin to do the same. | leaders’ example | organisational |
The cases are illustrative.
Warning
Common mistakes. (1) Blaming only “bad people”: situations and systems shape behaviour too. (2) Treating poverty as an excuse: pressure explains wrongdoing but does not justify it. (3) Forgetting that rewards can push people the wrong way: a target that can only be met by cheating is itself an ethical problem.
Practice
Sources and credits
Written by Ganzaa: the Gasana case, the fraud-triangle diagram (after Donald Cressey’s model), the tables, the worked examples and the practice items. The people and cases are illustrative (2026).
