Abstract
Each and every organization aims at ensuring that it has in place the best practices in the market. Dignity and reputation of a firm depends on interrelations not only amongst staff, but also with customers and suppliers. As a result, having a code of ethics which defines the ethical actions that one can take in any given scenario has become the order of the day.
Codes of ethics help in enhancing consistence of behavior among employees, orientation of new employees as well as communicating expectations of the company to all stakeholders. While having a code of ethics is vital in creation of ethical corporate culture, there are people who have a contrary view. The paper enumerates the various benefits of code of ethics thus outlining its importance in creation of a working corporate culture.
Codes of Ethics and Corporate Culture
The main aim of any business entity is to make as much profit as possible. Employees are therefore encouraged use their inputs in a manner that will maximize income of the organization. However, if pushed too much by the need to make more money, many people are bound to engage in certain behaviors that might not be in tandem with the visions of the organization. As a result, many organizations and professions have come up with regulations limiting the behavior that is allowed.
These codes of ethics define what employees as well as people in a given profession can or cannot do. The process of carrying out a given activity is fully outlined and deviance from these may lead to punishment. Though many people have applauded these codes of ethics due to the benefits that they have to organizations, there are those who do not see the importance of ethical codes conduct to corporate cultures.
To begin with, it should be noted that almost every organization has in place a code of ethics which regulates the behavior of its members. The main aim of having ethical code of ethics in place is not necessarily to increase output but rather to enhance correct behavior among people in the organization. As a matter of fact, good behavior among employees of a given company is known as one of the factors that attract customers and enhances customer retention (Shaw, 2010).
In this regard, ethical codes of conduct are vital in providing the proper way of handling various issues especially if the course of action is not immediately clear. It is important to note that there are scenarios whose mode of action is not defined in the rules and regulations of a company. Situations like these require a defined way of handling them to avoid conflicts.
On the same note, ethical codes of conduct are used to socialize new employees when they join an organization. It is important to note that new employees will need to be guided on how to behave while working in an organization. If they find that everybody is supposed to use his or her own means in solving a problem, they will also start using their own ways in addressing various issues. However, people have diverse ways of approaching issues in life and leaving them free to act how they want will lead to conflicts (Mika, 2011). Codes of ethics are therefore essential in enhancing values and principles of organizations among employees whether new or old.
Similarly, codes of ethics are usually written in a manner that fosters what the company expects from each and every stakeholder. Codes of ethics define the expected behavior of every person in any given scenario.
In this regard, organizations are able to clearly communicate their expectations not only to staff, but also customers (Wulf, 2011). After understanding organizational code of ethics, people are able to streamline their actions as required. Moreover, ethical codes of conduct help in promoting honesty and free communication in an organization.
Among the issues outlined in the ethical code of ethics is how people should be treated within an organization. The rights and privileges of each and every employee are clearly explained. Additionally, each member’s responsibilities are highlighted and procedures to be followed for promotions or demotions are laid down.
As a result, favors or unequal treatment can be avoided (Wulf, 2011). Knowledge of one’s rights is very crucial in enabling a person to avoid mistreatment. Therefore, outlining the rights of employees and other important procedures in ethical codes of conduct helps in eliminating unprofessional behaviors especially among managers. As a result, a culture of adhering to company policies is propagated which in the end enhances the sense of belonging.
It should be noted that there are regulations that are put in place by governments of various countries on what is expected from business organizations. However, not all these requirements can be captured in organizations’ rules and regulations.
As a result, codes of ethics help in ensuring that various governmental regulations are adhered to. As a matter of fact, it is a governmental requirement that each organization should have in place an ethical code of conduct (Bacher, 2007). This ensures that people in the organization develop a culture of respecting and adhering to governmental regulations.
Ethical code of conduct highlights how business transactions should be handled and how problems from customers and suppliers will be addressed. Besides ensuring consistence in the way that customer issues and business activities are handled, ethical code of ethics make sure that the best practices are used in executing duties.
This ensures that customers are satisfactorily served and that the reputation of a firm is upheld (Wulf, 2011). This is crucial in securing public trust in the company thus increasing its market share. Notably, daily actions of people end up being their behavior in the end.
Loyalty of employees is highly dependent on whether the organization handles them well or not. Buy having a good and sound code of ethics in place, a firm ensures that subjective treatment of employees by management is eliminated. Moreover, sound ethical code of conduct elevates public opinion regarding a firm.
This is quite essential in enhancing employee morale and pride thus enhancing not only their behavior, but also their productivity. Arguably, employees are motivated to behave in a given manner by the social status of the firm they work for. Most importantly, corporate culture is supposed to be effective and positive devoid of the governmental policies in place. In areas where there are weak governmental policies, ethical code of conduct is very essential in ensuring that high degree of professionalism is maintained.
Some actions may seem negligible to an individual but they can lead to legal actions against an organization (Shaw, 2010). Employees should be made to avoid these actions thereby saving the firm from unnecessary legal tussles. Ethical code of conduct defines all procedures that should be followed in executing any duty thus helping in reducing legal risks.
Additionally, ethical codes of conduct form the basis on which employee training and development is based. When an employee is unable to fully adhere to the laid down code of ethics, it sends a message to the management that the employee requires training in the given area. This helps in enhancing good behavior among employee and aligning the behavior of all employees.
On the same note, ethical code of conduct is part of the requirements that are supposed to be met by new employees. As a result, having a sound code of ethics in place ensures that only the best employees are recruited thus fostering organizational culture (Mika, 2011). It, therefore, goes without saying that ethical code of conduct is a very important ingredient in generating organizational culture.
However, this beautiful ideology has its own drawbacks which have made some people skeptical about its advantages to organizations. Firstly, evidence has depicted that though codes of conduct are designed with the aim of enhancing equality among employees of an organization, this is not always the case.
High ranking employees and managers are always exempted from some requirements that are outlined in the codes of ethics. For example, top-level managers are not so much monitored on the time that they report to work as is the case for junior employees. All this does not go unnoticed by the other members of staff (Bacher, 2007). As a result, instead of the codes of conduct boosting compliance and positive organizational culture, the reverse might be the case.
Similarly, success of ethical codes of conduct depends on their enforceability. Moreover, the willingness of employees and other concerned parties in ensuring that the ethical code of conduct is implemented is vital. However, people will only be willing to implement regulations that do not seem to limit their freedom. Unfortunately, some ethical codes of conduct have been drafted in a mechanical way and they have too many explanations which sometimes go too far regarding what is demanded from each employ.
These codes of conduct become complicated and thus difficult to implement. On the other hand, some ethical codes of conduct make employees fell like they are being micromanaged (Wulf, 2011). As a result, rebellious tendencies are generated within the organization making implementation of ethical codes of conduct impossible.
On the same note, some ethical codes of conduct limit what employees can talk and what they cannot say. Furthermore, some processes outlined by ethical codes of conduct are just ethical from the outside but nobody usually follows them. Similarly, there is no serious action that is taken against those who do not follow the ethical codes of conduct in some instances (Shaw, 2010).
Having rules in place which nobody cares whether they are implemented or not encourages deviant behaviors. As a result, instead of ethical codes of conduct propelling positive organizational culture among staff of an organization, they will be leading to increased unethical actions.
Notably, nothing legal or otherwise compels a firm to implement its own ethical code of conduct. The legal requirement is just aimed at ensuring that every organization drafts ethical code of conduct. No mechanisms are put in place to ensure that these ethical codes of conduct are implemented.
Management of any organization has the option of either implementing their ethical code of conduct or not. Moreover, ethical codes of conduct are prone to manipulation (Shaw, 2010). As a result, directors and managers of firms can change them to fit their ambitions which can easily lead to conflict of interest.
Clearly, the benefits of a having a code of ethics in place are far too many compared to the disadvantages. It is what people do each day that determines their behavior. Not everybody will do the right thing at any given point in time. Human beings are used to having rules that guide what can or cannot be done.
In this regard, a code of ethics is a very crucial document for any organization. It will be practically impossible to achieve long term goals at once (Wulf, 2011). They need to be broken down into short term manageable goals. This is exactly what codes of ethics do. They take into consideration organizational vision and mission, break them down into every day activities and then ensure that the short term goals are met.
By ensuring that nobody goes against what is required by the firm, ethical codes of conduct help in propagating organizational culture. Moreover, through defining the correct behavior of staff and other stakeholders, ethical code of conduct enhances company values.
As a matter of fact, organizational culture comprises of the behavior among employees and the behavior of the staff to the outside world. This is what is defined by the ethical code of conduct. Therefore, ethical code of conduct helps in making employees develop the required characters.
Nonetheless, ethical code of conduct per se cannot bring about positive organizational culture. Employees must be willing and ready to follow and live by the regulations outlined in the ethical codes of conduct (Mika, 2011). Rules only do not change the behavior of a person. People can easily pretend to be following the ethical codes of conduct just because they want to secure their jobs while in reality what they are doing is the opposite. Change of behavior begins with the internal willingness of a person and not by the presence of regulations.
Having appositive organizational culture is the aim of every business entity. These will not only enhance their customer retention ability, but also their income levels. Positive and professional behavior will also reduce mistakes that can lead to legal actions. Certainly, codes of ethics are inevitable in the quest to formulate standard organizational culture. However, it should be noted that formulation of non biased codes of ethics and ensuring that they are fully implemented is as vital as having a code of ethics in place.
References
Bacher, C. (2007). Corporate Codes of Ethics. Munchen: GRIN Verlag.
Mika, A. (2011). The Importance of Codes of Ethics: Examination of the Ned of Business Ethics and the Efficient Usage of Codes of Ethics for Good Corporate Governance. Hamburg: Diplomarbeiten Angentur.
Shaw, W. H. (2010). Business Ethics: A Text Book with Cases. Stanford: Cengage Learning.
Wulf, K. (2011). From Codes of Conduct to Ethics and Compliance Programs: Recent Developments in the United States. Berlin: Logos Verlag Berlin GmbH.