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Why should my organization have an ethics code?

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 rohith asked over 2 years ago

Hi Friends, I am Rohith. Can I know, Why should my organization have an ethics code?

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6 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered over 2 years ago

In a small business, a code of ethics is usually based on the business owner’s personal morals or values. As the business grows and expands, the ethical values can be implemented into the business' organizational mission or values statement. This statement helps provide companies with a compass to guide the organization through the business environment. Companies often refer to the mission or values statement when guidance is needed regarding questionable situations.

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Open uri20170510 32134 1c996lj?1494421732 Anil answered over 2 years ago

As referenced above a code can be used as a management tool to help an organization communicate, measure and monitor its values and objectives. Having a code is often a regulatory requirement, particularly for large companies. Many key stakeholders including investors, regulators and employees expect a company to document its values and goals in a code. While it is not possible for a code to have a rule that guides human behavior for every situation, everyone (management, employees, investors and other stakeholders) has a right to know what behaviours are to be expected of the organization and of the people operating within it. It is important to note, however, that articulating corporate or organizational values in a code is a starting point, not an end point to, for encouraging ethical behaviour. Non-profit organizations and small-medium sized business often do not have the same resources, nor the same societal or regulator expectations, that led to a code. The advantages of having a code, however, can benefit an organization of any size. An organization without a code of conduct should still have a way of communicating ethical values to their employees and other key stakeholders

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 HIMANSHU answered over 2 years ago

Hiii Business organizations often develop several different policies, rules and guidelines for governing their operations. While home-based or sole proprietorship businesses usually require fewer policies, larger organizations use these guidelines to manage employee behavior. A code of ethics is a common organizational policy used in business organizations. The code of ethics policy usually sets the minimum standards for business owners, managers and employees to follow when completing various business functions. Facts In a small business, a code of ethics is usually based on the business owner’s personal morals or values. As the business grows and expands, the ethical values can be implemented into the business' organizational mission or values statement. This statement helps provide companies with a compass to guide the organization through the business environment. Companies often refer to the mission or values statement when guidance is needed regarding questionable situations. Improve Business Relationships A code of ethics can help companies improve business relationships. Ethical values are often designed to provide guidance when working with other companies and the general public. These values dictate how businesses handle contract negotiations, customer questions and feedback or negative business situations. Prohibit Inappropriate Behavior Many companies use a code of ethics to prohibit inappropriate employee behavior. Inappropriate behavior can include lying to managers or clients, engaging in fraud or embezzlement, failing to meet specific operational standards or other similar conduct. A code of ethics can help employees understand why these actions are inappropriate and the reasons companies expect better behavioral performance. Companies may also limit their legal liability from poor employee performance by using a code of ethics. Hold Management Accountable Owner, director or upper-level management accountability is an important function of a company’s code of conduct. These individuals are usually required to exhibit honesty, transparency and integrity in their daily roles. Not only do these actions set the company’s ethical tone, it also keeps individual owners and managers accountable for their actions. Allowing an unethical manager free rein in a business capacity can create difficult business situations that overextend the company’s resources.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered over 2 years ago

Dear Friend, There has been a dramatic increase in the ethical expectations of businesses and professions over the past ten years. Increasingly, customers, clients and employees are deliberately seeking out those who define the basic ground rules of their operations on a day to day ----------------------------------- **"Why have a Code of Ethics?** -to define accepted/acceptable behaviours; -to promote high standards of practice; -to provide a benchmark for members to use for self evaluation; -to establish a framework for professional behaviour and responsibilities; -as a vehicle for occupational identity; -as a mark of occupational maturity;" --A code can be used as a management tool to help an organization communicate, measure and monitor its values and objectives. Having a code is often a regulatory requirement, particularly for large companies. Many key stakeholders including investors, regulators and employees expect a company to document its values and goals in a code. While it is not possible for a code to have a rule that guides human behavior for every situation, everyone (management, employees, investors and other stakeholders) has a right to know what behaviours are to be expected of the organization and of the people operating within it. It is important to note, however, that articulating corporate or organizational values in a code is a starting point, not an end point to, for encouraging ethical behaviour. --Non-profit organizations and small-medium sized business often do not have the same resources, nor the same societal or regulator expectations, that led to a code. The advantages of having a code, however, can benefit an organization of any size. An organization without a code of conduct should still have a way of communicating ethical values to their employees and other key stakeholders.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 lochan answered over 2 years ago

to define accepted/acceptable behaviours; to promote high standards of practice; to provide a benchmark for members to use for self evaluation; to establish a framework for professional behaviour and responsibilities; as a vehicle for occupational identity; as a mark of occupational maturity;" Thanks

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Open uri20170510 32134 1uwcnoc?1494421631 Shubhangi Jain answered over 2 years ago

**Business organizations often develop several different policies, rules and guidelines for governing their operations.** While home-based or sole proprietorship businesses usually require fewer policies, larger organizations use these guidelines to manage employee behavior. A **code of ethics** is a common organizational policy used in business organizations. The code of ethics policy usually sets the minimum standards for business owners, managers and employees to follow when completing various business functions. Facts ----- In a small business, a code of ethics is usually based on the business owner’s personal morals or values. As the business grows and expands, the ethical values can be implemented into the business' organizational mission or values statement. This statement helps provide companies with a compass to guide the organization through the business environment. Companies often refer to the mission or values statement when guidance is needed regarding questionable situations. Improve Business Relationships ------------------------------ A code of ethics can help companies improve business relationships. Ethical values are often designed to provide guidance when working with other companies and the general public. These values dictate how businesses handle contract negotiations, customer questions and feedback or negative business situations. Prohibit Inappropriate Behavior ------------------------------- Many companies use a code of ethics to prohibit inappropriate employee behavior. Inappropriate behavior can include lying to managers or clients, engaging in fraud or embezzlement, failing to meet specific operational standards or other similar conduct. A code of ethics can help employees understand why these actions are inappropriate and the reasons companies expect better behavioral performance. Companies may also limit their legal liability from poor employee performance by using a code of ethics. Hold Management Accountable --------------------------- Owner, director or upper-level management accountability is an important function of a company’s code of conduct. These individuals are usually required to exhibit honesty, transparency and integrity in their daily roles. Not only do these actions set the company’s ethical tone, it also keeps individual owners and managers accountable for their actions. Allowing an unethical manager free rein in a business capacity can create difficult business situations that overextend the company’s resources. Considerations -------------- Companies often use refresher seminars to continually educate and inform employees about the importance of ethical behavior. The seminars may also provide information regarding new business policies or past violations of the company’s code of ethics. This information ensures that employees have a clear understanding about the importance of ethics and why they should adhere to the company’s policy. Companies can use an employee or third-party agency to conduct these refresher seminars or meetings.

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