Business Ethics Code of Conduct

Last Updated: 28 May 2020
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Any inappropriate behavior or violation of an organizations code of conduct is a serious allegation to bring against either the company or an individual inside the organization. In the case of this occurring, a reporting structure is essential in dealing with both the situation itself and the employees who are responsible for the issues happening.

A mandatory reporting structure is required for many aspects of business, from employee grievances to performance and salary related activities, such as commission or bonus payments for outstanding work. Ethical and moral issues also need to be covered by some kind of reporting scheme.

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In this case, if a collegial and supportive atmosphere exists in the workplace then an ethical code of conduct is required in order to maintain, and not upset this working environment. A code of conduct is a general statement of intent by an organization to promote ethical and morally sound behavior amongst staff, and usually states the required actions of staff members in case of any ethical issue, or at least gives staff members a way of reporting any issues of a morally unsound nature or ethically dubious actions taken by staff, or in some cases customers.

Designing a system of reporting that does not damage the collegial and supportive structure is a very difficult one, as it needs to be sufficiently secure so that complainants are not singled out for abuse, and also that those being reported on are able to defend their actions without any prejudice. The reporting structure would need to be created in a similar way to the operational structure of reporting, through middle management up to the higher board level, where major issues are resolved.

However it is also possible to employ a code of conduct in order to achieve similar aims as a reporting structure. Setting out a standard that everyone has to adhere to, or face the consequences is one way of making this reporting structure work, as middle management become responsible for employee actions, as well as their ethical and moral obligations to the company and to the stakeholders. If this code is broken, then the employee would be subject to a similar disciplinary procedure as if they had committed a criminal act, or an act of sexual harassment.

Then the supportive structure is not damaged, and the incentive in on the employees to perform ethically and morally. 2. Corporations have a social responsibility to the various groups associated with them. These groups, called stakeholders represent many groups of people, or organizations who deal with the company in every way, such as the shareholders of the business who have invested money in it as well as the local community in which the business operates. These groups should affect the way the organization operates and behaves, hopefully in a responsible way.

Organizations cannot have responsibility, as only people can have responsibility, and this leads to a conflict in the discussion of this subject. The context is that each company has responsibilities to each employee of that company, as well as the shareholders who have a monetary investment in the company. Therefore the organization has to be held responsible to these groups, so should by default be responsible for every other group that has some stake in the operation.

Some, including Milton Friedman, believe that a corporations’ responsibility lie purely with its shareholders, and that to have social responsibility jeopardizes potential profits and is therefore a bad business decision meaning a business cannot potentially damage itself by having a conscience. All organizations do have a social responsibility to all groups that they interact with because they are offering a product or service that has to be sustainable and yet profitable as well as being conducted ethically.

The major responsibilities of an organization lie with protecting the investment of the shareholders and with its employees and the local community. As well as this, making ethical business decisions with the best interests of the shareholders and the employees is critical in how the business operates. Therefore board consideration is needed to ensure that decisions are made with the best interests of all groups of stakeholders at heart.

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Business Ethics Code of Conduct. (2016, Jul 16). Retrieved from

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