Managing business ethics: Code of ethics by 3R72K6vb


									             Managing business ethics: Code of ethics
What is business ethics management?
Business ethics management is the direct attempt to formally or informally manage
ethical issues or problems through specific policies, practices and programmes.

                 Typical components of business ethics management
Mission or values statements: corporate aims, beliefs,values, include social goals.
Codes of ethics: outlines of what type of conduct is desired and expected of
employees within a organization; profession, or industry.
Reporting/advice channels: gathering information on ethical matters and providing
employees with appropriate channels for reporting or receiving advice.
Ethics managers, officers and committees: Specific individuals or groups are
appointed to co-ordinate and /or take responsibility for managing ethics in their org.
Ethics consultants:Wide range of companies use external consultants rather than
internal executives to manage certain areas of business ethics-research, project mgt.
Ethics education and training: Offered through ethics consultants, universities,
colleges or corporate training specialists.
Stakeholder consultation, dialogue and partnership programs:these are central
activities in the promotion of corporate accountability.
Auditing, accounting and reporting: Concerned with measuring, evaluating and
communicating the organization’s impacts and performance on a range of social, ethical
and environmental issues of interest to their stakeholders.

Evolution of business ethics management (BEM)
Previously primarily focused on managing employee behaviour
Increasing attention to management of broader social responsibilities

The management of business ethics might be relevant:
Setting standards of ethical behavior: mainly examine the role of ethical codes and
their implementation.
Managing stakeholder relations: mainly at how to assess stakeholders, different ways
of managing them, and the benefits and problems of doing so.
Assessing ethical performance: Consider the role of social accounting in contributing
to the mgt and assessment of business ethics.
Setting standards of ethical behavior: designing and implementing codes of
Codes of ethics are voluntary statements that commit organizations, industries, or
professions to specific beliefs, values, and actions and/or set out appropriate ethical
behaviour for employees.
                              4 main types of ethical codes
Organisational or corporate codes of ethics: Specific to a single organization-called
codes of conduct or codes of business principles.

Professional codes of ethics: Professional groups have their own guidelines for
appropriate conduct for their members-medicine, law, accountancy.

Industry codes of ethics: Specific professions, particular industries have their own
codes of conduct. Ex-the financial services industry will have a code of conduct for
companies and/or employees operating in the industry.

Programme or group codes of ethics: Conforming to a particular programme code is a
prerequisite for using a particular label or mark of accreditation.
Research on codes of ethics (focusing four main issues):
•Prevalence of codes and ethics
•Content of codes and ethics
•Effectiveness of codes of ethics
•Global codes of ethics

                         Prevalence of codes and ethics
Substantial rise in usage during 1990s-2/3 of large UK firms have some kind of formal
ethical code whilst almost all large US firms have a code of ethics-Less prevalent in
                           Content of codes and ethics
Codes of ethics typically attempt to do one or both of the following:
Define principles or standards that the organization, profession or industry believes in
or wants to uphold-Generalized codes

Set out practical guidelines for employee behaviour, either generally or in specific
situations (such as accepting gifts, treating customers etc.)-Specific codes
Effectiveness of codes of ethics
Not what a code says but how it is developed, implemented and followed up
Suggestions for successful implementation-Maximise participation of organisation
members in development stage to encourage commitment and ‘buy in’ to the principles
and rules of the code-Companies must to discipline employees found in breach of them.
Follow-through (detect violations-follow up on notification of violations and
consistency between the policy and action)

Global codes of ethics:
Can organisations devise one set of principles for all countries in which they operate?
Cross-cultural issues most commonly addressed are:
Gifts (hospitality and bribes)-Conflicts of interest-Insider dealing-Equal opportunities
and discrimination-Protection of the environment
MNEs should be guided by 3 principles (Donaldson 1996)
Respect for core human values
Respect for local traditions
Belief that context matters when deciding right and wrong

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