In the last decades the practice of establishing codes of ethics in business organizations has increased tremendously. The growth in adopting these ethical codes started in 1970s and was seen as a way to set out specific guidelines and standards to direct appropriate ethical behavior for the company’s employees (Crane, Matten, 2004, p. 175). Since the market and the legal systems do not always lead to organizational behavior that includes morality in its decision making, many scholars view the creation of codes of ethics as an important element to enhance employees’ ethical conduct. Others believe that through codes of ethics, business as a profession can be established “similar to medicine or law,” and through the creation of ethical codes, the organizational values and norms may become part of the corporation’s culture and facilitate the incorporation and adaptation of new employees (Adams et al, 2001, p. 199).
The main argument against the establishment of corporate codes of ethics is the discrepancy that exists between what managers expect to achieve and what is actually achieved. Some view that having broader ethical codes cannot successfully regulate the behavior of employees (Robin et al, 1989, p. 71). Very often codes of ethics are also identified as “questionable control mechanisms that potentially seek to exert influence over employee beliefs, values and behaviors” (Crane, Matten, 2004, p. 181). Other weakness is that in the presence of codes of ethics individuals might tend to feel as being relieved from the responsibility of evaluating ethical dilemmas and taking moral decisions (Adams et al, 2001, p. 203).
When it comes to the effectiveness of codes of ethics the question is highly arguable. Although, there is little evidence that employees can actually recall the content of their company’s code of ethics or that it influences their behavior in a certain way, making unethical employees ethical and moral, the mere presence of code of ethics indicates “that management places some value on ethical behavior” (Adams et al, 2001, p. 201). As Crane and Matten state: “…it is perhaps less important what a code says than how it is developed, implemented and followed up” (p. 180). The proper and clear communication of the code from the management to the personnel is the only successful way to ensure that the company’s code of ethics will be remembered and easily recalled by the employees, changing their pattern of behavior in a more ethical direction. High importance is placed on codes of ethics in terms of the growing number of multinational corporations, where there is an urgent need to make managers in different geographic areas follow one and the same policy. However, a problem might arise with the exact framing of the codes, because not always the design of the ethical codes for domestic application works for the company’s international operations. Important questions are what is the best way to stay politically correct and to take into consideration cultural barriers when communicating ethical norms, and isn’t morality one and the same for all individuals or there should be a differentiation based on cultural background.
In order to examine the effectiveness of code of ethics, first there should be a clear definition of what it means. Crane and Matten define codes of ethics as “voluntary statements that commit organizations, industries, or professions to specific beliefs, values, and the actions and/or that set out appropriate ethical behavior for employees” (2004, p. 175). They distinguish between four different types of ethical codes and divide them into organizational or corporate codes of ethics, professional codes of ethics, industry codes of ethics, and program or group codes of ethics.
Codes of ethics, however, are not principles, because they do not apply universally but rather are limited to the employees of specific company. Codes of ethics are also functional when they...
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