Ethical concerns are an essential area in business practices, which is applied within organizations to examine ethical principles and ethical dilemmas arisen. In order to form long-term ethical conduct within an organization, usually, a company would organize for ethical business policies, for example, establishing codes of ethics combined with training programs, or/and execute these ethical policies which means “leadership in delegation, communication and motivation of the company’s ethical position to employees” (Murphy 1988, p.907).
The comparison of the effects of these two approaches bring the question of which is more effective for shaping long-term ethical behaviors in an organization. Although codes of ethics are recognized as one of the essential factors that affect the ethical criteria of organizations and their individuals (Stajkovic and Luthans, 1997), I hold that strong ethical leadership is much more effective for shaping a long-term ethical behavior than codes of ethics. Briefly, for example, the people who disobey the code of ethics might not be punished, and in some cases they are rewarded as whose actions produce benefits to the organizations. Hence, if the leadership is not ethical, the employees may violate the codes of ethics without fear of having to accept responsibilities for their behaviors.
In order to explore this question deeply, in the following parts, the importance, beneficial effects, insufficiencies and recommendations of ethics codes and ethical leadership for shaping long-term ethical behaviors in an organization will be separately discussed and illustrated with various examples. Additionally, the necessity of ethics training companied with codes of ethics, the theory of corporate social responsibility (CSR) and a model for evaluating corporate social performance will also be examined. Furthermore, as a result of the drawbacks of the two approaches, in the subsequent part, the significance of combining the ethics codes and ethical leadership to form the ethical climate will be indicated. Finally, I will make a conclusion about which approach is more effective for shaping long-term ethical behaviors and the most appropriate organizational structure for ethical practices in my own opinion.
Codes of ethics/conduct have long been viewed as “the major organizational structure in which to implement ethical policy” (Murphy 1988, p.908). As early as 1986, a research has already indicated that almost 90 percent of Fortune 500 firms have codes in place (Center for business ethics, 1986). Carroll (1989) insists that a formal ethics code is a key symbol that senior managers provide to illustrate their commitment to expected ethical behaviors. Furthermore, there is an increasing realization today that organizational leaders need to be more sensitive to their moral obligations to the larger society, which includes all their stakeholders. This kind of Corporate Social Responsibility (CSR) is a commitment made by organizations to improve the quality of life of stakeholders to contribute to sustainable development.
The past three decades of adopting codes of ethics witnessed a fact that their presence, in the short term, could influence the organizational climate on ethical behaviors. Specifically, according to a pair of laboratory studies by Hegarty and Sims (1978 and 1979), it found that ethical behaviors were more likely to occur as there was an organizational ethics policy. Also, a recent study by Adams, Tashchian and Shore (2001) which investigated effects of ethics codes on perceptions of ethical behaviors examined that “companies with written codes of ethics rated role set staff as more ethical and felt more encouraged for ethical behaviors than companies without codes” (Adams et al. 2001, p.199). Moreover, it researched that “the key aspects of the organizational climate, such as supportiveness for ethical behavior, freedom to act ethically, and satisfaction with the outcome of...
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