Chapter 4

Code of Ethics

Copyright © 2012 Pearson Education, Inc. All rights reserved.

Copyright © 2012 Pearson Education, Inc. All rights reserved.
 Code of Ethics
• Code of ethics: is a written document that clearly
states what acceptable and unacceptable behaviors are
for all of the employees in the organization. Represents
the identification and explanation of what the firm
considers acceptable behavior
• Factors influencing the development of Code of ethics :
– Social factors
– Personal factors
– Organizational factors
– Occupational factors

Copyright © 2012 Pearson Education, Inc. All rights reserved.

 Why Business
Benefits Codeof
of a Code ofEthics
Ethics
 Business code of ethics help define what is
acceptable behavior in the workplace.
 A code that is accepted by employees generally
promotes high standards, whether in
manufacturing, finance, customer service, or any
other functional area of the company.
 Employees working under code have a benchmark
upon which they can judge their own behavior
and that of others within the organization..

Copyright © 2012 Pearson Education, Inc. All rights reserved.

 Benefits
Why of a Code
Business
Anticipated Code of
ofEthics
Ethics— 1
benefits
• Enhances reputation .
• Builds trust – internally and externally.
• Increases awareness of ethics issues.
• Guides decision-making .
• Reduces ethics risks .
• Questionable behavior decreases .
• Employee relations improve .
• Competitive positions improve
Copyright © 2012 Pearson Education, Inc. All rights reserved.
 Code of Ethics and Stakeholders

• Code allows firm to state its ethical vision to

all stakeholders.
• Companies should consider four ethical values
when developing a code of ethics:
– Integrity . ‫ن زاهة‬
– Justice . ‫عدا لة‬
– Proficiency . ‫اتقان‬
– Utility . ‫منفع ة‬

Copyright © 2012 Pearson Education, Inc. All rights reserved.

 Steps for Effective Code of Ethics

• Step 1 :
• Create a list of all the standards by which you believe
your company should take. Write them down on a
piece of paper. This should include :
• The general values of the company, managers, and
workers.
• The ways in which the company helps with employees'
continued education; and how the business complies
with all laws and reports all legal issues.

Copyright © 2012 Pearson Education, Inc. All rights reserved.

 Steps for Effective Code of Ethics

• Step 2 :
Customize your code of ethics to your
business. Include examples from your firm
into the code.
• If, for example, you use a code of ethics from
another business in your industry, rewrite the
code so it has meaning and, therefore, benefit
to your goals.

Copyright © 2012 Pearson Education, Inc. All rights reserved.

 Steps for Effective Code of Ethics

• Step 3 :
• Involve employees in the creation of a business
code of ethics. Every employee has insight into
the day-to-day operations and challenges. If,
for example, a department experiences low
confidence because of office gossip (‫)ن ميمة‬, help
employees find productive ways to build a
culture of trust and respect.

Copyright © 2012 Pearson Education, Inc. All rights reserved.

 Steps for Effective Code of Ethics

• Step 4 :
• Write down "Code of Ethics".
• A code of ethics should be to the point, and
simple to read. It should have a positive tone
and focus on improving the lives of the
business' directors, employees, and customers.

Copyright © 2012 Pearson Education, Inc. All rights reserved.

 McDonald's Code of Ethics for Employees
• Worldwide, McDonald's employees follow a
standard ethical code.
• With franchises all over the world, McDonald's has
developed a uniform standard of conduct that
applies to all employees.
• It requires the employee, upon being hired, to
sign a copy of these expectations of ethical
conduct, confirming that the employee
understands them and agrees to implement them.

Copyright © 2012 Pearson Education, Inc. All rights reserved.

 McDonald's Expectations
• McDonald's believes that “the customer is
important”.
• They expect employees to be committed to their
jobs and to their customers, and to behave as
ambassadors of the company.
• They also believe that it is important to
acknowledge the community that supports each
McDonald's restaurant and to return that support
to the community.

Copyright © 2012 Pearson Education, Inc. All rights reserved.

 McDonald's Expectations
• Employee Responsibilities :
• To perform to the highest standards set by the
company, employees must treat fellow workers,
supervisors and customers with respect.
• An employee cannot bother anyone or threaten them.
offensive behavior is not allowed.
• Employees cannot insult others with words or actions.
• Employees must practice safety at all times to ensure
not only his well-being but that of others.
• Alcohol or illegal drugs are forbidden.

Copyright © 2012 Pearson Education, Inc. All rights reserved.

 McDonald's Expectations

• Responsibility to the Company:

• During training, employees learn that they cannot
use any company assets for personal reasons.
• Computers should not be used for personal emails or
for accessing illegal or inappropriate material.
• McDonald's owns not just the computers but the
information entered into them, and is entitled to
investigate their contents.

Copyright © 2012 Pearson Education, Inc. All rights reserved.