Organizational Ethics

Lecture 5
Ethical Corporate Behavior
Session Objectives

By the end of this session, we will be able to:

 Explain the levels of Organizational ethical issues:

corporate mission, constituency relations and policies
and practices

 Describe the concept of corporate code of ethics

 Understand the advantages of a code of ethics

Example

Suppose that a person writes inappropriate things about

religion on a social media platform like Twitter or Facebook

Do you know what will happen in such a case?

Social media managers of organization will block the

particular account from the platform according to the
organization's rules and regulations or ethics
Do you know, what are the levels of organizational ethical issues?
Organizational Ethics

 Organizational ethics relates to the manner in which a

company should react to its external environment

 Organization ethics includes various guidelines and

principles which decide the way individuals should
behave at the workplace
Organizational Ethics

Organizational ethical issues can be handled at three levels. These

levels are:

Corporate mission Constituency relations Policies and practices

Corporate Mission

 Corporate mission refers to the objectives of an

organization that are used to define its ethical
responsibilities

 It also reflects the ambitions and expectations of

the employees

 Employees should be integrated in a good

manner to achieve the corporate mission
Constituency Relations

 Constituency relations define the responsibilities of the

elements of an organization

 The elements of an organization may be employees,

customers, suppliers, shareholders, and the general
public

 These responsibilities must be handled properly to

manage the ethical conduct of business
Policies and Practices

 Organizational ethics can also be used to

evaluate the policies and practices of the
organizations

 Together, policies and procedures provide a

roadmap for day-to-day operations

 Public commitment to ethical principles can give

way to business and administrative practices
Activity

Fill in the blanks:

1. Organization ethics includes various guidelines and _________which decide the way individuals should behave
at the workplace.

2. Corporate mission refers to the ________ of an organization that are used to define its ethical responsibilities.

3. Constituency relations define the ___________ of the elements of an organization.

4. Together, policies and procedures provide a __________ for day-to-day operations.

What is Corporate code of ethics?
Corporate Code of Ethics

 Corporate code of ethics is a guide of principles designed to help professionals conduct business honestly
and with integrity

 A code of ethics document may outline the mission and values of the business or organization
Corporate Code of Ethics

The main types of codes of ethics are as follows:

Compliance-based code of ethics

Value-based code of ethics

Code of ethics among professionals

Compliance-Based Code of Ethics

Compliance-based codes of ethics not only set guidelines for conduct but also determine penalties for
violations

It is based on clear-cut rules and well-defined consequences rather than individual monitoring of personal
behavior
Value-Based Code of Ethics

A value-based code of ethics addresses a company's core value system

It may outline standards of responsible conduct as they relate to the larger public good and the
environment

Value-based ethical codes may require a greater degree of self-regulation than compliance-based codes
Code of Ethics among Professionals

Certain professions, such as those in the finance or health fields, have specific laws that mandate codes
of ethics and conduct
Advantages

The advantages of code of ethics in organization are as follows:

Good ethics helps sales

More trust from stakeholders

Better reputation

Employee loyalty

Higher level of customer satisfaction

Activity

Fill in the blanks:

1. Corporate code of ethics is a guide of principles designed to help professionals conduct business ____________ and
with integrity

2. Compliance-based codes of ethics not only set guidelines for conduct but also determine penalties for
____________.

3. Value-based ethical codes may require a ___________ of self-regulation than compliance-based codes

4. Better reputation and employee loyalty are the ____________ of code of ethics.