Tips on Developing Company Ethics and Organizational Standards


Company ethics and standards can be learned and enforced across an organization, and there is a procedure for achieving this. Below are tips for creating a culture of ethics and organizational standards in your company.

Define the Company Ethics

Every company has spoken and unspoken rules on how employees can behave. Clear explanations of what is and what is not acceptable should be provided to guide behavior that is directed at other employees, customers, and the public. These guidelines are often different from company to company.

Provide Necessary Tools and Build Skills

It is the responsibility of the human resources department to enforce organizational ethics and standards by ensuring that employees are equipped with the adequate tools needed to behave ethically. For example, employees should have resources such as training, policies, and procedures that explain who they should consult if they have a question about what is considered appropriate conduct. Examples of inappropriate conduct should be provided so that they are able to avoid such behavior. Teaching employees about ethical behavior through focused training is more effective than merely providing a written policy. This provides employees concrete examples on how to conduct themselves professionally and ethically (Bhaswati B., 2016). It also allows for questions and answers.

Reinforce Desired Behavior

Strengthening the behavior of an employee is never an easy task. One of the simplest ways to reinforce ethical behavior is to recognize employees who behave according to the policy. To create a strong ethical culture in an organization, there must be regular communication about ethical values among employees. An organization can use these opportunities to specifically explain the behaviors they wish to inculcate in their employees.

An ethical organization has a greater chance of success than an unethical one because it will have earned a better reputation among internal and external consumers. Managers in an organization can inspire ethical practices within their company by performing all aspects of their job ethically. This motivates employees to adhere to the organization’s code of ethics in their day-to-day duties.


Why a Business Must Develop a Code of Ethics



Why A Business Needs to Develop A Code of Ethics

A company’s code of ethics (also referred to as a code of conduct) covers illegal and unacceptable behavior that is harmful to the company and/or its clients. Potential conflicts of interest should be identified, and specific examples should be provided.  A good code of ethics should include a motivational statement on the reason for the company’s existence. It should address the consequences of violating its code of ethics, as well as ways to report violations. The code of ethics should be located in a logical place such as an employee handbook, which should be easily located and accessed by all employees.


Every company needs a strong code of ethics because a code of ethics can:


Show Employees Your Values and Principles

A company’s code of ethics is an excellent internal communication tool.  New employees immediately are aware of the company’s standards and expectations. If management reinforces the code of ethics and leads by example, a consistent culture of fairness, goodness, and professional conduct can grow within the company. Additionally, understanding their actions and consequences in the context of the company’s values and principles sets employees up for success. The code of ethics can serve as a guide for day-to-day decision making, particularly if relevant examples are provided within the policy (“Why Have a Code of Conduct”, n.d.). Using the code of ethics as a resource may also help employees avoid potential missteps of which they were previously unaware.


Show Customers the Business Values Integrity

Customers feel reassured when a business has a code of ethics, as they believe this will extend to all areas of that business. Third-party groups also tend to view organizations that adopt a code of ethics in a favorable light, appreciating the effort made to develop a culture of responsibility and honesty within the company (Nieweler, 2016).


Reduce Liability

Several laws exist that encourage companies to adopt and adhere to ethical standards. The Federal Sentencing Guidelines for Organizations (FSGO) of 1991 established standards, that when implemented by an organization, lessen the penalties for the organization if they were found guilty of misconduct. The seven key criteria required to have an effective compliance program are: establishing standards and procedures to prevent and detect criminal conduct, oversight by high-level personnel, due care in delegating substantial discretionary authority, effective communication to all levels of employees, reasonable steps to achieve compliance (which include systems for monitoring, auditing, and reporting suspected wrongdoing without fear of reprisal), consistent enforcement of compliance standards (including disciplinary mechanisms), and reasonable steps to respond to and prevent further similar offenses upon detection of a violation (United States Sentencing Commission, n.d.). Another law, the Sarbanes-Oxley Act of 2002, “requires publicly traded companies to disclose whether they have adopted a code of ethics for senior officers” (Tyler, 2005).


Provide A Clear Point of Reference When Enforcing Corrections

A code of ethics serves as a point of reference when taking corrective actions or when having to terminate employment. Constant enforcement of the company’s code of ethics solidifies the standards as part of the company’s accountable culture.

Codes of conduct should be written clearly for maximum comprehension. Avoid legalese and use bullet points instead of long paragraphs. Keeping things simple ensures that employees understand the content of the code of conduct (Nieweler, 2016).


The Importance of Ethical and Professional Standards in Business



The goal of every for-profit business is to make a profit. In working to achieve this goal, some businesses have been known to engage in unethical practices. Even though much has changed in today’s business world, this does not mean ethical and professional standards in business have become less important.

According to D’Amato et al., (2009), “A company’s ethical behavior is the mirror image of its culture, a shared set of values and guiding principles deeply ingrained throughout the organization and the ethical behavior and culture become part of the definition of corporate identity.”

An ethical and professional standard in business operation is essential in building a company’s image, which heavily impacts the business itself and the world around it. While some businesses synonymize ethics with just adhering to the law, others are striving to operate ethically and establish codes of conduct for their businesses. Acting ethically does not necessarily mean the business will make a profit nor does acting unethically mean that the business will be punished. However, in the 21st century, businesses are governed more carefully, and ethical standards are expected from them by the public. In the long run, acting ethically earns the company more advantages than businesses that operate unethically (Luu et. al., 2015).

Why Does Society Value Ethical Conduct in Business?

A business can only be successful when it has a considerable number of customers who are willing to purchase the businesses’ products. While customers have a need that the business fulfills, they expect the business to give part of its success back to society as a way of showing gratitude to the community.

The more society develops, the more there is a need for businesses to not only provide the best quality products but to do so in the most ethical manner. In recent years, the number of persons who have decided to go vegan and vegetarian has increased dramatically mainly due to concerns about a link between meat production and gas emission, and concerns about humans killing animals for consumption. This shows just how much consideration consumers are giving to ethical and best-result practices.

The value consumers place in business ethics has its roots deep in their psyche. As humans, we feel a sense of satisfaction when we are able to help others, anger when we see acts of injustice, and care for people even when we have no direct connection with them. Feelings of altruism and empathy only exist among humans and through our evolution, we have developed a desire to help others, since it is within our gene pool to do that (Luu, 2015).