The Codes of Conduct and Ethics That Guide Business Practices - Essay Example

Legal Legal In the business arena, it is rather obligatory to implement procedures and standards which are to be followed by the employees and the management staff (Cutler, Haufler & Porter, 1999). These standards are the codes of conduct and ethics that guide business practices. These codes of ethics and conduct can be regulated by outside agencies like the government. This is common with certain professions like social work, massage therapy, the health profession and psychology. However, other companies gazette their own code of ethics to be followed by their staff (Preston, & Andrew, 2000). This article will argue on whether businesses should be regulated or not. This paper will also explain how ethics and morality influence the regulation and deregulation process. In addition, the paper will explain if self-regulation is possible, or if government intrusion should be justified. When a company or any other organization adopts a code of conduct, it depicts that it is stern in maintaining high ethical standards (Hampton, 1986). The organization’s stance on these high standards is summed up in the preamble. This preamble is considered the first portion of the guidelines of codes of ethics which talk about the organization’s core values, mission, and vision (Preston, & Andrew, 2000). Mainly, the preamble talks about the inspirations of the organization aimed to let the corporation remain in an ethical foundation. This move enhances the company’s image by enabling it get to a wide market. A company, a group, or an organization that is not running on any principles relating to the code of conduct sees its employees in the depiction of unworthy characters (Cutler, Haufler & Porter, 1999). This can force the management of the group to crop up with their personal set of codes of ethics. When a code of conduct is set, personnel are to deliberate on what is wrong or right since the code states this unmistakably. The code of ethics indicates lucid behavior with the laws and regulations of the industry. Essentially, the code of ethics depicts restrictions that are not to be crossed when working in the job. It also encourages the board, together with other workforce members to be honorable and honest in their daily activities. This ensures that there is a set behavioral standard in the business. When a group sets a code of ethics, all workforce members are held accountable. The code of ethics is supposed to be signed only if the employee has read through codes carefully and understood the terms and conditions that are to be met (Hampton, 1986). There are some companies that also set their code of ethics publicly. This is to allow potential customers and clients to see the strict standards upheld by such organizations. It also provides clients with an opportunity to report on violations of these standards. Through the provision of this information, potential customers are guaranteed full employee accountability on violation of any code (Hampton, 1986). This plays a significant role in maintaining strong customer expectations and improving the state of the organization. Furthermore, it is clear that when a company has a code of ethics or conduct, it holds all employees accountable; both the management and non-management employees (Cutler, Haufler & Porter, 1999). Each employee should sign and approve the statement when he has familiarized himself with the code. Through this, one acknowledges that he is proverbial with any prohibited conduct. The signing of the code of ethics also shows that the employee understands the consequences and repercussions, following breaking of any code of conduct (Paul, 2008). Violation of this code of ethics may lead to consequences like suspension, revocation of licenses, terminations, and fines among others. On the other hand, non-regulation in the business arena is also impacting majorly in some businesses. The rise of self-regulation in businesses offers a challenging scenario in the business world. This affects the relationship between the business and the code of conduct or ethics. Regulation without enforcement that comes externally has become the main tip for explorations into the link between economic behavior and morality (Preston, & Andrew, 2000). Self regulatory regimes are upheld only in a self-regulatory organization (SRO). An SRO is an organization or group which exercises some degree of regulatory authority over a profession or an industry (Paul, 2008). The ability of an SRO to exercise regulatory authority does not derive from a grant of authority from the state. An SRO (Self-regulatory Organization) is a defined term and due to the prominence of SROs in the industry of securities; the term SRO is often used narrowly to describe an organization authorized by the government or any statute to have full authorization to control definite aspects in the industry. An example of an SRO is the National Association of Realtors (NAR). This association sets rules for multiple listing services and also defines how brokers use them (Hampton, 1986). Another illustration is the American Medical Association that sets regulations for accreditation, disciplinary action, conflicts, and ethics in the medicine industry. Self-regulation is beneficial since it includes personal feelings and beliefs that one would not be willing to compromise and define as an individual person (Cutler, Haufler & Porter, 1999). Having a code of ethics or conduct is seen as a milestone in an individual’s development. This allows one to believe in own facts and ideas. This kind of belief creates a core of ethics that one can hold tight to, and give a sense of self sustainability in the business world (Paul, 2008). A self-regulatory code of ethics also helps organizations relate well with their clients (Hampton, 1986). Since the organizations center on their own facet of personal ethics, they are able to distinguish clearly between legitimate and vice in their organization. This gives their clients a sense of well-being, making them handle their customers with outmost respect and morality. Moral suasion denotes a justified code of conduct in a pleasant manner. Moral suasion, sometimes known as jawboning, can be defined in the monetary sphere as an effort to coerce clandestine economic activity via governmental exhortation in guidelines not only dictated by the existing statute law. This moral aspect originates from pressure for moral responsibility to function in a consistent way with furthering the economic good. Pure moral suasion and impure moral suasion apply in this aspect. Moral suasion differs from direct suasion through laws that object to the use of moral suasion by regarding them as immoral, and also due to the fact that some people criticize it as immoral (Hampton, 1986). Moreover, moral suasion includes the fact that it constitutes largely on lawful coercion by the state. This adds ambiguity to the regulatory process, and can postpone implementation of a triumphant legislation. Some examples of moral suasion include protecting the environment, curbing inflation, promoting tolerance of religion and regulating the financial sector (Cutler, Haufler & Porter, 1999). A self-regulatory code of ethics ensures that a company exploits its full potential (Preston, & Andrew, 2000). This enables the organization to achieve its goals. This does not necessarily guarantee success but paddles companies into success in a major way. Advantageously, a personal code of ethics can include other ethical codes. Other companies also research on these philosophies, and takes portions into their code of conduct and ethics. This chiefly comes about if the derived codes are what define these companies (Paul, 2008). In conclusion, this apparent dichotomy related to self-regulation takes it all. Basically, overall implementation of a triumphant ethical program is assumingly parallel to the implementation of a worthy program. A survey carried out in the business world depicts that companies, organizations, and groups that use self-regulatory programs are prospering compared to government intrusion justified institutions (Paul, 2008). Therefore, individuals are capable of self-regulation. Ethics influences the regulation process effectively and forced government intrusion in businesses is not justified. However, the government is accountable to regulation in state-owned institutions only (Preston, & Andrew, 2000). References Cutler, C., Haufler, V., & Porter, T. (1999). Private authority and international affairs. Albany: State University of New York Press. Hampton, J. (1986). Hobbes and the social contract tradition. Cambridge: Cambridge University Press. Paul, A. (2008). The challenge of business self-regulation. Arlington: Inderscience Publishers. Preston, D., & Andrew, B. (2000). Can ethical behavior really exist in business? Netherlands: Kluwer Academic Publishers. Read More