Evaluation of a Business Code of Ethics - Research Paper Example

 An Evaluation of Business Code of Ethics: Exxon Mobil Corporation Abstract The objective of the essay is to assist one in refining problem-solving capabilities that organizations already possess for use in business ethics applications. This paper uses a structured, objective format called a system of inquiry. This assignment is a systematic formalized inquiry into or examination of the code of ethics of an organization and its effects to achieve a specific level of ethical behavior in employees, management, and executives. To attain the specified goal, the Code of Ethics and Business Conduct of Exxon Mobil Corporation is evaluated with the following detailed goals: (1) to write a general information paragraph on the company, including its mission statement; (2) to determine the type of ethical system used by the firm and reasons or examples upon which decisions are based; and (3) to identify and discuss how the code of ethics is used. An Evaluation of Business Code of Ethics: Exxon Mobil Corporation Introduction Ethics, like preference, may be considered a product of values. To some, the suggestion that an orderly and analytical process of decision making, not only on a personal level – but more so in business, should include the discussion of highly controversial ethical issues, about which honest differences of opinion are common and self-deceiving rationalization endless, is repugnant. Ethics, after all, encompass wider perspectives of human concerns ultimately affecting business organizations. As businesses comprise a greater majority of the world’s human activities, the importance of studying ethics come as a necessity rather than a matter of natural occurrence. In this regard, to ensure that each and every personnel of the organization complies with a set of standards to guide them in their problem-solving and decision-making process, a code of ethics is ultimately designed. An organization’s code of ethics is a set of moral principles of conduct which guide practitioners into decision making based on theoretical discourses that conform to ethics and morals. Any career or profession must be guided by a set of professional principles that would ensure the safety, security, and protection of their clientele. To closely evaluate the effectiveness by which the standards govern an organization’s ethical behavior, the Code of Ethics and Business Conduct of Exxon Mobil Corporation is evaluated with the following detailed goals: (1) to write a general information paragraph on the company, including its mission statement; (2) to determine the type of ethical system used by the firm and reasons or examples upon which decisions are based; and (3) to identify and discuss how the code of ethics is used. Company Background Exxon Mobil is one of the world’s renowned globally traded oil and gas corporation whose existence has spanned more than a century. The company has extensive scope of global operations “holding exploration and production acreage in 38 countries and conducting production operations in 23 countries around the world.” (Exxon, n.d., par. 4) Due to the responsibility and accountability of Exxon’s management to various stakeholders, it is pertinent that a clear and concise mission statement be explicitly stated. As indicated in Exxon’s official website, the organization’s mission statement is indicated as: “Exxon Mobil Corporation is committed to being the world's premier petroleum and petrochemical company. To that end, we must continuously achieve superior financial and operating results while simultaneously adhering to high ethical standards” (Exxon, n.d., par. 1). The Code of Ethics and Business Conduct Exxon gives primary importance to compliance with laws and regulations pertaining to operating the business. As such, their ethical system is considered duty-driven. Management details an ethical policy which encompasses the recognition of organizational culture, fair transactions of company personnel with various stakeholders, accuracy in financial documentations and reporting, a system of management that gives due importance to honesty and integrity in bookkeeping, budget proposals and economic evaluation of projects, and in disclosure decisions. The company’s code of ethics as embodied in the Code of Ethics and Standards of Business Conduct comprehensively stipulate the foundation policies and procedures in all facets of operations. These policies are regularly reviewed by the Board of Directors, officers, and employees and updated and applied accordingly. The open door communication policy encourages employees who have any inquiry relating to these policies to be forwarded to management accordingly. The policies to ensure the safety and security of all resources in the organization are embodied in the Standards of Business Conduct which would specifically itemize and indicate security measures in its coordination with various agencies and institutions in the regular course of business. The security programs must be consistent with global security standards that ensure addressing local threats and risks, previously identified in the assessment of risks and threat at Exxon. The policies in the security program are designed to be adjusted and adapted to changes in the environment. A statement focusing on ethical expectations from employees are quoted as “the Corporation expects compliance with its standard of integrity throughout the organization and will not tolerate employees who achieve results at the cost of violation of law or who deal unscrupulously” (Code of Ethics, n.d., par. 8). Contracts with private security personnel would stipulate, among others, pertinent provisions addressing human rights issues and training and development requirements, as deemed necessary. The code also specifically emphasizes that “directors, officers and employees should deal fairly with each other and with the Corporation’s suppliers, customers, competitors, and other third parties” (Code of Ethics, n.d., par. 7). Evaluation of the Code of Ethics In evaluating the company’s code of ethics, the following concerns were addressed: (1) why might the organization need to modify their existing code of ethics? Consider how one might modify the code if one is the new CEO and how would the changes be implemented? The code of ethics of Exxon Mobil is generally written failing to provide specific details on expected actions of directors, officers and employees in terms of conforming to principles and values of integrity, objectivity, competence, respect and protection of legal and personal rights, confidentiality, nondiscrimination, promotion of wellness and disease prevention, refusal to participate in illegal and unethical acts, following scientific and ethical research procedures and compliance with state and federal laws, among others. There are other areas touching on avoiding conflicts of interests, corporate assets policy, directorship policy and procedure for open door communication. Measurement of adherence and compliance with the code is difficult to appraise. For a new CEO, the code of ethics should clearly stipulate expected behavior of personnel, officers and directors and clearly identify the tasks to ensure that Exxon would consistently worked on ensuring workforce safety and workplace security through an implementation of programs and strategies the minimize accidents, injuries and illness, among others. The changes could be implemented through an organization-wide solicitation of commonly encountered ethical dilemmas and suggested plan of action to address them. (2) What possible reactions to the code are to be expected from employees and managers? What effects does the organizational culture have on the acceptance of the code? As suggested, inputs from employees and managers must be solicited to enable them to actively participate in the revision and improvement of the code of ethics and business conduct. Organizations who seek involvement of the personnel are found to be more successful due to the trust and respect that senior management accords to the personnel’s comments. In this regard, when each personnel’s participation is counted, the adherence to the code is most effective. Through solicitation of diverse inputs from all personnel, regardless of culture, support for workforce diversity is highly acknowledged. The end result would be an organization-wide acceptance of the revised code where inputs had been solicited from all. (3) What is the effect of the code on the organization? The code of ethics serves as standards by which each and every personnel in the organization must adhere to protect the integrity of their endeavor. The code of ethics gives practitioners a glimpse of possible moral and ethical issues that are prevalent in the career of choice. The moral principles provide clear and explicit statements that practitioners must adhere to in order to avoid legal implications and problems with clients and stakeholders under their jurisdiction. In this regard, the code would ensure that the organization would be more effective in the achievement of their stated mission, which is to continuously achieve superior financial and operating results while simultaneously adhering to high ethical standards. Conclusion Exxon Mobil is an organization that is sincerely committed to adhering to moral principles that covers concisely the ethical issues under their scope of jurisdiction. A letter from Rex W. Tillerson, Chairman and CEO, stipulated Exxon’s long term vision of continuously providing energy as a commitment to uplift the standards of living of people all over the world with the aim of providing a return to the organization’s shareholders. The goal of Exxon is to recognize “responsibility to safely help meet the growing energy demand while working to reduce the impact on the environment. To that end, the goal is to take action — improve security and safety measures for energy efficiency, help consumers improve theirs, and seek new technologies that could be the game-changers that tomorrow’s vast global energy system will require” (Exxon, n.d., par. 5). To achieve these objectives, Exxon must improve their code of ethics and business conduct through active participation of their diverse workforce. References Code of Ethics and Business Conduct. (n.d.) Retrieved 31 July 2010. Exxon Mobil. (n.d.) A long-term vision. Retrieved 31 July February 2010. < http://www.exxonmobil.com/Corporate/community_ccr_ceo.aspx> Exxon Mobil. (n.d.) About us. Retrieved 31 July 2010. < http://www.exxonmobil.com/corporate/about_operations_sbc_principles.aspx> Read More