You are on page 1of 24

Codes of Ethics

LEARNING OBJECTIVES

At the end of this chapter students will


be able to discuss and illustrate the:
1. Meaning of Code of Ethics
2. Objectives of having Code of Ethics
3. Decisions need to be made when
formulating and implementing the Code
of Ethics
4. Limitations of Code of Ethics

INTRODUCTION

Codes of ethics have an ambiguous reputation


One code of ethics might be a powerful
instrument that guides the behaviour of an
organization; another might be totally
ineffectual

This clearly indicates that a special effort is


required to make a code of ethics effective

The purpose of this chapter is to discuss some


of the important decisions that need to be
made in order to develop an effective code of
ethics

WHAT IS A CODE OF ETHICS?

A code of ethics is a document or


agreement that stipulates morally
acceptable behaviour within an
organization

It defines the moral standards or


guidelines that need to be respected
by all members of an organization in
their decisions and actions

WHAT IS A CODE OF ETHICS? (cont.)

Other names are used to refer to a code


of ethics. These include:
Credo
Declaration of business principles
Value statement
Code of business practice
Standard of conduct
Code of conduct

THE PURPOSE OF THE CODE

Codes of ethics can serve a variety of


purposes in an organization
i. Code of ethics for internal
purposes
It can raise ethical awareness and
expectations, prevent unethical
behaviour,
promote
ethical
behaviour, provide guidance in
ethical
decision-making,
and
promote organizational integration
and co-ordination

THE PURPOSE OF THE CODE (cont.)


ii. Code of ethics for external purposes
A code of ethics can also be adopted to
satisfy external stakeholders
It sends a message to external
stakeholders that will bolster their trust
in the organization
Promote the reputation, pacify external
stakeholders, deflect state interference
in the internal affairs of a business, preempt legal action against a company

THE PURPOSE OF THE CODE (cont.)


iii. Code of ethics for cultural
purposes
Organizations must constantly
adapt to changes in national and
international culture
A code of ethics can become the
mechanism that ensures all
members of the workforce adhere
to specific standards of conduct

THE PURPOSE OF THE CODE (cont.)


Internal purposes
Raise ethical awareness
Prevent unethical behaviour
Promote ethical behaviour
Provide guidance
Promote organizational integration
External purposes
Promote reputation of the organization
Pacify external stakeholders
Deflect state interference in internal affairs
Pre-empt legal action against the company
Cultural purposes

THE PROCESS OF CODE DEVELOPMENT

The purpose of a code of ethics determines what


the appropriate process of code development will
be. It might be intended to:
Impose certain moral standards on the
workforce.
It would be sufficient to determine the
employers expectations and formulate them
into a code of ethics
Instil trust amongst external stakeholders in
the organization, the process would have to be
structured differently.
It would have to involve some consultation with
these stakeholders.

THE PROCESS OF CODE DEVELOPMENT


(cont.)
Discourage state regulation,
The process would have to be
structured in a way that will include
discussion and negotiation with the
government
Establish agreement about shared
values between members of an
organization,
A consensus-seeking process is
required

FORMAT OF THE CODE OF ETHICS

Aspirational codes
Usually a short document that spells out the
ethical values that should guide behaviour in an
organization
The
The

strengths: General in nature

weaknesses: Difficult to specify the


consequences

FORMAT OF THE CODE OF ETHICS (cont.)

Directional code format


Provides specific guidelines about what
is expected from members of an
organization in specific circumstances.
It has a definite directional purpose, as
it spells out clearly how people within
an organization are expected to
behave.
The strengths

FORMAT OF THE CODE OF ETHICS (cont.)


Specific
Easy to enforce
Can identify consequences
The weaknesses
Tends to be long
Does not allow much discretion

THE CONTENT OF THE CODE

The following categories of content are


typically to be found in codes of ethics:
Rationale for the code
Ethical values or standards
Guidelines for conduct
Sanctions
References to resources

THE CONTENT OF THE CODE (cont.)

Rationale for the code


It explains why the code has been
developed and what this means for the
organization

Ethical values or standards


They identify the ethical values and
standards to be adhered to
Considered the backbone of any code
of ethics

THE CONTENT OF THE CODE (cont.)

Guidelines for conduct


Prescribe or prohibit specific actions. Their purpose
is either to avoid malpractice or to promote ethical
behaviour by giving explicit directions about what is
expected from organizational members
Sanctions
These stipulate the consequences of disregard for
the code
References to resources
Codes sometimes also refer their readers to
specific resources that can be used in addition to
the code

THE TONE OF THE CODE

The spirit of the message that the code is


conveying is important

In general, a code of ethics that is


intended to stamp out ethical malpractice
by imposing sanctions will have a
negative and prohibiting tone

A code intended to inspire members of an


organization to live up to ethical values
will probably have a positive and
supportive tone

COMPETING VALUES FRAMEWORK

The Competing Values


Framework
Instrument for
analyzing the tone of
codes of ethics
Developed by Quinn,
et al. (1991) and
Stevens (1996)
Distinguishes four
rhetorical dimensions of
organizational
communication

Rational
(trust)

Transformational
(change)

Informational

Instructional

(facts)

(actions)

IMPLEMENTATION OF THE CODE

Proper consideration needs to be given


to the implementation of the code of
ethics. Without this, the code will remain
words on paper

Once finalized, the code of ethics needs


to be communicated regularly and in
different ways so that it is reinforced over
and over again

LIMITATIONS OF CODES OF ETHICS

Codes of ethics might hinder the


development of moral autonomy
Moral autonomy refers to the ability to
think independently and originally
about moral matters

One needs skills to use a code of ethics


It cannot ensure that people will be
able to apply the code in situations that
require ethical decision-making

LIMITATIONS OF CODES OF ETHICS (cont.)

Codes of ethics may silence other views


There are other valid moral viewpoints
that are not accommodated in the
existing code

Codes
of
ethics
can
be
counterproductive
Happens when there is a discrepancy
between the professed and actual
behaviour of an organization

EXAMPLES OF MALAYSIAN CODE OF


ETHICS

These codes enunciate standards of ethical conduct for


members of an association or body that is registered in
Malaysia

These Codes place obligations on members to practice


their profession in an objective manner, following
recognized principles in their respective association,
realizing that the lives, health and welfare of individuals
may be dependent upon their professional judgments
Malaysian Institute of Accountants (MIA) Code of Ethics
Code Of Medical Ethics, Malaysian Medical Association

CONCLUSION

A code of ethics can help to limit ethical


malpractice. But its effectiveness is not
guaranteed, and much depends upon
careful planning and a number of vital
decisions that need to be taken during the
process
of
development
and
implementation.

You might also like