Various Codes of Ethical Corporate Behavior

Presented to
Mrs. Perry Barton
MGMT2215-Team Project

By
Maury Rakestraw

Date
February 23, 2015
Ethical corporate behavior is when a company or group acts consistently in ways that are
good for the organization, the individual and society. Ethical behavior includes honesty, fairness,
equality, dignity, diversity, and the respect for all individual rights. There are also good practices
and principles to follow which include being truthful, keeping an open mind, meeting your
commitments, having clear records, becoming involved in the community, sustaining control of
accounting, and being respectful. Ethical business practices insure that the business is operating
and maintained under the highest moral and lawful standards. These standards are good for the
employer, employee, and also the customer. The organizations that adhere to ethical practices
and display good ethical behavior are the companies that are recognized for doing good business.
Ethics in business has been become a major issue globally. Competing in the global
economy requires a great deal of transparency to insure the safety of the public, as well as

identifying the risks and benefits of both economic and environmental issues. Other ethical
corporate issues that have to be considered are the reduction of corruption within the
organization, and how to avoid damaging the surrounding communities and destroying the
ecosystem. Organizations that want to make a good name for themselves and do reputable and
repeat businesses develop corporate laws that govern their businesses. The corporate laws
provide structure and also outline the practices and rules of the organization to ensure fairness,
transparency, and accountability with the stakeholders, customers, management, employees,
government, and the community. The need for these laws are apparent because of the practices of
companys like Toyota who is known for safety but, ignored safety concerns in order to remain
profitable, Apple who used child labor to produce some of its products, Wal-Mart who uses
gluttonous pricing, Trafigura who has illegally dumped toxic waste, Phillip Morris, a tobacco
manufacture, who advertising is geared toward targeting children, Dyn corporation who sprayed
herbicide that killed both livestock and people, Barrick corporation that burned three hundred
homes to expand their mining operation, and Chevron who dumped toxic waste into the
rainforest in South America. Issues like these have pushed corporate ethical behavior to the
forefront of business. The financers, investors, stakeholders, and customers are all taking part in
the unethical acts if they continue to support the companies that follow these unethical practices.
Companies who dont change their unethical practices can find themselves in both legal and
moral troubles. Unethical practices are simply bad for business. These types of acts which can be
carried out by an individual can ultimately give the corporation a bad name both locally and
globally and, can ultimately cost the organizations hundreds of millions of dollars to repair these
issues.
Unethical Practices are not all external issues there are internal issues as well that the
laws of an organization must govern. Ethical behavior goes beyond the legal obligations that are
being placed on the business, but also encompasses the flexible decision making and conduct
within the organization. Internal ethical practices help maintain quality, productivity, and attract
investors and customers to the product and the organization. Good ethical practices promote
teamwork and, encourage ethical decision making throughout the organization. Ethical
guidelines have to be established and enforced to prevent individuals from deliberately falsifying
timesheets, altering work documents, taking gifts from customers in return for business,
embezzling money, padding expense reports, stealing company supplies for personal use,
offering customers favors to increase purchasing habits, employing underage children, and
allowing sexual harassment and bullying. Managers have to be aware of these issues that take
place internally and eradicate these occurrences in the work environment. The rules and
guidelines must be outlined and, the punishment associated with the act must be enforced to the
fullest extent to prevent reoccurrences. The best way to insure enforcement is to make sure that
the rules are fair across the board and, the punishment is the same throughout the organization
that way no one internally can say that they have been treated unfairly concerning the situation.
The guidelines must specify specific punishments for these offenses to insure that ethical
practices are the same for all who are in violation of the rules. The same must also apply to
external suppliers who violate the rules and guidelines of the business agreement. Suppliers can
have unethical practices that eventually will affect the way you do business if you continue to
support them despite their actions. Unethical practices have a trickle-down effect that can
ultimately affect the bottom line and disrupt the purpose of the business.

A good way to combat those unethical practices is to incorporate ethics training. Ethics
training has become an important essential part of the organizations effort to insure ethical
fairness overall. Ethics training is the companies attempt to educate its workers so that they are
aware of the ethical action to take in any situation. The benefits of taking ethics training is so
employees get a basic understanding of the ethical laws and regulations, especially how ethical
behavior is pertinent to their job and their career. Most unethical acts go unreported so now
companies are taking the steps to insure that the employees are well educated on the subject. The
company is responsible for the actions of the employee both legally and financially, so doing the
right thing especially in an organizational setting is good for the individual as well as good for
the organization as a whole. Some of the most unreported unethical workplace incidents include:
misrepresenting time worked, lying to employees, bosses, customers, vendors, intimidating
employees, and using abusive behaviors. When these actions take place the company loses thats
why now more organizations are offering training to employees. The training helps familiarize
employees with the companys code of conduct, and should provide them with the chain of
command to report offenses. There are also laws that protect the individual who blows the
whistle on these unethical practices. Congress has started to award certain whistleblowers
monetary compensation as well as legal protection for reporting these acts.
The factors that might influence an employees ethical or unethical behavior might
include management. Management may only care about numbers and staying productive, so they
might encourage unethical behavior to insure continued progress and profit gains. The managers
personal values and beliefs and, his concerns for the bottom line may influence an employees
ethical or unethical behavior. When management make employee feel like they are just numbers
instead of contributing factors of the organization they start to cut corners and, put unethical
practices in place of the ethical behaviors. External environment also influences the employees
behavior with having to follow certain laws, regulations, and values. Human resource
management is a factor that contributes to employee behavior by setting the guidelines and
creating and maintaining company culture. The guidelines of the organization should be
engrained in ethics, and used to help create a culture where only ethical behavior is accepted.
Company culture is a major factor because it sets the tone internally of the value that the
employer places on its employees. This culture and added value is seen in the product and, in the
customer service that the organization displays to its stakeholders and customers. Factors like
product and competitive integrity also influences behavior. Creating a product with ethical value
and treating competitors with respect also contributes to the environment and, reflects back to
employee behavior. I definitely agree personally with management factor being one of the vital
factors that contribute to employee behavior. My current manger is focused on bottom line
numbers and, is pushing the supervision team to increase productivity and extend run time. One
of the ways we are doing it is not taking the production line down to clean equipment but, rather
leaves the equipment running and we clean it online. The problem with this is we have moving
parts that could be a potential safety hazard if it pinches or pulls the clean room attire that we
have on. Even though I have raised concern about the potential safety issue we are required to
clean equipment while running. The tone of human resource and upper management is that we
value our employees but, sometimes middle management is concerned with making sure that
they reach their production goals. Sometimes there is conflict to do what is morally and ethically
right and, fulfilling the desires of management. While middle management provides the
necessary training to insure proper cleaning of equipment they ignore the safety portion of the

rules. If an employee was injured it would be interested to see if they do the ethical thing and,
change practices and also compensate the employee for any injuries suffered because of wanting
to maximize production run time.
A clear ethics plan will outline the components, the rules, and guidelines which govern
the internal and external operations of the organization. The ethics plan will address issues such
as honesty, fairness, equality, dignity, diversity, and the respect for all individual rights. The plan
will essentially be used to outline organizational values, look at the organizational vulnerability
to misconduct, create opportunities to discuss the values and risks of the organization, to develop
and communicate a clear standard to misconduct, and to align management and the
organizational practices to support the ethical codes of the organization. Ethics is hard work and
an ongoing and continuous process that must be updated to keep up with the time. The following
components are a part of the ethics plan and must be included to insure fair treatment to all
consumers, employees and stakeholders.
Honesty is an ethical factor that greatly affects the behavior of an organization. Honesty
is defined as a facet of moral character that connotes positive and virtuous attributes such as
integrity, truthfulness, and straightforwardness, along with the absence of lying, cheating, or
theft.(Posner, 2014) Honesty is the one attribute that leaders must have in order to build
credibility with their followers and, it also goes hand in hand with trust and the leaders
acceptability. Ethical companies hire leaders with this attribute because they realize that honesty
creates trust and employees will buy into the vision if they trust leadership. Honesty brings
transparency to the leadership position, and honest ethical leaders are truthful even if the
circumstances and information they have to share is not good. I recently had to share bad news
with some of my employees because management made the decision to hire a select number of
people. Unfortunately, no one under my current supervision was chosen. The difficult decision
was to tell them because their expectations were they would be hired after the six month
temporary assignment ended. The rumor mill in the production plant was at work and, they were
receiving conflicting information that suggested that they were going to be hired shortly. I
individually called each one into the office and, explained the business situation and, informed
them of the hiring freeze. I was honest and did tell them the company was looking to hire on
additional help but, at this time no one on my shift was going to be hired. The news was not
pleasing to any of them and they let me know how they felt. I told them I wanted to be upfront
and honest and, not allow them to be guided by rumors but the truth. They accepted the fact that I
came to them and, thanked me later when they calmed down for being honest and upfront. Being
honest is not always the easiest thing to do but, in business it is the right thing to do. Honesty is
important internally amongst members of the corporation but, it also important externally when
dealing with customers and consumers of the products that are being produced.
Fairness is another component that plays a vital role in establishing ethical corporate
behavior. Fairness is directly associated with motivation and organizational justice within the
workplace. Research has shown that employees are more motivated when they feel that the
allocation of resources are being distributed fairly, that the overall decision making of the
organization is fair, and the employer is treating the employees fairly. Research has also shown
that employees who are treated fairly embrace organizational goals, values, and develop tight
knit bonds with other members within the organizational. Fairness takes the front seat in ethical

behavior and, has been shown to outweigh issues like pay, benefits, and promotion. Being treated
unfairly brings down worker morale and is the leading cause of decline in work performance,
commitment, trust, and the main reason for retaliation. One way to make sure fairness is clear
within the organization is to give the employees more information and allow them to be a part of
the decision making, provide clear information about the decisions that are being made, give
them a chance to voice their opinions, and provide acceptable responses to their concerns.
Management decisions cannot always be the popular decision but, they should be fair and
transparent to those individuals that the decision directly affects.
The equality component that goes into the governance of an organization and, remains a
big part of ethical corporate behavior has been on the forefront of issues for the last couple of
years. Equality insures that everyone has a fair chance at the opportunity that is being presented.
Equality does not include sex, race, national origin, religion, mental or physical ability or class.
Issues like gender equality and pay have been on the top of the agenda list for the President. The
first act signed into law by our President the Lily Ledbetter Act addressed issues about women
equality and pay. Corporations have to make sure they have clear guidelines and rules
concerning advancement and pay and they must be fair for all employees. The argument with
this component is that equity and equality is totally different. Equity is giving everyone what
they need to succeed and, equality is treating everyone the same. The equity component is used
to address the immediate need of an individual at the point where they are. The equality
component only addresses the need to treat everyone equally. If an individual is looking to
advance and they are looking for a certain resource the equality component may hold them from
advancing because they are only allotted what the rest of the team gets. However, if the manager
sees the potential to help them it would have to be on the grounds of equity which would allow
the resources to be allocated according to need instead of equally. In order to insure effectiveness
of this ethical practice it should be tied into a performance review and, the terms of its use
clearly spelled out in the ethics plan.
Dignity is one of the components that must be included in an ethics plan and, unethical
behavior concerning this component must be addressed immediately. The dignity component is
hard to define but, must be included to insure proper conduct within the work environment.
Dignity includes having a sense of pride and respect for you and, for the others that are a part of
the environment. Dignity falls into the human rights category and, address the issue of the way
that individuals are being treated in any situation. Human dignity and managerial accountability
explains the handling of employees, which is increasingly being recognized as an important
ingredient of sustainable business. Increasing evidence also shows that ethical and socially
responsible behavior is and must be spoken for in any size organization. Dignity deals with such
issues as bullying, child labor, slavery in developing countries, access to personal information,
and confidentiality. Some establishments have started making dignity training a part of the
orientation process into the organization. Dignity internally within the organization leads to
dignity externally outside the organization. Treating others the way you want to be treated is vital
to business success. Leading with dignity means treating each other as valuables and should
include a companywide initiative to create policies that respect others rights, creating an
environment where others are not afraid to speak up about unethical acts, and include training on
dignity to create a productive and profitable work environment.

Diversity is also a component of the work environment and must be included in the ethics
plan of a business. An organization looking to compete in the global arena must consider the
diversification of the workforce due to demographics and, the diversity of product and the
essential role that each plays in the success of a business. Diversity in this situation is being used
to address the different customs, cultures, and attitudes that are present in the work place.
Because we are all different diversity looks to bring our differences along with our talents
together for the common good of the organization. Organizations that recognize diversity makes
their employees feel needed and, this act alone gives them a sense of belonging. The recognition
of diversity by these organizations has also allowed them to capitalize on the talent base but, it
also gives the employer a greater commitment and contribution from the employee. Diversity in
an ethics plan is critical for overall success. Other organizations looking to compete globally
look at the diversification of other organizations and, how they do business. These other
multinational organizations are interested to see if the other diverse organization can speak to
their needs and, deliver on the goods promised. Diversity just makes sense for the business
locally with the demographics of the area and, in the global arena for business.
There are companies that take into the account the use of these ethical norms and, award
the companies that actually practice and promote the use of such ethical behaviors. The
Ethisphere Institute is a corporation that rates organizations that promote the best practices in
corporate ethics and, they recognize companies that truly go beyond making statements and
honor those who are active in putting those words in to action. The Ethisphere Institute is
benchmarking the successful practices of the worlds most ethical organizations and, helping
other organizations around the world meet the challenge of operating ethically. The Ethisphere
Company realizes that in todays tough global economy its becoming extremely difficult to meet
performance requirements and, address many compliance, governance, and sustainability needs
of an organization. The company stands on the firm belief that not implementing or having high
ethical standards has unacceptable impact on human and operational risk. They recognize the
organizations that are taken ethics head on and, that value the impact that having good ethics
brings to the table like attracting and retaining talent. American companies General Electric and
Gap have been selected to receive the award on numerous occasions. Recipients of this award
have shown commitment to the employee, customer, stakeholders, and a continued drive for
growth and success. A company like the Ethisphere Institute solidifies the idea that being ethical
is good for business.
Some companies have ethical practices and are still looking for ways to become even
more of a stand-out from the competition. These companies look for alternative ways to achieve
their performance goals and support the community and remain environmentally conscious.
These organizations look to start initiatives like going green, and support surrounding
community issues. The organizations that go green show that they care about the environment.
They start recycling programs that incorporate both job waste, but, even allow employees to
dispose of their home recyclables in company receptacles. They even tackle social issues by
hiring at risk teens and helping out lower income families. The one way companies can stand up
for ethics is to not do business with the businesses who are displaying unethical pracrices.
In conclusion ethics makes since for the organization to practice as well as for every
individual within the corporation. As individuals we make the choice each day to practice in
ethics. Individually we can make the choice not to gossip, embezzle money, and to keep

customer information confidential. The protection of everyones individual rights says a lot about
the corporation and, the image that they are trying to project both internally to its employees and
externally to the world. The same ethical codes have to be followed for an individual being
bullied internally and, for the employee who illegally dumps chemicals in unauthorized areas
externally. The consequences for these acts might be different but, the laws of governance of the
organization must be clear about the outcome in order to insure fairness to all parties. Having a
solid ethics plan and adhering to organizational guidelines has been proven to improve growth,
public relations, employee productivity, investment and even employee retention. The
organizations stakeholders, employees, suppliers, vendors, and consumers are all looking at the
ethical tone that is being set by the company. No organization wants the unethical reputation of
exploiting child labor, illegally dumping, and selling defective equipment. The smart ethical
organization is trying to leave a positive imprint in the mind of the consumer and, they are trying
to insure those same positive values are found all along the supply chain. Each company
supplying the organization must also be adhering to a set of ethical codes that would explain
their actions and, define the course of actions to be taken if a problem occurs. Ethics involves
being truthful, keeping an open mind, meeting your commitments, having clear records,
becoming involved in the community, maintaining control of accounting, and being courteous. In
a nut shell following these ethical rules and displaying positive ethical behavior is simply good
for business.

Works Cited
Posner, K. a. (2014, Dec. 08). Boundless management . Retrieved February 12,
2015, from Boundless.com:
/www.boundless.com/management/textbooks/boundless-managementtextbook/leadership-9/trait-approach-69/honesty-in-leadership-kouzes-andposner-346-3944/