Term Paper on "Code of Conduct"

Term Paper 6 pages (1882 words) Sources: 7 Style: APA

[EXCERPT] . . . .

Code of Conduct

In the past few years, several well-publicized scandals involving the improper management of ethics and values within large business organizations have emerged, bolstering the importance of business ethics in modern day society. The most notable scandals involving ethics and values have included global corporations such as Tyco. These three significant scandals that occurred in the past decade have led to the enactment of many laws, regulations, and suggestions for companies to implement to protect their business as well as their employees. One such suggestion for employers is to implement a code of conduct for all staff members to follow. A code of conduct within a regulated profession has shown to have a significant impact on the influence of ethics and values of current leaders. A code of conduct is a written code of internal controls and business conduct that integrates such values as honesty, trust, and integrity helps set the tone for the entire company. However, conflicts between the code of conduct and ethics of leaders have existed in many organizations. This paper will discuss a code of conduct that I have worked under and the ramifications of its existence within the organization.

A code of conduct can be described as a company's way of establishing commitment to integrity and high ethical standards in all of its business operations. Ideally, this commitment would be demonstrated in all of the employee's actions, both individually and collectively. Employees are expected to refrain from illegal and unethical conduct; supervisors must ensure that their employees know what is expected of them and to exemplify proper conduct by following the standards set forth in the code. This is because all employees are expected to represent the organization in their relations with others, such as customers, competitors and investors; employees should be expected to act in a way that maintains or enhances the company's reputation. This "required" code of business ethics can be compared to decisions that an individual would feel compelled to tell his/her family. In recent decades, fraud and corruption have emerged as a few of the greatest threats to economic development and business management. Any business with long-term interests will ultimately be harmed by any plans that include fraud and a lack of internal controls.

Ethics & Values

Ethics is generally a term used to describe a set of values that describe what is right or wrong, good or bad. From a professional and scientific point-of-view, the ethics of business and the moral code of our society are inseparable, sometimes indistinguishable. Ethics is a branch of philosophy that is concerned with the principles and standards of human conduct. Values and beliefs are cultivated strictly on ethics, which is the philosophy and science for determining what values to hold and when to hold them (Bottorff, 2004). Morality and ethics are closely linked in the operation of a business. One of the most important characteristics of moral judgments is that they express values. Moral judgments are made about those actions that involve choice. It is only when people have possible alternatives to their actions that we conclude those actions are either morally good or morally bad. In cases where business ethics have failed, the leaders in management positions covered up the losses and manipulated data so that the companies would continue to appear successful.

A code of conduct combines ethics and values into the mission and goal of the company. A company's business is dependent upon the public's continued trust and confidence, thus it is important to recognize that the appearance of a conflict of interest and an ethical concern may be just as damaging to the company's reputation as a real conflict. In relation to ethics, a company's code of conduct will usually state that employees should avoid any relationship with other people or businesses that might impair the proper performance of their job responsibilities. Employees must also avoid actions or business relationships that would affect their independence of judgment with respect to dealings between any of the company's operations and any other business or individual.

For example, a code of conduct would provide that an employee should not engage in a profit-making occupation outside of their regular assignment with the company if the outside employment: 1) competes with the company or provides services and assistance to a competitor; 2) interferes with the assigned duties with the company, such as requiring company time, property, or facilities to perform the duties relating to the outside employment, including, for example, making or receiving phone calls or electronic communications, handling correspondence, or receiving visits from customers; and 3) diminishes the ability to give the necessary time and competence to duties with the company. A code of conduct may also contain a provision that prohibits its employees from making any investment in any competing business organization, or any supplier, subcontractor, or client of the company. In addition, full-time employees are expected to devote their full working time, attention, and energies to the performance of their duties with the company. The next section will provide instances of situations where the code of conduct conflicts with a particular company leader.

Conflicts review of the leadership strategies at several large companies illustrates how a company's code of conduct may conflict with the ethics and values of a particular management individual. The recent Tyco case provides an example of a company with such a conflict. Tyco was hailed as one of America's fastest revenue growing companies; from 1997 through 2001, Tyco's revenues rose by 48.7% a year, while its pretax operating margins improved to 22.1% (Bianco et.al., 2002). At Tyco, CEO Dennis Kozlowski stole money from the company, set up an unauthorized relocation plan and also abused the company's Key Employee Loan Program, which had been established to help executives pay taxes due upon the vesting of restricted shares. From 1997 through 2001, the CEO allegedly used the loan program and the covert relocation accounts like revolving credit lines, dipping into one or the other for hundreds of millions in interest-free funds (Bianco et.al., 2002). In addition, the CEO misappropriated $43 million in corporate funds to make philanthropic contributions in his own name. He was finally investigated in 1999 by the Securities and Exchange Commission, and resigned right before his indictment.

The Tyco case provides a clear example of how the ethics and values of a leader may conflict with the code of conduct at a company. At Tyco, the CEO engaged in unethical practices that financially favored himself and those employees that he paid off. The code of conduct at Tyco did not appear to have a positive influence over the values of this leader. Kozlowski disregarded any values set by the company, and as a result, his actions conflicted with the regulations set by the code. Such a conflict has several ramifications for the company, the main ramification being the eventual downfall of the company. Other ramifications include how the company may go bankrupt, be subject to millions of dollars in lawsuits and settlements, and lose the acceptance of its consumers. Ethical conflicts can also bring down employee morale, and employees may become so accustomed to illegal practices that they begin to turn their head away from it. Finally, a well-know conflict can assist in bringing about other illegal activity, and such activity can become widespread and accepted by all employees as normal.

Code of Conduct I have worked under a particular code of conduct that also conflicted with a company's leader and his standards of ethics and values. It was a large company with an international presence, where the code of conduct was supposed to be taken very seriously. However, since it was a company with an international presence, the existence of differences in laws and thought played an important role. For example, the law regarding certain activities or sales practices may differ from one country to another. In addition, society's viewpoints on certain topics and what is acceptable and not acceptable may vary as well. The code of conduct stated that all employees must apply the same high standards of business and personal ethics in all countries in which the company did business in. Thus, even though governmental philosophies, customs, and standards of conduct may differ among countries, honesty, integrity, and fairness must always serve as the foundation of the business' dealings throughout the world.

In countries where common trading or negotiating practices are based on less stringent standards of conduct than the company customarily followed, myself and other employees had to continue to follow the more stringent code of conduct.

If the applicable law in a foreign country was more stringent than the law in the United States or Canada, the foreign law had to be followed, unless complying with the foreign law would result in a violation of United States or Canadian law.

In the case of a conflict between foreign and United States or Canadian laws, employees had to immediately contact their business center's legal department for advice. This enabled conflicts to… READ MORE

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