Term Paper on "Corporate Ethics in the 21st Century"

Term Paper 6 pages (1619 words) Sources: 1+

[EXCERPT] . . . .

Corporate Ethics in the 21st Century

Corporate ethics has emerged as one of the leading business issues of the Twenty-First century. Scandals at formerly reputable corporations such as Enron have sullied the corporate image for the public, not to mention major shareholders. Transparency and accountability are the new corporate watchwords, as companies from all industries and at all levels of operation struggle to adapt to the new climate of corporate responsibility. One of the greatest weapons that corporations have developed to deal with these new circumstances is the corporate code of ethics, or sometimes the code of conduct.

At its most basic, a code of ethics is a "management tool for establishing and articulating the corporate values, responsibilities, obligations, and ethical ambitions of an organization and the way it functions" (Codes of ethics, n.d.: par. 1). Simply put, a code of ethics amounts to a written record of a corporation's policies. Sometimes this can amount to a few sentences that describe the loose corporate values employees should keep in mind when faced with an ethical dilemma like integrity or honesty. In more extreme cases -- usually limited to larger corporations -- detailed descriptions will be provided for the appropriate ethical response to moral quandaries employees might face in the workplace. In those cases, the code of ethics functions as a moral compass for employees, a clear means by which decision-making can always progress.

Ethical Inquiry: The Case of BP

The purpose of this study is to develop a preliminary model of inquiry into an existing code of conduct, the code currently being used at British Petroleum (BP). An examination of BP's code of conduct provides an interesting glimpse into the effects and difficulties of implementation of codes of ethics in the corporate setting. Less than five years ago, management at BP faced significant ethical criticism based on a number of questionable policies. These included association with Chinese oil interests in a bid to build a pipeline across occupied Tibet, environmental concerns about exploratory drilling in the Arctic National Wildlife Refuge, and implicit involvement with oil-driven conflicts in Sudan (Clark, 2001). In short, BP faced a number of major ethical quandaries, not to mention the run-of-the-mill variety associated with nearly all corporations such as fair business and accounting practices.

Many will no doubt argue that BP's days of moral crisis are far from over. Nonetheless, the company drafted a new and more comprehensive code of conduct as late as 2005, which explicitly describes expected and ethical employee behavior in a number of key conduct areas (Code of conduct, 2006). The development of this new code came on the heels of more stringent attempts to eliminate unethical behavior within the corporation. We must assume that this newfound sense of corporate responsibility was almost certainly driven by public scrutiny after other, very public, corporate scandals in recent years. Still, it's hard to argue with the results. In 2004, BP fired 252 of its own employees for unethical behavior ostensibly to weed out bribery and corruption. Most of the offenders were apparently guilty of theft, fraud, or harassment. That is a 50% increase in ethics-related firings at BP over the previous year and underscores the importance of the appearance of ethical compliance (BP sacked, 2005). A closer examination of BP's code of conduct reveals that implementation must and will continue to be difficult and will meet with implicit resistance throughout the corporate structure.

THe BP code of conduct is extensive and defines appropriate behavior in a myriad of situations. Employees could theoretically refer to it at any time they felt their own moral judgment might be compromised. It covers five main areas: health, safety, security, environment; employees; business partners; government communities; and company assets, financial integrity. An more detailed inquiry into the effects of this code in each of these identified areas will demonstrate the ambitious goals of BP's code of conduct and the unfortunate limitations that the code inevitably faces.

The Context of the Code: What Situations Produce Ethical Dilemmas for BP?

As a multinational energy company, BP faces certain ethical dilemmas that are unique to its industry. For instance, BP must partner with other businesses and corporations that may have wildly different values and whose decision may not be based on the same ethical values as BP. Additionally, as a multinational energy concern, BP must work with a number of national governments and local communities many of whom are unlikely to share the same cultural heritage and value system as the very Western BP. In these matters, BP's code of conduct becomes very detailed and describes how employees -- and the company as a whole -- should react to specific situations.

Ethical dilemmas abound for a corporation the size of BP that works internationally in an industry currently with a less than savory reputation. These can include conflicts of interest, trade restrictions, working within the legal structures of a number of different nations, bribery and corruption, and political involvement. BP's code of conduct provides guidance on appropriate responses for all of these situations. Moreover, the code addresses other more general concerns not specific to the energy industry. Employee relations and anti-harassment provisions are written into the code. BP is committed, according to their code, of working with trade unions and eliminating compulsory and child labor (Code of conduct, 2006). Even more generally, the code outlines accurate record-keeping policies, ethical accounting, intellectual property rights, the dilemma of insider trading, and the use of digital systems. This part of the BP's code is designed to preemptively respond to the possibility of the kind of scandals that ruined Enron, Arthur Anderson, and Martha Stewart.

When and How Will the Code of Conduct Be Implemented?

BP recognized from that start that any successful code of ethics relies on "committed dissemination, implementation, monitoring, and embedding" (Codes of ethics, n.d.: par. 3). In other words, employees will not utilize the prescriptions of the code or integrate its values if they know nothing of it or don't believe that it will be enforced. A corporate code of ethics represents the law of the land for all ethical dilemmas employees might face. The first step in successful implementation is making certain that everyone knows there's a new sheriff in town.

To that end, BP's initial education and promotion programs were quite successful. Internal surveys revealed that following the rollout of the new code, 99% of employees had heard of the new code of conduct and 96% of all employees had a copy of their own (Code of conduct, 2006). The code of conduct cannot be thought of as act to be implemented once and then forgotten. If the values it embodies are to become an integral part of corporate operations, then management must take pains to ensure that the details of the code are fully incorporated at every level of the company. The long-term success of any code of ethics is dependent upon long-term commitment to the values and rules that it describes.

Who Needs the Code Anyway?

As has been evidenced from recent corporate scandals and debacles -- as well as the details of the BP code of conduct -- unethical behavior can occur at nearly every level within the corporation. Executives can be guilty of bribery and accounting fraud. Midlevel employees might face ethical problems dealing with harassment or unfair labor practices. Even the janitor who cleans up the office after hours might be tempted to steal office supplies. A corporate code of conduct provides all employees with a sense of corporate values and the dictated appropriate behaviors.

Probing Deeper in Conclusion: How Effective Should We Expect a Code of Conduct to Be in the Corporate Setting?

Corporate code of conducts are the "rage" in the business world at the moment. Transparency and accountability are seen as the… READ MORE

How to Reference "Corporate Ethics in the 21st Century" Term Paper in a Bibliography

Related Term Papers:

Corporate Environmental Responsibility in the 21st Century Thesis

Corporate Environmental Responsibility in the 21st Century

Presently, the financial world is recoiling from a collapse of the public's faith. The global population has been made intimately aware of the… read more

Thesis 8 pages (2346 words) Sources: 2 Style: MLA Topic: Environment / Conservation / Ecology

---

Ethics AIG and Ethics: Lessons Learned Term Paper

Ethics

AIG and Ethics: Lessons Learned

The exceptional lack of ethics during the first years of the 21st century immediately triggered an onslaught of global legislation that sought to enforce… read more

Term Paper 6 pages (1760 words) Sources: 4 Topic: Ethics / Morality

---

Ethics and Its Impact in the Sports World Research Proposal

Ethics on Sports

"It is only with the heart that one can see rightly;

what is essentially invisible to the eye"

the Fox in the Little Prince

(Kreyche, 2007, ¶… read more

Research Proposal 15 pages (5409 words) Sources: 21 Topic: Ethics / Morality

---

Code of Ethics in the Department of Justice Term Paper

Code of Ethics as Applicable to the Department of Justice

The topic of ethics from the aspect of a professional and scientific viewpoint has emerged as a topic of significant… read more

Term Paper 18 pages (4979 words) Sources: 1+ Topic: Ethics / Morality

---

Ethics and Morals - Business Research Proposal

Ethics & Morals - Business Ethics

Business ETHICS FAILURES and the CURRENT ECONOMIC CRISIS

Background, History, and Evolution of the Problem:

During the 20th century, the United States emerged as… read more

Research Proposal 10 pages (2860 words) Sources: 8 Style: MLA Topic: Economics / Finance / Banking

---

View 100+ more related papers  >>