Corporate Codes of Ethics E-Book

Christian Bächer

• Herausgeber: GRIN Verlag
• Sprache: Englisch

Veröffentlichungsjahr: 2006

Beschreibung

Essay from the year 2005 in the subject Business economics - Business Ethics, Corporate Ethics, grade: A+, University of Otago (Department of Management), course: International Management, language: English, abstract: As long as human societies exist, the life of man has been based on norms, rules, values and practices that governed human behaviour. Individual and communal-shared ethics even make life within society possible as we know it. Part of this social life is doing business, in form of exchanging goods to fulfil basic needs and to achieve higher levels of satisfaction for oneself and for others. However, to combine moral thinking and acting with today's business activities in a free market economy seems to be counterintuitive. Somehow both notions do not really fit together. Still, Corporate Codes of Ethics exist. This essay consist of two parts. Each part reflects one question or problem that I found worthy of having more light shed on it. The first part answers the question "Why do corporate Codes of Ethics exist?" or "Why do corporations establish corporate Codes of Ethics?" under the basic assumptions, that ethics are 'costly' and therefore against the idea of maximising profit which is predominant in the market ideology. Proving these assumptions is not so easy. First the term ethics will be defined and selected theories which could be the basis for Codes of Ethics will be portrayed. Then it is important to know what kind of morality is underlying the modern market ideology as we know it. Following that a correlation is sought between the market morality and corporate ethics, ending in the insight that corporate morality is costly and, therefore, is against economic intuition. Part one finishes then with a surprisingly simple answer to the question why codes exist. The second part brings the findings of the first part in a broader context. The considered corporation of part one now 'grows' beyond borders and begins to conduct business globally, as a multinational corporation. Its existing set of corporate Codes of Ethics are now confronted with other nations, societies and cultures and, possibly, other ethicities. Whether the company should 'do as the Romans do' or not is the major question of the second part, closely connected to the keywords relativism and universalism. The problems revealed by each approach, and possible solutions to them, will be shown in part two. The conclusion, finally, summarises the findings of the essay briefly, but, moreover, shows further questions and problems that would be worth to explore in the overlapping areas of applied ethics and international management.

Leseprobe

Table of Content

1 Introduction

2 Ethics and its theories.

3 The market and morality

4 Why do Codes of Ethics exist? Answers

5 The global context

6 Universalism, relativism and culture.

7 Ways out of the dilemma

8 Conclusion.

Appendix 1 - Codes of Conduct - Caux Roundtable Principles for Business

Appendix 2 - Codes of Ethics - Sara Lee Corporation

Appendix 3 - International Codes of Ethics.

List of References

Page 1

Page 2

1 Introduction

As long as human societies exist, the life of man has been based on norms, rules, values and practices that governed human behaviour. Individual and communal-shared ethics even make life within society possible as we know it. Part of this social life is doing business, in form of exchanging goods to fulfil basic needs and to achieve higher levels of satisfaction for oneself and for others. However, to combine moral thinking and acting with today's business activities in a free market economy seems to be counterintuitive. Somehow both notions do not really fit together.1Still,Corporate Codes of Ethicsexist. This essay consist of two parts. Each part reflects one question or problem that I found worthy of having more light shed on it. The first part answers the question "Why do corporate Codes of Ethics exist?" or "Why do corporations establish corporate Codes of Ethics?" under the basic assumptions, that ethics are 'costly' and therefore against the idea of maximising profit which is predominant in the market ideology. Proving these assumptions is not so easy. First the term ethics will be defined and selected theories which could be the basis for Codes of Ethics will be portrayed. Then it is important to know what kind of morality is underlying the modern market ideology as we know it. Following that a correlation is sought between the market morality and corporate ethics, ending in the insight that corporate moralityiscostly and, therefore,isagainst economic intuition. Part one finishes then with a surprisingly simple answer to the question why codes exist.

The second part brings the findings of the first part in a broader context. The considered corporation of part one now 'grows' beyond borders and begins to conduct business globally, as amultinational corporation.Its existing set of corporate Codes of Ethics are now confronted with other nations, societies and cultures and, possibly, other ethicities. Whether the company should 'do as the Romans do' or not is the major question of the second part, closely connected to the keywordsrelativismanduniversalism.The problems revealed by each approach, and possible solutions to them, will be shown in part two. The conclusion, finally, summarises the findings of the essay briefly, but, moreover, shows further questions and problems that would be worth to explore in the overlapping areas ofapplied ethicsandinternational management.

1This is my feeling, and, of course, this essay is premised on my ideas ofethicsand ofdoing business.Even if not my own words are used directly, it is still my selection of authors and literature and that reflects my point of

view.

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2 Ethics and its theories

Codes of Ethics2representnormsandvaluesthat are inherent in the company's objectives, that the corporation stands for and can be held accountable for.3These standards are established in a written document and is, therefore, very transparent for the company's internal and external environment. The codes delineate the corporation’s responsibilities to this environment which is, in its entirety, the sum of itsstakeholders4. Furthermore, codes also describe expectations towards these stakeholders, i.e.employee5sor suppliers (Kaptein, 2004; Clark & Leonard, 1998; Langlois & Schlegelmilch, 1990 and see part of a Corporate Code of Ethics in appendix 2).

Based on a content-research Kaptein (2004) summarised the main responsibilities of a corporation as providing a high-quality product or service, maximising long term returns to stakeholders or achieving at least a acceptable return and contributing to the well-being and development of society. In pursuing this, the corporation considers itself complying to transparency, honesty and fairness in their activities. Besides responsibility Kaptein found that the most cited corporate values are teamwork, open communication and innovation. Regarding the internal conduct, most organisations in Kaptein's comparative study require that their employees do not commit any acts which violate human rights like discrimination, sexual intimidation, or contain forwarding of confidential information or acceptance of gifts6. A rather processional issue, that some of the codes contain, are the implementation of the code and its compliance.

When speaking about Codes of Ethics it should also be clarified what is behind the abstract term 'ethics', what concepts, what theories and whose ethics. A good basis for this part of the essay is laid by the writing of Frankena (1973). According to whom ethics, as a

2The term 'Codes of Ethics' and 'corporate codes' will synonymously be used for 'Corporate Codes of Ethics'.

3Norms are expressed with normative sentences, according to which acts are placed into categories: should, allowed, not allowed. Accordingly, acts are put into the categories: responsibility, allowed or prohibited. In

ethical discussion, the expressions "good" and "bad" are used. These terms are called normative. Values: are

expressed by sentences of value, according to which phenomena are classified as positive and negative and

sometimes indifferent. It is possible to express greater and minor value. There are several terms of value but the

most important ones are "good" and "bad" (Pekkola & Pekkola, 2001).

4The stakeholders of the company are commonly regarded as the parties the company has relationships with, who are somehow affected by the company's activity or who have enforceable claims on the company. In a

broader sense they consist of employees and shareholders, customers and suppliers, the legal authorities and non-

governmental organisations (NGOs), competitors and partners, the local community and the global society. The

stakeholders name the interest groups the company's loyalty aims at (Pekkola & Pekkola, 2001).

5The termemployeesdoes not only contain the average blue-collar workers or administrative white-collar employees, the decision-making, 'employed' management of the organization is meant as well.