A Business Code of Ethics Affects Employee Behavior

by: Nichole Gunn April 4, 2011

Ethics is a set of principles demonstrating right from wrong.  Business ethics are guidelines a company follows to ensure its actions are in accordance with ethical standards. These ethics should be followed by all members of an organization from leaders, to managers, to the employees.

Managers are key players in ethics. They need to fully understand the company’s code of ethics in order to perform their jobs in an unbiased manner, as well as be an example of appropriate behavior.

“At its most basic level, it [ethics] means acting fairly and honestly in individual as well as group decision making, explains Barrie Gross, writing for AllBusiness.com ” Explaining its relevance on a business level, she adds, “It can refer, for example, to fair and honest competition, acting without deception or misrepresentation, and working within the boundaries of the law."

A code of ethics is an essential feature to every organization. While most people have no desire to act unethically in any situation, there are those situations in which right and wrong may become blurred in “ethically vulnerable individuals.” For example, finding $1000 in the curb by your car, what would you do? In a business scenario, “What if you found a document on the street that had sensitive information about a competitor's product?”

While some individuals are sure they would act in an ethical manner, some may be able to bend and twist their value system to convince themselves that a particular unethical behavior isn’t really so bad.

This is why the role of managers is so important – to keep the high road constantly visible. Gross advises businesses to implement effective ethics training programs that touch on global issues as well as the company’s code of ethics.

Employees’ watch and remember the actions of their managers and company leaders. To enhance respect for the company and those in charge, business leaders need to ‘walk the ethics walk.’ This will go a long way in fostering employee motivation and a productive working environment, which in turn will attract new talent and help retain those already onboard.

Barrie Gross is former Vice President and Senior Corporate Counsel (Employment Law) for an international Fortune 1000 company and is a regular contributor to AllBusiness.com. She is the founder of Barrie Gross Consulting, a human resources training and consulting firm.