Responsibilities of a Business Firm

Responsibilities of a Business Firm

It is commonplace to find that a company has an official code of ethics in place for its employees, but it is also commonplace that employees rarely use the code of ethics. Codes of ethics tend to cover an array of topics from respecting co-workers, to discrimination policies, to financial integrity, to acceptable use of computers at work. No matter what types of measures are put into place to try to stop these unethical behaviors in a workplace, like having a code of ethics, it is bound to occur in one form or another over time. As companies grow, they have an increasingly higher risk of encountering ethical compliance issues. This is because they have a larger population of employees that could be potentially committing unethical practices. The following will show some of the reasons it is relevant for a company to have a code of ethics, even though employees often times are not using them as they should in their daily decisions at work.

Although the use of the code of ethics by employees is a rarity, there are still reasons it is important for a company to have one. One reason is so the company can legally take action on employees that commit unethical behavior. When the company has put an official code of ethics into writing for its employees, it is providing the employee with a set of rules and principles they are required to use when working (Dolgoff, 2009, p.21). If an employee does not follow the code, the company can legally take action against that employee. An example of an action the company could legally take is termination of the employee, without legal recourse from the employee. The employee will not be able to claim discrimination or other types of affirmative action if they violated the actual code of ethics for the company. Companies take this seriously, and recently businesses have become active in protecting themselves from these claims by putting a code of ethics in place at their companies (Vallario, 2007).

Secondly, companies that work to emphasize the importance of ethics are in essence helping to protect the company's brand and reputation as a whole. Integrating the value of the code of ethics to the entire company can indeed help to prevent some unethical behaviors and that safeguards the company's corporate reputation (Vitell, 2006). Having the code of ethics in place, no matter how much employees are actually acting upon it, helps the company's external perceptions. The company can highlight this when trying to get a foot ahead of competition, and although small, it can give the needed advantage. When customers or other companies are deciding to do business with a new company, they will want to work with a company that has the perception of good ethics, and having a code of ethics in place gives that perception they are looking for.