Code of Ethics for a Supply Chain Software Start-Up

Introduction: XYZ Corporation and Its Competitive Context

XYZ Corporation is a start-up company that develops supply chain software. The software is intended to provide real-time updates about any aspect of a company's supply chain, on any device, through a simple platform. The tracking functions and interface are the key elements of the product and service offering. The company is marketing its software to small and medium-sized enterprises (SMEs). Most similar applications are either proprietary or are built for very large companies. The objective of XYZ is to win market share by offering high-end supply chain management software to companies that otherwise cannot afford it.

There are several competitors in this industry, mostly falling into two categories. The first category includes large companies — such as SAP — that develop solutions for large and multinational corporations. They tend not to pursue smaller companies because the incremental revenue is not high enough to justify the effort. The second category of competitor targets SMEs, but with cheaper software applications. The industry is moderately competitive and characterized by a rapid pace of technological change. If costs come down, the larger competitors can pursue smaller clients, or the smaller competitors can take advantage of lower costs to offer products similar to XYZ's. XYZ sells via a sales force that operates as a remote virtual team, spread across North America but working together to service clients and integrate their suppliers into the platform.

It is important for any company to have a code of ethics, and this is no less true for XYZ. Ingram (2015) notes that breaches in ethics can be costly for any company, reflecting poorly on the brand, degrading asset value, and inviting regulatory and legal scrutiny. In more extreme cases, ethical breaches involve the commission of illegal acts and can bankrupt a company — but even minor breaches, such as an inappropriate social media comment, can reflect negatively on a company's brand. An ethical code contributes to avoiding such problems in a couple of important ways. First, it helps to set the ethical tone and culture of the organization; a more ethical organization is less likely to experience major lapses in judgment. Second, a code of ethics can serve as a specific reference point for people faced with ethical dilemmas, providing them with decision-making criteria to help them make the best choices for the organization (Ethics.org, 2009).

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