Ethics And Governance Essay

2402 words - 10 pages

An organisation’s ethics determines its reputation. In today’s competitive market, in view of globalisation and technological advances, it is especially essential for organisations to practice ethical business behaviour to build a strong public image to garner the support of consumers and employees. Although practicing good business ethics has many benefits, it remains as a constant challenge for organisations, as the potential for unethical behaviour is illimitable.
In recent years, the cases of corporate misconduct in Singapore have been on the rise. In June 2011, Deputy Prime Minister Teo Chee Hean announced that commercial crimes, including fraud and cheating, rose by 13% ...view middle of the document...

An example of an ethical but illegal act would be the case of the Greenpeace’s harassment of whaling ships (BBC News, 2008), and on the other hand an unethical but legal act would be the promotion of unhealthy food using cartoon characters (Smith, 2008).
Organisations can endorse ethical behaviour using two approaches of control system, the compliance approach and values approach (Ferrell & Fraedrich, 2011). The compliance approach relies on enforcing standards of conduct, legislations, and tries to compel acceptable behaviour; whereas the values approach is orientated by aspirations, professionalism, and positively motivating employees to carry out desired behaviour instead of coercing. Weaver and Treviño (1999) noted that these two approaches are not mutually exclusive, and should be used jointly to effectively formulate an ethics program to suit each organization’s culture.
"A corporate ethics program is made up of values, policies and activities which impact the propriety of organization behaviours." (Brenner, 1992, V11, pp. 391-399) This program aims to instil ethical behaviour in the employees by providing guidelines and knowledge on ethics, and providing the required resources to assist in identifying and resolving ethical dilemmas. Gandz and Bird (1989) adds that the tools used in this program include codes of ethics, codes of conduct, policies and procedure, resolving ethical dilemmas, and ethics training. However, as programs are formulated according to each organisation, not every program will contain all of the components, and the emphasis on each will vary.
Code of Ethics
Stevens (2008) describes the code of ethics as a general guideline for decision making. It typically contains information such as organisational values, whistle-blowing, and other inspirational statements to promote ethical behaviour. Some desirable values the code should establish are integrity, trustworthiness, respect, citizenship, fairness, and kindness.

Code of Conduct
The code of conduct specifies the organisation’s expectation of actions and behaviours at the workplace, which employees are required to conform to. These expectations should align with, and not contradict any guidelines in the code of ethics (Coughlan, 2005). Commonly addressed topics would include confidentiality clause, anti-discrimination, and use of intellectual property.

Policies and Procedures
Policies and procedures are set rules established by the organisation to manage values, control instruments and operating procedures to achieve preferred behaviour derived from the code of conduct. An example would be to implement a policy to print on both sides of a document or to recycle waste to align with the value of corporate social responsibility. Control instruments such as performance appraisal forms and budget report formats are also reviewed regularly so that it is up-to-date to keep up with the expectations from the code of conduct.

Resolving Ethical Dilemmas

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