BUSINESS ETHICS & SOCIAL

RESPONSIBILITY

Code of Ethics
in Business
(Part 2)
What Is It?
A secret to success lies in recognizing the
value of ethics in industry. The customers,
management, and staff value honest and
ethical practices. Hence, business ethics is
vital because it helps maintain a great
reputation, helps to avoid significant financial
and legal issues, and ultimately benefits all
involved. Therefore, it is highly suggested that
each company formulates its own Code of
Ethics to be used as a guide in its business
operation.
What is Code of Ethics?
Code of Ethics is a set of rules about good
and bad behavior. It is a guide of
principles designed to help professionals
conduct business honestly and with integrity. A
code of ethics document may outline the
mission and values of the business or
organization, how professionals are supposed
to approach problems, the ethical principles
based on the organization's core values, and
the standards to which the professional is held.
What is Code of Ethics?
Saucer and Sims (2013) offer
recommendations for developing Code of
Ethics in business organizations:
1. Adopt code of ethics (use the Code of
Ethics of other companies as a
reference and modify according to the
needs of the company).
2. Offer training on ethics (for
management and employees).
What is Code of Ethics?
3. Hire and foster individuals with
ethical value.
4. Deal with immoral activities.
Employees must know the
implications and effects of making
unethical actions, and should be
ready to accept consequences.
What is Code of Ethics?
5. Take constructive measures. For example,
give rewards to employees who admit their
mistakes. If the company is conscientious and
smart, it can encourage warehouse workers
to take responsibility for their mistakes and
even praise them for coming forward,
apologizing and ensuring that a faulty
product is not purchased by the customer. At
first it seems counter-intuitive to reward an
employee for a mistake, but in the end, it
provides everyone with the best result.
What is Code of Ethics?
6. Carry out a social audit. Conduct survey to
employees once in a while.
7. Cover all whistleblowers. These people detect
illegal activities within organizations and disclose
the actions to the authority or managers. A
whistleblower who works sincerely, correctly
reporting an issue, should be praised for his/her
courage and integrity, as opposed to being
disciplined and ostracized. If an individual blasts
the whistle, it is possible that the company itself
has failed internally to motivate and improve fair
and ethical conversations.
What is Code of Ethics?
8. Empower the defenders of integrity.
Support those who work with honesty
and integrity.
9. Ensure executive commitment. The
anonymity of those who report the
problems should be practiced.
10.Communicate the principles of
conduct within the company and
across the industry.
What is Code of Ethics?
11. Assign an officer who is clearly responsible
for the enforcement of ethical standards.
He/she can be consulted for advice.
12. Establish a procedure for violations of
ethical standards, and fully review any
offenses reported.
13. Ensure high perseverance by the
company's board of trustees.
14. Lead by example, above everything else.
What is Code of Ethics?
It should be remembered that when
faced with an ethical situation, the
outcome of the decision-making
process should be considered. One
way to tackle ethical situations is by
using the four-way test to evaluate
decisions.
What is Code of Ethics?
This four-way test consists of asking four
questions:
1. Is my decision truthful?
2. Is my decision fair to all who are
affected by it?
3. Will this build the organization's
goodwill?
4. Will the decision benefit all parties with
vested interest in the outcome?
What is Code of Ethics?
Code of Ethics aims to lessen conflicting issues
as it explains to what degree such conflicts can
be avoided and what parties can do if these
conflicts happened. Professionals therefore
cannot say that they were ignorant of the
immoral nature of their improper behavior.
Often relevant is the possibility of disciplinary
action (e.g. disbarment of a lawyer) which
helps minimize unnecessary disagreements or
offensive behavior where a confrontation is
imminent or is likely to happen.
Code of Ethics contains the
following:
1. Vision means something that you
imagine; a picture that you see in your
mind (Merriam-Webster Dictionary). The
vision statement helps to ensure the
alignment of the decisions to the
company goals.
Example: To make innovations that
everyone could access and adapt
depending on their needs
Code of Ethics contains the
following:
2. Values (value means something
thought of as important or useful)
Values in business help to ensure that
all of the employees work towards the
company goals.
Example: We commit ourselves to
serve our customers with quality
service and utmost respect.
Code of Ethics contains the
following:
3. Mission- a specific task with which a
person or a group is charged (Merriam-
Webster Dictionary). The mission
statement clearly and effectively
guides the business or the organization
in its decision-making.
Example: To inspire all the young athletes
of the country… tell them to dream and go
for it!
Code of Ethics contains the
following:
4. Principles- moral rules or beliefs that
help you know what is right and
wrong and that influence your
actions (Merriam-Webster
Dictionary).
Examples:
Customers have to be respected.
Make sure to deliver quality product.
Sample of Code of Ethics

Our Core Values

Our Vision: To lead the car industry by giving
our customers quality carsworthy of their
money and unmatched customer services
Our Values:
We act with the highest standards of integrity.
We respect individuals and treat them fairly.
Sample of Code of Ethics

Our Mission:
To work efficiently and enthusiastically
to make XYZ Company the country’s
top car dealer while serving our
customers punctually and courteously
Sample of Code of Ethics
Our Principles:
1st: XYZ Company shall adopt a zero-
tolerance policy towards bribery and
corruption in whatever form;
2nd: All company officers and employees
shall conduct business in accordance with
Philippine laws and regulations; and
3rd: We shall act in good faith and observe
sense of professionalism at all times.
 Do you have
any question?