business ethics lesson

1. Code of Ethics and
Business Conduct
Lesson 4:

2. Codes of Ethics
 American Ethical Codes were first called creeds or credos and in
the 1980's were considered "legalistic" and "more likely to talk
about ethics or the reputation of the company".
 It is the written document which attempt to state the major
philosophical principles and articulate the values embrace by the
organization.
 The policy documents defining responsibilities of the organization to
stakeholders and articulating the conduct expected of employees
(Kaptein and Wemper,2002).
 In contrast, mission statement articulate the objectives of a
company and declare what goals the organization intends to
accomplish.

3. Carl Skoogland (former ethics director of Texas Instrument)
 Argues "Ethical managers must know what is right,
value what is right and do what is right."
Culture of character
• The type of organizational culture in which positive moral
values are ingrained throughout the organization.
• An organizational culture whose leaders and members are
truly committed to ethical conduct and make
ethical behavior a fundamental component of their every
action.
Continuation...

4. Specific Philippine Examples
Ayala Corporation
Code of Business Conduct and Ethics
Ayala adopts as part of its basic operating principles, the
primacy of the person, shared values, and the
empowerment of people. The company and its employees
are guided by four core values:
1. Integrity
2. Long-term vision
3. Empowering leadership
4. Commitment to national development

5. What is Corporate Culture?
Culture
 Culture has a profound influence on all aspects of human
behavior. Its impact may subtle or pronounced, direct or
oblique, or enduring or ephemeral.
 Cultural influences change and culture evolves as political,
social, economic and technological forces reshape
the cultural landscape.
 Culture is a human reality and resides in human communities.
 Culture is continuatio naturae.
Corporate culture refers to the assumptions, beliefs, goas,
knowledge and values that are shared by organizational
members.

6. The Need for Ethical Organization Culture
 The economics of organization has to subject itself to ethics, and
needs to focus on how to employ those goods and resources as
well as human capabilities in accord with the alternatives available,
that is to say, it should constantly seek a possible alternative by
which human beings can improve and grow, which in the ultimate
instance is what characterizes the ethical organization.
 One way of achieving this is the development of the organizational
culture that would ensure the positive learning in
the organizational members and formation of their character
through the virtues.

7. Creating Corporate Codes of Ethics
Creating an Ethical Corporate Culture
Pastin describes organizations exhibiting what we call a culture
of character as those that possess the following four stylistic
markers:
 They are at ease interacting with diverse internal and external
stakeholder groups.
 They are obsessed with fairness.
 Responsibility is individual rather than collective, with
individuals assuming personal responsibility for actions of the
organization.
 They see their activities in terms of purpose.

8. Creating Corporate Codes of Ethics
Sims has added:
 There exists a clear vision and picture of integrity throughout the
organization.
 The vision is owned and embodied by top management over time.
 The reward system is aligned with the vision of integrity.
 Policies and practices of the organization are aligned with
the vision; there are no mixed message.
 It is understood that every significant leadership decision has
ethical value dimensions.
 Everyone is expected to work through conflicting stakeholders
value perspectives.

9. 1. Adopt a code of Ethics
2. Provide ethic training
3. Hire and promote ethical people
4. Correct unethical people
5. Take a proactive strategy
6. Conduct a social audit
7. Protect whistle-blowers
8. Empower the guardians of integrity
9. Assure commitment from the top
Creating Corporate Codes of Ethics

10. 10. Communicate the standards of conducts widely throughout
the organization and the industry.
11. Designate an ethics officer with clear responsibility for
enforcing ethical standards.
12. Establish a process for reporting violations for ethical
standards and actively investigate all reported violations.
13. Assure due diligence by the organization's board of
directors.
14. Above all, lead by example
Creating Corporate Codes of Ethics

11. THANK YOU.