A study carried out by Lee andYoshihara (1997) was designed to analyse the ethical behaviour of Korean andJapanese business executives after implementing codes of conduct.
The resultsportrayed a vital factor showing that employees were willing to change andembrace the morals and values of the firm after knowing that the executivesalso follow the ethical policy. This shows how an employee’s ethical behaviourcan change after knowing how much importance the ethics code is to the businessexecutive’s personal values. LINKIT TO MCDONALDS OR Another COMPANY!Usually, managers and directorswill act ethically as a result of their internalized moral core values. Whilst establishing behavioural standards in corporations and written codes ofconduct to help strengthen moral values and encourage ethical organizationalbehaviour, it is important to know that everyone will behave and actdifferently to the specific guidelines within specific workplace areas.Codes of conduct would alsoaffect the public for example, McDonalds is perceived by the public to beethically and socially concerned which is honoured and respected by otherindividuals who have no knowledge of its actual working. According to Jamal and Bowie, (1995) codes of conduct promote ethicalbehaviour in organisations. In order for companies to build a sustainableemployee culture it is essential to set the expectations for employeebehaviour. For example, the codes of conduct for Lehman Brothers corporation,an investment bank which went bust during the financial crisis in 2008.
Their ethicalpolicies were designed to transform their culture by guiding the executivesduring the crisis to make strategic decisions and communicate effectively withthe employees.NS1 According to Trevino and Weaver,(2003) ethical policies can shape an employee’s behaviour positively thus influencingethical decisions in an organisation. This is further supported by Manley(1991) who stated that codes of conduct are employed in firms to help workersfeel more positive about their company.Although some companieshave such policies to promote good behaviour other firms such as Lehmanbrothers play an active part to guide their employees to behave ethically, witha general consensus of employees across organisations favouring to work forcompany’s who are committed to values and ethics.This is further supported bySolomon and Hanson (1985) who argue that codes of conduct are vital forproviding guidelines, stability, and a point of focus for everybody in theorganization. Prior findings by Murphy etal (1992) and Somers (2001) conducted in UnitedStates show that awareness of unethical activity is less prevalent incorporations that have implemented codes of conduct.
This provides evidence tosupport the proposition that employees in organisations who had adoptedcorporate codes of conduct were significantly more aware of wrongdoing thanwere employee in organizations without codes of ethical conduct. However, according to Montoya & Richard(1994) in some situations individuals can makewrong decisions which can be associated with the individual’s morals.Having adopted such policies remindsemployees of their accountability and the consequences of their actions. The responsibilityfalls onto individuals to seek advice before taking action and to ensure thatthey comply with the principles outlined in company’s codes of conduct. NS1 McDonald and Nijhof (1999)developed a framework for implementing an ethical policy curriculum designed toinspire individuals to behave morally and responsibly in organisations whichcould increase the ethicalness in the employees ‘actions and behaviour’. However,communicating codes of conduct from the upper echelons of order can sometimes leadindividuals to flout the policy. Trevino and Weaver (2003) found that in highlycentralized organizations, mandated codes were found to be ineffective becauseemployees rejected the attempts at top-down control. Creating ethical policiesdoes not ensure that ethical behaviour will occur; rather, ethicaldecision-making and the code must be a part of the corporate culture and notmandated from the executive suite.
Ethics code will only work whenemployees see that organizational actions are in line with the ethicalpolicies. Codes of conduct becomestructurally embedded when directors successfully create and act in accordanceto the organization’s culture using the code. According to Adam and Rachman(2004), ethical policies can shape an individual’s behaviour by discussing thecore values with each other, thus making the members realise that taking theright action will often require them to have conversations with otherindividuals. Furthermore, Petersen and Krings (2009) argued that codes ofconduct significantly reduced “employer discrimination”, however only when the ethicalpolicies are part of a society and has approval from a higher level.
Ethicalpolicies have a significant impact on the managers behaviour in terms of theirrole, as having such policies implemented forces the managers to behave”ethically right”. The moral actions of a manager usually have the greatestinfluence on employees, this is supported by Adam and Rachman (2004) who arguedthat ethical policies are more effective when managers and corporate boardsabide by the rules and set the right tone, rather than providing ethicaltraining to employees. However,codes of conduct can fail if it is rejected by the culture of an organization.For example, Enron’s ethical policies failed due toa number of reasons such as; the company not being socially responsible totheir stakeholders, betrayed their investors and employees regarding their realfinancial status, despite stating in their report that they aim to implementcode of conduct to respect others, assurance to non-discrimination, protectingthe environment, human health and natural resources etc. Perlow and Williams(2003) argued that having ethical policies implemented may not always work ifindividuals feel like they cannot communicate openly about wrongdoing.Organizationalmembers react to clear and visible justice, so where managers’ or employees’behaviours violate the code and no consequences are observed, the code willfail. Nitsch, Baetz & Hughes observed that frustration,cynicism, and anger develop when code violations go unpunished (2005).
NS2 Perceivedunfairness or unequal treatment also causes low trust in organizations andweakens members’ commitment to the code (Kickup, 2005).Similarly, Glenn and Van Loo’s(1993) study has shown that codes of ethics appear to be less influential thanthe individual’s strong personal value system. This is further supported byMichael Schtuartz (2002) who argued that ethical codes are a management systemdesigned to control the organisation by formulating policies. This shows that in the absence ofethics codes, individuals might behave differently.
In relation to this,Simon Critchley (2007) argued that everyone are moral individuals and thatthere is always this demand on us as moral actors.Overall, codes of conduct are seen as an important toolin creating and establishing an ethical environment. Nevertheless, there islittle agreement in the literature on the extent of usefulness of codes and theinfluence they have on behaviour, with some scholars proposing that a code ofethics has a significant influence on ethical perceptions, judgements andbehaviour, while others are more sceptical, suggesting that the foundation ofethics is in the mind of the person, through the personal value system. NS3 Needto change.