Companies Code of Ethics

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To have control over business functions or activities, resources, and public image is crucial in managing entities. On the contrary, companies are under pressure to achieve growth despite the economic, social, or political turmoil experienced in the modern world. Unethical behaviors stem from the urge to achieve financial gains, with the risk of corruption remaining strong, especially in private sectors. Management that is vital in controlling business to avoid unfair practices is the code of conduct. International organizations such as the World Bank, organization for economic co-operation and development (OECD), or the United Nations Office on Drugs and Crime (UNODC) issues guidelines and provide recommendations on firms’ codes of conduct (Popescu, 2016). Since the 90s, organizations have adopted behavior protocols or upgrade old ones to adjust to economic situations and meet social and legal requirements (Popescu, 2016). Therefore, an impressive number of corporates worldwide have followed such a trend. The purpose of this paper is to compare the codes of ethics of PepsiCo and Alstom.

US company Vs. Foreign Company

PepsiCo’s global code of conduct was issued effectively in 2012, and every year, the policy is amended to accommodate new changes (PepsiCo, 2020). The decorum is changed according to updated laws or issues that are impacting the business. PepsiCo’s moral guideline aligns with its mission and vision of being a global leader in providing convenient food and beverage products. Updating the firm’s behavior rules helps enhance overall readability and incorporate international practices (PepsiCo, 2020). PepsiCo employees are expected to embrace the etiquette program as the foundation of commitment to excellence.

Alstom is a French-based company whose ambition is to lead as an innovative global player for sustainability and smooth mobility. In this aspiration, the company is committed to the highest ethical principles and comply with laws, regulations, and procedures (Alstom, 2020). The Alstom ethics policy is designed to enhance honest and ethical relationships with stakeholders such as clients, suppliers, contractors, shareholders, competitors, the general public, and the government. The company’s ethics guidelines were first published in 2001 and have since been regularly polished and supplemented (Alstom, 2020). The policy is distributed to all workers and introduced to new hires. Employees are accountable for respecting the principles or rules of the code of ethics. Alstom’s CEO urges that the company’s policy cannot be effective without the team, and to better the system, the leader insists on using an internal reporting system. Values and moral rules are held as the source of unity and pride in the corporate.

Critically, the company’s codes of conduct share similarities in various ways. For instance, both documents are meant to protect the firm’s key assets, stakeholders, and public interests. These policies have one overall objective: to serve as a roadmap for organizations’ success. The difference may be observed in what the programs stipulate in terms of content and requirements. Rules governing how employees should behave in specific settings vary due to differences in organization environment exposure. For example, the markets and scope of operation of these two companies are not the same; hence it is expected that the policies governing people’s behaviors would differ. Entities develop behavior guidelines for distinct reasons and circumstances, and thus assessing these policies can be challenging. The efficiency and necessity of formulated codes might not always be straightforward.

Nevertheless, the code of ethics for a US company is better than that of a foreign entity. The US-based company’s behavior policy focuses more on rules concerning workers’ actions that ensure equity and fairness. On the other hand, foreign-based entities such as those in the European region emphasize general business principles and relationship formation with stakeholders (Popescu, 2016). Furthermore, at the European level, the code of conduct may vary; for example, French companies such as Alstom enforces guidelines that focus on customer relations. In others, there is substantial attention to the idea of all workers’ joint responsibility despite their position in the corporate. Compared to the US, the companies’ codes of conduct, such as PepsiCo, seem better harmonized than Alstom.

Code’s Element and Deontological Theory

From PepsiCo’s “Global Code of Conduct” (n.d.), key elements that best represent the deontological model include respecting the workplace, trust in the marketplace, and fairness in business relationships. On the other hand, aspects of the duty to care theory represented in Alstom’s ethics codes are unwavering commitment to integrity, agility, and inclusion (“Ethics,” 2021). Alstom acts quickly, anticipating to learn and adapt to changes in the surrounding. Concerning inclusiveness, the company designs mobility solutions in a culture where all people are embraced. With respect to ethics and compliance, Alstom has a duty to act responsibly and ensure safety rules (Alstom, 2020). Such components are a representation of deontological ethics- duty-based principles which concerns what individuals do. The two companies’ ethical programs commit employees to act right. Workers are not expected to do wrong; for instance, at Alstom, staff must uphold integrity promises. The company implements dedicated training courses, procedures ad internal communication campaigns to promote transparency.

Teleological ethical theory is concerned with the consequences of people’s actions or actions. From the model standpoint, the result of behaviors infers right or wrong; for instance, stealing can be judged based on outcomes. In the Alstom code of ethics, an element that may present a teleological framework is that on data privacy, the company does not communicate personal information to third parties unless necessary (Alstom, 2020). In such a situation, the right or wrong concerning personal data sharing can be a judgment based on the outcomes. In case information exchange produces acceptable to the stakeholder and the company, then revealing details is allowed.

Nevertheless, a component representing the teleological model in PepsiCo’s governance is business gifts, which include anything valuable given on behalf of a company for goodwill. In this case, the results obtained when offerings are made can be judged morally if they involve promoting wellness and relationships without expecting anything in return. Should a company’s agent receive rewards and return the favor by engaging in certain actions, conflict may arise concerning the potential act of bribery or corruption.

Foreign Corrupt Practices Act (FCPA)

The Foreign Corrupt Practices Act (FCPA) was enacted to prohibit unethical acts of bribery to foreign officials to help in obtaining or sustenance the business. The legislation applies to limit unfair conduct anywhere globally and extends to stockholders, agents, directors, companies’ officers, and employees. FCPA requires maintaining accurate reports or books with internal control systems in place to provide reasonable assurance of practices.

PepsiCo’s code of conduct stipulates that suppliers acting on behalf of the company must obey the US foreign corrupt practices act (FCPA) or any other applicable anti-corruption law. The policy does not disclose the FCPA in detail but vaguely mentions which rule the firm’s agents or third parties must abide by. On the other hand, Alstom’s code of behavior includes the FCPA to prevent corruption and bribery measure. The company warns that a breach of this law is a severe crime that may incur hefty company fines. Although the rule is shallowly mentioned, Alstom focuses on it more than PepsiCo by highlighting the potential outcome of the violation.

Insider Trading

Codes of ethics for PepsiCo and Alstom addresses insider trading, stipulating what entities should observe. PepsiCo does better to mention on code guidelines that insider businesses are prohibited (PepsiCo, 2020). The company introduced employees to material non-public information and securities not to transact while in the company. For instance, workers are warned of debt securities, common or restricted stock, and PEP units. Unlike Alstom policy that tells employees what not to do as insider dealings, PepsiCo’s ethics program gives examples of individuals not to trade with, such as family members (Alstom, 2020). PepsiCo’s policy guideline outlines inside deals better by informing what not to do and with specific examples.

PepsiCo was once sanctioned by SEC following securities regulators filing a lawsuit against unidentified defendants citing suspicious buying of shares belonging to Wimm-Bill-Dann Foods. The investor was able to reap significant profit, and according to the company’s code of ethics, this can be termed a breach of moral principles through personal gains (“SEC files insider-trading case in PepsiCo deal,” n.d). On the other hand, Alstom encountered a sanction for an ethical lapse after executives were found with FCPA offenses. Allegedly, a former Alstom senior bribed the head of a state-operated power company in Indonesia and was charged with FCPA violations, money laundering, and conspiracy (Cassin, 2020). Such enforcement represents a breach of the company’s code of ethics, which stipulates the prevention of corruption and bribery.

References

Alstom. (2020). Code of ethics. Web.

Cassin, R. L. (2020). DOJ charges former Alstom and Marubeni execs with FCPA offenses. The FCPA Blog. Web.

Ethics. (2021). Alstom. Web.

Global code of conduct. (n.d.). PepsiCo. Web.

PepsiCo. (2020). Code of conduct: Act with integrity, the PepsiCo way. Web.

Popescu, A.-I. (2016). In brief: Pros and cons of corporate codes of conduct. Journal of Public Administration, Finance and Law, 9(9), 125–130. Web.

SEC files insider-trading case in PepsiCo deal. (2010). Reuters. Web.

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