Management Decisions: The Code of Ethics


Corporate ethics is defined as part of guides, principles, standards, or values that take individuals through managerial decisions that go past lawful governance obligations. It takes care of this while taking into consideration the prospects of society. This includes the whole range of dealings with individual entities, societies, associations, groups, institutes, businesses, and organizations in the way issues concerning business are carried out (Grace, 2005).

Corporate unethical behavior is a vital setback in managing organizations in the world today. This problem exhibits commercial descend in the standards of ethics consisting of the collapse in laid down structures and the overall management of an organization. Unethical corporate ethics also triggers deficiency in conscientiousness, loss in self-belief, honesty, and competence in the whole system of management. The aftermath of this kind of problem can be, loss of employment, loss of business opportunities, lifetime savings, the creation of economic crisis, the decline in capital markets, and investment venture losses. Ethical problems escalate and are sometimes seen to result in the loss of livelihoods. This report presents explanations in dealing with this kind of behavior in the system of management.

Inclusions in the code of ethics

The code of ethics is a declaration concerning the actions and insights of all employees working within an organization. The document is a set of instructions binding employees of an organization to particular laid down rules but does not signify the whole breadth comprising good moral behavior. The code of ethics puts forward prospects for employees who use them to carry out their work with good moral standards. This document is written in a way enabling the fostering of honesty and esteem among the employees in a particular organization and their entire management system.

The code of ethics entails the following: 1Covers all employees of a particular organization and their conducts (persons who wish to be absorbed in the organization must first agree to put up with the regulation which runs the organization consisting of the code of ethics) 2 Employees are supposed to act by the set standards of the code of ethics recommend by the stakeholders of the organization 3 The recommendations of handling unethical behavior among the employees of the organization.

The code of ethics also makes sure that all employees of an organization go about their businesses while respecting their fellow workmates to guard each other’s reputations. It also states that the employees’ profession is judged by the behavior of particular individuals. This document also makes sure that employees use it as a means of improvement and not individual exaggeration while making sure employees are not involved in malfeasance and they do not create misrepresentation regarding professional descriptions approved by the organization. The code of ethics also blocks employees from misrepresenting qualifications and professional experience.

Again this document makes sure employees do not reveal the organization’s information to other people, makes them uphold quality professional moral behavior and societal relationships, and makes them responsible for taking care of laid down rules regarding the cord of ethics i.e. reporting acts of employees viewed to be unethical. It also establishes laws that deal with discrimination, race, gender, beliefs, and disability among members.

Ethical management practices

The code of ethics makes the management systems absorb social responsibility actions which are regarded to be the most convenient move towards what it entails. This document makes employees consider the well-being of all people around them while making the management competitive. “The employment of ethical business practices can enhance overall corporate health in many important areas. The first area is productivity. The employees of a corporation are stakeholders who are affected by management practices. When management considers ethics in its actions toward stakeholders, employees can be positively affected.

For example, a corporation may decide that business ethics requires a special effort to ensure the health and welfare of employees. Many corporations have established employee advisory programs (EAPs) to help employees with family, work, financial, or legal problems, or with mental illness or chemical dependency. These programs can be a source of enhanced productivity for a corporation” (Collins, 2005).

“Another area in which ethical management practices can enhance corporate health is by positively affecting “outside” stakeholders, such as suppliers and customers. A positive public image can attract customers. For example, a manufacturer of baby products carefully guards its public image as a company that puts customer health and well-being ahead of corporate profits, as exemplified in its code of ethics” (Mikes, 2002).

Corporate Ethics

These encompass principles, values, and guidelines directing one’s decision going past officially authorized management obligations. This is accomplished in consideration of the expectations of society. Still, it involves the entire field of communication involving individuals, societies, and institutions in the conducting of business deals (Davidson & Griffin, 2006). All over the world, this issue of corporate ethical behavior has affected the management of organizations significantly. This is exhibited by standards of management that are unethical which usually encompasses a lack of integrity, capability, and diligence which is demonstrated in every stage.

Consequences of these kinds of behaviors can trigger employment loss, economic crisis, loss of opportunities to conduct business, and loss of investments. This affects livelihoods and the welfare of those affected to the household level. All this is realized as a result of a deficiency in corporate ethics and unethical decision-making. Lack of confidence in the integrity of carrying out managerial duties has great impacts on the society via the turn down in capital markets. This is brought about as a result of management transgression.

Establishment of the code of ethics

The establishment of the code of ethics involves publications stating that the institution is interested in encouraging ethical behavior. It is also responsible for the provision of the foundation of the institute’s moral behavior (wood, 2006). It usually provides the general directions for the development of ethics. These directions then promote integrity, objectivity, and impartiality. Codes of ethics are very suitable particularly in situations needing decision making in the absence of clearly laid down rules. The document is comprehensible and coherent regarding the institution’s ethical standards (McNutt & Batho, 2005), which is necessary for insuring, maintaining, and managing high standards of ethics (Farrell, 2001).

Availability of codes of ethics makes it possible for the management systems to be accountable while providing an improved moral atmosphere for the management to act morally while indicating behaviors not to be accepted (Hazzlett, 2007). The significant manifestation of this is whereby the whole system of management becomes responsible for their actions. The code of ethics topics that should be given top priority comprises honesty, moral conflict decree model, the integrity of records and books ways of effecting judgment, and rules on handling unethical behavior. To minimize the social collision of company failure and reinstate business confidence, business ethics is highly recommended (Vinten, 2002).

Institutions that embrace the ethical practice and conveys Ethical codes after a long period report a higher financial return. This is due to the motivation provided by the ethical surrounding to the staff officials. (Odom & Green, 2003).In addition to the code of ethics, ethical business practices of institutions need to be informed to the employees ( Wood, 2006) after which there is the passing of skill about leadership regarding the code of Ethics.

Leadership communication

Leadership skills entail large and detailed coverage. The skill focuses on a distinct skill of passing across ethical leadership to foster positive ethical culture. It follows the stages of an institution’s management since senior management influences what culture an organization follows (Cohan, 2006). The significance of an institution’s culture is further established in an ethical workforce (Vinten 2002).

All stakeholders also need to be informed on the significance of enhancing the image of their institution and how to get capital markets (Wood & Vilkinas, 2006). This is done by effectively conveying information in an institution. To achieve this, one needs to identify a group of ethical professionals for teaching ethics and secondly establish a committee for dealing with ethical issues ( Wood & Callaghan, 2003). The use of ethical staff(ombudsman) as a channel to convey ethical leadership is also very vital in this regard (Vinten 2002). The use of the internet, news materials, memos together with distributing manuals to the employees assist in communicating responsibilities and provides a good backup for updating (Leung , 2007).


It’s therefore important that any characters of unethical nature displayed in any institution be dealt with in time. The most preferred way of dealing with unethical issues is through embracing the code of ethics thus establishing an ethical surrounding (McNutt & Batho, 2005). Secondly, the code of ethics is supposed to be conveyed in an effective manner (Wood 2006), enabling the officials at high-level management and those employed to achieve their objective with the common aim of optimistic ethical culture (Odom & Green, 2003). Social attitude furthermore embeds corporate ethics in management and therefore they need to be tackled in a better way (Vinten, 2002).

For the proper implementation of a solution for this problem, therefore, organizations should institute and carry out a code of ethics that is constituted by all stakeholders. The written code of ethics integrates reports concerning organizational values and principles on moral decision-making processes. It also deals with environmental and welfare accountability, reliability, honesty, truthfulness, integrity, conflict of interest issues, and moral uprightness (Fisher & Lovell, 2006).

The code of ethics is also supposed to be publicized to all the employees of the organization for sensitization and educational purposes. For proper achievement of this particular goal again enlightening committees and commissions that encourage ethical behavior should be set up. An ethical ombudsman which deals with moral issues can also be instituted to help curb this problem of unethical management (Callaghan 2004). Furthermore, organizations are supposed to set up educative arrangements as substitute ways of efficiency in the use of communication of the code of ethics. This is achievable through the use of the internet, conferences, and memorandums for putting across information about the code of ethics in an organization to employees (Leung, 2007).


Callaghan, M. (2004). Communicating the ethos of codes of ethics in corporate Australia, 1195-2001: Whose rights, whose responsibilities? Employees Responsibilities and Rights Journal, 15(4), 209-221.

Cohan, J.A. (2002). ‘I didn’t know’ and ‘I was only doing my job’: Has corporate governance careered out of control? A case study of Enron’s information myopia. Journal of Business Ethics, 40, 275-299.

Collins, N. (2005). Business ethics: 2nd Ugandan edition. Kampala, UG: Alberts & and sons Ltd.

Davidson, P., & Griffin, R. (2006). Management: 3rd Australasian edition. Brisbane, QLD: John Wiley & Sons Australia Ltd.

Farrell, B.J. (2002). Codes of ethics: Their evolution, development and other controversies. Journal of Management Development, 21(2), 152-163.

Fisher, C., & Lovell, A. (2006). Business ethics and values: Individual, corporate and international perspectives (2nd Ed.). London, England: Pearson Education.

Grace, D. (2005). Business ethics: Problems and cases (3rd ed.). South Melbourne, VIC: Oxford University Press.

Lueng, P. (2007). Modern auditing & assurance services (3rd ed.). Brisbane, QLD: John Wiley & Sons Australia Ltd.

Hazlett, S. (2007). From quality management to socially responsible organizations: The case for CSR. International Journal of Quality and Reliability Management, 24(7), 669-682.

McNutt, P.A., & Batho, C.A. (2005). Code of ethics and employee governance. International Journal of Social Economics, 32(8), 656-666.

Mikes, J. (2002). Management Ethics: 1st Kenyan edition, Nairobi, KNY: Kamau and sons Ltd.

Odom, L., & Green, M.T. (2003). Law and the ethics of transformational leadership. Leadership and Organization Development Journal, 24(2), 62-69.

Wood, G. (2006). The relevance to international mergers of the ethical perspectives of participants. Corporate Governance, 5(5), 39-50.

Wood, G., & Callaghan, M. (2003). Communicating the ethos of codes of ethics in corporate Australia, 1195-2001: Whose rights, whose responsibilities? Employees Responsibilities and Rights Journal, 15(4), 209-221.

Wood, J., & Vilkinas, T. (2006). CEO success: Perceptions of CEOs and their staff. Journal of Management Development, 26(3), 213-227.

Vinten, G. (2002). The corporate governance lessons. Corporate Governance, 2(4), 4-9.

Cite this paper

Select style


BusinessEssay. (2022, October 20). Management Decisions: The Code of Ethics. Retrieved from


BusinessEssay. (2022, October 20). Management Decisions: The Code of Ethics.

Work Cited

"Management Decisions: The Code of Ethics." BusinessEssay, 20 Oct. 2022,


BusinessEssay. (2022) 'Management Decisions: The Code of Ethics'. 20 October.


BusinessEssay. 2022. "Management Decisions: The Code of Ethics." October 20, 2022.

1. BusinessEssay. "Management Decisions: The Code of Ethics." October 20, 2022.


BusinessEssay. "Management Decisions: The Code of Ethics." October 20, 2022.