By Charles kulwa n reg no 42688

Corporate ethical codes as strategic documents

Ethical codes state the major philosophical principles and values in an organization and functions as policy documents which define the responsibility of organizations to stakeholders. They spell out the conduct expected of employees and articulate the acceptable ethical parameters of behaviour in the organization. Most large us and multinational firms today have a code. If utilized effectively and embraced, codes can be key strategic documents in an organization for moderating employee behaviour and reducing unethical actions.

To be effective they must be communicated well and become a part of the culture of the organization. An ethical code from a major investment bank is analyzed in terms of code effectiveness and its role as key corporate strategic document

A code can be used as key strategic documents in an organization or it can simply be window in an organization or it can simply be window dressing an artifact to make the organization appear more ethical to its stakeholders. Some firms draft codes to create a positive public image or receive a break under federal sentencing guidelines; others attempt to guide and focus employees on ethical behaviour appropriate to the organization. When codes do not functions as key documents, they usually have not been communicated n effectively or culturally embedded in the organization

What make codes effectively?

Good communication

Code can save as core foundation documents that give organization members a sense of shared values and commitment to ethical purpose ( Stevens 2008) good communication is the first requirement for effectiveness

Communication plays a central role in code effectiveness; members must be aware of the code and know why it exists. Weeks and Nantel (1992) noted the relationship between codes and organizational communication; they saw that codes were effective if they were communicated well through the right channels. The manner in which ethical codes are communicated contributes directly to their success or failure. Shcwartz study of codes found that they are most effective when are readable, relevant and written positively rather than negatively (2004)

When communication is encouraged or absent, silence can kill a company. Per low and Williams cited the Enron Corporation as an example of silenced organization where individual felt they could not speak freely about wrongdpoing (2003)

Conversely the lack of communication has been attributed to code failure, while strong evidence showing that codes are effective under the right conditions, they sometimes fail to prevent unethical behaviour.

Communicating a code from the top often leads to the code being ignored. Mandated codes from the top in highly centralized structure have been rendered ineffective because employees rejected attempt at control (Trevino 2003).

Mckibenn recently observed that employees faced with many messages absorb and respond to burst of information automatically, rather than thinking carefully about them (2003). Reflection time is absent from many organization cultures. A code can become simply become other compliance documents that is easy to ignore and inspiration motivation.

If one of the goal of transformational leadership is to make better citizebns of both leaders and followers. Then the way the leaders communicate is extremely important.