Codes of Ethics and the Pursuit of Organizational Legitimacy: Theoretical and Empirical Contributions

The focus of this paper is to further a discussion of codes of ethics as institutionalized organizational structures that extend some form of legitimacy to organizations. The particular form of legitimacy is of critical importance to our analysis. After reviewing various theories of legitimacy, we analyze the literature on how legitimacy is derived from codes of ethics to discover which specific form of legitimacy is gained from their presence in organizations. We content analyze a sample of codes to consider the question of whether a strategic, self-interested rationale lies behind the adoption of a code of ethics. We propose that the process of employing codes of ethics in this strategic manner has become, through isomorphism, an institutionalized practice that itself confers a cognitive form of legitimacy to the organization and further distances the codes from their moral foundation.     

Speaking Platitudes to Power: Observing American Business Ethics in an Age of Declining Hegemony

The use of technology in marketing has become an increasingly important competitive tool in developing and maintaining efficient and productive customer relationships. However, the ethics of using this technology has received little attention. This study investigates how and if marketing organizations are adapting their ethics policies to incorporate use of sales technology (ST). Based on in-depth interviews with executives from a variety of highly regulated to nonregulated business-to-business and business-to-consumer industries, our results show that, although most organizations indeed have codes of ethics, there appears to be a gray area of how these codes address ST. Further, it appears that monitoring the ethical use of ST varies and can be a frustrating and time-consuming issue for marketing and sales executives. Implications of our findings are discussed for the benefit of marketing practitioners, ethics managers, and researchers.     

Ethics in Tourism-Reality or Hallucination

Many professional organizations have established codes of ethics which members are expected to adhere to. These ethical codes serve an important function by containing the rules that govern the conduct of the members of the profession. Should the tourism industry be governed by a code of ethics? Is it important enough and large enough to spend a lot of time and energy developing a code of ethics since tourism is based on service rather than a physical good, which does not lend itself to standardization or control? This paper will examine these issues.     

The Impact of Codes of Ethics on Decision Making: Some Insights from Information Economics

Although it is suggested that an important role for codes of ethics is to influence decision making, the little research into the impact of codes of ethics on decisions finds little impact. Insights from information economics help to explain this.If an individual will select (forego) the action that a code of ethics indicates to be ethical (unethical) in the absence of a code, then expressing that position in a code of ethics will have no impact on the action chosen. Even if the individual will select (forego) the action that a code of ethics indicates to be unethical (ethical) in the absence of a code, the presence of a statement in the code of ethics must cause the individual's beliefs to change enough so that he or she changes actions. This can be a fairly high obstacle.     

A Code of Ethics for CorporateCode of Ethics

Are corporate codes of ethics necessarily ethical? To challenge this notion, an initial set of universal moral standards is proposed by which all corporate codes of ethics can be ethically evaluated. The set of universal moral standards includes: (1) trustworthiness; (2) respect; (3) responsibility; (4) fairness; (5) caring; and (6) citizenship. By applying the six moral standards to four different stages of code development (i.e., content, creation, implementation, administration), a code of ethics for corporate codes of ethics is constructed by which companies can be ethically audited for compliance. The newly proposed code of ethics for corporate codes of ethics was then applied to four large Canadian companies representing a variety of industries: telecommunications; banking, manufacturing, and high technology. The ethical audit of the four companies' ethics programs based on the proposed code indicates that all four companies have room to improve the ethical nature of their codes of ethics (i.e., content, creation, implementation, administration).     

Proposal for a model for the elaboration of ethical codes based on discourse ethics

This article presents a model for the procedure of elaboration of an effective ethical code. Taking as the starting point the concept of business ethics as critical hermeneutics, we describe a process which will lead to the creation of a document that is truly ethical and efficient. We believe the elaboration of an ethical code should follow a definite procedure, and that the process is as important as the result, but we also add that in order for the process to be a truly rational dialogue it is necessary to make efforts to ensure the participation of truly valid interlocutors who can represent their interests in conditions that are as close as possible to an ideal community of dialogue. Our model for the elaboration of an ethical code attempts to break with the conventional distinction between processes of elaboration and application in order to develop a truly integrative ethics, while also giving attention to the concrete conditions in which the ethical code is developed. In our view the contribution made by this model is the emphasis it places on the transformation of the will of the participants in the dialogue.     

The Representation of Social Actors in Corporate Codes of Ethics. How Code Language Positions Internal Actors

This article understands codes of ethics as written documents that represent social actors in specific ways through the use of language. It presents an empirical study that investigated the codes of ethics of the German Dax30 companies. The study adopted a critical discourse analysis-approach in order to reveal how the code-texts produce a particular understanding of the various internal social groups for the readers. Language is regarded as social practice that functions at creating particular understandings of individuals and groups, how they are interrelated, and how they should behave. Findings show that codes of ethics do not represent employees as a group that is empowered or morally enlightened; instead they are positioned as passive receivers of rules and regulations. Furthermore, codes of ethics classify employees as having a need to be monitored and controlled by the higher levels of the corporate hierarchy. Overall, code language enforces compliance through maintaining existing and building new asymmetries between the different groups within a company. As a consequence, the article discusses a somewhat different understanding of code effectiveness. Reproducing and reemphasizing hierarchical relations could also lead to code compliance, perhaps without any need for developing the moral employee that is committed to ethical values.     

An Inquiry into the Study of Corporate Codes of Ethics

This paper takes its point of departure in an article by Stevens [Stevens, B.: 1994, Journal of Business Ethics 54, 163–171], in which she identified a lack of knowledge regarding how corporate codes of ethics are communicated and affect behavior in organizations. Taking heed of this suggested gap, we review studies on corporate codes of ethics with an empirical content, published since 1994. The conclusion of the review is that we still lack knowledge on how codes work, how they are communicated and how they are transformed inside organizations. Stevens’ plea could even be extended, arguing that the knowledge gap might be of even more significance than in the mid-1990s. Some directions for how this situation can be approached in future studies are outlined in the paper.     

Marketing

In carrying out their jobs marketers face many ethical dilemmas. Several examples of such dilemmas and how managers may reduce unethical marketing behavior are discussed. Managers must expose unethical marketing practices and encourage ethical behavior. This can be done by establishing organizational goals, providing supportive corporate environments, and drafting codes of conduct or codes of ethics. Each of these factors is discussed in separate sections of h e article. Top managers can uphold marketing ethics by creating programs to mobilize the organization toward realizing its ethical goals. Top managers can support ethical marketing behavior by setting realistic marketing goals and rewarding ethical marketers. Finally, corporate marketing     

A comparison of business ethics commitment in private and public sector organizations in Sweden

This paper reports the results of a study of the top 500 private sector organizations and the top 100 public sector organizations in Sweden. It is a replication of the study by Svensson et al. (2004) . The aim of the study was to describe and compare the business ethics commitment of organizations across the two sectors. The empirical findings indicate that the processes involved in business ethics commitment have begun to be recognized and acted upon at an organizational level in Sweden. Some support is provided to show that codes of ethics are developing in some of Sweden's largest private and public sector organizations – although this is happening to a lesser extent in the public sector. It is noted that an effect of a code of ethics on the bottom line of the business was acknowledged by respondents in both private and public sector organizations. We believe that the supporting measures of business ethics commitment appear to be underutilized in both private and public sector organizations in Sweden (among those that possess codes of ethics), thus indicating that the commitment to business ethics in Swedish organizations has potential for future development.     

An Essay on When to Fully Disclose in Sales Relationships: Applying Two Practical Guidelines for Addressing Truth-Telling Problems

Salespeople have a moral obligation to prospect/customer, company and self. As such, they continually encounter truth-telling dilemmas. "lgnorance" and "conflict" often block the path to morally correct sales behaviors. Academics and practitioners agree that adoption of ethical codes is the most effective measure for encouraging ethical sales behaviors. Yet no ethical code has been offered which can be conveniently used to overcome the unique circumstances that contribute to the moral dilemmas often encountered in personal selling. An ethical code is developed that charts ethical paths across a variety of sales settings (addressing "ignorance") while illustrating why the cost associated with acting morally is generally reasonable (addressing "conflict"). The code applies the universal transactional notions of customer expectations and salesperson reputation to illustrate why and when salespeople are morally required to tell the truth. In doing so, the code tackles head-on the vexing question of how best to juggle mixed motives - involving self-interests, corporate-concerns, cus-tomer-needs and other influences such as the nature of the transaction. The issue of how mixed motives can be dealt with through moral means is one that ethicists have previously sidestepped (Stark, 1993).     

Professionalism, Ethical Codes and the Internal Auditor: A Moral Argument

This paper examines the case of the internal auditor from a sociological and ethical perspective. Is it appropriate to extend the designation of professional to internal auditors? The discussion includes criteria from the sociology literature on professionalism. Further, professional ethical codes are compared. Internal auditors' code of ethics is found to have a strong moral approach, contrasting to the more instrumental approach of certified professional accountants. Internal auditors are noted as using their code of ethics to help resolve professional ethical dilemmas.     

Ethics Codes and Sales Professionals' Perceptions of Their Organizations' Ethical Values

Most large companies and many smaller ones have adopted ethics codes, but the evidence is mixed as to whether they have a positive impact on the behavior of employees. We suggest that one way that ethics codes could contribute to ethical behavior is by influencing the perceptions that employees have about the ethical values of organizations. We examine whether a group of sales professionals in organizations with ethics codes perceive that their organizational context is more supportive of ethical behavior than sales professionals in companies without codes. After accounting for the effect of several covariates, our results indicated that sales professionals employed in organizations with codes of ethics perceived their work environments to have more positive ethical values than did other sales professionals.     

Codes of Ethics as Signals for Ethical Behavior

This study investigated effects of codes of ethics on perceptions of ethical behavior. Respondents from companies with codes of ethics (n = 465) rated role set members (top management, supervisors, peers, subordinates, self) as more ethical and felt more encouraged and supported for ethical behavior than respondents from companies without codes (n = 301). Key aspects of the organizational climate, such as supportiveness for ethical behavior, freedom to act ethically, and satisfaction with the outcome of ethical problems were impacted by the presence of an ethics code. The mere presence of a code of ethics appears to have a positive impact on perceptions of ethical behavior in organizations, even when respondents cannot recall specific content of the code.     

Codes, Values and Justifications in the Ethical Decision-Making Process

The resolution of ethical dilemmas often requires individuals to search for reasonable justifications to support their choices. Occasionally, such justifications must be made explicit to stakeholders inside or outside the organization. Other times, the justification for a decision will be known only by the decision-maker. In either case, the organizational code of conduct that governs the individual can play a vital role in providing guidelines about appropriate and inappropriate justifications. The present paper discusses the connections between organizational codes and employee justifications. Richard Coughlan is Associate Dean for Graduate and Executive Programs in the Robins School of Business at the University of Richmond, where he teaches courses on business ethics and negotiations. He earned both an MBA and a Ph.D. at the University of Arizona. His research on ethics and decision-making has been published in leading academic journals including Journal of Behavioral Decision Makingand Organizational Behavior and Human Decision Processes.     

Barriers Against Globalizing Corporate Ethics: An Analysis of Legal Disputes on Implementing U.S. Codes of Ethics in Germany

Global firms need to decide on the correspondence between their corporate ethics and the globalization of their activities. When firms go global, they face ethical complexities as they operate in different legal and cultural environments that may impact the admissibility and appropriateness of their approach to institutionalize and implement corporate ethics. Global firms may have good reasons to establish global codes of ethics that are to be obeyed by all employees worldwide. However, developing and implementing such codes can be rather difficult due to various, and partly competing, conditions in the countries of operation. In this article, two legal disputes are analyzed to illustrate some of the difficulties that may emerge when firms globalize their codes of ethics. I argue that these conflicts can be mitigated when firms carefully design their codes and the processes of code implementation.     

Ethics Codes and Professionals' Tolerance of Societal Diversity

Companies often develop codes prescribing an ethical organizational environment. However, the ability of ethics codes to increase individuals' tolerance of diversity is not fully considered in the ethics literature. This relationship was explored using a sample of 143 business and legal professionals. After accounting for the impact of several covariates, results indicated that professionals employed in organizations that had an ethics code were more tolerant of societal diversity than were professionals working in organizations that did not have an ethics code. The findings also showed that a traditional orientation toward gender roles was also related to the acceptance of diversity. These findings imply that companies to some degree define societal norms, possibly through training programs that make employees aware of their differences.     

Codes,Ethics and Cross-Cultural Differences: Stories from the Implementation of a Corporate Code of Ethics in a MNC Subsidiary

In this article, we focus on the cross- cultural aspects of the implementation of an American company’s code of ethics into its Swedish subsidiary. We identify the cross-cultural stories that the receivers in the subsidiary use when trying to explain the parent’s code and conceptualize these stories as part of an emerging narrative of national belonging and differences. The receivers resisted the code by amplifying the importance of national identity. Rather than stimulating a discussion on ethics that might have strengthened the ties between the parent and the subsidiary, the outcome of the code implementation had the opposite effect. The article concludes by stressing the process of implementing codes across cultures rather than code content.     

Transparency to Reduce Corruption?

Corruption within the private sector has often not been dealt with in Brazil. Organizations may find corrupt acts in its operations or practices, but specific concepts and programs to avoid them are neither concrete nor clear. Some Brazilian stockholders have become aware of the risks involved in unethical procedures and are adopting the Best Practices of Corporate Governance initiative. International agencies have intensively supported organizations and governments in an effort to define policies that inhibit illegal or corrupt cultural habits throughout the world, but Brazilian practitioners show insufficient response. Skepticism may indicate a lack of understanding about how an ethical leadership can guide employees, setting high standards for the organizational culture and climate, clearly defining limits of correct behavior, and creating appropriate codes of ethics. Transparency still has to be discovered as a significant tool to encourage professionalism in performance and reporting of data in Brazilian companies. In this article, we analyze the ethical behavior of the purchasing department of a multinational company in its host country, Brazil. It focuses specifically on the supplier–buyer relationship. The results indicate that despite the negative reputation Brazilians have in business ethics, a company can still develop a positive and ethical relationship with its stakeholders. Communication, transparency, compliance with the company’s code of conduct as well as the supplier’s awareness of the buyer’s code of conduct are the factors which influence the supplier–buyer relationship. Transparency can be used as a tool to reduce corruption, thereby increasing ethical behavior and company image. Good ethical behavior can help to build up a company’s image.