Professional Documents
Culture Documents
2000
Section
CHAPTER 1
CODE OF CONDUCT AND ETHICAL ISSUES
LEARNING OUTCOMES
After studying this chapter, the student should be able to
INTRODUCTION
A code of conduct is a framework how to do a particular task. In terms of business
language it can be termed as set of standards or ethical standards.
For example, dress code, discipline is a part of professional code of conduct.
Say Lawyers have to follow black and white color in their outfit. Similarly Doctors
have to follow white color coat in their dressing outfit. Politicians normally use Khadi
dresses etc. This creates a formal discipline in the organisation.
The International Federation of Accountants provided the following working definition:
"Principles, values, standards, or rules of behavior that guide the decisions,
procedures and systems of an organization in a way that (a) contributes to the
welfare of its key stakeholders, and (b) respects the rights of all constituents
affected by its operations."
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For instance, if an employee of a firm does not follow the set of rules then he will not
perform his work systematically and efficiently. As a result the profitability and
success of business will suffer in return.
It means every organisation should develop their code of conduct and some ethical
standards to control the working of organization.
A code of conduct is divided into two parts:
Code
of
cond
uct
Set of
rules &
regulatio
ns for
employee
s
Managem
ent
needs &
objective
s
Code of conduct
CODE
(Guidelines)
CONDUCT
(Behaviour)
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Section
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------11.
6.
1.
Principle of Right
thing at right time
Principle of
Universality
7.
2.
Principle of
1.
defining the
profession
3.
Principle of
8.
Communication
8.
Principle of Unity
of Command
Principle of
recommendation
4.
Principle of
Commitment from
Board of Directors
5.
Principle of
modification
9.
Principle of
Awareness
10.
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Principle of
Disobedience
1.
Principle of Right thing at right time: It means code of conduct helps the
members in doing right work properly at right time which in turn help the
organisation in achieving their goals.
E.g.: if a manager takes decision after completion of the target then it is of no
use.
2.
3.
SITUATION 1
BOSS
Emplo
yee
SITUATION 2
BOSS
1
BOSS
2
BOSS
3
Emplo
yee
In above example there are two situations given. First shows that an employee
takes directions from only one boss. But situation 2 shows an employee gets
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directions from 3 bosses at same time. He becomes confused here which boss
he follows first.
4.
5.
6.
7.
Principle
of
Communication:
Code
of
conduct
should
be
properly
employees say A, B, C
Then their evaluation card is:
A
TARGET
B
20
C
20
20
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OUTPUT
18
20
EVALUATION
(-) 2
PERFORMANCE
Below Average
22
(+) 2
Good
Above Average
This example helps the manager in taking proper decision. He will decide to
reduce employee A target, do no change with employee B and increase the
target of C employee.
9.
ASSESSMENT
1. What are the principles of code of conduct?
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Section
-----1.
RELATIONSHIP
BETWEEN
CODE
OF
CONDUCT
AND
SUCCESSFUL MARKETING
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2. Practice: marketers have lot of activities to do. In a single society they have
to move here and there for their business. So sometimes it becomes difficult for
them to follow the code of conduct at each level of the society. Here their
organisation plays a vital role. Marketing organizations should encourage their
employers. They should give rewards to those marketers who practically adopt
ethical behaviour. E.g. a manager announces the rewards for those employee who
will not use unfair means like cheating, frauds, misguidance and all.
3. Competitors: competition with other firms can become one of the reasons for
not following code of conduct. But if companies compare their products with other
firms in a fair means then code of conduct can be followed very easily. They
should represent their product or service in a fair mean to the customer so that
he/she may not get confused while selecting the product/services.
4. Representation: marketers/sellers should represent their product or service
fairly while advertising. It helps in creating a healthy relationship between buyers
and sellers. Marketers should not use unfair means of advertising like bribes or
offering fake claims and wrong information.
ASSESSMENT
1. What is the role of code of conduct in marketing?
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------2. Define the meaning of moral values.
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----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------3. What is the relationship between the code of conduct and successful marketing?
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------1.
5. Ethical programmes play a vital role in following the legal laws and regulations
carefully and not doing any deal in unfair means. E.g. helps in avoiding taking
bribes or offering false claims to consumers.
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Having a lot of franchises through world wide and a global reputation to maintain,
McDonalds has developed a uniform code of conduct for their organisation. For this a
simple process is adopted by the organisation.
1. Firstly new employees are hired
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2. Then they sign a copy of code of conduct of the organisation after agreeing
with all the terms and conditions
3. Then implement this code of conduct in the organisation.
Ray Kroc set the original standard for McDonald's when he said that "the basis for our
entire business is that we are ethical, truthful and dependable."
McDonald's purpose/objectives
1. McDonald believes that customer is the king of the market. so the purpose is to
satisfy them completely.
2. The company wants that the employees should be committed to their jobs.
3. They want that the employees should present as ambassadors of the company.
4. Code of conduct trains each employee so that they perform their jobs
efficiently.
5. Ethical standards help in creating employees positive attitude towards their
job.
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customers very well. They present a very humble attitude and give a homely
environment to their customers. This kind of behaviour develops only by adopting
ethical standards and code of conduct of a company.
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ASSESSMENT
Search for the code of conduct of any well-known South African company on the
Internet. Read the code of conduct and then discuss the following:
1. What is the name the company?
2. In what industry does this company operate?
3. Who is the CEO or managing director of the company?
4. Do you believe that this company and its employees act according to the
guidelines in its code of conduct?
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SUMMARY
Code of conduct set the rules and regulations, plans and policies for the business. It
governs the business in an ethical way. It creates guidelines for all the members of
the organizations like for boards of directors, managers, supervisors and employees.
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All the members of the organizations must follow these planned rules and regulations.
Code of conduct helps the individual in planning and taking right decisions. This code
of conduct further helps the organisation in protecting the reputation and credibility
of the organisation.