Ethical Code Of Corporate Ethics

1533 Words 7 Pages
Every organization has their own set of rules, guidelines, values, and procedure on how they want to manage their business. However, organizations question the importance of ethical coding. Are they beneficial to the corporation? Can they help raise and bring in profits? Or does it have the potential to cause risk to the corporation? This topic has been very controversial for many businesses. Eric Krell believes building true corporate ethics is achievable as long as the organization enforces it precisely with ethics audits. Greg Young and David S. Hasler believe that enforcing ethical codes is not the way to go, in comparison to using Enterprise Risk Management ERM.
Eric Krell recommends ethics audits aside ethical codes to form
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Hasler suggest having an ethics audit is simply not enough. In order to strengthen the reputation and ethical role, business owner and managers must have a core understanding of economic values, potential risk, and a strong relationship with employees/stakeholder, customers and the residential society. Young and Hasler focus on using Enterprise Risk Management (ERM) in replacement for business ethical codes. The Committee of Sponsoring Organizations of the Treadway Commission (COSO), “are fast becoming standards for best practices in organizations”. (Taking Sides. page 55) Many businesses are starting to take form in the ERM strategies to direct their stakeholders. The groups participating within an organization (stakeholders, customers, suppliers, etc.) want to be in an organization that has great reputation for integrity. Building a strong fundamental framework around an ethical principles is to build behavior relation with their stakeholders, this is the core to implementing ERM. The IMA Statement of Ethical Professional Practice have a principle that describes a designed approach which follows, “honesty, fairness, objectivity, and responsibility”, (Taking Sides. page 55). This is explained in detail so that very member knows what behavior and manner is acceptable to the corporation’s values. Encouraging one another to continue to follow this principle that is not only valued by the corporation but also valued by each individual within the …show more content…
One practice that is discussed in the text is ‘Risk Management Approach to Reputational Capital’. Carly Fiorina said, “Good ethics and good judgement are what must drive business behavior… Employees and customer always know what’s wrong.” (Taking Sides. page 58) Using this approach can give insight to your business on potential risk that can arise. Being able to get feedback from employees along with your consumer can put your corporation in an advantage. Talk with the staff, the suppliers, and every other group that is involved with your business. As a result, to being alert and visualizing all possible risk and opportunities, you are able to open new doors that can be attended to as needed. The Risk Management Approach practice involves an assessment on eight components, which are handed out to stakeholder. They take score from a scale of 1 through 10 on the corporation’s performance and level of trust. This dialogue structure creates different layouts for stakeholders that can implement different situation that can arise within the corporation. Their task is to see all the possible negative consequence, alongside with the likelihood that the situation can occur. This gives them the chance to see the consequence effect with an estimated price on the misconduct. Then “the risk manager askes the stakeholder to consider the alternative enterprise responses—avoid the risk, accept it, reduce it, or share it

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