Discussion: Building an Ethical Company

Topic: Business Ethics
Words: 672 Pages: 2

Companies experience rising pressure to implement more ethical business practices in the current political climate. It can only be considered a positive development, especially for the employee. An ethical working environment is effective, tolerant, and inclusive. It would be much better for the mental health of the workers. High ethical standards at the workplace are the basis for the proper respect of human rights. To create such a workplace, management should enact a concrete plan for fostering high ethical standards at the company.

Managers striving to build a more ethical company should start their tenure with an employee address. In this address, they should outline which previous corporate practices are considered unethical and announce an actionable plan to tackle the issue. Management should establish reliable communication with the employees to have accurate and honest reporting on unethical behavior occurring at the company (McGraw Hill, 2021). Without a doubt, the newly appointed manager should be an example to his subordinates and must not engage in any behavior deemed unethical.

One of the main instruments for achieving a more ethical workplace is a code of ethics. The code of ethics contains guiding principles of professional conduct and outlines company values. Two types of codes of ethics could be employed for the company: compliance-based and value-based (Dziengeleski, 2020). Compliance-based codes include not only strictly written rules but determine penalties for violations. Implementation of these codes usually calls for formal training of employees. Industries with higher importance on ethical conduct, such as law, employ compliance-based codes. They provide well-defined rules that are supposed to be easy to follow and rely on punishments and formal adherence to the written rules.

Value-based codes are built on the company’s core values and give only a generalized outline of professional conduct. They often refer to a larger public good, such as a clean environment or equity. This type of code relies more on the employees’ self-regulation and integrity. It is built upon persuading employees that the conduct outlined in the code is necessary and beneficial for them, the company, and the greater society.

A values-based code of ethics is more appropriate in this case as it focuses on the company’s value system. In addition, this code may formulate a statement of broader social rules. That is, the code of values ​​is more extensive in the context of the application and the aspects that it covers. Moreover, it also includes factors of the environment, which correlates with the modern eco-friendly trend. The most effective way to build an ethical culture is to reward and punish ethical actions. In addition, one may involve special ethical training. The third way would be to develop clear ethical models within the company, which should be based on honesty, respect, and fairness.

It is also possible to see that without the work to persuade employees to adopt company values of ethical conduct, the implementation of a compliance code could worsen the ethical climate. Written rules might be abused for personal gain or bypassed with the help of technicalities. In this case, the main goal will not be achieved to create a more ethical workplace. Additional ways to engage employees to build more ethical culture is an address the workforce, explaining the new direction of the company, and reaffirming the values of ethical conduct. Management should strive to establish trust with their subordinates, and to that end, feedback systems should be created. It is essential as ethical factors in the organization formulate the key condition to success (Gupta & Sharma, 2021). The company should conduct educational seminars explaining its ethical values to the workforce.

In conclusion, it is possible to say that in the presented scenario, the implementation of a value-based ethics code is preferable. Value-based codes are more flexible and their reliance on learned values and self-regulation seem to be more applicable for creating a truly ethical workplace and not just an outward appearance of one. Value-based code will be a valuable tool in the hands of management in creating a workplace with higher ethical standards.


Dziengeleski, R. (2020). The ethics code: A broader view? Journal of Forestry, 118(06), 548-550.

Gupta, P., & Sharma, N. (2021). Business Ethics: The Mantra for Sustaining Success in Modern Business Organizations. Test Engineering and Management, 83(01), 15896–15904.

McGraw Hill. (2021). Connect Master: Introduction to Business OLA (2nd Edition). McGraw-Hill Connect.

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