How Code of Ethics or Lack Thereof Influences Production Outcome

How code of ethics or lack thereof influences production outcome?

Code of Ethics is one of the pillars for running the organization successfully in today’s world. It’s a set of values and behavior that needs to be followed in the organization. The top level management plays a great role in setting up great ethical standards for the whole organization. But if the top level management fails to act ethically than he surely have to pay for it in near or long future, here are some examples of results of unethical behavior by leaders Enron. Worldcom. Tyco. Cendant. Bernie Madoff, once chairman of the NASDAQ, is now cooling his heels in jail. The ex-CEO of Comverse is arrested in Namibia, the CEO at United Healthcare is forced to step down, and Patricia Dunn of Hewlett Packard is charged in an ethics scandal (The Decline of Ethical Behavior in Business by Jeffrey T. Luftig and Steven Ouellette).   Ethics is directly related to the society, more the organization is ethical, more the benefits it reaps from the society and its customers. Both the internal and external customers show a great support towards the organization. Employees, who are internal customers to organization gives their best output in ethical environment. The suppliers and external customers be more supportive and loyal to an organization which shows great ethics.  

According to a 2006 Business for Social Responsibility brief, “Corruption and Bribery” ( www.bsr.org/research/issue-briefs.cfm  )(The Decline of Ethical Behavior in Business by Jeffrey T. Luftig and Steven Ouellette), an organization has many reasons for operating ethically, including avoiding fines and litigation, reducing damage to the firm’s reputation, protecting or increasing capital and shareholder value, direct and indirect cost control, creating a competitive advantage, and avoiding internal corruption.