According to Laufer and Robinson (1997), when employeeswitness managers following ethical policies it positively effects otherindividual’s behaviour to also act in accordance with the codes of conduct. Astudy showed that management accountants working in organisations withcorporate codes report less wrongdoing than respondents in firms without formalcodes. (Somers, 2001).
Furthermore, Scalet (2006) stated that organisations whohad adopted codes of conduct created patterns of trust amongst employees. Thesestudies clearly show that ethical policies encourage managers and to act withintegrity. A study carried out by Lee and Yoshihara (1997) was designedto analyse the ethical behaviour of Korean and Japanese business executivesafter implementing codes of conduct. The results portrayed a vital factorshowing that employees were willing to change and embrace the morals and valuesof the firm after knowing that the executives also follow the ethical policy.In relation to McDonalds this shows how an employee’s ethical behaviour canchange after knowing how much importance the ethics code is to the businessexecutive’s personal values.
Usually, managers and directors will act ethically as aresult of their internalized moral core values. Whilst establishingbehavioural standards in corporations and written codes of conduct to helpstrengthen moral values and encourage ethical organizational behaviour, it isimportant to know that everyone will behave and act differently to the specificguidelines within specific workplace areas.Codesof conduct would also affect the public for example, McDonalds is perceived bythe public to be ethically and socially concerned which is honoured andrespected by other individuals who have no knowledge of its actual working. According to Jamal and Bowie, (1995) codes of conduct promoteethical behaviour in organisations. In order for companies to build asustainable employee culture it is essential to set the expectations foremployee behaviour. For example, the codes of conduct for Lehman Brotherscorporation, an investment bank which went bust during the financial crisis in2008. Their ethical policies were designed to transform their culture byguiding the executives during the crisis to make strategic decisions andcommunicate effectively with the employees.According to Trevino and Weaver, (2003) ethical policies canshape an employee’s behaviour positively thus influencing ethical decisions inan organisation.
This is further supported by Manley (1991) who stated thatcodes of conduct are employed in firms to help workers feel more positive abouttheir company.Although some companies have such policies topromote good behaviour other firms such as Lehman brothers play an active partto guide their employees to behave ethically, with a general consensus ofemployees across organisations favouring to work for company’s who arecommitted to values and ethics. This shapes the experience of the individualsinvolved as it creates a an atmosphere were values and morals are meaningfuland associated with those individuals who remain motivated to work for you (Jenkin, 2018).This is further supported by Solomon and Hanson(1985) argue that codes of conduct are vital for providing guidelines,stability, and a point of focus for everybody in the organization. Prior findings by Murphy, Smith, Daley (1992)and Somers (2001) conducted in United States showthat awareness of unethical activity is less prevalent in corporations thathave implemented codes of conduct.
This provides evidence to support theproposition that employees in firms who had adopted corporate codes of conductwere significantly more aware of wrongdoing than employee in organizationswithout codes of ethical conduct. However,according to Montoya & Richard (1994) inmany situations individuals can make wrong decisions which could be relatedwith the individual’s morals.