According to Laufer and Robinson (1997), when employees
witness managers following ethical policies it positively effects other
individual’s behaviour to also act in accordance with the codes of conduct. A
study showed that management accountants working in organisations with
corporate codes report less wrongdoing than respondents in firms without formal
codes. (Somers, 2001). Furthermore, Scalet (2006) stated that organisations who
had adopted codes of conduct created patterns of trust amongst employees. These
studies clearly show that ethical policies encourage managers and to act with
integrity.

A study carried out by Lee and Yoshihara (1997) was designed
to analyse the ethical behaviour of Korean and Japanese business executives
after implementing codes of conduct. The results portrayed a vital factor
showing that employees were willing to change and embrace the morals and values
of the firm after knowing that the executives also follow the ethical policy.
In relation to McDonalds this shows how an employee’s ethical behaviour can
change after knowing how much importance the ethics code is to the business
executive’s personal values.

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Usually, managers and directors will act ethically as a
result of their internalized moral core values.  Whilst establishing
behavioural standards in corporations and written codes of conduct to help
strengthen moral values and encourage ethical organizational behaviour, it is
important to know that everyone will behave and act differently to the specific
guidelines within specific workplace areas.
Codes
of conduct would also affect the public for example, McDonalds is perceived by
the public to be ethically and socially concerned which is honoured and
respected by other individuals who have no knowledge of its actual working.

According to Jamal and Bowie, (1995) codes of conduct promote
ethical behaviour in organisations. In order for companies to build a
sustainable employee culture it is essential to set the expectations for
employee behaviour. For example, the codes of conduct for Lehman Brothers
corporation, an investment bank which went bust during the financial crisis in
2008. Their ethical policies were designed to transform their culture by
guiding the executives during the crisis to make strategic decisions and
communicate effectively with the employees.

According to Trevino and Weaver, (2003) ethical policies can
shape an employee’s behaviour positively thus influencing ethical decisions in
an organisation. This is further supported by Manley (1991) who stated that
codes of conduct are employed in firms to help workers feel more positive about
their company.

Although some companies have such policies to
promote good behaviour other firms such as Lehman brothers play an active part
to guide their employees to behave ethically, with a general consensus of
employees across organisations favouring to work for company’s who are
committed to values and ethics. This shapes the experience of the individuals
involved as it creates a an atmosphere were values and morals are meaningful
and 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 show
that awareness of unethical activity is less prevalent in corporations that
have implemented codes of conduct. This provides evidence to support the
proposition that employees in firms who had adopted corporate codes of conduct
were significantly more aware of wrongdoing than employee in organizations
without codes of ethical conduct. However,
according to Montoya & Richard (1994) in
many situations individuals can make wrong decisions which could be related
with the individual’s morals.

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