Introduction
A code of ethics does not only help in improving organizational performance and employee-employer relationships but also helps in improving the profitability of an organization. There are various approaches that an organization can use in ensuring that it makes ethical decisions. Some of the approaches include emergent and centralized approaches. For the established code of ethics to be significant to a company, there are numerous components that need to be included. The code ought to outline the organizational values and principles as well as clearly state the relationship between all stakeholders of the company. Moreover, the code ought to give room for all employees to report problems experienced during the operations.
Strategies to ethical decision making
To ensure that all departments within an organization act ethically, it is imperative that an organization adopts strategies that will help it come up with mechanisms for ensuring that ethics is observed across the organization. Two strategies that an organization might employ are centralized strategic planning and the emergent approach. The centralized ethical decision-making process is based on logical analysis. In this approach, the overall management team for the organization can be responsible for coming up with ethical standards to be observed in the entire organization (Andersen, 2001). The top management may comprise managers from the various departments of the toy company. After coming up with ethical standards for the different departments, the team can then embark on educating its employees about the standards to ensure that they know what is expected from them. After employees in all the departments are aware of their respective ethical conducts, the management team can take the role of implementing the standards and ensuring that employees always observe them throughout the organization.
Another approach that the toy company may use in ensuring that ethical decisions are made across the organization is the emergent approach. In this approach, the company may establish a team that would be responsible for formulating ethical standards based on internal and external changes that emerge during the day-to-day operations of the company (Andersen, 2001). In this approach ethical standards can be established based on lessons learned in different departments of the organization. A manager from one department may formulate ethical standards for the department without consulting the top management team based on changes that occur in the department. In simple terms, through the emergent approach, the various departments within the toy company can make autonomous ethical decisions on matters affecting them.
How the company can benefit from the code of ethics
Through the establishment of a code of ethics the toy company can be in a position of improving its productivity as well as reputation. A code of ethics ensures that there is a good relationship between the employees and the employers. Consequently, employees perceive to be treated fairly thus committing themselves to organizational activities (Bowden & Smythe, 2008). Hence, through the establishment of a code of ethics, the toy company can improve its productivity due to employees’ commitment. Instances of organizations coming up with faulty products arise due to a lack of ethical standards. Employees develop products haphazardly as they try to save time thus not following the necessary steps. In addition, organizations try to look for the most cost-effective methods of manufacturing their products thus skipping some of the processes or using inferior materials. It is such an incident that led to employees in the toy company manufacturing toys with more lead content than expected.
The establishment of a code of ethics would help in ensuring that employees stick to the required procedures in manufacturing the toys. Failure to do this would result in them being penalized. As a result, a code of ethics would help the company manufacture quality toys thus increasing its sales volume. The company would also be saved from costs associated with recalling the toys from the market.
Apart from reduction in operating costs and improved productivity, a code of ethics can help the toy company to increase its profitability (Bowden & Smythe, 2008). By sticking to the guidelines in the code of ethics, the company would not incur cases of toy recalls due to poor quality. Consequently, it would ensure that all the manufactured toys are sold thus cutting down on inventory costs. Besides, the company would earn customer loyalty as they would always get quality products from the company.
Components of a code of ethics
Through a code of ethics, a company can successfully determine its values and priorities. On the other hand, a code of ethics; if not well followed may plunge an organization into a lot of problems. Hence, when drafting a code of ethics, the toy company ought to clearly state its practices and principles that all employees are expected to live by. In addition, the code of ethics ought to be tailored to the organizational mission and vision. To develop a viable code of ethics the toy company ought to start by setting the organizational values as well as the boundaries that the company should not go beyond (Bowden & Smythe, 2008). In so doing the company would ensure that employees stick to the established corporate social responsibilities thus offering quality products. This would save the company from costs associated with the manufacturing of faulty products as it was witnessed with the elementary toys.
At times employees perceive a code of ethics as an avenue used by employers in dictating and influencing them to do what they believe to be right. As a result, most employees comply with stipulated rules not because they help in improving their performance and relationship in the company but because they fear losing their jobs. To ensure that a code of ethics helps in improving organizational performance, the company needs to ensure that it includes a clause that outlines the relationship between the employees and the employers as well as the employees and their fellow employees (Bowden & Smythe, 2008). This would lead to employees feeling to be fairly treated thus committing themselves to organizational activities.
For effective management of the company, a code of ethics ought to give room for every employee in the company to raise an alarm on identifying anomalies in the manner in which the company is being managed. However, this may lead to some employees being subjected to discrimination especially if they happen to report anomalies caused by their supervisors (Bowden & Smythe, 2008). It is imperative that the company come up with measures to ensure that all employees who report such cases are protected.
Conclusion
A code of ethics helps in improving organizational performance. To ensure that all departments within an organization act ethically an organization may use two strategies. Through a centralized approach, the top management team of the company may establish and implement ethical standards to be observed in the entire company. On the other hand, the company may use emergent approach to establish ethical standards for the different departments. Ensuring that a company acts ethically helps it cut down on its operating costs and at the same time increases its profit margin. A good code of ethics needs to stipulate the values and principles of a company, the relationship between all the stakeholders in the company and also pave room for all members of the company to report anomalies discovered in the company.
Reference List
Andersen, T. J. (2001). Information technology, strategic decision-making approaches and organizational performance in different industrial settings. Journal of Strategic Information System, 10, pp. 101-119.
Bowden, P. & Smythe, V. (2008). Making codes of ethics meaningful and effective. Web.
Magloff, L. (2010). Examples of a code of ethics for business. Demand Media. Web.