Unit 2 - Code of Ethics (5)

Question 1

Increasingly important for business to show that

Answer 1

They are conducting business in an ethical way, due to fraudulent activity in recent years. Therefore business are expected to have a code of ethics in place.

Question 2

A code of ethics is a formal way in which an employer provides employees with

Answer 2

A set of rules stating exactly what the organisation expects of them with regard to their conduct on behalf of the organisation. (Guidance on how to behave) And also informs employees on how management will implement ethical behaviour towards them and other stakeholders.

Question 3

Aspects included in the code of ethics

Answer 3

• Organisation - make it clear to employees that they form part of a bigger organisation and their behaviour contributes to the profitability and survival of the organisation. Employees must be informed of what is expected of them regarding the use and management of resources.
• Employees - must detail the responsibility management has towards employees. Responsibility of management to train and educate employees.
• Customers – Employees should behave with dignity when dealing with customers and deliver on the promises they make.
• Suppliers – Employees must have a professional relationship with suppliers, deliver on promises and should not accept kick-backs.
• Competitors – Employees should be discouraged from dealing with competitors to prevent the disclosure of trade secrets. And a business should make it clear that is will behave in an unethical way in order to gain a competitive advantage.
• Community – Clarify their responsibility towards the community in which they operate is.

Question 4

Requirements for an acceptable code of ethics

Answer 4

• Clarifies what is acceptable and unacceptable practice
• Encourages ethical behaviour of the board of directors, management and employees at all levels.
• Provides guidance in difficult decision making
• Makes ethical infringements easy to identify
• Helps to resolve conflicts
• Enhances the ethical reputation of the organisation.

Question 5

A code of ethics is not guarantee that

Answer 5

Ethical behaviour will always take place in a business. However it makes everyone aware of their responsibilities and the consequences of acting in an unacceptable manner