Pakistan study notes for Matric, Intermediate, B.A, B.COM BSC, M.A, BCS. Free Pakistani Urdu educational school, colleges and University notes.



Corporations adopt a code of ethics to improve business ethics. Codes of ethic act as standards against which responsibility is measured. Codes act in the form of arbitrary rules, regulations. They may be clear-cut or vague. Observance of codes reduces conflicts, grievances, and diffidence or doubts. Codes create harmony between parties of extreme points like employer and employee. Some of the advantages are described below.

1. Internal Benefits

American Management Association opines, “The process of formulating the creed is often more valuable than the finished product.” Cynics who have lost their belief in human goodness now should change their attitude because people are inclined to live and to let live. Codes once formulated should not be shelved. They should be observed by the parties involved.

Effective self regulation calls for no external controls. Those who enjoy freedom within the limits set by law are law-abiding citizens. Firms, companies, and institutions working within codes o ethics have good public image and support, and are free from attention of law-enforcing agencies and legislators.


2. Employees Benefits

The company formulating and truly observing code is able to attract right man for the right job. Morale of employees is raised. Their productivity increases.

Ethical company can have ethical employees. Mutual cooperation and confidence are enhanced. Written ethics are especially useful for new employees. They dispel contusion of the job and facilitate training. On the strength of codes, an employee can refer on unethical and illegitimate requests, or orders. Employees are more devoted to the job, bosses, subordinates, and the company.


3. Customers Benefits

Codes and their observance create a sense of confidence in the customers. Winning the confidence of customers and general public cannot be overemphasized. Customers know that they can depend on price, quality, and terms of sales of the company. Their confidence about uniformity of policy and equal treatment of customers bring more business to the company.


4. Advantages for the Industry

Almost all the major industries have their codes. Machiavelli once said that the good or ethical man was often an easy prey for the unscrupulous. Therefore, the weak or ethical persons of an industry may unite themselves to behave iii a required ethical fashion. Thus unethical practices may be overcome.


Not only Industries but professions also have codes of ethics. Doctors, engineer, accountants, and advocates have to work within the codes. Codes have raised the image of their professions.


Codes tend to make it much easier to identify violation and punish those who behave in an undesirable fashion. Even it codes are not strictly followed, their mere creation and existence at east retard the degree of unethical action.

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