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An organization's social norms, regulations, obligations, expectations, and proper practices are laid forth in the code of conduct, which is a set of guidelines. The term was given a more thorough working definition in 2007 by the International Good Practice Guidance (IGPG), which defined it as the "principles, standards, values and rules of behavior that guide individuals and groups in the decisions, methods, and systems in the organization in a manner that contributes favorably to the welfare of organization's stakeholders and respects all the constituents rights who are affected by the company's operations." (McMillan, 2012) Ethics among the organization’s owners, shareholders and management are an essential element in the 21st century for companies so that they can effectively meet their objectives. The degree of the code of conduct is a major prerequisite in guaranteeing the balance of rights and interests of all the stakeholders, employees, clients and the community. The code of conduct requires the company’s shareholders to become the compliance guarantors in respect to the director’s and management obligations. Ethics are a presupposition of a company’s rigorous compliance in applicable legislation in addition to the Articles of Incorporation and the internal operations’ regulations (Doig & Wilson, 1988).
The code of conduct is critical in an organization in establishing an inclusive culture but it should not be mistaken to be a solution of its own in creating an ethical culture. An ethical culture is rather facilitated by the organization’s executives and management who exhibit their ethics through attitude and behavior. This paper will review and analyze the code of conduct for two companies, Clorox and Verizon Wireless. The two sets of the code of conduct will be compared and contrasted to find their similarities and differences, find the demanding and missing sections of the code, and determine what the codes specify about the employees’ course of action once faced with an ethical issue. The better code of conduct between the two companies shall be identified and the rationale explained.
2.1 Clorox and Verizon's Code of Conducts analysis (Comparison and Sections)
Clorox’s Code of conduct has documented the ethical and legal behavioral standards and the business practices required and expected from the company’s directors, executive, management and employees across their branches. Clorox’s board members and employees are expected to complete the training and certify compliance with the code of conduct. The code has encompassed topics such as environmental compliance and safety, workplace behavior, anti-discrimination, human rights, political contributions and anticorruption. The code of conduct embodies Clorox’s commitment to doing the right thing in all organizational aspects. Clorox undertakes a constant proactive action in communicating the code of conduct and has set up a compliance program that involves a compliance hotline through which its employees can fully engage in through various methods such as an annual training of the code of conduct. The company has also launched an awareness campaign that involves fliers, posters, the company’s intranet, and other electronic communications (The Clorox Company, 2017).
Verizon’s main commitment in its code of conduct is putting its customers first and providing the best services to them. This is the core purpose of the company and as it states the reason for its existence. Verizon maintains that through a focus on customers and responsibility to the community members, the company will generate profit for its shareholders, create a meaningful work for itself and provide a sustainable value to the society. The company’s core values are integrity, respect, performance excellence and accountability (Verizon, 2015). Integrity is the fundamental aspect of Verizon’s operations, which is similar to Clorox. Honesty and an ethical conduct is the foundation of the companies’ relationship with customers, the community, shareholders and the employees. Respect, on the other hand, is critical in every aspect of Verizon’s level of business. The company is a huge advocate for diversity, individual embracement and regards all people’s opinion highly. Verizon holds itself to a very high-performance standard where it honors innovative ideas and important teamwork that facilitates the realization of these ideas (Verizon, 2015). Verizon is always in a constant endeavor to make the customers experience better and every day it welcomes any solution to this. The company also takes responsibility for its actions, collaborate with each other, and strive to meet the expectations of the customers and coworkers.
“Doing the right thing” is the main slogan of Clorox’s code of conduct, it is the core value in which the company upholds for its long-term success (The Clorox Company, 2016). The company’s code of conduct encompasses the following; why they have a code and its significance to the organization, speaking (guidance and voicing concerns), doing the right thing, how Clorox upholds the code of conduct and its core values, taking personal ownership, working together to win and stretching for results. Verizon, on the other hand, has its code of conduct statement as “Integrity is at the core of who we are.” The core values of the company comprise of values which Verizon considers as its identity ‘who we are’. These values include providing the customer with high-quality services, focusing outward on the customer hence enhancing the customer’s ability to do business with the company through response, anticipation and listening to their needs (Verizon, 2015). Verizon also values teamwork with the rationale that it facilitates efficient customer service through diversity embracement and employees personal development. Integrity is also the core of Verizon’s identity, which is similar to Clorox. Integrity is critical in establishing trust with the employees, shareholders, customers and the community. The structure of Verizon’s code of conduct is also quite different with Clorox’s. Verizon’s structure and focus are on maintaining an inclusive, healthy and fair work environment, maintaining integrity in the workplace and in the marketplace, and protecting the company’s assets and reputation (Verizon, 2015).
In the first section of the company’s code of conduct, Clorox expounds why it has the code and what it means to its fraternity. Personal integrity is the foundation of corporate integrity and every person is responsible for supporting Clorox’s core values which require compliance with the law and the ethical conduct. The company states that it is strongly committed to performing its business ethically and complying with all the applicable laws. Clorox has policies, training, and processes in place to facilitate the support of ethical and legal decision making (The Clorox Company, 2016). The company code defines what they can expect from one another and provide guidance on how the employees can report and how the management can handle the alleged violation of the stated standards. The expectations of everyone is to act with honesty and integrity all the time and demand from each other the highest standards of personal and corporate integrity. Clorox’s policy is also to abide by all the applicable laws of the United States. The company’s leaders are expected to be the ethical role models for everyone and demonstrate the Clorox values and leadership traits. The leaders and managers should also create a positive working environment for the employees where they can have a safe and comfortable platform to raise concerns about the compliance with the code of conducts. Subject to the company’s applicable laws, individuals that violate the Clorox code and policies are viable for appropriate disciplinary action and measures. The seriousness of the violation and personal circumstances will determine the disciplinary measure (The Clorox Company, 2017). Possible sanctions will include suspensions, terminations, written warnings or legal action through referring the matter to the law enforcers. The first
In the third section of the code of conduct, Clorox expounds on how it ‘does the right thing’ and how it upholds the code of conduct and its core values. By following the company’s code, the core values, and the inspiring principles, Clorox believes it can establish and maintain the ideal ethical culture in the company where integrity and the respect for others are the guiding principle in work, business partners, and community’s relationships. The core values at Clorox are the intrinsic part of the company’s identity (The Clorox Company, 2016, p. 9). Clorox states that its long-term success is dependent on its integrity and its decision making that uphold the high ethical standards. The company has a personal responsibility to ensure the delivery of excellent results to the shareholders and its goals. The company’s core values include; “exercising honesty and fairness in everything it does, always acting in the best interest of Clorox rather than personal profit, not engaging in prohibited stock exchanges, refusing to take or make bribes or questionable payments regardless of their location or whom it does business with, unacceptance of inappropriate gifts or hospitality by following the Clorox gifts and entertainment standards, not using Clorox finds or assets on behalf of political parties unless explicitly approved by Clorox board, accurate and timely communications about the business performance (public disclosure), responsible use of technology and the company’s resources, appropriately complying with the insider trading laws, responsibility in protecting all intellectual property and that which is entrusted to Clorox, following Clorox information technology and security procedures and standards, following antitrust and competition laws, cooperation with all the audit requests, and avoiding any conflict of interest (The Clorox Company, 2016).”
Verizon’s main emphasis in the code of conduct has been its employees and ensuring the perfect workplace that is fair, inclusive and healthy. Verizon is committed to attract, develop and retain the best qualified, diverse and dedicated workforce. It is the company’s policy to comply with the equal opportunity laws to all people regardless of race, gender, status or ethnicity. The focus on employees in the code of conduct is further exhibited by the second section of the code of conduct document which stipulates the framework on handling the employees’ personal conflicts of interest and the ethical implications of activities such as contribution of corporate assets, seeking public office, transaction in securities, taking personal loans and personal conduct outside the workplace (Verizon, 2015). Verizon’s reputation relies heavily on its employees’ actions and integrity which is imperative that the individuals in the workforce should avoid any conduct, behavior or actions that might impair relevant relationships and the ability of the employee to make effective and objective decisions while performing their job. Verizon clearly states that the employees have a duty to advance the company’s legitimate interests and shun any action that is aimed at achieving personal goals. Employees are also required to act in all integrity and honesty, comply with all the policies and the laws that govern the company’s business and maintain an ethical and professional work environment. Verizon employees are also expected to treat all the customers, coworkers and the company’s business partners with dignity, honesty, respect, integrity and fairness.
2.2 Reporting the Violation of Conducts Framework
Clorox has set up mechanisms for reporting misconduct in its second part of its code. The code states that every individual in the organization has a responsibility for self, the co-workers and the Clorox itself. It urges all the employees to be alert to all the activities going around them and encouraging them to speak up once they suspect illegal and unethical conduct (Dorer, 2013). The framework for reporting misconduct in Clorox has been provided as follows; once an individual suspect’s illegal or unethical behavior or the occurrence of the code violation, he/she should take the matter to the supervisor, local management, human resource or legal services departments for investigation. There is also an anonymous compliance hotline which can be contacted through an online, mail or phone platform. The organization takes cases the violation of codes and unethical behavior seriously and it promptly investigates them, handles them with discretion and confidentiality and takes appropriate action (Dorer, 2013). Clorox has a zero tolerance policy on retaliation against individuals who have raised their ethical concerns in good faith. The zero tolerance policy in Verizon mostly concerns discrimination, sexual harassment, and harassment based on religion, gender, sexual orientation, disability, status or race. Verizon is also intolerant to workplace violence such as hostile and abusive behavior (Verizon, 2015).
Verizon’s reporting policy is an ‘open door’ approach where “everyone is free to speak his or her mind in respect to ethical concerns (Verizon, 2015, p. 9).” Everyone should report any suspected violations of the code of conduct, Verizon’s policy, and the law. The company then investigates on the reported occurrences of questionable unethical behavior. The criteria for evaluating a violation of the code before reporting has been specified through questions such as; is the conduct dishonest, unlawful or unethical? Can the conduct harm Verizon through loss of credibility and reputation? Can the conduct harm the employees, investors or customers? If the answer to any of the question is yes or maybe, one has successfully identified a potential violation that must be reported (Verizon, 2015, p. 9). The company has set up an anonymous, confidential complaint and inquiry platform known as the Compliance guideline which has a contact number. Violence, hostile behavior and weapons possession in the workplace or company’s property should also be reported immediately to the premise security, management or supervisor. Regarding financial misconduct and auditing complaints, questions and concerns, Verizon stipulates that these integrity issues should be reported to the Internal Audit department which they have provided an email address (Verizon, 2015, p. 10).
2.3 Better Code of Conduct
In the code of conducts, ‘the devil is in the details’. The most effective code of conducts must have a balance between specificity and breadth. A good code of conduct is easily manageable by the company’s employee and it focuses on the clarity and communication of the standards of ethics rather than having a complex set of legal elements which are hard to follow (Gilman, 2005, p. 40). For these reasons, the Verizon Wireless code of conduct has been better than Clorox’s. The Clorox code of conduct was also fraught with some generalizations, for example, the company states that “we exercise fairness and honesty in everything we do (The Clorox Company, 2016, p. 3)” in comparison to Verizon’s “our integrity is the core of who we are in which we establish our relationships… and follow sound business practices in our dealings with owners, competitors, customers and suppliers (Verizon, 2015, p. 3).” Verizon’s code of conduct seems to achieve the right balance of specificity and simplicity and its focus on the employee rather than a general code of conduct for all parties concerned as in Clorox’s makes it a more solid framework to address the ethical issues in the workplace.
3.How Employees can be encouraged to follow the Code of Conduct
Formalizing the company’s standards and values in which employees can follow through the development of a code of ethics is only the first step in ensuring they can behave in an ethical manner. Once the establishment of the code of ethics is complete, employees can be encouraged to follow them through ethics training, setting and following the procedures and policies, setting examples through the leaders and including the employees’ ethical conduct in the performance appraisals. Employees must first understand the code of ethics and an annual training offers them this opportunity to gain a deeper comprehension of the company’s values and ethics. Ethical training can be conducted in the induction process, specific training sessions in the workplace and management training programs (Sekerka, 2009, p. 82). Employees can also be involved in the review of the firm’s code of ethics whereby for instance they can collectively develop their own code of conduct, provided they align with the company’s, customer’s, shareholder’s and vendor’s expectations. An organization should also have a policy and procedure that will ensure the appropriate following of the code of ethics. The procedures ascertain that all employees are dealt with equally and fairly. These procedures and policies include disciplinary procedures and employment policies (Nicholson, 2008, p. 452).
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