Corporate Codes of Ethics

Essay from the year 2005 in the subject Business economics - Business Ethics, Corporate Ethics, grade: A+, University of Otago (Department of Management), course: International Management, language: English, abstract: As long as human societies exist, the life of man has been based on norms, rules, values and practices that governed human behaviour. Individual and communal-shared ethics even make life within society possible as we know it. Part of this social life is doing business, in form of exchanging goods to fulfil basic needs and to achieve higher levels of satisfaction for oneself and for others. However, to combine moral thinking and acting with today's business activities in a free market economy seems to be counterintuitive. Somehow both notions do not really fit together. Still, Corporate Codes of Ethics exist.
This essay consist of two parts. Each part reflects one question or problem that I found worthy of having more light shed on it. The first part answers the question "Why do corporate Codes of Ethics exist?" or "Why do corporations establish corporate Codes of Ethics?" under the basic assumptions, that ethics are 'costly' and therefore against the idea of maximising profit which is predominant in the market ideology. Proving these assumptions is not so easy.
First the term ethics will be defined and selected theories which could be the basis for Codes of Ethics will be portrayed. Then it is important to know what kind of morality is underlying the modern market ideology as we know it. Following that a correlation is sought between the market morality and corporate ethics, ending in the insight that corporate morality is costly and, therefore, is against economic intuition. Part one finishes then with a surprisingly simple answer to the question why codes exist.
The second part brings the findings of the first part in a broader context. The considered corporation of part one now 'grows' beyond borders and begins to conduct business globally, as a multinational corporation. Its existing set of corporate Codes of Ethics are now confronted with other nations, societies and cultures and, possibly, other ethicities. Whether the company should 'do as the Romans do' or not is the major question of the second part, closely connected to the keywords relativism and universalism. The problems revealed by each approach, and possible solutions to them, will be shown in part two.
The conclusion, finally, summarises the findings of the essay briefly, but, moreover, shows further questions and problems that would be worth to explore in the overlapping areas of applied ethics and international management.