Corporate ethical codes as strategic documents: An analysis of success and failure

Abstract

Ethical codes state the major philosophical principles and values in organizations and function as policy documents which define the responsibilities of organizations to stakeholders. They spell out the conduct expected of employees and articulate the acceptable ethical parameters of behavior in the organization. Most large US and multinational firms today have a code. If utilized effectively and embraced, codes can be key strategic documents in organizations for moderating employee behavior and reducing unethical actions. To be effective they must be communicated well and become a part of the culture of the organization. An ethical code from a major investment bank is analyzed in terms of code effectiveness, transformational communication, and its role as a key corporate strategic document.