Code of Ethics and Its Impact on a Business

Abstract

Ethical values and principles are essential for daily business activities and a fundamental part of a successful business. If employees are nurtured in an unethical environment, it will impact the going concern of the business. A code of ethics is a blueprint of standards intended to support employees to work and lead the business genuinely and with nobility. The purpose of this paper is to examine the impact of codes of ethics on businesses. The researcher used secondary data collected from various studies. A good code of ethics must be comprehensive, manageable, and aligned with the genuine mission of a business. To apply the content of the code of ethics correctly, the management should consistently communicate its content to all employees. It is proved in the paper that business organizations that exercise ethical practices via implementing a code of ethics tend to create favorable relationships among employees, customers, and other internal and external stakeholders.