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Instructor Resource

Collins, Business Ethics 3e

SAGE Publishing, 2022

Instructor Manual

Chapter 5: Codes of Ethics and Codes of Conduct

CHAPTER 5 LEARNING OBJECTIVES AND END OF CHAPTER QUESTIONS

After reading this chapter, you will be able to

5.1 Compare a code of ethics with a code of conduct.

End of Chapter Question 1: What is the difference between a code of ethics and a

code of conduct?

5.2 Explain five key benefits of having a code of ethics.

5.3 Create a bottom-up code of ethics.

End of Chapter Question 3: How would you create a bottom-up code of ethics for

an organization?

5.4 Describe the content found in most codes of conduct.

CHAPTER 5 OVERVIEW

An organization’s code of ethics and code of conduct minimize ethical ambiguities by

communicating clear ethical guidelines for employees to apply when making decisions. These

codes serve as the organization’s conscience.

Instructor Resource

Collins, Business Ethics 3e

SAGE Publishing, 2022

CHAPTER 5 LECTURE OUTLINE

Suggested Time: 2 to 3 hours of class time is recommended to present this chapter.

I. Chapter Question 1: What is the difference between a code of ethics and a

code of conduct?

A code of ethics briefly describes broad ethical aspirations.

II. Chapter Question 2: What are five key benefits of having a code of ethics?

Align the Organization’s Values with Industry, Professional, and Legal Codes

Positive Impact on Employee Behaviors

III. Chapter Question 3: How would you create a bottom-up code of ethics for an

organization?

Oaths

IV. Chapter Question 4: What topics should be addressed in a code of conduct?

Ethical Applications: Commitment to My Co-Workers

V. Chapter Question 5: How would you implement an effective code

communication strategy?

Instructor Resource

Collins, Business Ethics 3e

SAGE Publishing, 2022

Elements of the communication strategy should include the following:

• Connect the code to the organization’s strategy

• Managers demonstrate active support for the codes

• Discuss the codes during ethics training workshops

• Mention the code of ethics in correspondences with suppliers and customer

VI. Chapter Question 6: How can you transform a code of ethics into an

assessment tool?

Step 1: Form small groups around common job tasks and have participants read the

organization’s code of ethics. If none exists, inform participants that organizational members are

Instructor Resource

Collins, Business Ethics 3e

SAGE Publishing, 2022

Step 3: Each group member independently highlights one weak area and writes down strategies

and action steps that can be taken to improve that score.

Step 6: Each group member shares a story about a survey item with a low score.

Step 7: Each group member shares a strategy and action steps that would improve the low score

and integrates ideas and suggestions from other group members to develop a more detailed

continuous improvement plan.

Step 8: The group summarizes its scores and suggestions for improvement and submits the

CHAPTER 5 SUPPORTING MATERIALS

Textbook Inserts

Step 4: Group members share their survey scores with one another and determine similarities and

Instructor Resource

Collins, Business Ethics 3e

SAGE Publishing, 2022

Ethical Dilemma Analysis

• What Would You Do: Vendor Relationships

Tables and Figures

• Table 5.1: Ethics Program Growth and Organizational Size

• Figure 5.1: Ethical Alignment: Individual-Organization-Professional Code-Laws

Self-Assessment (in Vantage only)

• Self-Assessment 5.1: My Personal Code of Ethics

Thematic Boxes

• Ethics in Action: Gap Inc. Code of Conduct—Gratuities

CHAPTER QUESTION 1: WHAT IS THE DIFFERENCE BETWEEN A CODE OF

ETHICS AND A CODE OF CONDUCT?

The terms code of ethics and code of conduct are often mistakenly used interchangeably. They

are two unique documents.

CODE OF ETHICS

• A code of ethics briefly describes broad ethical aspirations.

Instructor Resource

Collins, Business Ethics 3e

SAGE Publishing, 2022

CODE OF CONDUCT

• A code of conduct more extensively describes acceptable behaviors for specific

situations that are likely to arise.

DISCUSSION ACTIVITY

Have students search the internet for “code of ethics” and “code of conduct” and compare the

similarities and differences between the two documents.

CHAPTER QUESTION 2: WHAT ARE FIVE KEY BENEFITS OF HAVING A CODE

OF ETHICS?

AT WHAT SIZE SHOULD ORGANIZATION’S CONSIDER CREATING A CODE OF

ETHICS?

A code of ethics is usually the first step in formalizing an ethics program. The extent of an

organization’s ethics program is often related to its size.

Instructor Resource

Collins, Business Ethics 3e

Table 5.1 Ethics Program Growth and Organizational Size

• 1–9 Employees: Orient employees to relevant laws and regulation; share stories about

ethical decisions.

BENEFIT #1: ALIGNS THE ORGANIZATION’S VALUES WITH INDUSTRY,

PROFESSIONAL, AND LEGAL CODES

Align the code with the following (see Figure 5.1):

• What individual’s commonly believe to be right or wrong

BENEFIT #2: DEMONSTRATES MANAGERIAL CONCERN FOR ETHICS

• The organization’s code of ethics and conduct should be discussed with new employees

to establish ethical expectations.

Instructor Resource

Collins, Business Ethics 3e

SAGE Publishing, 2022

BENEFIT #3: CONVEYS A PARTICULAR SET OF VALUES AND OBLIGATIONS

• Codes convey a set of values and obligations that clarify appropriate behaviors and

provide employees with clear and consistent moral guidance.

• Codes of ethics articulate and reinforce a moral consensus, rather than just one person’s

opinion.

BENEFIT #4: MEETS LEGAL REQUIREMENTS AND INDUSTRY TRENDS

• Codes are sometimes required by law, such as the Sarbanes-Oxley Act of 2002.

• The New York Stock Exchange (NYSE) and the National Association of Securities

Dealers Automated Quotations (NASDAQ) require that all listed firms must have a code

BENEFIT #5: POSITIVELY IMPACTS EMPLOYEE BEHAVIORS

• Researchers report that organizations with codes of ethics have higher levels of employee

commitment and greater tolerance for diversity.

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Collins, Business Ethics 3e

SAGE Publishing, 2022

CHAPTER QUESTION 3: HOW WOULD YOU CREATE A BOTTOM-UP CODE OF

ETHICS FOR AN ORGANIZATION?

CODE OF ETHICS CONTENT

A code of ethics expresses the principles that define an organization’s ideal moral essence.

• Codes should keep the language simple and avoid legalese or professional jargon.

• An extensive scholarly review of corporate codes of ethics, global codes of ethics, and

the business ethics literature found the following six values continually expressed:

1. Trustworthiness

DISCUSSION ACTIVITY

Ask students if their employer or volunteer organization has a code of ethics or code of conduct.

If so, ask them to bring it to class. Do employees know it exists? Is it inspiring? Do employees

refer to it when ethical dilemmas arise?

Instructor Resource

Collins, Business Ethics 3e

SAGE Publishing, 2022

OATHS

• An oath is a public promise that serves as a moral anchor.

DISCUSSION ACTIVITY

Have students examine the MBA Oath.

* How would they feel about pledging this oath at graduation?

CODE OF CONDUCT FOR INTERNATIONAL BUSINESS

In 1994, theologians, philosophers, clerics, and businesspeople met to determine what moral

values the three Abrahamic religions shared in common. They created the “Interfaith

Declaration: A Code of Ethics on International Business for Christians, Muslims and Jews.”

• Justice

CAUX PRINCIPLES FOR RESPONSIBLE BUSINESS

• Attempts have been made to create a moral level playing field worldwide through an

international code of ethics, where principles such as integrity and honesty are adopted by

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o Principle 2: Contribute to Economic, Social and Environmental Development

o Principle 3: Respect the letter and the spirit of the law

DISCUSSION ACTIVITY

Ask students if it is ethical for the United States to impose its value system on other nations.

HOW TO CREATE A CODE

• It is relatively easy to copy another organization’s code of ethics. After all, how many

different ways can one say treat all stakeholders with utmost respect and integrity? But

13-STEP PROCESS

Step 1: Obtain approval from executives.

Step 2: Create a code writing team.

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Step 8: Compare to other codes and modify.

Step 9: Compare to other groups participating in creating the code.

DISCUSSION ACTIVITY

Have students adopt the 13-step process to develop a code of ethics for some organizational unit

on campus, such as the business school, management department, student organization, or staff

department. Share this with the leader of the appropriate organizational unit.

The code of ethics can be a key aspect of an organization’s strategic plan. Strategic planning

integrates an organization’s mission with its vision and provides clear direction on how the

organization will progress from its current situation to a highly desired future situation.

CHAPTER QUESTION 4: WHAT TOPICS SHOULD BE ADDRESSED IN A CODE OF

CONDUCT?

BACKGROUND

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• A code of conduct expands on the moral principles embodied in a code of ethics. A code

of ethics principle such as “We will treat everyone fairly,” for example, can be clarified

in a code of conduct as “All information about an employee is considered confidential

TOPICS

The New York Stock Exchange recommends that a code of conduct address the following seven

topics:

1. Conflicts of Interest. Avoid conflict or potential conflict between an individual’s personal

interests and those of the organization.

2. Corporate Opportunities. Do not use corporate information or assets for personal gain.

DISCUSSION ACTIVITY

A Judicial Ethics Advisory Committee in Florida ruled that judges and lawyers linked as

“friends” on Facebook creates an appearance of impropriety. Ask students the following: Is it

Instructor Resource

Collins, Business Ethics 3e

SAGE Publishing, 2022

ethical for a student and a college professor to be friends on Facebook while the student is

enrolled in the professor’s: (a) class or (b) school? Why or why not?

Codes of conduct should be used to highlight specific issues of major importance. Two problem

BUSINESS GRATUITIES

A business gratuity is a “present, gift, hospitality, or favor for which fair market value is

not paid by the recipient, … including such items as gifts, meals, drinks, entertainment

(including tickets and passes), recreation (including golf course and tennis court fees),

door prizes, honoraria, transportation, discounts, [or] promotional items.”

• A fine line exists between a business gratuity/courtesy and a bribe. Did the buyer

purchase the product because of its quality or had the buyer changed his or her

DISCUSSION ACTIVITY

Have students discuss which of the following intended gratuities might be considered a bribe: a

$15 book about golf putting, a dozen golf balls costing $50, golf clothing valued at $150, a round

of golf for two people at an exclusive golf club for $280, or two tickets and traveling expenses

for the upcoming Masters golf tournament valued at $2,500?