Institutionalize Ethics

Institutionalized Ethics Lisa B

Business Dictionary defines institutionalization as “a process which translates an organization’s code of conduct, mission, policies, vision, and strategic plans into action guidelines applicable to the daily activities of its officers and other employees.  It aims at integrating fundamental values and objectives into the organization’s culture and structure” (Institutionalization, 2017).  Today more and more businesses and other organizations find it essential to institutionalize ethics.  Not only does this institutionalization show stakeholders they are working with a trustworthy company but also sets guidelines for employees how to behave on behalf of the company.

Companies desire consumer and stakeholder confidence.  One way to achieve this is through an ethics policy.  Having a straightforward procedure set within the business structure shows all who deal with the company they are trustworthy and do not make decisions based solely on profit (Eigen, 2017).  This trust develops a stronger relationship between a company and its stockholders building a competitive advantage.   The more one trusts, the more loyal to a corporation one will become.

Research shows “most people learn the difference between right and wrong at an early age, but sometimes the difference between right and wrong in a business setting is not black and white” (Eigen, 2017).   Because of this gray area, it is crucial for a business to build ethical guidelines for the employees.  The guidelines allow the employees to understand company expectations and how to react in certain situations building a trust amongst the team.  Therefore, the employees’ morale will improve creating a profiting cycle for the corporation.  Once morale improves, employees work harder, building more confidence in the company, subsequently leading to a more significant bottom line. 

In conclusion, businesses and other organizations stand to benefit from the institutionalization of ethics.  By institutionalizing ethics, corporations build a trusting environment for the stakeholders including its employees.  By establishing this trust, the confidence in the company internally and externally grows.  Employees find they are happier in the workplace knowing their expectations and how to represent the business causing them to work harder, while stakeholders obtain a stronger loyalty to the company.

 

References

Eigen, D. (2017). How to institutionalize ethics in a corporation. Chron. Retrieved from

            http://smallbusiness.chron.com/institutionalize-ethics-corporation-49898.html

Institutionalization. (2017). Business dictionary. Retrieved from

http://www.businessdictionary.com/definition/institutionalization.html

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