Business Communication-II

Study of Code of Ethics and Code of Communication of an

organization

Submitted To Submitted By

Dr. Kapil Chaturvedi Pritam Pandey

Group 1 Section D

2014205

CODE OF ETHICS

A code of ethics issued by a business is a particular kind of policy statement. A properly framed code is, in

effect, a form of legislation within the company binding on its employees, with specific sanctions for violation

of the code. Both businesses and trade organizations typically have some sort of code of ethics that its

employees or members are supposed to follow. Breaking the code of ethics can result in termination or

dismissal from the organization. A code of ethics is important because it clearly lays our the "rules" for

behaviour and provides a pre-emptive warning.

Business ethics emerged as a specialty in the 1960s in the wake of the

"social responsibility" movement embraced by some large corporations;

that movement itself was stimulated by rising public interest in

consumerism and the environment. An important distinction exists between

law and ethics. Obeying the law is the minimum level of ethical conduct

enforced in society; ethical behaviour includes more than simply legal

behaviour. It is unethical to lie, for instance; but lying is against the law

only under certain limited circumstances: lying under oath is perjury.

Business ethics, and the codes that formally define it, always include

elements that go beyond strict legality; they demand adherence to a higher standard.

THE DOCUMENT

A code of ethics is a formal document rather than merely an

"environment," an "understanding," a consensus,

"unwritten rule," or just an aspect of "corporate culture."

It is at minimum a published document. In many

organizations employees are also required to sign a

statement to the effect that they have read and understood

it. Variations on this theme exist. In very large

corporations or corporations reacting to recent scandals,

sometimes only corporate officers or only financial

officers are required to sign. In other cases multiple codes

of ethics may exist tailor-made to such functions as

purchasing, sales, accounting, etc.

Codes of ethics are free-standing expressions of corporate

will even when they are published as chapters or sections

in a document which may contain a mission statement, a

listing of corporate values, and general policies relating to operations.

CONTENT

Codes typically divide into three distinct elements: 1) an introduction or preamble, 2) a statement of purposes

and values, 3) specific rules of conduct which may be subdivided in various ways, and 4) implementation of the

code, which will define administrative processes, reporting, and sanctions.

Introduction: Management Sponsorship

The introduction or preamble to a code of ethics ideally carries a statement by the top-ranked officer of the

corporation indicating his or her personal commitment to and backing of the code. Experts on and scholars of

business ethics never fail to underline the importance of top management leadership, including by example.

Codes of ethics published pro forma, possibly in the context of some rumors of scandals, carry little weight

with employees unless tangible signs of corporate commitment are given. The preamble of a code of ethics

provides an opportunity for sending such a signal.

Purposes and Values

The leading section of the code typically provides an abbreviated mission statement followed by values. This

section states what the company is all about, what it does, why it exists. Ideally the code will state practical

financial objectives as well as less precise social and professional aspirations. The statement of values,

similarly, will begin with narrowly defined statements and expand on these. Obeying all pertinent laws and

regulations may be the initial value; adherence to higher ethical values will be spelled out next. Corporations

engaged in some professional specialty (engineering, medicine, law, etc.) may explicitly refer to professional

standards and standard-setting bodies.

Rules of Conduct

Rules of conduct are

typically subdivided.

The Institute of

Business Ethics

(IBE), a London-

based organization,

provides a list easily

adaptable by a small

business formulating

its own code. IBE

divides the central

presentation into

codes of conduct

adopted by the

business toward its

employees,

customers,

shareholders and

other funding agents,

suppliers, and then

the wider society. In

the subsection dealing with employees, an effective code will be further subdivided into the corporation's

conduct toward employees and, separately, conduct expected from its employees.

In the language of business, the groups named above constitute the "stakeholders," those who have a stake in

the well-being (and also in the ethical behaviour) of the business. These groups typically define all those with

whom the corporation has an interaction. In many cases, all depending on the range and activities of the

corporation, other areas will get special emphasis. Thus rules of conduct may be spelled out in relation to the

physical environment; ethnic, gender, and race relations; realms such a law and justice or medical practice.

Codes of ethics may also specifically address areas of difficulty such as campaign contributions or compliance

with specific laws. Examples of such rules are provided by FindLaw for Small Business, of instance, relating to

antitrust statutes.

Within subdivisions, the code may specify categories of problems such as conflicts of interest; taking or

offering bribes, gifts, favours, etc.; rules relating to information such as disclosures, withholding data, insider

trading, and so forth; preferential treatment, discrimination; interpersonal relations including sexual harassment;

resolving quality versus cost conflicts; and potentially endlessly more issues. Well-executed codes of ethics will

be concise, as brief as possible, yet will contain vivid examples to make each point as clear as possible.

Implementation, Reporting, and Sanctions

The final section of a code will deal with administrative implementation of the code and sanctions against code

violations. The simplest code will require reporting of code infractions up the management chain, including

what action to take if the next level up fails to take action. In larger organizations an office or function may be

expressly charged with handling code violations. Ombudsmen may be named. Sanctions will be spelled out and

their administration defined, including a transparent process for establishing facts, the issuance of warnings,

requirements for counselling or re-education, consequences of repeat offences, on up to discharge or even, if

appropriate, litigation.

For obvious reasons, a code of ethics without sanctions and a rational process for its implementation will be

viewed by employees as merely a gesture without "teeth." Conversely, the business owner must be alert to the

fact that ethical violations are not necessarily be legal infringements; therefore sanctions such as firing an

employee may be problematical unless the business has an "employment at will" hiring and firing policy and its

exercise is backed by state and federal law under the circumstances.

ETHICS CODES AND SMALL BUSINESS

One of the advantages of small business is that it can avoid what are sometimes time-consuming upheavals in

the business world. By any measure, traditional or modern, ethics is an important issue. Observation and studies

show that ethical behaviour is efficient. A. Millage recently wrote in Internal Auditor about the findings of the

"2005 National Business Ethics Survey" (NBES). The NBES is conducted by the Ethics Resource Center. The

survey showed that 70 percent of employees in companies with a "weak" ethical culture (as measured by

NBES) observed ethical wrong-doing in their companies. Only 34 percent of employees in organizations with

"strong" ethical culture did so. Employees observed morale-destroying behaviour such as discrimination and

sexual harassment; lying internally, to vendors, customers, and the public; misreporting of time; direct thievery;

and other problems. By any measure such activities translate into higher costs, lost reputation, poor

performance, etc. Ethics matters.

At the same time, the current preoccupation with codes of ethics is producing very large documents, sometimes

reaching the length of books. A Google search on the phrase "code of ethics" yielded 17,900,000 hits in January

2006, a Yahoo search 12,000,000. Much of the current interest may be due to recent corporate scandals and the

requirements of the Sarbanes-Oxley Act of 2002. Does the current interest mean that a small business must

formulate its own code of ethics? In most cases, it will do no harm.

To publish such a code is relatively easy. Many hundreds of sample codes are available on the Internet, many of

them specifically designed for the small business. The small business owner can easily write a one-page code

and distribute it to employees if he or she sees the need for this. Many small businesses have found it useful in

the past to publish policy statements that deal with personnel policy, including business hours, vacations,

accrual of personal time, and so forth. A code of ethics along the same lines may be easy to produce and serve

an important purpose: to underline the owner's commitment to ethical behaviour.

Many very small businesses of 10 to 20 employees operate more like families. Ethical behaviour is part of the

culture—as it is in a family. In such situations the sudden appearance of a code of ethics may be rather jarring.

Discussion of the matter in a staff meeting may serve the purpose better: to alert employees to this issue and

what is happening "out there."

Example:

Companies from Tata to Infosys follow code of ethics to maintain the credibility of the company and provide

the firm a right direction. Following are the Samsung Securities code of ethics-

One, We will perform our jobs honestly and fairly, adhering to the highest standards of ethical conduct.

One, We will act in the best interests of our customers, keeping with our fiduciary duty.

One, We will protect shareholder value by generating profits through effective and efficient

management.

One, We will comply with all applicable laws, regulations, and company policies, and compete fairly to

promote healthy growth of the industry.

One, We will treat each other with mutual trust and respect, believing what is good for the company is

good for us all.

One, We will continue to pursue self-development and enhance our professional expertise.

CODE OF CORPORATE COMMUNICATION

The power to communicate with corporations' employees and customers carries considerable responsibilities.

Organizations including the International Association of Business Communicators and the Public Relations

Society of America develop ethical standards essential for the professional communicator. The content varies

by organization, but the principles are the same.

Important principles of Code of Corporate Communication are-

Honesty

Professional communicators are honest,

accurate and candid in all communications.

This practice encourages the free flow of

important information in the interest of the

public.

Confidentiality

Protecting the confidences and privacy rights

of employees and customers is the duty of

professional communicators. Additionally,

they must abide by legal requirements for

disclosing information that affects the welfare

of others.

Credit

When content is borrowed from another source, professional communicators give credit and identify that

source. In many cases, communicators must request permission from the original source before sharing the

borrowed information.

Free Speech

Professional communicators support the principles of free speech and free ideas. These practices encourage

open competition.

Courtesy

Sensitivity to cultural values and beliefs are

crucial for the professional communicator. It’s

important to understand your audience and

encourage mutual understanding.

Example:

Swedish Match’s Corporate Communication Code is an important aspect of their continual efforts to build up

global trust in the corporate brand. It has been adopted by Swedish Match’s Board of Directors to provide

guidelines for how communication should be conducted to ensure that it is in accordance with the Swedish

Match Group’s interests.

The main purpose of the Corporate Communication Code is to establish guidelines for presenting the Company

to current and potential stakeholders, both internally and externally.

Main goals for external communications:

• Support the business concept and strategies

• Strengthen confidence in the Swedish Match Group, the Swedish Match brand, its employees, management,

and products

• Share information with regard to Public Affairs and Scientific Affairs

• Meet expectations concerning Swedish Match’s compliance with legislation, regulations and standards

relating to communication activities

• Support a correct evaluation of the Swedish Match share and facilitate the raising of capital by giving as

accurate a picture as possible of the Group’s financial position

• Manage the image of Swedish Match, its products, and activities. Facilitate recruitment of employees

Main goals for internal communications:

• Make sure that the Company’s goals, policies and guidelines are communicated Strive to give employees the

information they need, when they need it, in order to increase understanding and commitment, build

motivation, and support the Company’s strategies

• Communicate with employees about decisions and events that affect them before (if possible) and never later

than when information is communicated externally

• Contribute to the Swedish Match Group’s business objectives

• Increase each employee’s knowledge about the Swedish Match Group and its development

• Enhance employee’s knowledge of Swedish Match’s business objectives, strategies and values

• Provide clear and current information to employees on Group policies and information vital to the Group with

regard to corporate branding (Corporate Identity)

• Internally disseminate success stories and good business solutions throughout the organization, in order to

spread creativity and encourage cross-operating unit.

Key words for communication

The Swedish Match Communication Codes governs how we behave and establishes rules and standards for our

day-to-day communication. The key words are:

• Correct

• Proactive

• Well-planned

• Factual

• Long term

• Simultaneous

• Pertinent

• Consistent

• Adapted to target groups

• Rapid

APPLICATION OF ABOVE MENTIONED CODES IN INDIA

Code of Ethics in Indian Corporate

With the globalization, many changes occurred in Indian Industry. From empowerment of labours to

automation. In the process ethics in business became an important matter of concern. Among the Indian

corporates, Tata group is the best example of business ethics. Now-a-days companies are not only concentrating

on the profit but the ways, by which those profit level is attained. Customer satisfaction is one of the major

reason due to which companies strongly follow code of ethics. According to article published in THE HINDU

on January 11, 2013

The NHRC came up with the 12-point Code after a panel appointed by it submitted a report and said Indian industry‟s

criteria for social and ethical aspects are yet to reach the desired level of sophistication.

“As per this tenet, companies must conform to trade procedures, including licensing, documentation and other

necessary formalities, as applicable,” the study „Developing Code of Ethics for Indian Industry‟ said.

Noting that inclusion is one of the key deterrents to growth in the country, the study said, the first tenet to ethical

behaviour has to be inclusiveness.“ All companies must refrain from undertaking projects or activities that would be

detrimental to the wider interests of the communities in which they operate. This implies that companies should respect

the local culture, customs and traditions in which they operate,” it said.

In a statement, NHRC said the Code of Ethics for Indian Industry strongly advocates for equal opportunities to all

qualified employees, regardless of their race, caste, gender, religion etc for their inclusive growth and welfare.

In the 21st century India, all businesses can afford to pay all due taxes and avoid corrupt practices while still

making good profits needed for survival and growth. This is a fact that has to be understood clearly by all. They

have a large number of good examples of successful and ethical businesses in India to emulate; and their

number is increasing due to the changed expectations of multinational corporations from their Indian vendors

and partners. Only a firm resolve by the top management can make it possible for a business organisation to

behave ethically in its interface with the government. The top alone can decide not to evade taxes and

simultaneously find ethically right ways of making the business grow. Use of information technology has made

it possible to bring in great transparency in systems and has eliminated corruption at many levels. India is

marching internally towards better democracy, improved governance, fewer unduly restrictive laws and

simplified tax regime. Externally, India is getting increasingly integrated with the businesses and institutions

from the advanced countries that are far ahead in ethical behaviour in business.

Codes of Corporate Communication in India

Infosys tried to preserve the attributes of a small company even with the expanding base and worked in small

groups; Managers played the role of mentors and used their experience to guide their team members. Infosys

was one of the first companies to offer scope to its employees compensation depended on the performance of

individual, the team and the company Challenges faced by the company to retain its talented workforce.

Leadership at different levels of the organization in Tata display strong commitment to ethics through

communication and adoption of role model stature. In order to ensure ethical business practices in an

organization, it is important to have an ethical orientation among the people who own, manage, and work for it.

At Tata, this has been achieved by adopting proper structures, policies, and practices as they influence the

ethical behaviour through flow of communication and reinforcements of ethical choices.

Bharti being an Indian company and many of their vendors are multinational companies there will be many

culture differences for Bharti employees to deal with. Not only in the way business is handled but with

company’s norms, communication barriers, and best practices. In aligning Knowledge Management with

strategic goals, it became part of Bharti’s culture. That said, there are always people who will question the

value of Knowledge Management. Given this, regular, focused communications and visible senior-management

support remain invaluable.

The State Bank of India had to face a dramatic cultural change with the challenges thrown by the private sector

banks which provided customer oriented services while most of the staff in SBI was not aware of the fact that

the bank was losing its hold amongst the upper end market. According to survey report “the top two obstacles

encountered by bank during the major organizational changes are communication breakdown and employee’s

resistance. ”Biggest challenge for the management was to convey its idea of transformation to each and every

employee of the organization. Communication is the key to SBIs success as it is able to link numerous branches

across the globe.

Reliance Industries Ltd. ensure institution of standardised channels of internal communications across the

Company to facilitate a high level of disciplined participation. Reliance Knowledge Management System

(KMS) was built to be the common intranet system for Reliance Industries Ltd., allowing users to share news,

photos, videos and more.

Looking at the most of the Indian corporations, it is observed that communication tends to be more top-

downwards than bottom-upwards. Due to a tendency to centralize authority and decision making at the top of

the organization, horizontal communication (or co-ordination) is considered difficult to achieve.

Because of low level of delegation, too much information flow is assumed as not required; not to mention that

the feeling of distrust encourages information-hoarding. Hence, information is clearly perceived as power by

superiors, and is distributed carefully and selectively. This may be attributed to the high power distance, where

communication tends to be less open and more indirect. In India, involving an intermediary is imperative for all

cases that could lead to a clash between people and thus to a loss of face. Examples are a critical appraisal of a

subordinate or a counterpart or the resolution of a conflict of interest within the organization. In dealing with

the outside world, intermediaries are used even more frequently.

Bibliography

http://www.investopedia.com/terms/c/code-of-ethics.asp

http://www.inc.com/encyclopedia/code-of-ethics.html

http://www.samsungsecurities.com/csr/ethics.do?cmd=list&MenuCode=M030301

http://www.ehow.com/facts_6726807_corporate-communication-code-ethics.html

http://www.iimidr.ac.in/iimi/images/IMJ/Volume3_Issue1/Business%20Ethics%20in%20India.pdf

http://nhrc.nic.in/Documents/reports/misc_dev_code_of_ethics_for_indian_industry_ICSM.pdf

http://www.thehindu.com/business/nhrc-unveils-code-of-ethics-for-indian-industry/article4298624.ece

http://www.anmconsultants.com/role-communication-indian-corporate-culture