The success of any business organization depends on the trust and confidence prevalent between customers, employees, and shareholders. Its credibility is enhanced by the work commitments, sense of honesty, and integrity in achieving the business goals by following an ethical code of conduct. It is easier said than done to perform entirely based on ethics and morals. A code of ethics provides guidelines to business professionals to conduct their activities fairly and honestly. It lays down the organizationâ€™s mission and core values, which integrates them in the best possible manner. It assists the professionals in approaching a problem and tackling it in a manner that does not disturb the organizationâ€™s mission. The core values are based on the ethical principles which every person working in the organization should follow. A code of ethics consists of business ethics, professional ethics, and employee code of conduct.
The code of ethics in the context of marketing revolves around the customers. All marketing activities like branding, sales promotion, after-sales support, and advertising are done according to the customersâ€™ needs. The customersâ€™ well-being is the most important code of ethics to be followed in the marketing industry.
Compliance-based code of ethics: These ethical codes provide guidance not only for behavioral conduct of the employees in a business organization but also penalties for any violations. The laws and regulations that help formulate ethical codes in some industries like banking use these codes. Employees are given formal training for this purpose.
Value-based code of ethics: The core value system of a business organization is determined by this type of code of ethics. They require more self-regulation than compliance-based ethical codes. They are mostly associated with public goods and the environment.
Professional code of ethics: Professionals such as financial advisors have to follow a separate code of conduct known as a fiduciary duty. These ethical codes are registered under a state regulator known as the Securities and Exchange Commission (SEC).
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