Tag Archives: business management

Why Are Ethical Policies Essential For An Organization?

Everything has to be carried out, following some rules and regulations, in an organization. These rules and regulations help in making sure that all those who are employed work in an organized and co-ordinated manner, in order to reach the goals of the organization. Every organization has exclusive rules and regulations, which have to be followed by all its members.

But, these rules and regulations, known as policies, are not only restricted to the co-ordination of employees. Actually, rules and regulations for the code of conduct of the employees with each other, their customers and the outsiders also exist.

With the impossibility to survive having only one person, an organization needs other members to make joint efforts in order to achieve its goals. These organization members have to communicate with one another and the outside world; therefore, appropriate rules and regulations have to be developed, so that members can learn how to interact among themselves and with outsiders, by consulting these guidelines.

Ethical policy is the name given to these rules and regulations, which are used to govern the behaviour and interaction of members of an organization with the outside world and amongst them. Ethical policy is necessary for every organization as without this policy, there is no fixed outline for the behaviour of the members, and each individual will act on his own accord and thus, create a communicational disharmony in the organization.

In case of an organization carrying out the business of investment financing, handling hundreds of customers every day, an adequate ethical policy is required to monitor the behaviour of the employees with the customers; it also governs the activities of the company in reference to its customers.

The ethical policy has a direct impact on the investment of the customers in the company, as the objective of a company with a limited ethical policy is to have its employees deal with customers in such a way so as to influence them via their services; thus, the consequence is more customers and obviously, more investment.

According to the ethical policy, the actions of the company and operations are decided upon. If a company has an ethical policy that implies that customers will be their first priority, with the organization not allowing operations violating basic rights of their customers to occur, the company will definitely be more successful than a company having a weak ethical policy. An example would be: the ethical policy of an investment company would decide if the company would appropriately utilise the money invested. Moreover, the use of the money and its safety with the organization is referred to by the ethical policy.

Therefore, an ethical policy is necessary to ensure smooth operation of an organization and its acceptance and goodwill among its customers. A company with a weak ethical policy, which is easily violated, will not be able to secure such a position in the market that can ensure its success and progress.

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