Evaluation of Business Code of Ethics

Evaluation of a Business Code of Ethics

Benjamin Enuma

PHL 323

December 22, 2014

Edward Peet

Abstract

Business codes of ethics are written guidelines or set of standards designed to set out acceptable behaviors for members of a particular group, association, or profession. A company’s business ethics outlines the ethical standards within an organization and a code of business ethics supports these standards by providing behavioral guidelines on daily activity such as product safety, employee health, smoking, waste disposal, conflict of interest, employee privacy and sexual harassment.

Using Diageo Inc., as a reference, this paper provides an analysis of code of business ethics; an evaluation of the organization’s mission statement and ethical system. It discusses how the code of ethics affects employees, management, board of directors, and other stakeholders of the organization. Areas where the organization needs to modify the existing code of ethics and the best method to implement these changes were also touched. It concludes with an insight of the possible reactions from employees, managers, and the effects the code may have on the organization.

Statement of Mission

Diageo Inc.,“is a global company, with an outstanding collection of beverage alcohol brands across spirits, beer and wine categories, with its products sold in more than 180 markets around the world. Diageo mission statement (purpose) is “celebrate life every day, everywhere.” This mission statement connects with the Diageo beliefs and values. Diageo values are (1) passionate about customers and consumers, (2) freedom to succeed, (3) proud of what we do, (4) be the best, and (5) value each other.

For people to celebrate life everyday everywhere with their brands, they need to demonstrate strong passion and commitment to customers’ satisfaction. They seek to remain ahead of competition and the best in the market through innovation and creativity. They keep their pride and reputation by conducting all their activities ethically and with high sense of integrity. Employees are given the freedom to succeed by creating a working environment and conditions that inspire them to give their best and overcome barriers to career growth. They value each other by treating one another with dignity and making everyone count no matter the background or status.

Type of Ethical System Used

The ultimate purpose of Diageo is to provide drinks for people to celebrate life every day and everywhere. The ethical system used in Diageo can be described as ends-driven. An "end-driven" ethical theory implies the right act is the one that aims at a certain outcome. This ethical system seems appropriate because the essence of struggling to make ends meet is to be happy and enjoy life. The CEO of Diageo states: “Our purpose, to celebrate life every day, everywhere, and our values, lie at the heart of our business. Our values define our approach to the way we work and reflect our beliefs about what is important in the way that we work together and with others outside of Diageo. We bring them to life in our business, every day, everywhere, through the way we behave and the results we achieve”. (www.diageo.com Diageo).

Implementation of Code of Ethics

Though the code applies to everyone working for Diageo, there are various implications and accountabilities for the different stakeholders impacted by the code.

Implication for Management

Saddled with the responsibility the day-today running of the company, top management plays the biggest role in shaping and enforcing ethical culture in the workplace. This is well captured in the following quote “If you manage people, you are expected to adopt the Diageo Leadership Standard and be a role model for others”. Those in leadership position must make use of the code and ensure that employees under their supervision receive the guidance, resources and training needed to do their job in compliance with the code. The code is useful in building the enabling environment for trust in which employees feel free to ask questions, raise concerns and report suspected violations without fear of victimization.

Implication for Employees

All the employees, of the company are expected to act in harmony with the principles of the code and relevant policies and standards. The code is useful in ensuring that confidential information should be handled with the required secrecy and professionalism; it is forbids the manipulation, concealing and abuse of company information. Applying the code would help employees avoid conflict of interest.

Implication for Board of Directors

        Board members are not involved in the day-to-day running of the business; hence they are governed by a separate code of ethics called “Board of directors’ code of ethics.” It is useful because it contains several operational examples of the very types of dilemmas and ambiguities that an individual director might encounter in the course of exercising their responsibilities.