Essays on Should Legally Enforceable Codes of Business Ethics Be Mandatory for Every Business Coursework

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The paper "Should Legally Enforceable Codes of Business Ethics Be Mandatory for Every Business" is a perfect example of business coursework.   According to this article, the introduction of Indonesian Law No. 40 in 2007 continues to cause a conflict of understanding of whether Corporate Social Responsibility (CSR) should be mandatory or voluntary. This legal framework introduced a representation of legal recognition to CSR existence. The article notes that the proponents of the law argue that making CSR mandatory to every corporation is essential in ensuring that all business entities understand the legal concepts, responsibility and obligations they must ensure in order to carry businesses in Indonesia.

However, according to the article, the introduction of the law has also caused confusion, especially concerning its procedures and substance. The article also discusses the voluntary versus mandatory dichotomy with a conclusion that the introduced law is legitimate and encouraged. However, it also notes that the mandatory nature is problematic in practice since a definite understanding of CSR and recognition of beneficiaries and duty bearer must be mandatory alongside the mechanisms for effective implementation. Gilley, K, M, Robertson, C, J & Mazur, T, C 2010, ‘ The bottom-line benefits of ethics code commitment’ Business Horizons, vol.

53, no. 1, pp. 31-37. This article indicates that the creation of a detrimental firm value critically depends on the financial performance of that firm. However, the Ethics Code Commitment (ECC), especially in relation to the top management behaviors significantly leads to an increase in financial and psychological commitments. The ECC also plays a significant role in empowering the organizational culture. Through this article, the authors develop the various benefits ECC has on stakeholders and competitiveness.

According to the article, the focus in ensuring and effective ECC is through including employees and key community leaders in the development process. The authors, therefore, indicate that there is need to move away from the legalistic approach to inspiring stakeholders. This portrays the connection between the managerial approaches to the ethics of strategy in ensuring effectiveness of codes of ethics in an organization. Therefore, the relationship between stakeholders and the firm is the most essential aspect of the ECC. Kaptein, M 2011, ‘ Toward Effective Codes: Testing the Relationship with Unethical Behaviour’ Journal of Business Ethics, vol.

99, no. 2, pp. 233-251. This article indicates that business code of ethics is essential in dealing with unethical behavior in organizations. The article puts more emphasis on the factors that play a critical role in determining the impact of code. The article also discusses the five critical factors that play a vital role in determining the business code of ethics. According to the author, frequency of communication code, code content, code embedment, and communication activity quality are the most essential aspects to consider when considerations are made to enact a business code of ethics.

The article includes a research conducted that revealed that close a modest code of conduct in businesses existed with up to explainable 32% possible unethical behavior. The study, therefore, revealed when codes are effective and when they develop into counter-effective.

References

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Waagstein, P, C 2010, ‘The Mandatory Corporate Social Responsibility in Indonesia: Problems and Implications’ Journal of Business Ethics, vol. 98, no. 3, pp. 455-466.

Gilley, K, M, Robertson, C, J & Mazur, T, C 2010, ‘The bottom-line benefits of ethics code commitment’ Business Horizons, vol. 53, no. 1, pp. 31-37.

Kaptein, M 2011, ‘Toward Effective Codes: Testing the Relationship with Unethical Behaviour’ Journal of Business Ethics, vol. 99, no. 2, pp. 233-251.

Kaptein, M & Schwartz, M, S 2008, ‘The Effectiveness of Business Codes: A Critical Examination of Existing Studies and the Development of an Integrated’ Journal of Business Ethics, vol. 22, no. 2, pp. 111-127.

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