Question

"Is a code of ethics a long-term competitive advantage for an organization?"

Answer 1

Answer: Code of Ethics are the outline of vision & mission of an organization. It sets principles & standards on how to deal with matters or problems in more professional way based on organization’s values.

Code of Ethics may bring long term competitive advantages in following manner:

-          Ensure compliance with applicable laws & regulations – Timely fulfillment of compliance or reporting requirements of applicable laws may help in avoid corporate scandals or breach of applicable laws.

-          Builds strong reputation of organization- In today’s world, stakeholders focuses more on quality of organization rather than quantum of profits/gains. Organizations simply cannot afford to focus solely on bottom line, they focusses more on ethics which also helps establishing lasting partnerships both within and outside the organization.

-          Forms strong foundation of corporate culture- Binding all the employees in the hierarchy by the same rules and guidelines may help creating transparent and competitive corporate culture and also helps in increasing productivity of an organization.

-          Attracts more people- An organization with established code of ethics and well known corporate culture tends to attract efficient employees and other stakeholders who contributes more to the organization.