Business Ethics Organizational Norms Hold Thesis

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3. Professional codes are put in place by industry organizations in order to guide the behavior of their members. The codes provide definitions and guidance with respect to right or wrong behavior. In some cases, these codes also include provisions for the discipline of members that do not adhere to the conditions of the code. The codes also serve another purpose is that they communicate to the public the ethics and morals to which the members of the organization are expected to adhere.

Professional codes have the benefit of guiding behavior, which in concert with the communication raises the standard of morals, ethics and behavior among the group members. The criminological theory of social disorganization, for example, postulates that criminal behavior can derive from a lack of social norms (Cullen & Agnew, 2002). The professional codes then provide the structure required to prevent this.

The industry also gains competitive advantage from the establishment of professional codes. The public is likely to feel greater confidence in dealing with members of a group with a professional code. This is because the presence of the code will help to guide the member's behavior towards that norm. While this does not offer a guarantee of adherence, it does increase the incidence of adherence. This builds confidence among the public with respect to the organization.

Confidence is also built among the legislative body as well. Professional organizations can therefore deflect scrutiny of regulators by implementing professional codes. The code is part of the institution of regulation that the professional organization uses to regulate the norms and behaviors of its members. Without such guidance, it can be expected that criminality would increase.

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A result of this is that the organization would inevitably find itself subject to greater regulatory scrutiny. By deflecting this scrutiny, the organization is better able to determine for itself the codes to which it wants to adhere. Having ethics and rules imposed from the outside by regulators would likely serve the interests of the public or of the regulators more than it would serve the interests of the professional organization.

Such codes do, however, have limitations. They lack the bite of the law, except in cases where one's ability to conduct business is tied to their membership in the organization (the legal profession, for example). Sanctions from a professional organization may not be a sufficient deterrent because they are potentially not as strong as sanction from governmental bodies.

Professional codes are also limited by the degree to which the individual must interact with other members of the professional organization. In many such professions, interaction is limited. The codes work in terms of guiding behavior mainly in the context of broader social interaction. For organizations whose members work independently, such interaction may be limited. This in turn limits the effectiveness of the code itself.

Lastly, the codes are limited because they are written by the organization for its own members. This fails to serve the interests of the public or other stakeholders. The impact of this is relative to the power of those stakeholders, but ultimately a professional code is limited by the degree to which the writers of the code put the interests of the stakeholders above their own interests.

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