Creating a code of conduct

The code of conduct needs to rope in all the stakeholders in the merged firms. Mike and
Theresa should ensure that the code of conduct is based on the agreed mission, vision, and values
during its development. The key relationships in the business need to be incorporated, such as
interpersonal relationships between employees business relations with suppliers, customers, the
government, owners, and investors. ‘
The process of developing the code of conduct needs collaboration and comprehensive
research. Mike and Theresa can communicate that they would like to develop a code of conduct
and ask for information from the staff, customers, and suppliers. This information does not need
to be corrected directly; it can be done in a survey. In the survey, the merged firm can ask
stakeholders which values they consider essential and which values they would like the
organization to include, and the ones in the code of conduct. After the information has been
collected, the organization can create a draft code of conduct and submit it for review and
correction. The various stakeholders can then give their views and make amendments if need be.
The amended draft can then be reviewed at the highest level of management, after which it can
be adopted.The organization can develop its code of conduct from scratch, and however, it can
refer to other codes of conduct that global organizations have adopted.
What should be included in the code of conduct?

Integrity
Businesses thrive based on the quality of their reputation among customers. Customers
identify with businesses that maintain high integrity standards in their operations. Mike and
Theresa need to stress that their organization observes high integrity standards in competition,
financial accounting, and reporting standards. Such commitment by the organization leads the
employees to improve their attitudes on personal ethical commitments (Adam & Rackman-
Moore, 2004).
Quality
The organization’s success is based on the promise of quality to its customers. The
merged organization has achieved success due to its ability to meet customer needs through
delivering quality and cost-effectiveness. These values need to be included in the code of
conduct. The organization can improve quality by sourcing the best quality of raw materials and
adopting best practices in fabric processing.
Diversity and inclusion
The organization would like to have a global outlook. Therefore it must entrench the
values of diversity and inclusion in its code of conduct. Diversity and inclusion can be
demonstrated in several variables, such as hiring practices. The code can need to be clear that it
does not condone any form of discrimination against employees, customers, or suppliers.
Protection of organizational assets

3
The code of conduct can guide how the organization protects its assets. Assets can be
physical such as land and buildings, human assets, or company information. Here, the code can
include safety measures that touch on employees’ physical safety, physical security of the
building, and company data protection requirements. This is essential because assets are critical
to operations in most organizations, and in some organizations, company information contains
the organization’s competitive advantage.
Reporting procedures
Developing a code of conduct is only an excellent place to start if the code is followed
through. One way to ensure the code is followed is by creating a method of reporting. The
organization needs to create modalities where staff can report a breach of code of conduct. A
reporting procedure should be effective enough to give the organization crucial information
about the breach and still protect the whistleblower’s identity. Breach of code of conduct can be
interpreted as employee misconduct and therefore should be handled by the human resources
department. The merged firm can appoint a person to handle complaints regarding a breach of
code in the organization.

Impact of the code of conduct on organizational culture

The code of conduct ensures that the organization develops a respectful culture. The
organization is currently navigating a merger that may present different challenges. Mike and
Theresa would want a situation where every employee feels safe and valued. A code of conduct
guides employee interpersonal relations, and, therefore, respect can be achieved. The code of
conduct also trains employees to respect their organization. This is essential because when
employees respect the organization, they rarely take actions that jeopardize the organization or
its reputation.
A code of conduct enables employees to adopt ethical behavior and decision-making. The
merged organization’s code of conduct stresses integrity in dealings with business stakeholders.
As such, employees become ethically conscious of the organization’s commitment to ethics and
change their behaviors to become ethically compliant (Erwin 2010). Over time, ethical behavior
subconsciously becomes embedded in employee dealings, and ethical standards are passed down
to generational employees. A code of conduct helps the organization to form an ethical culture.
A code of conduct creates a culture that preserves organizational strategic advantage. The
code of conduct specifies how employees should handle crucial information about the
organization. In some organizations, the quality of information is the source of competitive
advantage. For example, the Coca-Cola company has kept the formula for its cola drink secret. A
code of conduct ensures that employees learn best practices in handling crucial information and
as such, competitive advantage is preserved.

4

References

Adam, A. M., & Rachman-moore, D. (2004). The Methods Used to Implement an Ethical Code
of Conduct and Employee Attitudes. Journal of Business Ethics, 54(3), 223–242.
https://doi.org/10.1007/s10551-004-1774-4
Erwin, P. M. (2010). Corporate Codes of Conduct: The Effects of Code Content and Quality on
Ethical Performance. Journal of Business Ethics, 99(4), 535–548.
https://doi.org/10.1007/s10551-010-0667-y