Question

Top managers demonstrate commitment to ethical business practices with ________.

• A. the adoption of written codes of ethics
• B. employee empowerment
• C. decentralized decision making practices
• D. collusion with other companies

Answer 1

The correct option is A the adoption of written codes of ethics

• Managers at all levels and in all functional areas face ethical issues. In fact, there is seldom a decision wherein an ethical dimension is not involved. Matters of right and wrong, just and unjust, and fair and unfair arise frequently. In order to deal with these issues, managers need some guidelines.
  
• Organisations, formulate both business and non-business guidelines in the form of a code of conduct or code of ethics. The need for a corporate code of conduct has increased due to frequent corporate scandals, inside trading and misuse of funds. With globalization of business, more and more companies are developing a code of ethics to be observed. Moreover, every profession has a code of conduct for its members.
• A code of ethics should reflect top management's desire for compliance with the values, rules, and policies that support an ethical climate. The development of a code of ethics should involve the President, Board of Directors, and Chief Executive Officers who should be implementing the code.
  
• Legal staff should also ensure that the code has assessed key areas of risk correctly, and that it provides buffers for potential legal problems.