A code of ethics is necessary because it allows individuals to know what is expected of them as acceptable behavior. It provides guidelines on making decisions that are in line with the goals of the organization.
Regardless of the size of business, a code of ethics is a necessary tool for any business looking to succeed. The values and morals incorporated into a code of ethics should be well thought out to ensure that the desired results are achieved. A successful code of ethics will translate into a positive reputation for the organization, which increases business for a company.
A code of ethics improves the business's reputation, and it holds the employees and management accountable. It is important to provide employees a guideline of what the company considers right and wrong. Without a code of ethics, there can be misunderstandings as to what is acceptable. If there are no standards in place, it can be very difficult to hold employees responsible for behavior that negatively impacts business. Every employee's decision can impact the business either positively or negatively. By implementing a code of ethics that reflects a company's views, many of the decisions that are made by employees will positively affect the business.