GE and the Pros and Cons of Ethical Code free essay sample

What do we mean when we say business ethics? In this paper we discuss the business ethics and the pros and cons of implementation and compliance. Looking at one of the most successful companies in the world, we have found that a â€Å"Code of Ethics† has multiple roles when considering the ramifications of following or not following those codes. General Electric is looked upon as one of the largest corporate governing companies in the world and that by implementing a good code of ethics, and following them, can play a vital role in the success of GE. Whether in the US or conducting business abroad we look at the way a corporate code of ethics can affect each sector in its own ways. Considering the implication of corporate ethics, it is important to see the pros and cons of one company and learn from, not only the good, bad the unethical practices and avoid making the same mistakes. We will write a custom essay sample on GE and the Pros and Cons of Ethical Code or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page GE and the Pros and Cons of Ethical Code Beliefs, morals, virtue, and ethics; what is it that drives us in the way we run our personnel and professional lives? Where do this measure in the way we run a business? In this paper we will discuss the ways these traits influence our direction in which one company has looked at different ethical issues and some examples of how to implement such a code. We are going to dive into some of General Electric’s ethical decision making and the pros and cons of those decisions, but also in business in general as well. When I asked a group of colleagues from different levels of my company, I saw that there were many different opinions on how to handle certain situations and you will see this throughout the selected cases of GE. Using a written code of ethics in business can help companies develop a positive perception with consumers. The ability to educate consumers on how the company chooses to operate can go a long way in creating customer goodwill. Companies, like GE, can often improve their employees performance through a written code of ethics. This allows the company to set a specific set of ethical standards for employees to follow when working in the company. I want to make sure that we understand a few of these definitions so we will talk  about a general code of ethics in business today. It is also important that it is understood that perception of ethics comes in many different opinions. It’s up to you, the individual, and their personal convictions in the decision making process when concerning their imparticular company’s ethical code. First, I would like to define what Ethics is. Ethics can be defined as the rules of conduct recognized in respect to a particular class of human actions or a particular group, culture, etc. Simply put, they are a system of moral principles. Secondly, Business Ethics should be defined as a form of applied ethics or professional ethics that examines ethical principles and moral or ethical problems that arise in a business environment. It applies to all aspects of business conduct and is relevant to the conduct of individuals and entire organizations. Research has, however, shown that for an ethics code to be effective, it must be used as part of a comprehensive corporate ethics program that includes infrastructure such as the ethics office, ethics reward and sanctioning, and periodical business ethics training for staff. Implementing the code as part of a comprehensive ethics program ensures that the code becomes real in the eyes of employees. It also ensures that it is not a once-off event that remains a written expression destined for staff office drawers without it ever shaping their behavior. Implementing the code as part of the comprehensive ethics program will also ensure that it is not accompanied by a belief that once the code has been crafted and distributed to staff, staff will simply join hands to practice ethical business behavior. The crafting process of the ethics code should involve employees so that there is a total buy-in and for the employee to be willing to abide by it. The tone and the style in which the code is written and communicated should be such that it will easily understand with employees’ expectations. The code should be written in simple and plain language. Management should understand that a code does not provide the answer to every difficult situation in the organization neither should it be viewed as a substitute for individual judgment. The code should be acknowledged for what it is simply a guide to ethical decision-making in situations of ethical dilemmas and complex ethical decision-making. The ethics code should contribute towards the creation of an ethical culture that encourages meaningful and thoughtful inquiry about complex ethical issues in the workplace, which should ultimately bolster organizational performance. Finally, how do we implement ethics in our business and what are the pros and cons of doing so. Even though we think having a code of ethics in our company is a positive business practice, there are pros and cons of implementation. Of course we all want to run our companies in a moral ethical manner so here are some of the pros of implementing such a program. Using a written code of ethics in business can help companies develop a positive perception with consumers. The ability to educate consumers on how the company chooses to operate can go a long way in creating customer goodwill. Companies can often improve their employees performance through their written code of ethics. This allows the company to set a specific set of ethical standards for employees to follow when working in the company. There are cons for such implementation of written ethical codes. A written code of ethics can increase a companys operating costs. Business owners and managers will need to spend time educating employees and promoting the code through educational seminars and other training methods. Decreases in revenue may occur when a company operates under a written code of ethics. The company will need to avoid business opportunities that violate the companys code of ethics, regardless of the sales potential. As we discuss the â€Å"code of ethics† I want to look at one of the most successful companies in the world. General Electric can provide many cases of ethics, ethical issues, and the pros and cons of these case studies. I have looked into many cases involving GE and certain situations concerning their code of ethics and we will look at the pros and cons of each case. Let us look at how GE began. â€Å"In 1890, Edison started a company to bring together his various businesses all under one roof, and called it the Edison General Electric Company. Two years later Edison merged with his primary competitor, the Thomas-Houston Company, and they called the new company the General Electric Company. The move was largely a bid to combine their various patents, to allow for more profitability on both of their parts, as it allowed them to freely use the many smaller inventions each inventor had created in their larger projects. Over the years, General Electric continued to grow and produce different products for a wide range of applications. Many of Edison’s early inventions formed the backbone of various General Electric lines through the 19th century, the 20th century, and down to the present day. Electric lighting, Power transmission, medical equipment, and transportation were all areas in which Edison held patents and had formed small companies, and are all areas in which General Electric today has large holdings. General Electric continued to innovate in a huge range of fields, and opened divisions specializing in everything from plastics to airplanes to electric fans. At the beginning of the 20th century General Electric had the first voice radio broadcast in the world, the first electric toaster, and began work on vacuum tubes that would herald the dawn of the electronic age. In the 1910s and 1920s General Electric continued to innovate, setting a new altitude record with an airplane, making the refrigerator a common household word, and building the world’s largest electrical facility on the Panama Canal. Through the Great Depression, General Electric continued to innovate in other ways, introducing a Consumer Finance system to allow consumers to buy appliances for the home even in hard times. In the era of World War II, General Electric assisted with the war effort, innovating in radar technology, and creating the first jet engine. From the 1950s through to the new millennium, General Electric continued to grow, tapping into emerging markets and investing massive resources in pushing the bounds of technologies across every sector. To this day they remain one of the largest investors in invention in the world, and use their massive size and power to shape policy across the globe. †(McGuigan, 2013) After looking at the history of how GE began we can see that having a standing code of ethics is essential in the success of a large company. Looking in the early 90s, GE was one of the largest companies in the world and has met its challenges concerning ethics and moral business practices. â€Å"There are few companies in the U. S. as successful as General Electric, the maker of everything from Thomas Edisons illuminating light bulb to the engines on the Presidents jet. GE is the fifth-largest industrial company the U. S. Revenues in 1993 from its 12 business groups exceeded $60 billion, up 6% over 1992, of which the company will have paid the tax collector $2 billion. Unfortunately for GE, there are also few companies in the U. S.  with as checkered an ethical record. In addition to 72 Superfund environmental cleanup sites in which it is named a potentially responsible party (total cost to GE to date: $500 million), GE has paid fines or settlement fees in 16 cases of abuse, fraud and waste in government contracting since 1990. This year alone, GE is facing a highly publicized trading scandal at its Kidder, Peabody subsidiary and a Justice Department investigation for alleged contract violation at its aircraft engine unit, and will go to trial in October to face accusations of price fixing and antitrust violations in the industrial diamond market. Looking at these examples questionable ethical decision, what is the reason for the vast array of penalties. GE is a company made up of many different subsidiaries. If GE decides to become the parent company isn’t it up to them to do their due diligent and make sure those companies follow the same code of ethics? I believe when a company acquires, or starts a joint venture, there must be clear guidance of the parent companies code of ethics. Sometime maybe the parent company can learn from the practices of the one they are going into business with. One of the pros of going into business or acquiring a new company for GE is the new ideas brought to the table. As for the other company, it provides global presence and some corporate governance. Looking at it from the other side, there are times being associated with a company that has poor ethical practices can harm the over success of the two joint companies. As in the case above we can see that it goes both ways as far as the parent company and the subsidiary