Why Are Ethical Policies Essential For An Organization?

In an organization, everyone has to follow a few rules and regulations, which help to ensure that all the employees work in an organized way and together work to attain the objectives of the organization. Each organization has a unique, fixed set of rules and regulations, which the members of the organization are compelled to follow.

But, these rules and regulations, referred to as policies, are not only limited to the co-ordination of employees, but are even present for their code of conduct with each other, their customers and the outsiders.

An organization cannot survive with only one person, and needs other members to make combined efforts for achieving the goals of the organization. These members of an organization need to communicate with each other and the outside world, and thus, proper rules and regulations need to be established, which act as guidelines for the members of the organization to show them how to interact among themselves and with the outsiders.

Ethical policy is the name given to these rules and regulations, which are used to govern the behaviour and interaction of members of an organization with the outside world and amongst them. Ethical policy is necessary for every organization as without this policy, there is no fixed outline for the behaviour of the members, and each individual will act on his own accord and thus, create a communicational disharmony in the organization.

Suppose an organization carries out the business of investment financing, and it has to deal with hundreds of customers each day, a proper ethical policy is needed to govern the behaviour of the employees with the customers; it also governs the operations of the company with regards to its customers.

The investment of the customers in a company is directly affected by the ethical policy, since a company having a strict ethical policy makes sure that the employees deal with the customers in such a way that the customers are positively influenced by the services of the organization; and therefore, more customers avail the services of that organization, resulting in increased investment.

The actions of the company and its operations are also determined by its ethical policy. A company having an ethical policy, according to which, customers are considered to be the top priority, and the organization do not permit operations which are in violation of simple rights of the customers, for sure attain more success when compared to a company with a weak ethical policy. For example, it is up to the ethical policy of an investment company to suggest whether the company would make good use of the money invested in the company. Just like this, it also refers to the use of the money and its safety.

Hence, an ethical policy is essential in order to ensure smooth working of an organization, and its acceptance and goodwill among its customers. A company with a weak ethical policy, which people can go against easily, will not be able to reach a position in the market that would make sure that the company progresses and becomes successful.