Some of the guidelines that define how a company and its affiliates operate are provided in the form of laws. Other guidelines are provided in the form of company ethics, which is a body of regulations set by a company to guide operations and employee behavior by certain standards. Company ethics are often used to protect a business to help it maintain a certain image.
The subjects covered by company ethics can vary greatly from one business to another. These standards often dictate how employees should act toward each other and how they should act toward non-employees. Company ethics can regulate behaviors while working and the behaviors of employees outside of work. Commonly covered areas are integrity, discrimination, and fraternizing.
By employing company ethics, a company can exercise a greater amount of control over its image. This is possible by requiring everyone to act in a manner that falls within the vision of the company. The consequences for violating company ethics can vary as much as the policies. With some companies, all infractions can result in termination of employment. Others may have more lenient systems that allow for warnings or termination based on categories of severity.
Company ethics can also be used to keep a company and those associated with it well within the boundaries of other regulations. Many industries have professional ethics committees. These bodies are a step below the law and a step above a company. They usually have the ability to suspend professional licenses or to impose punishments such as penalties.
There are also the laws that govern business in general and certain industry behaviors specifically. Some companies do not wish to allow their employees to interpret these regulations on their own. Some companies also attempt to prevent their employees from developing habits or business strategies in gray areas. Company ethics can serve as a management technique that protects both the company and its employees from repercussions and tarnished images.
For example, some people handle alcohol well and others do not. Instead of leaving it to the judgment of each individual, a company may forbid the signing of any agreement at a meeting during which alcohol was consumed by either party. This protects the company’s employees from entering an unsound agreement due to intoxication. It also prevents claims by the other party's members that they were intentionally led to drink excessively so they could be coerced into signing an unsound agreement.