Why Companies Adopt a Code of Ethics
Jaap de Jonge, Management Consultant, Netherlands
If a company has embraced the NORMATIVE form of stakeholder commitment, it has a genuine commitment to ethical principles. They will adopt a code of ethics, simply because they feel it is the right thing to do.
If a company has embraced an INSTRUMENTAL form of stakeholder commitment, they believe that a commitment to ethical principles will benefit their strategy (for example: to ultimately make more money in the long term for the shareholders). They may adopt a code of ethics, simply because the law demands it or because they see it as instrumental, supportive, conducive for their strategy.