Reasons for Adopting a Code of Ethics by a Company

Intrinsic Stakeholder Commitment | Normative Approach
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Reasons for Adopting a Code of Ethics by a Company

What are the motivations for adopting the code of ethics using the normative form and using the instrumental form of stakeholder theory?

  Jaap de Jonge
Editor, Netherlands
 

Why Companies Adopt a Code of Ethics

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.

 

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