Reasons for Adopting a Code of Ethics by a Company




Intrinsic Stakeholder Commitment | Normative Approach
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gaolatheope moth, Botswana

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?
 
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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.

   

More on Intrinsic Stakeholder Commitment | Normative Approach:
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