Evaluating a Business Code of Ethics Essay.
Businesses in today’s society share a purpose, a vision, that relates philosophy and principles of ethics to better meet the needs of the organization and stakeholders, including customers, employees, shareholders, suppliers, and communities. Without professional ethics, businesses and its programs would not have the ability to be successful. This paper will examine Humana, its business code of ethics, and its mission statement that assists in organizational values and goals of the company. The type of ethical system used by Humana will be explored, along with examples that support this system and its attributes.
In addition, how the code of ethics is identified and used within the company will be addressed as it pertains to employees, management, and its board of directors. Upon further evaluation, this paper will explore the need for modification, if any, to their existing code of ethics. Reactions to the code of ethics, its effects of organizational culture on the code of ethics, and its effects on the organization will be defined.
Lastly, this paper will provide an analysis of Humana’s business code of ethics and how the analysis exhibits significant key concepts to maintain and promote ethical decision making and business success.
Business Code of Ethics and its Mission Statement Businesses developed codes of ethics starting back in the early 1970s within the United States. Business ethics “is the study of standards of business behavior which promote human welfare and good” (Santa Clara University [SCU], 2011, para. 1). Humana, a company that provides and administers health insurance plans, established its formalized code of ethics in 1995 and since established a 24-hour access to their ethics assistance hotline demonstrating its commitment and accessibility to business ethics (Humana, 2011, para. 1).
Humana’s code of ethics was developed as a means of understanding Human’s ethical standards and promoting open communication and the well-being of members as it pertains to these standards. Humana’s code of ethics stresses its mission and vision of the company: “to become the most trusted name in health solutions. To foster a successful environment, Humana’s code of ethics is designed to educate each associate to contribute to the company’s success through ethical behavior and by doing the right thing in the right way for the right reasons” (McCallister & Catron, 2011, p. 1).
Defining the purpose of the business’s code of ethics allows for better understanding of ways to promote ethical business behavior. Deontological Ethical System Ethical systems in business are the “contexts for making decisions in ethics, much like rules in an athletic competition,” giving significance and meaning to the performance and conduct of employees within an organization (Ulrich, 2010, para. 2). Ethical systems can be broken into subcategories depending on its purpose. Humana demonstrates a deontological, also known as a duty-driven ethical system. “Deontological comes from the Greek deon, meaning, duty.
Deontologists base their decisions about what’s right on broad, abstract universal ethical principles or values such as honesty, promise keeping, fairness, loyalty, rights, justice, compassion, and respect for persons and property” (Trevino & Nelson, 2007, p. 98). Humana’s business code of ethics lays out its purpose and mission statement and supports these objectives by establishing ethical principles that employees and stakeholders are to follow to ensure compliance, quality, and business success. Within Humana’s business code of ethics, it discusses the key to integrity.
The guidelines that are incorporated and integrated into Humana’s ethical code address several key issues that exemplify the business’ duty and obligations to ensure ethical standards are followed. For example, the key components of Humana’s code of ethics focuses on: “Honesty: act fairly and “honestly with those that are affected by our actions; compliance with laws: comply with laws, regulations, and act in such a manner that the full disclosure of all the facts would reflect favorably; business responsibility: adhere to the highest ethical standards of conduct; and responsibility for reporting violations: promote elationships based on trust and respect and reference policies, ethics hotline, and the ethics intranet within Humana’s website that further addresses compliance with Humana’s business code of ethics” (McCallister & Catron, 2011, p. 4). These components provide examples of a duty-driven, deontological ethical system. The code of ethics defines the ethical standards and expects employees and stakeholders to abide by these regulations in order to ensure the highest ethical standards and decision-making abilities.
How the Code of Ethics is Used Humana’s code of ethics defines its mission and goals and how stakeholders can actively participated in ethical decision making within the organization. Employees, for example, are provided with Humana’s business code of ethics on the first day of employment. The purpose of this is to clearly define the organization’s ethical standards and address how employees can adhere to these standards through Humana’s vision. Employees are required annually to view and complete an ethical compliance training course.
This reinforces Humana’s ethical standards and resources that are available when confronted with these ethical dilemmas. For example, one particular part of the code discusses how employees have the right to report workplace violence and harassment. The code lists several examples of unacceptable and unethical behavior that attributes to workplace violence. In addition to the 24-hour ethics hotline, the code of ethics provides additional resources and people to contact if this is occurring.
Furthermore, if violence is occurring outside of the workplace, affecting any one of Humana’s employees, they are also encouraged to discuss this with Employee Assistance. Employee assistance provides Humana employees with support services and resources when faced with violence whether at home or in the workplace. Humana discusses how employee performance and success can be affected both internally and externally and feels each employee should be given the resources and support no matter where employees encounter violence.
In addition to Humana’s business code of ethics, management and its board of directors also have another code of ethics, specifically addressing the ethical guidelines for leaders and managers, and directors within the company. The purpose of a corporate level code of ethics is to “maintain the highest standards in Humana’s financial reporting with governmental agencies” (Humana, 2004, p. 1). Management has responsibilities that require interaction and relationships with businesses, regulating and governing boards, and many stakeholders that participate in Humana’s business entities.
The corporate code of ethics was defined for this reason and discusses standards such as conflicts of interest, accurate reporting, and compliance with these ethical guidelines. In addition, guidelines that address “avoiding personal activity or association with people that could interfere in making good judgment concerning Humana’s best interests” (Humana, 2004, p. 2). The corporate code of ethics is additional resource and tool that managers can refer to when faced with ethical dilemmas such as these. Code of Ethics and Modification
Upon analysis of Humana’s business code of ethics, the guidelines are clear. Humana’s code of ethics is current, accessible, easily understood, and it provides a plethora of useful tools and resources that govern these ethical standards and offer support for Humana employees when face with ethical issues. In addition, a code of ethics is to: provide framework of acceptable behavior, promote high standards of practice, enhance a sense of community, create transparency in business activities, and offer guidelines to comply with government laws and regulations” (Fieser, 2008, para. ). Humana’s business code of ethics not only addresses the significant portions of a code of ethics, but also has 24-hours access to these ethical resources and guidance. When establishing a code of ethics, it is imperative to address key components of a company’s mission and company goals, along with clear guidelines that support a business’ vision. Reactions to a Code of Ethics When businesses prepare a code of ethics, consideration to addressing this code to ensure compliance is significant to ethical and organization success.
A code of ethics should be addressed immediately upon hire or the establishment of a business relationship. Addressing it early promotes the significance of the code of ethics along with guidelines that employees and business partners should be informed up early on to ensure they are able to support these guidelines while maintaining the business relationship. Employees and business partners can either react negatively, stating that this code of ethics tells an employee what to say and how to act.
Others react in a positive and constructive manner and understand the need for ethical guidelines within a business to ensure compliance, yet more importantly, ethical decision making in accordance within Human’s mission and vision, to ensure continued business success and growth. The organizational culture promotes the highest ethical standards that are directly in line with Humana’s mission and its guidelines that support the key to business integrity.
The Effect of a Code of Ethics Businesses are aware of downfalls and economic disasters that attribute to the lack of ethic performance and decision making. Humana’s business code of ethics affects employees, the organization, its stakeholders, and the surrounding communities in a way that displays moral and ethical importance, integrity, and success, attributed by the development of this code of ethics. Furthermore, Humana’s code of ethics promotes business responsibility, honesty, and fairness.
These characteristics affect business and community relationship by promoting trust, a significant behavior in organizational and community success. Summary of Ethical Analysis In reviewing Humana’s business code of ethics, it is apparent that this 52 page code of ethics was not established merely to put it in place. It was established as a way of making clear and important ethical guidelines that support business growth and success.
From its mission statement and supporting regulations, Humana’s business code of ethics supports high ethical standards, promotes trusting relationships, and keys to integrity. Addressing these key components and how employees can support these guidelines, along with several support tools, resources, and 24-hour access to ethical support, Humana provides a business code of ethics that supports ethical decision making and high ethical standards.