Code of Ethics

Encyclopedia of Small BusinessA-I (2009)

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Code of Ethics

A code of ethics issued by a business is a particular kind of policy statement. A properly framed code is, in effect, a form of legislation within the company binding on its employees, with specific sanctions for violation of the code. If such sanctions are absent, the code is just a list of pieties. The most severe sanction is usually dismissal—unless a crime has been committed.

Business ethics emerged as a specialty in the 1960s in the wake of the "social responsibility" movement embraced by some large corporations; that movement itself was stimulated by rising public interest in consumerism a...

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