COLUMN: Code of Ethics in Business

Namik Čolaković
Namik Čolaković

Numerous scientists and researchers continually point to the need to define universal moral norms and rules of business conduct that all countries and organizations will be obliged to act upon. This is especially important in the conditions of global connectivity, where great differences in economic, political, cultural, information, ecological, religious and moral context are expressed.

This universal approach is especially important given the fact that managers in multinational companies, most often trained in accordance with the moral values ​​and traditions of their countries, often have a dilemma to reconcile the contradictions between their country and the one they operate in. This dilemma is particularly pronounced when standards in one country support bribery, when in some parts of the world it is impossible to do business without resorting to various types of commissions, when it comes to environmental pollution problems or discrimination at work ….

Ethical dilemmas that managers face in their careers are an indispensable segment of every managerial job. However, deviations from ethical standards become more pronounced, and moral dilemmas are becoming more and more frequent, with the most common forms of deviation occurring in the form of corruption, conflict of interest, media manipulation, fraud, secret deals, industrial theft, and espionage and discrimination.

One way of preventing such deviations is raising the level of ethical awareness and defining new moral standards of behavior, and it is legally defined also the obligation to adopt a code of ethics in companies and institutions that regulate the principles, codes of conduct, employment and promotion of workers and the reporting of illicit actions. Although employees most often respond to such suspicious documents, believing that they represent only floscules that do not have actual application, in the modern conditions of life and work, the code of ethics is gaining importance.

In accordance with the ethical codes, codes of conduct, which include workplace activities, general guides have been established and must include examples of appropriate behavior in order to be meaningful. Examples of common codes of conduct are the style of dressing, avoidance of drugs and alcohol, reliability and effectiveness in work, obedience to the superiors, avoidance of receiving gifts from stakeholders, avoiding racial and sexual discrimination, avoiding conflicts of interest, not using the organization’s assets for personal purposes and reporting about illegal or suspicious activities.

The ethical risk category refers to the ratio of the number of unethical procedures that employees notice in their work and the number of reported unethical procedures. This is important to establish, as research has shown that employees, due to feelings of helplessness and fear of retaliation, do not report unethical practices in their workplaces. Ethical risk is most effectively mitigated by a positive ethical approach, on the basis of which he does not carry the creation of a mentally traumatized, but focuses on ethical leadership, commitment to ethical behavior and the adoption of ethical values. The program thus established, significantly reduces the number of unethical procedures and eliminates the retaliation for reported procedures.

By appreciating the existing economic and political complexity in Bosnia and Herzegovina, it can be freely argued that this topic is very little or almost inaccessible to the public. Ethical codes are probably adopted in most public enterprises under the pressure of the law, while there are no official information about their existence in other enterprises. Likewise, data on the number of reported unethical procedures couldn’t be found, although data on reported unethical procedures, especially in the public sector, are often publicly reported. It is particularly important to point out that illegal and immoral behavior, abuse of public authority and corruption has led to a decrease in the confidence of citizens in institutions of government, which poses a specific danger, as this undermines the foundations of all segments of society.

All this indicates that there must be changes that certainly should include the application of ethical principles that do not represent some absolute rules or values ​​that vary from individual to individual or from culture to culture, but it is simply a set of constant, important determinants with the basic function to trigger our conscience and manage our actions.

Perhaps Thomas Reed’s thought best illustrates the need for an ethical approach in all spheres of society: “One of the greatest illusions of the modern world is the deep-rooted belief that all its present evils can be eliminated only by good laws.”