Advantages and Disadvantages of Professional Codes of Ethics

Ethics is undoubtedly important for business success because it guides employees and leaders towards best practice in the organization. To promote ethical culture in the workplace, companies develop ethical codes of ethics which highlight the values and principles that employees must follow in their actions.

A professional code of ethics or professional code of conduct creates an environment of trust, commitment and responsibility in an organization. It also enhances a sense of belonging and strong work relationships among employees.

Although many would think that professional codes of ethics are all good and indispensable, the truth is that ethical codes may also have certain demerits worth consideration. Here is a list of the pros and cons of having a professional code of conduct.

Advantages of a Professional Code of Ethics

1) Enhances the right organizational culture

Essentially, the purpose of a professional code of conduct is to create organizational culture where managers and employees trust one another. Ethical codes often foster integrity, trust, and respect. They also provide a guide on people’s behavior. The ethical values of an organization are well defined and documented in a professional code of ethics to ensure that all members of the organization are behaving in a certain way. This leads to a common culture that is characterized by specific ethical values and principles.

2) Establishes a good image for the organization

Customers and shareholders choose organizations with good reputation. In a competitive business environment and a saturated marketplace, customers can choose the companies that they trust. Those that don’t uphold ethical practices can go drying on the hanger. Companies also need to uphold ethical values in order to establish lasting relationships with shareholders and partners. Shareholders feel comfortable to invest in a company with good reputation because they believe that their money have been placed on the right hands. Therefore, ethical behavior is essential for firms seeking good reputation and public image.

3) Enhances compliance with the law

It is safe to say that everything that is lawful is ethical, but not everything that is ethical is lawful. By developing an ethical code of conduct, a company ensures that its employees are drawn closer to the law, and are put on the right side of the law. Individually, employees may also consider it wise to act professionally and lawfully. Ethical codes spell out the values that can guide people towards good business practices and avoid major scandals as it has happened in some bigwigs such as Uber, Enron, WorldCom, and facebook.

4) Attracting talented employees

Nowadays, employees value companies that uphold ethical values in their business practices. In the modern times, businesses are competing for top managers and talented employees. To attract the best among them, it is good to present to them a proper plan of ethical behavior. What can be the best way to that other than writing a professional code of ethics?

5) Promotes teamwork and productivity

We already saw that a code of ethics boosts organizational culture. In regards to that, a professional code of ethics or conduct can help build strong relationships in the workplace. It also enhances cooperation and unity, which cultivates strong teamwork and enhanced productivity.

Disadvantages of a Professional Code of Ethics

1) Increased costs and low profits

Sometimes professional codes of ethics can be costly because they require financial resources to establish. Money can be spent in documentation, consultancy, training and implementation of professional codes of conduct. Furthermore, a code of ethics prevents a company from going wholly and fully into profit maximization as they pursue ethical behaviors.

2) Loss of time

The company’s employees and managers may lose valuable time as they develop and implement professional codes of ethics. It usually takes a strong team of individuals, who form an ethical committee, to agree on ethical values needed for the organization. The ethics committee will take time in meetings and programs to develop the ethical code. This takes time. On the flip side, the wasted time is compensated with valuable relationships with key stakeholders.

3) Less Concern for Goals and Performance

Professional codes of ethics may place so much emphasis on relationships, at the expense of performance and achievement of goals. The implementation of code of ethics may also take away the company’s focus on results and standards. A happy work environment is valued more than a task-oriented workplace.

4) Lack of Flexibility

Professional codes of conduct may be too restrictive, causing the employees to work in a straight line. They may limit employee’s flexibility in terms of their actions, which may reduce independence and creativity in the workplace.


Despite the disadvantages, it is crucial to focus on the positives. The company might indeed lose the freedom to maximize profits and drive innovation, but organizations have to act responsibly as corporate citizens. Corporations and small businesses are all institutions of society, and they have to demonstrate ethical behavior to promote positive relationships in society. Professional codes of ethics also drive sales in the long term because they enable a company to attract, retain and sustain customers.

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