PART 1 RESPONSE: EXPLANATION ON WHY COMPANIES SHOULD USE VOLUNTARY CODES OF ETHICS FOR THEIR SUPPLY CHAIN WITH LIMITATIONS
Voluntary codes are effective in addressing the needs of consumers while ensuring that the company remains competitive. Through the voluntary codes, companies and organizations strive to conduct themselves and their business in upright ways that favor them in the market as well as the consumers. The benefits of voluntary codes include achieving goals and interests that the company has set towards the public, enabling the company to attract more customers as well as regulating burdens on the taxpayers to benefit both the company and its customers (Keller, 2008). Discussed are examples of voluntary codes of ethics, their benefits, and limitations.
Consumer charter for global business
Consumer charter for global business is a Voluntary code is maintained by a non-profit foundation known as Consumers International. The code sets an obligation for member companies to uphold the set standards concerning the ethical conduct. Maintaining voluntary code of ethics is crucial in improving the image of the company and a good reputation among its suppliers and its general supply chain.
The GAP Inc. voluntary code
The giant clothing company has set a voluntary code requires the suppliers adhere to set standards in regards to consumers before signing any contract with the company. Without such ethics, it might be difficult even for a company to achieve its social responsibilities, building and maintaining customer trust. These ethics significantly improve the system of delivery within a company increasing its effectiveness while reducing operational costs (Jenkins, & Unies, 2001).
Limitations of voluntary code of ethics
The limitations are these codes only address the issues that are of importance to the company mostly and not the public. The codes address potentially highly damaging areas of interest to the company and they are more likely to ignore other larger problems that may arise from neglected areas as lees important like distribution. Another limitation is these codes are only enacted once complaints are launched and the company does very little to ensure prior enforcement of the codes. This leaves the burden of observing if these codes are adhered by to the public (Franco et al, pg. 1).
Benefits of the voluntary code of ethics
Benefits of the voluntary code of ethics can lead increase in revenues, as the company is able to reduce wastages. The company improves its public image to the pubic increasing customer trust. Other advantages include management efficiency as self-motives and interests are eliminated. The other benefit is improvement in quality of services as the business will focus on genuine customer complaints to be addressed.
The company can engage in environmentally responsible practices through recycling of waste products to reduce pollution. This can reduce the cost of raw materials that the company is planning to purchase. Business also can engage in environmental control programs like climate change to ensure their sustainability. For instance, businesses that depend on environmental products are likely to be affected in due to climate change, which may reduce availability and quality of raw material. Through engaging in environmental activities, a business demonstrates to its customers that it cares about the environment gaining their support while attracting new customers.
In conclusion, businesses benefit significantly by enacting voluntary codes and enforcing them proactively. Apart from increasing customer trust, which directly increases sales, businesses also easily achieve their set objectives and goals. The zero tolerance policy to corruption is essential in maintaining employee discipline ensuring that the company services runs efficiently. It also boosts the public image and reputation among its clients. The business can engage in environmental responsible practices through recycling waste and climate control programs (Mazurkiewicz, 2004).
Keller, H. (2008). Codes of Conduct and their Implementation: the Question of Legitimacy (pp. 219-298). Springer Berlin Heidelberg.
Jenkins, R., & Unies, N. (2001). Corporate codes of conduct: Self-regulation in a global economy.
Broomhill, R. (2007). Corporate Socal Responsibility: Key Issues and Debates. Don Dunstan Foundation.
Mazurkiewicz, P. (2004). Corporate environmental responsibility: Is a common CSR framework possible. World Bank, 2.