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July 19, 2008

McDONALD: Ethics in organization

EDITOR’S NOTE: This is the second part of a two-part series on ethics in leadership. The first part appeared in Saturday’s edition.


“Our Credo is more than just a moral compass. We believe it's a recipe for business success. The fact that Johnson & Johnson is one of only a handful of companies that have flourished through more than a century of change is proof of that.”

-— Robert Wood Johnson, Johnson & Johnson

Robert Wood Johnson, former chairman of Johnson & Johnson from 1932 to 1963 and a member of the Company's founding family crafted the company credo himself in 1943, just before Johnson & Johnson became a publicly traded company. This was long before anyone ever heard the term “corporate social responsibility.” A good friend of mine works for a unit of Johnson & Johnson and every major decision must comply with the company credo. The credo is their true north and guidepost.

Organizations have a reason for being and a direction the organization will take exhibited in the mission and vision statements. A code of ethics sets the boundaries for defining acceptable and unacceptable behavior since shareholders, clients and employees prefer dealing with establishments that uphold high levels of ethical and moral standards of practice. A code of ethics is a document that assures the public that the organization is intent doing what is legal but also going well above legally proper to a higher standard of ethical behavior. Sadly when I investigated several in southern Indiana including corporations, public schools and nonprofit organizations, a code of ethics was lacking.

A code of ethics benefits the organization, the employee and society in general. For the organization internal dilemmas are not often black and white types of situations but more complex problems requiring well defined policies securely in place in order to facilitate fairness and moral management. A code of ethics also provides guidance for dealing with clients, shareholders and the government. For the individual, a code of ethics provides guidelines for behavior and for the community an assurance from the organization of community participation and stewardship of the environment.

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