Organizations must develop a code of ethics and mission and vision statements due to the dynamics of the modern business landscape. These businesses' requirements are crucial because they inform the outside world about the reasons for a firm's existence. From a code of ethics and mission and vision statement, a firm can derive its core values. Regardless of the size of a business and its industry of operations, core values will always shape its culture. A progressive and productive corporate culture can influence prospective human resources and customers to want to engage and partner with a company and stay with the firm for a long time. A code of ethics and mission and vision statements and, therefore, core values are indicators of a business' principles, philosophy, and beliefs. How an employee behaves and handles ethical situations within their organizational mandate is influenced by the code of ethics and the provisions of the mission and vision statement. A common trend in vision and mission statements today is that they prioritize customers more than any other stakeholder because, to many firms, a customer is a key reason for their being ( Nir, 2020 ). The cutthroat competition for customers, especially in this industry, requires that the company develop a code of ethics and mission and vision and statements. Code of ethics and mission and vision statements are crucial in a business’s strategic management, such as governing employee conduct.
Significance of A Code of Ethics
A code of ethics is essential for any business because it sets out the rules for employee behavior and provides the foundation for preemptive warning. Size of an organization notwithstanding, the management expects all employees to follow a given code of conduct because how an employee behaves affects the company's image. When the management staff adheres to the code of ethics, other employees learn from them and purposely complying with the set rules. Partners in a business need to understand that employees will face many ethical problems such as fraud, compliance, abuse, privacy, and confidentiality (Flite & Harman, 2013). The partners must initiate the development of rules that will govern employee behavior in such scenarios. Although any issue arising from the above ethical scenarios can be addressed administratively, the decisions can be strengthened by having a robust code of ethics in place.
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Administrative systems are essential and inalienable from the running of an organization, but due to the frequency that problems arise within a company, employees are required to make decisions before the guidance of these systems is sought. For example, a worker may identify a loophole for fraud, which they may want to profit from, but with a code of ethics in place, they will be guided appropriately. If they decide to breach the code of ethics, the management can apply the rules and other administrative tools. Therefore, through the available code of conduct, the partners will lay the foundation for values that they would want all stakeholders to have. Once everyone has internalized these values, the result is a formidable and progressive corporate culture.
Significance of Mission and Vision Statements
Strategic planning is a principal function that the management of a company undertakes because it helps them set priorities, distribute resources, and ensure that all employees work towards common objectives. For business owners to achieve this agenda, they must have a futuristic mission and vision statements that act as a guide for establishing a roadmap that everyone must follow. Without these critical statements, confusion will set, thus making it harder to achieve the set goals. According to Akeem et al. (2016), well-crafted and implement vision and mission statements can influence workers' daily activities and help achieve the organizational goals. The company must develop meaningful mission and vision statements for it to be on the right path. The process of developing these statements should not be a one-time event, but the firm must continually revise it to fit the changing business landscape. When establishing a business, the partners always have a long-term idea of where they want their establishment, encapsulated in goals and objectives. According to Tanković (2013), a vision statement reflects a firm's desired future, while the mission statement indicates why the business is in existence. These two statements are interconnected and intertwined. The vision statement will give the business a visionary future, key in any strategic management function. Differently, the mission statement will reflect the values and priorities of the organization. Hence, while the vision statement will indicate its future aspirations, the mission statement will show how the firm’s values and priorities will influence this journey.
Relationship Between the Code of Ethics and Mission and Vision Statement
In a business establishment, the code of ethics and mission and vision statements are related in that they enhance each other’s purpose. The code of ethics stipulates the rules that all company stakeholders must abide by when representing the business when faced with ethical conduct. For example, employees must always understand that it is wrong to disclose any client's data to third parties. When an employee gives out customer's private and confidential information to a third party, such as a rival business, they will have breached their company's ethical guidelines. Differently, a mission statement explains why a business exists while the vision statement shows the corporate’s future road map. The reason for business existence and the journey towards the desired future are collectively accomplished by different stakeholders, including executives, employees, and the management board. According to Correia and Lucena (2020), a code of conduct is a crucial framework for designing and institutionalizing appropriate ethical behavior in an organization. For a business to live up to its mission and vision statement, all internal stakeholders must work towards a common direction as defined by the set goals and objectives.
However, when working to actualize the mission and vision statements, many distractions may arise, affecting an organization's strategic management. Many of these distractions take the form of ethical scenarios and, when not handled well, can have a negative impact on a company. For example, the finance manager may exploit loopholes in the financial management system and defraud vast amounts of money. Such unethical conduct can scare away prospective investors that derailing the vision and mission of their organization. If the company culture is based on a firm code of ethics, it may preempt such a behavior. The management must always emphasize the need for everyone to internalize and adhere to the available code of ethics. Essentially, this set of rules is critical in a company’s strategic management because it helps with planning, directing, organizing, leading, and controlling (Stevens, 2009). Workers must conform to the ethical rules if these functions are going to be actualized. When human resources agree to abide by the code of ethics, the whole firm will have unity of purpose, detailed in its mission and vision statements. One thus realizes that the code of ethics works as an enhancer in the endeavors to actualize mission and vision statements. When there are no ethical rules in a company, workers can become ungovernable, negatively affecting strategic management functions.
Leadership’s Role in Promoting and Supporting the Mission, Vision, and Ethical Principles of the Organization
Leadership is an important pillar when developing and implementing mission and vision statements and ethical principles. Leadership is the ability of an individual to influence the behaviors and productivity of a group of people. A leader must be able to influence and guide members of an organization towards a common goal. As such, leadership pertains to establishing clear vision and mission statements, sharing them with the rest of the workers, and inspiring them to heed them for their firm’s prosperity. Similarly, after developing a code of ethics, the management board members must exhibit leadership traits if employees are to head to the rules provided. Leadership plays a crucial in promoting and supporting the mission, vision, and ethical principles of a company. After developing these three frameworks of strategic management, leadership will be key in influencing employees' behaviors. Members of the management board and the executives must communicate the mission and vision statements and ethical principles to all the workers (Brown, 2020). Through such elaborate communication, they will impress their subordinates why these management tools are important to the company. Organizational leaders must use communication to initiate and sustain action needed to implement mission and vision statements and adherence to the code of ethics. Constant communication is critical to creating a corporate culture characterized by positive values and supported by a robust code of ethics. Resultantly, the company's leadership will have set a clear path to attaining the mission and vision statement.
Summary
The modern business environment's dynamicity requires that organizations explicitly state their mission and vision statement and have an elaborate code of ethics. A company must develop these tools of strategic management and ensure that they are actualized. A code of ethics is important because it influences how employees behave when faced with an ethical dilemma. The mission statement explains to the public why the organization is in existence while a vision reflects the business's desired future. All three elements of a business work establish the core values and hence influence the entrenchment of its culture. This interrelationship is depicted by how they augment each other purpose. The code of ethics helps establish the culture and values needed to realize the mission and vision statement. For these tools to be effective, the communication aspect of leadership must be engaged. The focus is to inspire the rest of the organization to own up the entire process. Without explicit communication on mission and vision statements and ethical principles, workers will not understand their firm’s goals laying a foundation for its failure.
References
Brown, A. (2020). Communication and leadership in healthcare quality governance. Journal of Health Organization and Management , 34 (2). https://doi.org/10.1108/JHOM-07-2019-0194
Correia, B., & Lucena, W. (2020). Board of directors and code of business ethics of Brazilian companies. RAUSP Management Journal , 55 (2). https://doi.org/https://doi.org/10.1108/RAUSP-12-2018-0147
Flite, C. A., & Harman, L. B. (2013). Code of ethics: principles for ethical leadership. Perspectives in health information management , 10 (Winter), 1d.
Nir, M. (2018). Define and Communicate the Mission and Vision. In The Pragmatist's Guide to Corporate Lean Strategy (pp. 21-31). Apress, Berkeley, CA.
Stevens, B. (2009). Corporate ethical codes as strategic documents: An analysis of success and failure. EJBO-Electronic Journal of Business Ethics and Organization Studies .
Taiwo, A. A., Lawal, F. A., & Agwu, P. E. (2016). Vision and Mission in Organization: Myth or Heuristic Device?. The International Journal of Business & Management , 4 (3).
Tanković, A. (2013). Defining Strategy using Vision and Mission Statements of Croatian Organizations in Times of Crisis. Economic Research-Ekonomska Istraživanja , 26 (1). https://doi.org/https://doi.org/10.1080/1331677X.2013.11517655
