The Disadvantages of a Code of Conduct

by Neil Kokemuller; Updated September 26, 2017

Companies use a code of conduct to guide or manage the behaviors of employees. Ideally, these align conduct standards and enforcement with the goals of the organization. An effective code of conduct on its own has few drawbacks, but limitations or challenges include the time involved in preparing an effective code, legal and cultural obstacles, and enforcement obligations.

Time Involvement

As with other strategic plans or documents, it takes time to create a code of conduct. While company leaders could rush through and put pen to paper, a thoughtful code that provides long-term ethical stability takes longer. If different departments are consulted or outside consultants brought in to help with the process, the expenses only multiply.

Legal and Cultural Challenges

Though conduct codes sometimes align with laws, a code of conduct is intended to broaden the scope of standards to include morals and ethics. In a sales organization, for instance, a code of conduct might address confidentiality and transparency when dealing with customers. When crafting a code, the business must take care not to violate human resources laws or other business-related laws.

Cultural challenges often are more of an obstacle. While a code sets expectations on employees, it ideally is viewed as a benefit to the organization. A code with standards that contradict existing cultural values is tough to implement with strong worker buy-in. For instance, a business that emphasizes a "fun" culture would struggle to win favor with a code that is exceptionally restrictive relative to previous expectations. Cultural challenges are especially prominent in global organizations trying to identify core company values across many distinct country and culture borders. In some countries, rigid adherence to punctuality or time is valued, but in other countries time parameters are viewed more loosely.

Warnings

  • A lack of formality in organizational operations in certain cultures is another obstacle for global companies in implementing a code of conduct.

Enforcement Obligations

One of the biggest challenges of a code of conduct is the need to follow-through on enforcement of its tenets. If employees pick up on the fact that nothing is ever said or done about violations, the code is worth little more than the paper it is printed on. Not only do you need to display enforcement that aligns with stated policies, but employees should also believe that leaders consistently apply the code to all workers. Inconsistent application can lead to envy, tension and poor morale.

About the Author

Neil Kokemuller has been an active business, finance and education writer and content media website developer since 2007. He has been a college marketing professor since 2004. Kokemuller has additional professional experience in marketing, retail and small business. He holds a Master of Business Administration from Iowa State University.