Which statement best describes why companies create codes of ethics?

• A. To make ethical decision making more predictable
• B. To punish employees
• C. To circumvent laws
• D. To micromanage staff

Answer: (A)

Codes of ethics provide a framework that reflects an organization’s values and guides decisions when situations aren’t clear-cut. They help make ethical decision making more predictable because employees have a reference point for what is acceptable, which reduces guesswork and inconsistency across departments and over time. Beyond guiding day-to-day choices, a code communicates the company’s standards to new hires, supports training, and helps protect the organization’s reputation and legal compliance by aligning behavior with stated values. The goal isn’t to punish people or to control every action, nor is it to sidestep laws or micromanage staff; rather, it establishes expected conduct and a basis for accountability when those standards aren’t met.