Concept
Organizational ethics is the ethics of an organization, and it is how an organization responds to an internal or external stimulus. Organizational ethics is interdependent with the organizational culture. Although it is to both organizational behavior and industrial and organizational psychology as well as business ethics on the micro and macro levels, organizational ethics is neither organizational behavior nor industrial and organizational psychology, nor is it solely business ethics (which includes corporate governance and corporate ethics). Organizational ethics express the values of an organization to its employees and/or other entities irrespective of governmental and/or regulatory laws. Ethics are the principles and values used by an individual to govern their actions and decisions. An organization forms when individuals with varied interests and different backgrounds unite on a common platform and work together towards predefined goals and objectives. A code of ethics within an organization is a set of principles that is used to guide the organization in its decisions, programs, and policies. An ethical organizational culture consists of leaders and employees adhering to a code of ethics. An organization's ethical philosophy can affect the organization in many ways including its reputation, productivity, and bottom line. Ethics within an organization can offer many benefits. A positive ethical corporate culture improves the morale among the workers in an organization, which could increase productivity, employee retention and loyalty. Higher productivity improves the efficiency of the organizations and increased employee retention reduces the cost of replacing employees. Other essential benefits of an ethical culture include better internal communication and wider community development through corporate social responsibility. In the US, the Foreign Corrupt Practices Act restricts United States business firms from engaging in bribery and other illegal practices internationally.