Introduction
In today's society, businesses are driven by a common purpose and vision that intertwines philosophy and ethical principles to better serve their organizations and stakeholders. These stakeholders include customers, employees, shareholders, suppliers, and communities. Without a strong foundation of professional ethics, businesses and their programs would struggle to achieve success. This paper delves into an in-depth examination of Humana, focusing on its business code of ethics and its mission statement, which play a crucial role in shaping the company's values and objectives.
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This analysis explores the type of ethical system employed by Humana and provides real-world examples to illustrate this system and its attributes. Additionally, it delves into how the code of ethics is identified and utilized within the organization, encompassing employees, management, and the board of directors. The need for potential modifications to the existing code of ethics is also discussed, along with reactions to the code, its impact on organizational culture, and its broader effects on the company.
Ultimately, this paper aims to provide a comprehensive analysis of Humana's business code of ethics, highlighting key concepts that promote ethical decision-making and business success.
Business Code of Ethics and its Mission Statement
The concept of business ethics began to take shape in the early 1970s in the United States. Business ethics can be defined as "the study of standards of business behavior which promote human welfare and the greater good" (Santa Clara University [SCU], 2011, para. 1). Humana, a prominent provider and administrator of health insurance plans, formalized its code of ethics in 1995, demonstrating a commitment to ethical business practices by establishing a 24-hour ethics assistance hotline (Humana, 2011, para.
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1).
Humana's code of ethics serves as a framework for understanding the company's ethical standards while promoting open communication and the well-being of its members. The code underscores Humana's mission and vision: "to become the most trusted name in health solutions." It is designed to educate associates on how to contribute to the company's success through ethical behavior, emphasizing doing the right thing in the right way for the right reasons (McCallister & Catron, 2011, p. 1).
By defining the purpose of its business code of ethics, Humana facilitates a better understanding of how to promote ethical behavior within the organization. This code of ethics plays a pivotal role in shaping Humana's ethical standards and fostering a culture of integrity.
Deontological Ethical System
Ethical systems in business serve as the guiding contexts for ethical decision-making, much like the rules in an athletic competition. They lend significance and meaning to employees' conduct within an organization (Ulrich, 2010, para. 2). Ethical systems can be categorized based on their underlying principles. Humana's ethical system aligns with deontology, also known as a duty-driven ethical system. The term "deontological" derives from the Greek word "deon," meaning duty.
Deontologists base their ethical decisions on broad, abstract universal principles or values, such as honesty, promise-keeping, fairness, loyalty, rights, justice, compassion, and respect for persons and property (Trevino & Nelson, 2007, p. 98). Humana's business code of ethics exemplifies a duty-driven ethical system by establishing ethical principles that employees and stakeholders must follow to ensure compliance, quality, and business success.
Humana's code of ethics explicitly outlines the importance of integrity. It incorporates guidelines that address various key aspects, emphasizing the company's duties and obligations to maintain ethical standards. For instance, the code places significant emphasis on honesty, compliance with laws and regulations, adherence to the highest ethical standards of conduct, and the responsibility to report violations. These components serve as clear examples of a duty-driven, deontological ethical system.
Utilization of the Code of Ethics
The application of Humana's code of ethics is instrumental in promoting ethical decision-making and behavior within the organization. To ensure that employees understand and adhere to these standards, Humana provides the code of ethics to all employees on their first day of employment. This initial introduction serves to establish the organization's ethical expectations and how employees can uphold these standards in alignment with Humana's mission and vision.
Furthermore, Humana requires employees to undergo annual ethical compliance training. This training reinforces the company's ethical standards and provides employees with the necessary knowledge and resources to address ethical dilemmas effectively. For instance, the code of ethics addresses employees' right to report workplace violence and harassment, offering specific examples of unacceptable behavior contributing to workplace violence. In addition to the 24-hour ethics hotline, the code provides additional resources for employees to contact when faced with such issues.
Moreover, if instances of violence occur outside of the workplace, affecting any Humana employee, the organization encourages individuals to seek support through its Employee Assistance program. This program provides employees with essential support services and resources to address violence, whether it occurs at home or in the workplace. Humana is committed to providing resources and assistance to employees who encounter violence, recognizing its potential impact on employee performance and well-being.
Beyond employees, Humana's code of ethics also extends to the management team and the board of directors. A corporate-level code of ethics specifically addresses the ethical guidelines for leaders, managers, and directors within the company. This code aims to maintain the highest standards in Humana's financial reporting with governmental agencies. It covers standards related to conflicts of interest, accurate reporting, and the avoidance of personal activities or associations that could interfere with making sound judgments in the best interests of Humana.
Overall, the code of ethics serves as a valuable resource and tool for managers, enabling them to navigate ethical dilemmas effectively. Humana recognizes the significance of ethical guidelines and resources in ensuring compliance and ethical decision-making throughout the organization.
Potential Modifications to the Code of Ethics
Upon a thorough analysis of Humana's business code of ethics, it becomes evident that the code is comprehensive, accessible, and easy to understand. Furthermore, it provides a wide array of useful tools and resources to support ethical standards and offers continuous support to employees through its 24-hour access to ethical assistance. When establishing a code of ethics, it is crucial to address key components of the company's mission and goals, along with clear guidelines that support the organization's vision.
As it stands, Humana's code of ethics fulfills these criteria. It promotes transparency, offers guidance for compliance with government laws and regulations, and provides a framework for acceptable behavior. Humana has successfully created an environment that fosters high ethical standards and a strong sense of community.
Given the code's current effectiveness and comprehensiveness, there may be limited need for modifications at this time. However, it's essential for organizations to periodically review and update their code of ethics to adapt to changing ethical landscapes, legal requirements, and business environments. Humana should consider the following factors when evaluating the need for potential modifications:
- Evolving Ethical Standards: Humana should stay vigilant regarding evolving ethical standards within the healthcare and insurance industry. As societal values and expectations change, the code of ethics should reflect these shifts to remain relevant and effective.
- Legal Compliance: Regularly reviewing and updating the code of ethics ensures that it aligns with current laws and regulations. Staying compliant with legal requirements is crucial for any organization, especially in the highly regulated healthcare sector.
- Employee Feedback: Soliciting feedback from employees can provide valuable insights into areas where the code of ethics may need improvement or clarification. Anonymous surveys or focus group discussions can be used to gather employee perspectives.
- External Stakeholder Input: Considering input from external stakeholders, such as customers, suppliers, and community members, can help Humana gauge the code's effectiveness in fostering trust and transparency.
- Ethical Dilemmas: Analyzing real ethical dilemmas and how they were resolved within the organization can reveal areas where the code of ethics may require additional guidance or specificity.
- Industry Best Practices: Benchmarking against industry best practices can identify areas where Humana can enhance its code of ethics to align with or exceed industry standards.
- Diversity and Inclusion: Ensuring that the code of ethics addresses issues related to diversity, equity, and inclusion is increasingly important in today's business environment. Humana should assess whether these aspects are adequately covered.
- Technological Advances: Given the rapid advancement of technology in healthcare, Humana should assess whether its code of ethics adequately addresses emerging ethical challenges related to data privacy, telemedicine, and artificial intelligence.
- Global Expansion: If Humana plans to expand its operations internationally, it should review its code of ethics to ensure it complies with international ethical standards and cultural norms.
- Training and Communication: Evaluating the effectiveness of the code's communication and training programs is essential. Regular training sessions and clear communication channels ensure that all employees are aware of and understand the code's principles.
In summary, while Humana's current code of ethics is comprehensive and well-structured, ongoing review and potential modifications are essential to keep it aligned with evolving ethical standards, legal requirements, and the changing landscape of the healthcare industry. An ethical code that adapts to these changes will continue to serve as a valuable tool in promoting ethical decision-making and sustaining the organization's success.
Reactions to the Code of Ethics
When introducing a code of ethics within an organization, it is essential to anticipate and understand the various reactions it may elicit from employees, management, and stakeholders. Reactions to a code of ethics can vary widely, ranging from positive acceptance to skepticism or resistance. It is crucial to address these reactions effectively to ensure that the code is embraced and integrated into the organizational culture.
Positive Reactions
Positive reactions to a code of ethics typically indicate that employees and stakeholders understand the importance of ethical guidelines and are supportive of the organization's commitment to ethical behavior. These reactions may include:
- Alignment with Values: Some individuals may resonate with the ethical principles outlined in the code and perceive them as consistent with their personal values and beliefs. They are likely to embrace the code enthusiastically.
- Enhanced Trust: Positive reactions often result in increased trust among employees and stakeholders. They trust that the organization is committed to ethical conduct and that their interests are being considered.
- Improved Morale: A well-received code of ethics can boost morale within the organization. Employees may feel a sense of pride in working for a company that prioritizes ethical behavior.
- Clear Guidance: Positive reactions may stem from the clarity and comprehensiveness of the code. When the code provides clear guidance on ethical decision-making, employees are more likely to support and follow it.
- Ethical Role Models: Employees who have positive reactions may view the organization's leadership as ethical role models. This perception can influence their own behavior and decisions.
Negative Reactions
Negative reactions to a code of ethics should not be dismissed but rather viewed as opportunities for constructive dialogue and education. Common negative reactions include:
- Perceived Intrusiveness: Some employees may perceive the code as intrusive or overly prescriptive. They may feel that it dictates what they should say and how they should act, which can lead to resistance.
- Lack of Autonomy: Negative reactions may stem from a perception that the code restricts individual autonomy and decision-making. Employees may fear that their judgment is being undermined.
- Cynicism: In some cases, employees or stakeholders may view the code with cynicism, questioning the organization's sincerity in upholding ethical standards. They may see it as a mere PR tool.
- Resistance to Change: Resistance to change is a common reaction when introducing a new code of ethics. People are often resistant to new policies or guidelines, especially if they disrupt established routines.
- Misinterpretation: Negative reactions can also arise from misinterpretation or misunderstanding of the code's provisions. Clear communication and training can help address this issue.
Addressing Reactions
To address reactions effectively, organizations, including Humana, should consider the following strategies:
- Communication: Clear and transparent communication is key. Explain the rationale behind the code of ethics, emphasizing its alignment with the organization's mission and values.
- Education and Training: Provide comprehensive training to ensure that all employees understand the code's principles and how to apply them in their roles.
- Open Dialogue: Encourage open dialogue and feedback channels where employees can express concerns or seek clarification on any aspects of the code. Addressing concerns promptly demonstrates the organization's commitment to transparency.
- Leadership Commitment: Leaders should lead by example, consistently demonstrating ethical behavior and values. Their commitment to the code sets the tone for the entire organization.
- Flexibility: Where possible, allow for flexibility in the interpretation and application of the code to accommodate different roles and situations within the organization.
- Inclusivity: Involve employees and stakeholders in the code's development and revision processes. Their input can enhance the code's relevance and acceptance.
- Continuous Evaluation: Regularly assess the code's impact and effectiveness through surveys, feedback mechanisms, and ethical audits. Use this data to make necessary adjustments.
Impact of the Code of Ethics on Organizational Culture
A well-implemented code of ethics has a profound impact on the organizational culture of a company like Humana. It shapes the values, behaviors, and norms that define how employees interact and make decisions within the organization. Here are some key ways in which a code of ethics influences organizational culture:
Fostering Ethical Behavior
The primary goal of a code of ethics is to promote ethical behavior throughout the organization. When employees consistently adhere to the ethical principles outlined in the code, it creates a culture of integrity. Ethical behavior becomes the norm, and employees hold themselves and their colleagues accountable for upholding these standards.
Building Trust
Trust is a foundational element of any organizational culture. A well-communicated and consistently enforced code of ethics builds trust among employees, stakeholders, and the broader community. When individuals see that the organization is committed to ethical conduct, they are more likely to trust its leadership and decisions.
Enhancing Employee Morale
A culture that prioritizes ethics and values can boost employee morale. When employees feel that they are part of an organization that upholds high ethical standards, they are more likely to take pride in their work and feel a sense of purpose. This, in turn, can lead to higher job satisfaction and productivity.
Aligning with Mission and Values
An effective code of ethics aligns with the organization's mission and values. It reinforces the message that ethical conduct is not just a set of rules but a fundamental aspect of the company's identity. This alignment strengthens the connection between the code of ethics and the broader organizational culture.
Supporting Ethical Decision-Making
A code of ethics serves as a valuable resource for employees when they face ethical dilemmas. It provides guidance and a framework for ethical decision-making. In a culture that encourages the use of the code as a reference, employees are more likely to make ethical choices even in challenging situations.
Effects on the Organization
The implementation and adherence to a code of ethics can have profound effects on the overall organization. These effects extend beyond the immediate impact on culture and ethics:
Legal Compliance
A well-structured code of ethics helps the organization stay compliant with relevant laws and regulations. By outlining the ethical principles that align with legal requirements, the code reduces the risk of legal issues and regulatory violations.
Reduced Risk
Ethical behavior and decision-making contribute to reduced organizational risk. Employees who consistently follow ethical guidelines are less likely to engage in fraudulent activities or unethical practices that could harm the organization's reputation and financial stability.
Enhanced Reputation
Organizations that prioritize ethics tend to have stronger reputations. A positive reputation can attract customers, investors, and partners who want to be associated with an ethical organization. This, in turn, can lead to business growth and success.
Stakeholder Trust
A code of ethics fosters trust not only among employees but also among stakeholders such as customers, suppliers, and shareholders. When stakeholders trust the organization's commitment to ethical conduct, they are more likely to engage in long-term relationships and collaborations.
Employee Retention
A culture of ethics and integrity can improve employee retention rates. Employees are more likely to stay with an organization where they feel their values are aligned and where they are proud of the company's ethical reputation.
Innovation and Creativity
An ethical culture encourages open communication and collaboration. When employees feel safe and valued, they are more likely to contribute innovative ideas and creative solutions to business challenges.
Conclusion
In conclusion, Humana's business code of ethics plays a pivotal role in shaping the organization's values, behavior, and overall culture. It operates within a deontological ethical system, emphasizing duty-driven principles that guide ethical decision-making and conduct. The code's utilization extends to employees, management, and the board of directors, ensuring that ethical standards are upheld throughout the organization.
While Humana's current code of ethics is comprehensive and effective, it is essential to periodically review and update it to align with evolving ethical standards and business environments. Addressing employee reactions and fostering a culture of ethics is crucial for its success. The code of ethics significantly impacts the organization by enhancing legal compliance, reducing risk, building trust, and supporting stakeholder relationships. Ultimately, it contributes to Humana's mission of becoming the most trusted name in health solutions and sustaining its success in the dynamic healthcare industry.
