Characteristics of Ethical Business Cultures

2015

The scandals and collapses, for example, involving Independent Insurance and Marconi in the United Kingdom, Elan in Ireland, Kirch in Germany, Royal Ahold in the Netherlands, HIH Insurance and One.Tel in Australia (Hill, 2001, p.369) and Satyam in India, posed analogous questions about the efficacy of corporate ethical practices. These global corporate collapses represent a defining moment in the contemporary corporate practices. After the failure of Enron and other high profile companies, many boards of directors, in response to new guidelines and a perceived crisis of confidence, decided to reexamine their business practices during the intervening period (Flanagan, Little, and Watts, 2005, p.278).In order to ensure that there were no systemic abuses by managers, legislations on fiduciary restraints, disclosure regimes and directors‘ duties were developed. Subsequently, corporate governance gained greater circulation, salience, credibility and eventually, entrenched as part of corp...

In difficult financial times, companies face various moral issues to try to keep up with their competitors. Although these issues have a direct impact on employee decision making, businesses rarely address how employees should assess the ethics of their actions and incorporate ethics into their decisions. Often this can be alleviated by creating and maintaining a corporate culture with a focus on ethics. Corporate culture is often considered to be both a source of various problems and the basis for solutions and is certainly a factor that determines how people behave in an organization. The role of management in the organizational culture is important as it both acts as a role model for the employees and can also directly influence the behavior and culture to improve organizational performance. Of course there are better methods that management can use to incorporate ethics into the corporate culture or increase the likelihood that its employees will act ethically and these methods are explored.

What constitutes ethical behaviour lies in a “grey zone” where clearcut right versus wrong and good versus bad dichotomies may not always exist. This paper is an empirical study on organizational culture and ethical behaviour from a strategic standpoint. Its objectives were to determine if there is a significant relationship between organizational culture and ethical behaviour and if there is a significant relationship between organizational culture and employees’ values. The participants of the study were employees of selected public and private organizations in Lagos, Nigeria. The selection was through simple random sampling technique. The sample size was 92 respondents. Two (2) hypotheses were formulated and tested using regression analysis. Hypothesis one revealed that there is significant relationship between organizational culture and ethical behavior; the coefficient of determination (R2) is 0.370. It shows that 37% of the variation or change in ethical behaviour is caused by variation in organizational culture. Hypothesis two also shows that the coefficient of determination (R2) is 0.423. It means that 42.3% of the variation or change in employees’ values is caused by variation in organizational culture, which connotes that organizational culture has significant relationship with employees’ values. The study recommends that management should constantly review its organizational culture to be sure that it remains strong on the vision of the founders of the organisation, because organizational culture can be eroded as more people come into the organization with their various individual behaviours and values. Key Words: Organization culture, ethical behaviour, strategic standpoint, employees’ values, leadership

Human Resource Development Review, 2009

This literature review identifies characteristics of ethical business cultures, describes factors, considered to be important in developing such cultures, describes current practices of developing ethical culture programs, and discusses the role of HRD in developing ethical business cultures. We argue that ethical thinking and behavior can be learned and internalized as a result of work-based interpretive interactions, and this learning process constitutes an important part of organizational learning. Therefore, to help the organization develop an ethical culture, HRD needs to play a key role in several interrelated activities which include: culture change efforts, focused on the creation of conditions, conducive to ethical behaviors; creation of a dynamic program of ethical training for employees on all levels of the organization; and development of upto-date codes of ethics.

Organizational research in the last two decades has paid greater attention to the topic of culture as a potential key or critical lever for better understanding of organizations. Culture has drawn attention to the long-neglected, subjective, or "soft" side, of organizational life. In functionalist thinking, culture is considered a component of an integrated social system which promotes the effectiveness of the organization and the well-being of all its stakeholders. Organizational culture refers to the assumptions, beliefs, goals, knowledge and values that are shared by organizational members. Culture represents the high-information "ideal factors" in a system or organization that exert significant and partly independent influence on human events. When an individual is faced with an ethical dilemma, his or her value system will color the perception of the ethical ramifications of the situation. This study, then, seeks to explore and have a basic understanding of the relationship between such value systems and employees' perceptions of organizational ethics. Analysis of a survey of 136 MBA students who are managers in Philippine companies regarding their firms' culture and their organizational members' perceptions of ethics reveals that there is a slightly significant relationship between particular cultural characteristics and employee perceptions of organizational ethics. This finding provides modest support for the theory that organizational values are associated with organizational members' perception of ethical business dilemmas. It likewise confirms the suggestion in the literature that organizations take on various cultural characteristics along the different stages of their life cycle, and that individual values and ethical perceptions do interact with the organizations' value systems.

African Journal of Business Management, 2013

Making wider the concept that ethical activities in business operations conducted by the organization can excel the organization performance is the core concept of this research study. Sample of different organization predicts that ethical practices of enterprises were vital for their expansion. Organizations that promote the culture of ethics in its operation enjoy its everlasting fruits.

Journal of Business Ethics, 2012

This study focuses on comparison of perceptions of ethical business cultures in large business organizations from four largest emerging economies, commonly referred to as the BRICs (Brazil, Russia, India, and China), and from the US. The data were collected from more than 13,000 managers and employees of business organizations in five countries. The study found significant differences among BRIC countries, with respondents from India and Brazil providing more favorable assessments of ethical cultures of their organizations than respondents from China and Russia. Overall, highest mean scores were provided by respondents from India, the US, and Brazil. There were significant similarities in ratings between the US and Brazil.

The Health Care Manager, 2014

The success of a health care institution-as defined by delivering high-quality, high-value care, positive patient outcomes, and financial solvency-is inextricably tied to the culture within that organization. The ability to achieve and sustain alignment between its mission, values, and everyday practices defines a positive organizational culture. An institution that has a diminished organizational culture, reflected in the failure to consistently align management and clinical decisions and practices with its mission and values, will struggle. The presence of misalignment or of ethics gaps affects the quality of care being delivered, the morale of the staff, and the organization's image in the community. Transforming an organizational culture will provide a foundation for success and a framework for daily ethics-grounded operations in any organization. However, building an ethics-grounded organization is a challenging process requiring strong organization leadership and planning. Using a case study, the authors provide a multiyear, continuous step-by-step strategy consisting of identifying ethics culture gaps, establishing an ethics taskforce, clarifying and prioritizing the problems, developing strategy for change, implementing the strategy, and evaluating outcomes. This process will assist organizations in aligning its actions with its mission and values, to find success on all fronts.

2011

Businesses in global world are interconnected with each other and practices at organizations for the compliance of business purpose. Organization cannot survive in isolation. The survival of organization depends upon the integration of business codes with the societal ethics and combinely format into an adjoined ethical practices prevailing saturate in market. Business ethics are gaining importance day by day which results into more saturation of business practices. The area of focus in this study is to investigate the effect of culture on ethics. Results proved in light of prior research that culture significantly effect on business ethics. Therefore it is very important need to give awareness to the employees so that firms can follow the ethics codes for doing business in good ethical ways.

European Business Review

2010

Along with increasing the influence of the private sector in the economical and financial life, the interest in the business constantly grows. It isn’t enough for organizations to offer new more qualitative, accessible and safer products on the market for the customers or these to offer better conditions for the employees, they must analyse the elements which influence ethics in the business, eradicating poverty, sustaining the healthy system and protecting the environment.

In view of the scope and scale of the latest scandals, e.g. Enron's maximum breaking bankruptcy, the re-discovery of ethics in business has received an impressive boost. By now even car salesmen have written ethics, ''a Code of Conduct'', e.g. in the USA or Poland. But there is no clear aim of the role ethics obtains in organizational settings as we may show in some small cases of practical approaches to deal with ethics in organizations. We discuss how ethics is the prerequisite to conduct any business and what advantages may be realized if a clear set of ethics is followed. We will discuss three practical examples. In cases of ethics-based valuesadded management of Siemens (Germany), Boeing (U.S.) and SAP (Germany) we explain the mechanisms of ethics in management to strengthen organizational success. We emphasize the importance of clear ethics-related communication processes in organizations. We explain the use of communication theories inside organizational processes to clarify communication about such an abstract topic as ethics. Finally, we point out how a management of ethical ideas and cultural values should be designed in business enterprises.

2016

The aim of this paper is to analyse the organizational culture within the business environment. The paper analyzes the ethical criteria of the entrepreneurs and the way they relate to the consumer, as well as the reinforcement of the moral values so that the final result of the economic activity is represented by sustainability and economic profit. We thought it would be important to point out that promoting an ethical firm can ensure the well-needed trust capital in a constantly changing society. In this context, corporate responsibility is a key element that ensures both the sustainability of the company as well as the sustainability of the relations with the business partners. In our view, a strong corporate culture must integrate ethics and responsibility in all its activities, since the focus is often laid on obtaining profit, not on the values ​​that should lead the organization towards success over a long period of time. Since our society provides both positive and negative i...

Journal of Business Ethics, 2000

In view of the scope and scale of the latest scandals, e.g. Enron's maximum breaking bankruptcy, the re-discovery of ethics in business has received an impressive boost. By now even car salesmen have written ethics, ''a Code of Conduct'', e.g. in the USA or Poland. But there is no clear aim of the role ethics obtains in organizational settings as we may show in some small cases of practical approaches to deal with ethics in organizations. We discuss how ethics is the prerequisite to conduct any business and what advantages may be realized if a clear set of ethics is followed. We will discuss three practical examples. In cases of ethics-based valuesadded management of Siemens (Germany), Boeing (U.S.) and SAP (Germany) we explain the mechanisms of ethics in management to strengthen organizational success. We emphasize the importance of clear ethics-related communication processes in organizations. We explain the use of communication theories inside organizational processes to clarify communication about such an abstract topic as ethics. Finally, we point out how a management of ethical ideas and cultural values should be designed in business enterprises.