The Ethical Corporate Culture
Organizational/Corporate Culture
• System of shared actions, values, and beliefs
that develops within an organization and
guides the behavior of its members.
(Schermerhorn, et al, 2012)
• “Culture shapes the people in the
organization, while the people also contribute
in shaping the culture of the organization.”
(Hartman, 2014)
Functions of Corporate Culture
• External Adaptation – requires the
organizational culture to determine how the
company will reach its goals, accomplish its
tasks, identify methods to achieve its goals,
and place measures to cope with success or
failure.
Functions of Corporate Culture
• Internal Adaptation – starts with the
establishment of an identity that is unique to
the business organization.
– Three important aspects of working together
• Members decide who is a member of the group or not
• Members develop an informal understanding of
acceptable and unacceptable behavior
• Members separate “friends” from “enemies”
Understanding Corporate Culture
OBSERVABLE CULTURE
SHARED VALUES
COMMON CULTURAL
ASSUMPTIONS
Understanding Corporate Culture
• Observable Culture – refers to the way things
are done in an organization.
• Shared Values – common values that are
meant to put together and motivate the
members of the organization.
• Common Cultural Assumptions – include the
taken-for-granted truths that the members
share as a result of a collective experience
with the organization.
Ethical Leadership & Management
• Two Recognized Types of Corporate Culture:
– Compliance-Based Culture – focuses on following
rules, laws, policies, and regulations as the
primary responsibility of ethics.
• E.g. GHI Bank in Muntinlupa City was cited by internal
audit because it was not able to follow the company’s
policy of dual control., that is, there should always be
two persons entering the vault. The CCTV footages
showed that there were two instances in May 2017 that
the branch manager entered the vault alone.
Ethical Leadership & Management
• Two Recognized Types of Corporate Culture:
– Value-Based Culture – reinforces a particular set
of values rather than a particular set of rules.
• E.g. Tina Garcia, a known actress of ABGM Network,
always goes to her teleserye tapings on time, all the
time. She got theses values from the TV Network
because all the employees of the ABGM Network give a
high regard to punctuality. Although there is no formal
log-in process, all employees still come on time, all the
time.
Setting a Corporate Code of Conduct
• Code of Conduct or Code of Ethics – a list of
guidelines and protocols based on the
organization’s values.
Guidelines in Developing a Code of
Conduct
1. Understand the mission and vision of the
organization.
2. Identify the values that the organization lives for.
3. Spell out the different behaviors and values that an
employee must follow in order to maintain the ethical
values of the organization.
4. Ensure proper enforcement of the code of conduct in
order to maintain the ethical culture within the
organization.
5. Outsiders must also understand the organization’s
code of conduct in order to avoid presenting the
employees with actions that go against the code.
Sample Code of Conduct
• Company Values
• Customer-centered – We strive to provide the best service
and products to our customers.
• Code of Conduct
• Employee Decorum
– Employees must always practice mutual respect to one other.
• Use of Company Property
– Company properties are the employees’ resources.
ACTIVITY #4 (11-22)
• Prepare your own sample code of conduct for
your chosen business organization. (5)
