Professional Documents
Culture Documents
In situations where the law is an incomplete guide for ethical decision making, the corporate culture is likely to be the determining factor. An ethical culture is one in which employees are empowered and expected to act in ethically responsible ways even when the law does not require it.
A corporate culture sets the norms and expectations that will determine which decisions get made.
An example of how cultures encourage some behaviors and discourage others is the two organizational approaches to relief efforts after Hurricane Katrina in September 2005.
The U.S. Coast Guard has a reputation for being less bureaucratic. Their unofficial motto is rescue first, and get permission later. The Coast Guard empowers front-line individuals to solve problems without waiting for authorization. While FEMA and the Coast Guard are similar organizations with similar missions, rules, and legal regulations, their cultures are very different, and their respective decisions reflect these cultures.
The cultivation of ones habits, including the cultivation of ethical virtue, is greatly shaped by the culture in which one lives. We are often as likely, or more likely, to act out of habit and based on our character, as to act based on careful deliberation. Business institutions provide an environment in which habits are formed and virtues are created. Such an environment is an ethical corporate culture.
Leadership sets the tone not only via personal behavior, but also via allocating corporate resources to support and promote ethical behavior.
It is important in ethical leadership to be perceived as a peopleoriented leader. Even traditional leadership duties are perceived as being done within the context of an ethics agenda. Ethical traits and behavior must be socially visible and understood (walking the talk) to have influence.
Ken Lay and Jeffrey Skilling of Enron were good and effective business leaders, and were also unethical leaders. One key difference between effective leaders and ethical leaders is the motivators used to achieve goals. Threats, intimidation, harassment, and coercion can be used effectively, but modeling, persuasion, and use of ones role in the company are ethical as well as effective.
The Johnson & Johnson credo is an excellent example of a clear ethical mission statement. After developing a mission statement, a code of conduct then can delineate this foundation more specifically. The code of conduct can enhance corporate reputation.
The code can give concrete guidance for internal decision making, thus creating a built-in system for risk management.
Means for enforcement includes allowing employees to come forward with questions, concerns, and information about unethical behavior.
Ethics ombudsmen
Ethics hotlines
A firms management of its internal and external relationships is critical evidence of its values.