Developing an Ethical Culture

Are organizations behaving ethically?

     Newman and Fuqua (2006) suggest that there is much concern about the ethics of business organizations. It is well known that some business leaders manipulate financial information or make unethical decisions with devastating consequences for their employees, the community and society in general. There is also great concern about general social misconduct in the workplace. The reason behind decline in moral behaviors is simply stated as:  GREED. Good old fashioned money can be a great motivator to do the wrong thing.  
     However, there is also another reason why people in the workplace are behaving badly. Since so many business leaders have gotten away with misconduct, it seems that there is a normalized view of unethical behaviors in organizations. In other words: if I can get away with it, why not?  The challenge then becomes identifying how an organization can establish and maintain an environment that promotes ethical values, accountability and responsibility. This business environment is also known as culture of ethics.

What is Ethics Culture?

     According to the Ethics Resource Center (ERC) Culture is another way of referring to “the way things are done around here.”

According to the 2014 National Business Ethics Survey (NBES), the culture of an organization includes how employees interact with one another, work attire, communication with clients, and with management. Ethics is a very important component of the culture of an organization. The degree of ethical culture in an organization defines its commitment to doing what is right at all levels and how successful they are at upholding those values and standards. Critical aspects of ethics culture include:  

•  Management’s trustworthiness and ethical leadership.
• Supervisor reinforcement of ethical behaviors. Whether managers at all levels talk about ethics and model appropriate behavior. 
• Peer commitment. The extent to which employees value and support ethical conduct, support one another in doing what is right, and are accountable. 
• Organizational transparency, nothing to hide.

Here’s what the NBES 2014 found: 

• The percentage of companies providing ethics training rose from 74 percent to 81 percent between 2011 and 2013.
• Two-thirds of companies (67 percent) included ethical conduct as a performance measure in employee evaluations, up from 60 percent in 2011.
• Almost three out of four companies (74 percent) communicated internally about disciplinary actions when wrongdoing occurs. 
• Companies are doing a better job of holding workers accountable, imposing discipline for misconduct, and letting it be known that bad behavior is being punished.

      It seems that there is a significant increase in the commitment of organizations to promote ethical behaviors. This is serious! When organizations have strong ethical values, wrongdoing tends to be significantly less. In 2013, 20 percent (one in five) workers reported seeing misconduct in companies where cultures are “strong” compared to 88 percent who witnessed wrongdoing in companies with the weakest cultures.

Additionally:

     The percentage of companies with stronger ethics cultures rose to 66 percent in 2013; an improvement compared to NBES 2011 which demonstrated a rate of 60 percent and are the same rates of 2009, when companies were still implementing many ethics-related controls in order to weather the 2007-2009 recession.

For the complete study visit:

http://www.ethics.org/nbes/download-reports/

References

National Business Ethics Survey from the Ethics Resource Center | The Nationally Recognized Barometer of Workplace Ethics. (2014). Retrieved December 3, 2014, from http://www.ethics.org/nbes/

Newman, J. L., & Fuqua, D. R. (2006). What does it profit an organization if it gains the whole world and loses its own soul? Consulting Psychology Journal: Practice And Research, 58(1), 13-22. doi:10.1037/1065-9293.58.1.13