What are the ethics and values of an organization?
|
Suggestions for Top Management Show
There are many writings about corporate culture but one stands out in my mind because the thoughts are those of Big-4 firm Deloitte. Providing advice to clients on how to strengthen corporate culture says a lot about the firm’s commitment to serve their clients not only from a compliance standpoint but from the perspective of the broader notion of ethical behavior. What is Corporate Culture? The culture of an organization says a lot about what it stands for. Organizations that commit to ethical decision-making tend to instill a culture that promotes doing the right thing regardless of the cost. They view decision-making from a long-term perspective. Such organizations do not make decisions based on expediency. They do so after careful deliberation about the potential consequences of their actions on stakeholders; whether they are meeting their obligations to customers, clients, employees and so on; and whether their actions match their values. In other words, the leaders of the organization should“walk the talk” of ethics. The following are some suggestions to enhance ethical corporate culture adapted from Deloitte for purposes of this writing and elaborated on by me for purposes of this piece.  Creating an Ethical Culture Create listening posts. Conduct cultural assessments that unveil what employees think and how they behave. Maintain a healthy mood in the middle. Middle management should convert the tone at the top into policies and practices that drive everyday behavior. Keep it Interesting. Find new and innovative ways to communicate cultural values that grab the attention of employees. Promote accountability. Reward the right behaviors and penalize the wrong ones while not favoring one employee over another. Shout it from the rooftops. Be strong and consistent with the message that core values and expectations for ethical behavior drive actions. Remember the water cooler. Learn how employees view how things get done and what the organization stands for. Walk the talk. Implement policies that align organization values with strategies and provide specific responsibilities for acting in an ethical manner. Create a flexible performance appraisal system: Develop just-in-time performance appraisals that give immediate feedback, not just annually. Reward principled performance. Include in ethics and compliance performance goals for C-suite executives and tie those goals to compensation. Reinforce positive behaviors. Communicate right behaviors while explaining why certain behaviors are wrong through employee training. Checking Your Behavior Top management should set a clear tone that ethics matters. One useful approach is to ask employees to consider the following before making decisions that may reflect negatively on the employee and organization. How would you feel if your son or daughter found out about what you planned to do? Would you be proud of it? How would you feel if your decision made it to the front pages of tomorrow’s newspaper? Could you defend it? How would you feel if your decision went viral on social media? Would you be able to explain it on social networking sites? To learn more about how an ethical workplace environment can bring happiness and meaning to your life read Steve’s new book Beyond Happiness and Meaning: Transforming Your Life Through Ethical Behavior. Blog posted by Steven Mintz, aka Ethics Sage, on July 11, 2019. Visit Steve’s website and sign up for his newsletter. Follow him on Facebook and “Like” his page. Organizational ethics is the ethics of an organization, and it is how an organization responds to an internal or external stimulus. Organizational ethics is interdependent with the organizational culture. Although it is to both organizational behavior and industrial and organizational psychology as well as business ethics on the micro and macro levels, organizational ethics is neither organizational behavior nor industrial and organizational psychology, nor is it solely business ethics (which includes corporate governance and corporate ethics). Organizational ethics express the values of an organization to its employees and/or other entities irrespective of governmental and/or regulatory laws. Ethics are the principles and values used by an individual to govern his or her actions and decisions.[1] An organization forms when individuals with varied interests and different backgrounds unite on a common platform and work together towards predefined goals and objectives.[1] A code of ethics within an organization is a set of principles that is used to guide the organization in its decisions, programs, and policies.[2] An ethical organizational culture consists of leaders and employees adhering to a code of ethics.[2] Overview[edit]An organization's ethical philosophy can affect the organization in many ways including its reputation, productivity, and the bottom line of the organization.[2] Ethics within an organization can offer many benefits. A positive ethical corporate culture improves the morale among the workers in an organization, which could increase productivity, employee retention and loyalty.[3] Higher productivity improves the efficiency of the organizations and increased employee retention reduces the cost of replacing employees. Other essential benefits of an ethical culture include better internal communication and wider community development through corporate social responsibility.[citation needed] In the US, the Foreign Corrupt Practices Act restricts the United States business firms from engaging in bribery and other illegal practices internationally. There are laws that have the same type of prohibition for European companies which create a disadvantage competitively for both European and U.S. firms.[4] Such laws are not a restricting element to organizations that have highly elevated ethical behavior as part of their values. Organizations that lack ethical practices as a mandatory basis of their business structure and corporate culture, have commonly been found to fail due to the absence of business ethics. Corporate downfalls would include, but are not limited to, the recent Enron and WorldCom scandals, two primary examples of unethical business practices concerning questionable accounting transactions. Organizations focusing on encouraging ethical practices are commonly viewed with respect by their employees, the community, and corresponding industries.[5] Ethical business practices of organizations have resulted in a solid financial bottom-line. This has been seen through greater sales and increased revenue by companies retaining talented personnel and attracting new skilled employees. More importantly, an ethical organization will have the ability to retain employees that are experienced and knowledgeable (generally referred to as human capital). This human capital results in less employee turnover, less training time for new employees, and greater output regarding services (or production of goods). Basic ethical elements[edit]There are at least four elements that aim to create an ethical culture and behavior of employees within an organization. These elements are:
Organizations are constantly striving for a better ethical atmosphere within the business climate and culture. Businesses must create an ethical business climate in order to develop an ethical organization. Otherwise said, companies must focus on the ethics of employees in order to create an ethical business. Employees must know the difference between what is acceptable and unacceptable in the workplace. These standards are found in the written code of ethics or may be referred to as the employee handbook. These standards are a written form of employee conduct and performance expectations. Employee handbooks also commonly include rules concerning expectations and consequences that follow misconduct. Handbooks normally will
clearly state the rules, guidelines, and standards of an organization as well as possible rules, regulations, and laws that they are bound by. Many company handbooks will include laws regarding sexual harassment, alcohol abuse, and
drug/substance abuse. Intrinsic and extrinsic organizational rewards[edit]The intrinsic and extrinsic rewards of an ethical organization are
bound to an organization's culture and ethics. Based on the reliability and support structure of each of the four areas needed for ethical behavior, the organizational ethics will be evident throughout the organization. The organization including the employees, managers, suppliers, customers, and other entities, will receive intrinsic and extrinsic rewards. Actions of employees can range from whistle
blowing (intrinsic) to the extraordinary actions of hourly employee purchasing all the recently produced peanut butter (as produced by his employer), that has no resale value due to mislabeled jars. This employee was aware that his employer (extrinsic) would reimburse him in full for purchasing the mislabeled peanut
butter.[7] Ethical theory and leadership empowerment[edit]There are many theories and organizational studies that are related to “organizational ethics,” but
"organizations" and "ethics" are wide and varied in application and scope. These theories and studies can range from individual(s), team(s),
stakeholder, management, leadership, human resources,
group(s) interaction(s), as well as the psychological framework behind each area to include the distribution of job tasks within various types of organizations. As among these areas, the influence of leadership
in any organization cannot go unexamined, because of a clear understanding of the organization's vision, goals (to include immediate and long-term strategic plans), and values. Leadership sets the tone for organizational
management (strategic actions taken by an organization to create a positive image to both internal and external public). In turn, leadership directly influences the organizational symbolism (which reflects the culture, the language of the members, any meaningful objects, representations, and/or how someone may act or think within an organization). The values and ideals within an organization generally center upon “values for business” as the theoretical approach most leaders use to present to
their "co-members" (which in truth maybe subordinates). Stakeholder theory[edit]Whether it is a team, small group, or a large international entity, the ability for any organization to reason, act rationally, and respond ethically is paramount. Leaders must have the ability to recognize the needs and desires of members (or called “stakeholders” in some
theories or models), and how they correspond to the organization. It is the stakeholder theory that implies that all stakeholders (or individuals) must be treated equally, regardless of the fact that some individuals will contribute more than others to the
organization.[11] Ethical system implementation[edit]The function of developing and implementing business ethics into an organization is difficult. Due to each organization's culture and atmosphere being different, there is no clear or specific way to implement a code of ethics to an existing business. Business ethics implementation can be categorized into two groups; formal and informal measures. Formal measures include training and courses pertaining to ethics. Informal measures are led by example from either the manager or the social norm of the company.[12] There are several steps to follow when trying to implement an ethical system. Some of these steps include obtaining a commitment from the board of directors and senior managers, developing resources for ethics initiatives, and determining ethical risks and developing contingency plans. Other steps include developing an ethics program that addresses risks while still maintaining compliance with the ethical standards, providing insight for implementation and audits of the ethical programs, and communicating with stakeholders to create shared commitment and values for ethical conduct.[13] The implementation should be performed to the entirety of the business including all areas of operations. If it is not implemented pragmatically and with caution for the needs, desires, and personalities (consider the Big Five personality traits) of the stakeholders, the culture, and the employees, then problems may arise. Although a great deal of time may be required, stakeholder management should consider the Rational Decision-Making Model for implementation of various aspects, details, and standards of an ethical system to the stakeholders. If an implementation has been performed successfully, then all stakeholders have accepted the newly designed ethics system for the organization. With the implementation of an ethical system comes the implementation of new tasks and responsibilities. The responsibilities include leadership in ethics, delegating, and communicating as well as motivating the company's ethical position to its employees.[14] Some corporations have tried to burnish their ethical image by creating whistle-blower protections, such as anonymity. In the case of Citi, they call this the Ethics Hotline.[15] Though it is unclear whether firms such as Citi take offences reported to these hotlines seriously or not. Theories and models[edit]Refer to the following theories and models for more information:
See also[edit]
References[edit]
External links[edit]
Notes[edit]
What are values of an organization?Organization values are the beliefs and principles that drive a business forward. These abstract ideas guide the way people within an organization think and act in everything they do and may even inspire the company's creation.
What are the most ethical values in many organization?While there are many out there, the following represent some of the core values and ethics those in the business world should adopt:. Integrity.. Fairness.. Leadership.. Honesty.. Accountability.. Teamwork.. Charity/Kindness.. Loyalty.. What are the 5 ethical values?Moral Principles
The five principles, autonomy, justice, beneficence, nonmaleficence, and fidelity are each absolute truths in and of themselves. By exploring the dilemma in regards to these principles one may come to a better understanding of the conflicting issues.
What are the most important ethical values needed in an organization?Defining an Organization's Values and Ethics
These include but aren't limited to honesty, accountability, respect, caring and reliability. Values and ethics should be defined in an organization's bylaws, mission statement, vision statement and policies.
|
