Draft Unit 6

I • Corporate ethical culture II • Culture’s role in global business ethics III • Importance and rationale for having organizational ethical culture • Methods to motive members toward et

ORGANIZATIONAL ETHICAL CULTURE

Presented by Nguyen Anh Duc

ID: 253459 HAM34 Columbia Southern University

I • Corporate ethical culture

II • Culture’s role in global business ethics

III

• Importance and rationale for having organizational ethical culture

• Methods to motive members toward ethical business

practices

IV • Example of ethics guidelines

I Corporate ethical culture

 What is culture: there are a number of definitions of culture

o “Culture is the systems of knowledge shared by a relatively large group of people.” (Texas A&M University, n.d)

o “Culture is a collective programming of the mind that

distinguishes the members of one group or category of people

from another.” (Texas A&M University, n.d)

o “Culture is communication, communication is culture.” (Texas

A&M University, n.d)

I Corporate ethical culture

 What is corporate culture?

o “corporate culture comprises the shared values and beliefs of

employees within any given organization” (Stanwick, & Stanwick, 2015)

o to maintain ethical culture within the firm is to maintain a culture that encourage ethical behaviors and decisions and reduce the

likelihood of members of the firm acting unethically

o Stanwick, & Stanwick (2015) outlined various unethical activities within the firm, such as falsifying financial data, providing false information to the public, violate right to privacy of employees, …

I Corporate ethical culture

o Schein (1992, as cited by

Vliet, 2014) also suggested

that organizational culture

exits on three levels:

Artefacts and symbols,

Espoused Values and Basic

underlying assumptions

Toolshero (2014)

II Culture’s role in global business

ethics

 Culture of each society is different For example, the culture of the western countries will be different from that of the eastern

nations.

 Due to cultural difference, people from different countries may

have conflicting opinions and Judgments of some behaviors

o for instance: offering a gift in appreciation to someone is normal

in Romania, a business expense in Germany while it is a bribe in

the US (Budrina, 2012)

 Thus, it is crucial for multinational corporation to learn cultures of countries in which it places subsidiaries

III importance and rationale for

having organizational ethical

culture

 Having organizational ethical culture is crucial for businesses for some reasons:

o Sandford, & Darcy (2015) stated that “Without an ethical and

compliant culture, organizations will be at risk.”

o ethical culture within the firm could ensure that unethical

activities do not occur in the workplace (Stanwick, & Stanwick, 2015)

o with less incidence of unethical actions, the company can avoid financial loss as well as damage reputation

o by establishing and maintaining ethical workplace cultures, firms could achieve more financial success, better motivate employees and have higher labor productivity (Meinert, 2014)

III Methods to motive members toward ethical

business practices

 leaders have two mechanisms to embed culture:

1. Primary Embedding Mechanisms

• leaders can transmit culture by paying attention to things, asking questions, showing emotional expression, creating budget,

rewarding or punishing a certain behavior, selecting and

dismissing employees, etc (Schein, 1997)

2. Secondary Articulation and Reinforcement Mechanisms

• leaders can also change culture within the firm through designing organizational structure, designing organizational systems and

procedures like IT system, stories and legends in the firm, etc

(Schein, 1997)

IV Example of ethics guidelines

 in Sales and marketing department:

o always be honest with customers, colleagues, partners and suppliers

o not participating in activities that cause conflict of interest

o protecting information of customers, company, and other

stakeholders

o adhere to relevant law and regulations

o providing safe products to intended clients

o avoiding misleading advertising practices

IV Example of ethics guidelines

 in accounting and finance department

o to comply with laws and regulations

o maintain confidentiality of information of the customers and

company

o Do not falsify and manipulate information and data

o do not accepting or offering any kind of bribes and kickbacks

o provide accurate, full reports and statements in a timely manner

o not involved in discriminatory or harassing behaviors

IV Example of ethics guidelines

 in public relations department

o be accurate and truthful in all kinds of communications

o  do not engaging in any form of bribery and kickback

o to safeguard confidentiality of customer information

o to continually strive to improve expertise and professional practices

o promote a positive workplace

 Organizational culture plays an important role in

encouraging and strengthening the ethical behavior within the company

 in coming years, when the company will be more global, department managers should actively transmit ethical

culture to all employees, encouraging them to comply with global ethical standards

 Budrina (2012) Intercultural: Cultural ethical dilemmas in business- from bribes paying to political affairs Retrieved from:

http://www.romania-insider.com/intercultural-cultural-ethical -dilemmas-in-business-from-bribes-paying-to-political-affairs /66629/

 Meinert (2014) Creating an Ethical Workplace Retrieved from:

https://www.shrm.org/publications/hrmagazine/editorialcont ent/2014/0414/pages/0414-ethical-workplace-culture.aspx

 Sandford, & Darcy (2015) Corporate Culture: The Center of Strong Ethics and Compliance Retrieved from:

http://deloitte.wsj.com/riskandcompliance/2015/01/20/corpo rate-culture-the-center-of-strong-ethics-and-compliance/

 Schein, E H (1997) Organizational Culture & Leadership

Retrieved from: http://www.tnellen.com/ted/tc/schein.html

 Texas A&M University (n.d) Culture Retrieved from:

https://www.tamu.edu/faculty/choudhury/culture.html

 Toolshero (2014) ToolsHero_Approach-to-culture-Schein [Image file] Retrieved from:

http://www.toolshero.com/organization/organizational-culture-mod el-schein/

 Vliet (2014) Organizational culture model by Edgar Schein

Retrieved from:

http://www.toolshero.com/organization/organizational-culture-model-schein/