Organizational Culture and Ethical Leadership the Key to Workplace Ethics

Two weeks ago I blogged about “What is Ethics?” I pointed out that ethics should be based on accepted standards of behavior that have developed over time and come from a variety of sources including: (1) the influence of religious writing and interpretations; (2) the influence of philosophical thought; and (3) the influence of community (societal) values. In today’s blog I examine “What is Workplace Ethics?”

As noted by many writers, when we think of workplace ethics the first thing that comes to mind is a code of conduct that influences the development of an ethical culture within the workplace. A code of conduct goes beyond what is considered legal in the area where the business operates, they inspire communication between employees, allow for respect to be extended to each person within the organization, and promote customer relationships that are based on honesty and integrity. While there are core elements that tend to define a work-based code of ethics, the specific expressions of these central values vary from one corporate setting to the next.

When I teach about workplace ethics I like to begin with a discussion of the “Ethical Dissonance Model” by Maryjo Burchard that addresses the interaction between the individual and the organization, based on the person-organization ethical fit. This is an important consideration because the ethics of an individual influences the values that one brings to the workplace and decision making, while the ethics (through its culture) of an organization influences that behavior. To keep it simple, I adopt the idea that there can be a dissonance between what is considered ethical and what may actually be “best” for the subject inviting ethical consideration.

Of the four potential fit options, two possess high person-organization fit: (1) high organization ethics, high individual ethics (High-High), and (2) low organizational ethics, low individual ethics (Low-Low); and two possess low person-organization fit: (1) high organizational ethics, low individual ethics (High-Low) and (2) low organizational ethics, high individual ethics (Low-High).

Let’s focus on the ideal – High-High.  More likely than not an employee who knows her values and beliefs are an ethical match for the company she works for will conform her behavior to organizational expectations. But, how does she assess organizational ethics? Two researchers, Hian Chve Koh & Elfred H. Y. Boo, identified three distinct measures of organizational ethics: support for ethical behavior from top management, the ethical climate of the organization, and the connection between career success and ethical behavior.  These three factors relate to the culture of the organization and may have implications for actions such as whistleblowing. The researchers found that positive ethical culture and climate produces favorable organizational outcomes by setting down the ethical philosophy and rules of conduct and practices (i.e., code of ethics).

Employees who sense that top managers act unethically quickly loose trust in those managers. The result can be to become disillusioned with the goals of the organization and question whether the corporate culture is one that is consistent with those individuals’ personal values and beliefs. We all want to work for an ethical organization – one that we respect. An ethical organization is one in which top managers establish a tone at the top that promotes ethical behavior including to raise questions when questionable behavior occurs. Here is my top ten list (in no particular order) of how best to establish an ethical tone at the top.

1.      Establish clear policies on ethical conduct including a code of ethics

2.      Develop an ethics training program that instills a commitment to act ethically and explains code provisions

3.      Assign a top level officer (i.e., VP of Ethics) to oversee compliance with ethics policies

4.      Use the internal auditors to investigate whether the ethics policies have been followed in practice

5.      Establish strong internal controls to prevent and detect unethical behavior

6.      Establish an ethics hot line where employees can discuss questionable behavior on an anonymous basis

7.      Have employees sign a statement that they have complied with ethics policies

8.      Take immediate action against those who violate ethics policies

9.      Top management should “walk the talk” of ethics; follow their own ethics policies in word and deed

10.  Reward ethical behavior by including it in the performance evaluation system

As previously mentioned, we all want to work for an organization, whether public, private, or not for profit, that strives to be ethical and to follow leaders who make it clear in word and deed that the organization cares about following ethical principles. Workplace ethics and leadership go hand in hand. Noted guru on management behavior, Warren G. Bennis, once wrote “Managers are people who do things right while leaders are people who do the right thing.

Blog posted by Steven Mintz, aka Ethics Sage, on August 21, 2014. Dr. Mintz is a professor in the Orfalea College of Business at Cal Poly, San Luis Obispo. He also blogs at: www.ethicssage.com.