Broken Window Theory and Organizational Culture
Building an Ethical Workplace Environment
By Victoria Delgadillo, September 30, 2020
The following guest blog was written by Victoria Delgadillo, a student at Pepperdine University.
The Broken Window Theory has recently been applied to enhance organizational culture in the workplace. It holds that a company should take care of the small issues first to avoid bigger problems in the future. For example, the taking of office supplies or misuse of company electronic equipment should be dealt with swiftly so bigger crimes such as fraud would be less likely to occur.
Mintz points out that, broken window occurs when organizations choose to ignore early signs of poor behavior that manifests itself later in in senior leader behavior that can damage the reputation of the organization. By dealing with the small issues, senior managers establish a tone at the top that should permeate throughout the organization that small things will be handled quickly to ward off more serious offenses. Ethical leadership rules out over self-interested behavior.
The Broken Window Theory can be more successful if the organization establishes clear cut policies that misconduct will not be tolerated. It becomes part of an ethical culture.
The Broken Window Theory provides a great example of why the ethical culture of the organization is something that should remain one of the top priorities of a company’s operation. It has been studied that “...in the workplace, the organization’s values often have a greater influence on decisions than a person’s own values. Ethical decisions in the workplace are made jointly in work groups or other organizational settings. The strength of personal values, the opportunities to behave unethically, and the exposure to others who behave ethically or unethically influence decision making,” (Mintz, p. 120). There are definitely a few reasons why that may hold true, this could include a person simply wanting to fit in to their new environment, them genuinely not understanding the ethical/unethical nature of the behavior that they are being exposed to, or perhaps they are attracted to/remain in a certain work environment because of the match of values.
While many company’s may like to think they have done their part in ensuring an ethical workplace, the reality is that this belief does not necessarily reflect the truth. In a survey conducted by the Ethics & Compliance Institute (ECI) in 2018, it was revealed that 47% of the respondents had previously witnessed actions which were in violation of either the law or the ethical standards of the company, and of these violations, over half of these offenses were committed by someone in a management or supervisor position, (ECI p. 5). Now, it is important to consider that the severity of these violations may vary quite a bit, but they have occurred, nonetheless. It is not just the act at hand, but rather the message that is being sent when nothing is done about unethical behavior. If for no other reason, a company should care about the culture, because a lack of one can result in “higher turnover, lower productivity and ultimately, a diminished reputation and profitability,” (“The Value of Strong Workplace Ethics.”). So, what can a company do to mitigate these occurrences?
Historically, it looks like the most effective way to encourage the ethical behavior in the workplace is to create a strong culture revolving around it. To begin, it is essential they implement a program defining the elements of ethics, compliance and values that employees are expected to uphold. These should be clear, promoted throughout the organization and offer guidance to employees when they are faced with ethical dilemmas. The tone at the top is critical for this to be successful, which is why it is so concerning that a majority of violations come from management and supervisory positions. The importance of the culture needs to be reinforced throughout management, and those in leadership positions should visibly support these standards, meet performance goals, and encourage anyone to speak up if they witness misconduct. Failure to do so should be met with consequences.
In practice, there are a few ways this can be done successfully. Once clear policies are established, a training program that instills these values should be developed. A top-level officer should be assigned to oversee the compliance of these policies and internal auditors should also investigate as well. Internal controls are critical in this process and should be strong in order to prevent and detect any behaviors which do not comply with the organizations policies. There should be policies in place to protect whistleblowers, and a resource for employees to obtain guidance on behavior they are unsure about. Those who fail to uphold to the organizations ethical standards should be reprimanded, and those who comply should be rewarded for doing so. (Mintz, p. 144).
Ultimately, a company will reap what they sow. If they don’t put in the effort to mediate and discourage ethical misconduct now, they will likely need to put in much more work to clean up the mess that is left in the future.
Guest blog of Victoria Delgadillo, posted by Steven Mintz, aka Ethics Sage, on September 30, 2020. You can sign up for Steve's newsletter and learn more about Dr. Mintz’s activities at: https://www.stevenmintzethics.com/. Follow him on Facebook and on Twitter .