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  • Subject Name : Management

Creating an Ethical Organizational Culture

An organization should follow a certain set of rules which is termed as Ethics, while Business ethics means a code of conduct that the businesses are expected to follow in their business (Afon & Picardi, 2017).

Ethics help to set a standard for the organization, to regulate the behaviour of people working in the organization. It helps them to know the difference between what is right and what is wrong while working in the organization. Business Ethics are sometimes commonly called a code of conduct which means a set of rules that the people working in the organization must follow.

It makes sense to say that everyone wants that businesses should be clean and produce benefits to society (De Silva, Opatha & Gamage, 2016). If this needs to be achieved, then organizations must follow a set of ethics or rules and engage themselves in fair competition and fair practices; it will altogether benefit the organization as well as the consumers and society. Today, I am going to discuss the role and significance of ethics in a business and the ways to create an ethical organizational culture.

Importance of Ethics in an organization:

  1. Being ethical and truthful brings a feeling of satisfaction in the people as it is the basic human need to be fair and work fairly in an ethical organization (Di Stefano, Scrima & Parry, 2019).
  2. It creates credibility as the society always favours an organization that has moral values and is involved in fair practices (Hijal-Moghrabi, Sabharwal & Berman, 2017).
  3. It helps to unite people and to align the behaviours of people to achieve a common goal.
  4. It helps to improve decision making as decisions are driven by moral values.
  5. Organizations that work ethically become more profitable and successful in the long run.

Ways to Build an Ethical Organizational Culture

Here are the 5 steps that can help to create an ethical organizational culture:

  1. Top Management must be represented as an example for others

The employees working in an organization always look up to the behaviour of top management for example (Karakuş, 2018). Therefore, the companies can show their commitment towards an ethical organization by ensuring that the top management behaves in an ethical manner to display an example for others. The employees always seek the behaviour of the leaders as the type of behaviour that is acceptable in the company. As it is always said that actions speak much louder than words, so it is must that behaviour of top leaders or managers is ethical, as the employees reproduce the behaviour that they see. This requires the top executives to be sure to practice what they preach.

  1. Pass on clear expectations regarding Ethics

The company must create an official code of conduct that must be clear and must outline the values and morals that everyone in the organization is expected to follow (Manggai, bin Thukiman & bin Othman et al., 2018). It must be carefully communicated to all the employees of the organization. These norms are easily observed and detected from the environment, so just to create and communicate a well-written code of conduct is not enough. It must be ensured that if the top management does not display ethical behaviour, nothing will work.

  1. Provide Formal Training for Ethical Behaviour

The company must provide a formal ethics training program to the employees. The training programs can include seminars, workshops, and other programs that help to stress the importance of following the standards or code of conduct to be followed by everyone in the organization. They must clarify the difference between acceptable and unacceptable behaviour at work (Heckler & Ronquillo, 2020). The employees must be trained to handle ethical dilemmas and help them in improving their problem-solving skills.

  1. Stress upon the behaviour you want and behaviour you do not want

The annual performance appraisals must also include the ethical behaviour of managers and they must be evaluated on the same too. The appraisals must have questions related to the decisions made by managers against ethics. The employees who perform ethically must be noticed and awarded for their ethical behaviour whereas those who do not behave ethically must face the consequences for their unethical behaviour. The company should provide proper training to those who violate the rules instead of firing them on rules violation. Proper feedback and education of employees are required to bring improvement in their behaviour (Smith, Peters & Caldwell, 2016).

  1. Provide security to employees

The employees would want to work fairly and follow ethical behaviour in an organization that has high moral standards (Terec-Vlad & Marius, 2016). If they notice any unethical behaviour in the organization, it would be difficult for them to report about it to the seniors. It is more challenging for people who are shy or introverted. It becomes more tough for a person to complain about the unethical behaviour, especially if it is done by someone who is among the senior persons of the company.

Companies can take several steps to make the employees feel safe and report about any unethical practice without worrying about their jobs or without thinking much about the consequences (Warrick, 2017). In such situations, there are people such as an ethics officer, an ombudsman, or an ethics counselor can help with the investigation of the complaint.

Conclusion on Building CSR and Ethical Values into Organizational Culture

The ethical issues in the business should never be ignored by the top management. It is very important to provide a clearly written set of rules and policies. At the same time, it is required that the applied processes must ensure that those rules and code of conduct are followed and adhered to and the business practices are ethical and fair.

To effectively notice and address ethical issues in business, several efforts can be taken. The top management must be able to communicate and enforce a code of ethics while making decisions and must expect the same from the employees. The industry rules and regulations must be taken care of and everyone must be informed about the rules that impact the industry. Ensure that everyone is treated ethically and transparency is maintained in daily operations such as financial reports. The top management must follow the code of conduct and ensure that they pay attention to any kind of unethical thing happening in the organization and take the required action.

References for Building CSR and Ethical Values into Organizational Culture

Afon, J., & Picardi, C. A. (2017). Building CSR and Ethical Values into Organizational Culture.

De Silva, V. A., Opatha, H. H. D. N. P., & Gamage, A. S. (2016). Towards extending the ethical dimension of human resource management.

Di Stefano, G., Scrima, F., & Parry, E. (2019). The effect of organizational culture on deviant behaviors in the workplace. The International Journal of Human Resource Management, 30(17), 2482-2503.

Heckler, N., & Ronquillo, J. C. (2020). Effective Resolution of Ethical Dilemmas in Social Enterprise Organizations: A Moral Philosophy and Public Management Approach. Public Integrity, 22(1), 39-53.

Hijal-Moghrabi, I., Sabharwal, M., & Berman, E. M. (2017). The importance of ethical environment to organizational performance in employment at will states. Administration & Society, 49(9), 1346-1374.

Karakuş, M. (2018). The moderating effect of gender on the relationships between age, ethical leadership, and organizational commitment. Journal of Ethnic and Cultural Studies, 5(1), 74-84.

Manggai, B. A., bin Thukiman, K., bin Othman, M. F., & bin Abdul Majid, M. K. (2018). Organizational Culture and Ethics in Decision-Making. International Journal of Engineering & Technology, 7(2.29), 257-259.

Smith, S. S., Peters, R., & Caldwell, C. (2016). Creating a culture of engagement–insights for application. Business and Management Research, 5(2), 70-80.

Terec-Vlad, L., & Marius, C. U. C. U. (2016). Ethics and organizational culture–Key elements regarding the development of economic activities. Ecoforum Journal, 5(1).

Warrick, D. D. (2017). What leaders need to know about organizational culture. Business Horizons, 60(3), 395-404.

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