Corporate culture and ethics: from words to actions

Abstract

PurposeBusiness organizations should strive to create ethical cultures to win consumer loyalty and thus safeguard long-term performance success. Management bears ultimate responsibility for promoting ethical behavior. By rewarding ethical behaviors and punishing transgressions, management will reinforce morally upright behavior and create a positive company culture. Successful promotion of corporate ethics, in turn, will boost employee morale, increase performance beyond bare minimums and retain employees in the long run. With a well-structured ethics code and strong reward system, management has all the tools necessary to create an ethical company culture.Design/methodology/approachThis viewpoint paper, while advocating for a systematic approach to ethical behavior in a business organization, carefully reviews both well-established literature in this area as well as current best practices. The aim is to provide senior managers with a sense of how the best corporate ethics programs are organized and structured.FindingsA successful corporate ethics program must involve all employees from executives to hourly wage workers, with each taking personal responsibility for his or her own performance and results. While no guarantees of success are offered, one reasonably certain path to failure is for an organization to post an ethics code and then ignore it. Ethics must be discussed, modified from time to time and actively integrated into the life of every organization that hopes to avoid ethical missteps.Originality/valueThis paper offers a fresh viewpoint on both the value and the organization of a potentially successful corporate ethics program. While time-honored ideas serve as the foundation for our discussion, a thorough review of current issues and best practices form the directional heading for the paper’s conclusions.