Corporate Ethical Cultures Impacts and Implications
Corporate ethical culture is a set of values, beliefs, customs, and attitudes that help members of a corporate society to know what the organization stands for, how it does things, and what is considered important. The culture of a firm eminently influences its myriad actions and decisions because it guides the way its employees think, feel, and act. A number of important characteristics are associated with an organization’s culture for instance; observed behavioral regularities, norms as reflected by things such as amount of work to be done and the degree of cooperation between management and employees. Values that an organization advocates and expects workers to share, such as low absenteeism and the dressing code also characterize the ethical culture of an organization. Rules that dictate the do’s and don’ts of employee behavior for instance the how employees are expected to relate to each other also form the corporate ethical culture of an organization. The ethical culture of an organization plays a role in managers’ occupational well-being, for instance, they aid in making decisions (Huhtala, Feldt, Lämsä, Mauno & Kinnunen, 2011). This paper explains corporate ethical culture and examines its impacts and implications in an organization.
Impacts and Implications of corporate ethical culture
Corporate ethical culture has various implications to an organization which include; enhancing virtuous behavior, aids in conflict resolution, reduces complexity, helps in decision making and faster implementation of projects and a culture premised on reward motivates workers. Corporate ethical culture also has negative implications that include blocking new ideas and leads to lack of flexibility. Members of an organization that take part in a corporate culture acquire individual moral responsibility for their actions.
Firstly corporate culture energizes both the employee and the employers in an organization by enhancing virtuous behavior (Ruiz-Palomino & Martínez-Cañas, 2014). Corporate culture encourages cooperation in a business by uniting employees. Corporate culture elaborates on what is right and wrong in the organization thus providing an environment that the goals of the organization are accomplished.
Secondly a strong corporate ethical culture provides a conducive environment for conflict resolution in any organization. A corporate ethical culture that promotes cooperation and unity helps to avoid conflicts that may arise in any corporate society. Individuals in an organization share values when they engage habitually in value-laden practices and behaviors and enter into agreements to promote values that are important in determining moral responsibility for organizational outcomes (Dempsey, 2015). Corporate culture is also important in the success of organizational codes because if the codes of any organization are embedded in its culture and embraced by the administration then the codes are likely to be successful as opposed to where they are not embedded in the organizational culture. Commitments to promote values give each employee a normative reason to act in line with them so that each participant may be held causally responsible for actions the other parties take in pursuit of those values (Stevens, 2008).
Thirdly making of decisions within a firm is influenced and determined by the culture of the firm for example employees can be helped in making the right, or the wrong, decision by the expectations, values, and structure of the firm. Decisions are made faster unlike when the culture is strong because employees know what is right and wrong based on the corporate ethical culture. This avoids unnecessary waste of time due to conflicts that may arise when a culture is weak. Corporate ethical Cultures positively affect an organization’s capability to exploit resources at the organizations disposal. This creates a culture that fosters flexibility as well as an external focus on the market, and its opportunity is an important precondition for innovation success that is enhanced by an alignment of explorative and exploitative strategies. Decisions on resource allocation and attention to explorative activities are a major concern for corporate strategy (Matzler, Abfalter, Mooradian & Bailom, 2013).
Fourthly corporate ethical culture is important in enhancing workers performance which leads to attainment of goals of the corporate society. A strong culture within the corporate society raises the workers commitment towards accomplishing the goals of an organization with a common path. In a strong culture, employees are united towards accomplishing organizational goals, which also provides an opportunity for workers to grow. There is a relation between individual perceptions of a firm ethical context and ethical decision making (Valentine, Hollingworth & Hall, 2014). This shows that corporate ethical cultures are vital in helping employees to take good decisions that lead to improved performance of an organization. Corporate ethical culture leads to high performance amongst employees because it is considered as a driven force to improve the performance. It enhances self -confidence of workers, reduces job stress and improves the ethical behavior of stakeholders in any organization. The corporate culture helps in internalizing joint relationship that leads to managing successful organization processes. The employee performance would be considered as the backbone to the organization as it leads to its development effectively. Strong culture results in the effectual management of workforce which helps in enhancing performance. The common path for making perfect use of resources in the same cultural association helps in the positive development of the organization. On the basis of particular conditions corporate culture is helpful in improving and providing competitive edge. The employee commitment and group efficiency help in improving performance based upon organization sustainability.
Fifthly a corporate ethical culture which is premised on the reward system is critical in motivation of workers. It is vital in the inspiration of workers of any corporate society; this is accomplished through the reward system. An organization that has incorporated a culture of rewarding employees who have performed well motivates them and thus makes them work harder. Employee performance can be achieved optimally in organizational culture that is strong, and work motivation goes according to the conditions of workers at their place of work. Corporate ethical culture directly affects the work motivation which has an effect on the performance of employees. Employees believe that organizational efficiency increases with the increase in the motivational level of employees and that better motivation decrease the attrition rate of employees in the company (Sokro, 2012). Motivation of workers results in an efficient workforce thus leading to a maximum output. The better the organizational culture, the higher the motivational level of employees because organizations that develop a strong culture of rewarding employees performs better because the reward leads to increased motivation and performance .Work motivation does not mediate between transformational leadership and the performance of workers.
Sixthly innovation and creativity are also promoted by a corporate ethical culture that is strong. An organizational culture that provides an environment where creativity and ideas are shared is likely to encourage innovators. Strong corporate culture creates an intense sense of belonging and makes employees identify themselves with the organization; this leads to better motivation and high productivity thus job satisfaction. “Creation of organizational culture devoted to employees encourages creativity and team work, as well as improving team work and creation of triangle of knowledge which results in a better connection of research, education thus promoting innovation” (Abdussamad, Akib, Jasruddin & Paramata, 2015)
Faster implementation of projects, corporate culture has an effect on the implementation of projects in an organization. This is because it clearly stipulates how things should be done in the organization and helps to avoid conflicts that might make some projects of the organization to stall. Corporate ethical culture helps to avoid conflict among project participants, hostile socio-economic environment, harsh climate conditions, project manager’s ignorance and lack of knowledge, faulty project conceptualization and aggressive competition during tendering. Corporate ethical culture is a critical yet tacit element in laying the context of quality project performance in instructing and leading quality project performance (Tsung-Hsien & Yen-Lin, 2010).
Corporate ethical culture has negative implications, for instance, it blocks new ideas in an organization. Employees get used to doing certain things based on the corporate culture thus making them inflexible and unable to accept new ideas. New ways of accomplishing certain goals are resisted in an organization if the corporate ethical culture does not approve of such ways. “When organizational norms dominate, people will adopt the dominant perspective and potential dissenters who may provide alternative perspectives refrain from voicing their opinions for fear of rejection” (Lyons, Chatman & Joyce, 2007). This blocks novel ideas and makes an organization to stick to traditional methods of doing things which may be costly.
Corporate ethical culture has numerous impacts and implications to any organization. Corporate ethical culture is very important in every business entity and that is correlated to corporate performance. Besides, corporate culture has an influence on employees’ commitment to corporate goals in a positive way. Investing into ethical virtues of the organizational culture can promote managers’ goals because the stronger the presence of these virtues, the more ethical the corporate culture and this benefits the organization.
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