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Thursday, November 2, 2017

Culture and Business Ethics

Marshall Schminke
Originally published October 3, 2017

Here is an excerpt:

What do most companies overlook when it comes to organizational design?

Supervisors. Despite some high profile missteps, organizations generally do a pretty good job of making ethics a front-and-center issue at the upper levels.  Likewise, they invest heavily in education and training at the level of the rank-and-file worker.  But as with so many strategically important issues, low-to-mid-level supervisors are often ignored.  This is troublesome, because research shows the single most important factor in driving employees’ ethical actions is not what top managers or coworkers say or do.  Rather, it is the immediate supervisor—and whether he or she is capable of creating an ethically supportive work culture that employees experience every day—that matters most.  Yet in most cases, these “sergeants and lieutenants” of the workplace receive relatively little attention when it comes to ethics and ethics training.

How can E&C teams better emphasize ethics vs. compliance?

Culture. It’s not that rules aren’t important.  They are.  And they must be understood and followed.  But complex business environments—and complex ethical rules and standards—cannot address every situation employees might encounter.  Therefore, the only real insurance organizations have for getting the best ethical effort possible from their employees is to bake it into the culture and climate, where it becomes second nature to employees trying to do their best in a tough business world.

What have you learned as a part of the ES culture measurement working group?

As a culture and climate researcher for years, this experience has been truly eye-opening for me.  It has introduced me to different perspectives on culture and, in turn, exposed me to completely different ways of thinking about how to create and maintain effective ethical cultures.  For example, of the eight components of ethical culture identified by the Ethical Systems culture measurement working group, I had only a passing familiarity with the ethical awareness and ethical leadership components.  This experience has not only improved my understanding of those components, but has also heightened my awareness of how they fit and interact with the other six components.

The information is here.