Essay on Influence of corporate culture on business ethics

Abstract of Influence of corporate culture on business ethics

Introduction of Influence of corporate culture on business ethics:

When the financial crisis began, business has to face many challenges and then more forces can be seen that can affect the climate of the business. Greater financial burden on companies can be seen due to the actions of government like implementation of taxes or other environmental rules. Banks also decrease the amount of loans, as result of such increase burden on organization. And sometimes, sales reduce and there are very few tenders and contracts for the organization. These things can increase the pressure on companies. Companies have to face with many moral issues, in order to keep up with competitors or even for just surviving. Some previously mentions problems could have direct impact on ability of employee to make decision. There are various methods that organization can choose to incorporate ethics in to the corporate culture to increase the percentage of those employee who work with ethics and the organizational performance could get more improved. This paper is focusing on corporate cultures and how this could influence the ethics of the company. In any organization, the role of management is very important and critical as they can directly influence employee and can be a role model for them in order to improve the behavior and culture of the organization.

Ethics and ethical climate:

There is a difference between ethics, moral or morality. Ethics are actually something like philosophy we identify that what is right and wrong, while on the other hand morals are the beliefs that community has about what is wrong or right. But general population use both terms simultaneously so there is no such difference between these two in this article. Ethics give us principles and rules on which people can act to make a decision in many situations. For example, a recent study in Russia by Jaffe and Tsimerman (2011) demonstrated that Russian MBA students and managers lack ethical principles (according to typical international standards) particularly when their behavior is compounded by an economic crisis. An ethical climate is referring to as an environment of proper behaviors. In an environment of the business, ethics or the ethical climate is something that leader or management of the company do and what their followers do in that company. We can conclude that, behavior and perceptions of someone in any organization are affected by 3 things; 1) organizational factors like ethical program 2) institutional factors like ethics legislation 3) personal factors that include moral development.

Codes of ethics of Influence of corporate culture on business ethics:

Institutional factors are one that influence the behavior and perception of the organization. The most related one is code of ethics it can be defined as “a statement setting down corporate principles, ethics, rules of conduct, codes of practice or company philosophy concerning responsibility to employees, shareholders, consumers, the environment, or any other aspects of society external to the company” in another way we can say that it is written form of any organizational values and ethical norms. In order to maintain and boost up the organization reputation, code of ethics play its role. Code of ethics create positive picture of the company. And sometimes in order to conduct business, code of ethics is required. They help in creating a sense of community in an organization. But just establishing these codes of ethics are not enough, giving the help of other ethical measures to this is critical that also include creating a corporate culture ethics.

Organizational culture of Influence of corporate culture on business ethics:

Organizational culture is something along which people behave ethically in any organization and also increasingly documented. It can be defined as “a phenomenon that arise from the belief and interactions f the member of the organization that also include their values and mutual understandings and their behavior that make the persons in that organization bonded together over a time”. Corporate values and cultural values then help to make a sense of identity and also increase the social stability. It is the organization culture that hold up the organization together and prevent it from falling apart. It helps the members in the organization to be committed and to give good outcome. So, it is important in the context of talking about ethics so there is a direct relation ship between ethics and corporate culture. Followings are the typical elements of the organizational culture;

Core values- it means that what the individuals of the company believe are the right way of the perception.

Stories- events that go around the organization conveying their core values.

Heroes- people from past and present that demonstrate the core values.

Symbols- it can include language, that every organization has as a symbol to convey their core values.

Rites and rituals- the organization with their own way of doing something like how they celebrate heroes and events that explain their core values.

Conclusion of Influence of corporate culture on business ethics:

Ethical issues are giving some major challenges to the companies and there will be more problems regarding this in future. It is not easy to maintain good practices of ethics but still with a well design policy of ethics, ethical leadership and incorporating ethics into the strategies and processes, everything will become easier. This is the question that how could we develop any organization o cultures so it is the responsibility of every person within that organization like leadership. Strong leaders are those who pass on the aspects of ethics of the culture and use some strategies and s=decision making process, rewards, rituals, stories and heroes to make the culture strong in that organization. This article had defined the corporate culture and the role it plays in the ethics of the company. All this not only reduce the unhealthy environment that could began the financial crisis but it also helps in regaining the strength of financial system that actually caused it.

References of Influence of corporate culture on business ethics

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