Does Organizational Culture Impact Ethical Decisions in Business?

When it comes to making ethical business decisions, the culture of an organization is crucial to how the employees will operate, and whether they will make ethical business decisions. When organizations intentionally instill ethics into their culture they have an upper hand over an organization that merely has a compliance department to meet regulatory obligations.  When the leadership of an organization “walks the talk”, remains transparent, and leads its employees in ethical decision making, the organization proves to employees that it is an important aspect of the organization.  Hebrews 13:7 says “Remember your leaders, who spoke the word of God to you.  Consider the outcome of their way of life and imitate their faith.”  When leadership “walks the talk” and instills in the culture of the organization that ethics are a paramount, then the whole organization is likely to reflect on ethical decision making as being a part of life for that organization and that is how they will conduct their business. The ethical decision making then becomes the cultural norm within the organization.

While I think it is important to have good compliance programs within organizations, I think the culture of the organization is equally important in ensuring that ethical business decisions are being made.

 

Thank you for reading.

 

13 Comments

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  1. Chris says:

    Hi. Sorry to leave this note here but we are trying to get other students registered to post in this blog and are unable to figure out how to register them for it. Can you inform me how you were able to get in and post here? When I click the “Login” button and use my own WordPress login info it does not let me in. Please email me if you can at cbittner@ccu.edu.

  2. LanceSmith says:

    I could’t agree with you more. Although ethics are construed as being complicated we can all abide by strong ethical values simply by following the Lord and the Bible. I understand secular organizations may not follow scripture but it is imperative for Christians to understand the link between perceived ethical organizations and their links to Scripture. By conforming to Biblical principles individuals and organizations can avoid unethical decisions and can head down a path of long term prosperity.

  3. laurie otero says:

    2 Timothy 3:16-17 says, “All Scripture is breathed out by God and profitable for teaching, for reproof, for correction, and for training in righteousness, that the man of God may be competent, equipped for every good work”. In our decision making, if we teach and train in a way that is God breathed, the outcome of the decisions we make will be ethical. We can not sit behind a desk and talk about what we value and ask our employees to trust that without acting on what we value. We must show in our actions how, what and why we value what we do. It is important to know how we do things and what we do in our organizations, but it is also important to be transparent in why we do what we do.

  4. Julie says:

    Unfortunately many organizations promote ethics, but the people they have running the show have no sense of what this really means. Ethics has to be displayed at all times even behind closed doors. Just saying and doing the right thing in front of others is not enough, these values have to encompass all areas of our lives. Luke 16:15 says, “And he said to them, “You are those who justify yourselves before men, but God knows your hearts. For what is exalted among men is an abomination in the sight of God. Assuring that ethical behavior is demonstrated in every aspect of our lives, even when others are not watching, will result in a culture of trust and employee engagement.

    • Questbc3 says:

      It’s true, a lot of companies actually hand you out their company’s policies when you get hired to work for them, and they usually have the ethics and conduct listed in the hand book that you must follow while you are an employee at their company. Unfortunately, like you said that the people who are running the business are the first ones who break those rules. When people don’t apply the bible principles regarding honesty, integrity, or moral conduct, they can quickly get involved in doing immoral acts and don’t care about the welfare of others. As Christians, we should do our best to do what is right, and follow the bible principles in order to be effective leaders to our followers. “Let no one despise you for your youth, but set the believers an example in speech, in conduct, in love, in faith, in purity”. (1 Timothy 4:12, ESV)

  5. CajunGirl says:

    I agree. If the employees see their leadership as ethical and following moral core values, they will be much more likely to act ethically themselves.

  6. sarasbananas says:

    In very simple terms, one could say, “monkey see, monkey do.” When a leader within an organization leads by example, the subordinates are more likely to follow in their footsteps. The culture of an organization will certainly guide the actions of all within it. The culture of an organization should be based on ethical business decisions because those decisions are a direct cause and effect to the cultural norm.

  7. Amber Sargent says:

    Ive had leaders that have had ethical, and moral core values and I’ve easily followed in their path and acted the same way. I also had leaders that didn’t have those values and kinda messed around and I didn’t try as hard or work as hard because they didn’t. Leaders have a big role on empleyees and how employees act.

  8. humble as a Lamb says:

    Yes, the lead by example cliché. When a subordinate sees the leader doing what is expected of him/her, the task is readily acceptable. Proverbs 3:5-6 tells us to trust in the Lord with all our hearts and lean not unto our own understanding. But in all thy way acknowledge Him and He shall direct our paths. So leaders have a great task ahead of them as they lead the subordinates. Even when the task is not clearly understood, they trust the leader to guide them in the right path.

  9. Shayne Champlin says:

    The challenge is to create a culture built on a foundation of ethics and truth. It is one thing for one leader to act transparently and “walk the talk”. It is another thing entirely for an entire organization to live out a culture of truth and integrity. This type of culture is remarkably powerful and impactful, but creating this kind of culture is the eternal battle for almost all organizations.

  10. E.D. says:

    Within the context of Christian business; ethics should not be optional. The culture should automatically thrive and grow from roots planted firmly in the fundamental Truth found in God’s word. Ethics are not enough on their own. Christian organizations must be careful in hiring only spiritually, and emotionally mature believers. Spiritual and emotional immaturity leads to a mentality that Biblical Truth is a matter of perspective and only applies depending on what sets of eyes and ears are near. This type of immaturity in leadership has incredibly destructive potential and can impact the bottom line as well as the consumer in a negative way.

  11. kdlane326 says:

    I do believe organizational culture impacts ethical decisions in business on many levels. It all starts at the leadership level. It doesn’t matter if the leaders have a Christian worldview, but they do have to be fair leaders. They must foster a culture where the employees want to do the right thing. If that type of culture is pushed in the organization. then it will work its way down to the lowest levels and the organization will prosper.

  12. Questbc3 says:

    I agree, a good leader must set an example to his followers, by practicing good behavior and business ethics. If an organization has strong values and ethics in its culture, then it is much easier for its employees to follow ethical business practices. Employees’ performance depends strongly on the leadership within the organization. So, it is very important for an organization to set standards regarding business ethics to lead its employees in decision-making.

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