This month's highlighted ethics article.
Take-home ethics points.

Corporate Ethics 101: What should we do, and why should we do it?
          By Leonard Bucklin

In the last 20 years, considerable social science and business science research and analysis has been devoted to corporate ethics cultures. The scientific concepts that have developed have a core of common statements and conclusions. However, if you are a busy executive, you do not want a ton of statistics, a half-ton of conclusions, and a quarter-ton of alternatives to consider. You simply want to know, in bullet form:

• The basic concepts of corporate ethical cultures; and

• The primary proven strategies for corporate executives to manage, and improve, the ethical culture and decisions in their organizations.

So, in this condensed article, the bullet points are marked with a ()

Generally speaking, an employee makes what to him/her is a rational decision. That decision is based on his/her understanding of the "right thing" in the corporate world in which he works. You want his/her understanding of the A right thing@ to be the corporate values. The corporate values are not necessarily the same as the values he/she knows outside the company C and not necessarily the same as the values of a co-employee or an immediate boss.

Ethical culture is the combination of corporate factors which demonstrate and teach its values. Those corporate values are the corporate @ right thing@. The ethical culture of an organization shows employees: what is the @ right thing@ in the company= s world; whether doing the@ right thing@ matters; and that doing the @ right thing@ is expected.

A corporation's ethical culture is found in both the form and the content of the communication within the corporation. The culture (communication) includes:

1. Ethics-related attitudes,

2. Perceptions,

3. Organizational myths, (The term A myth@ is confusing , with its implication of false or supernatural belief. The term A organizational myths@ is meant to be a shorthand term for those stories which either concern the history of the company or explain the company= s social structure.)

4. Formal and informal teaching,

5. Ethics program components,

6. Reward and punishment systems, and

7. Decision-making processes in an organization

8. Ethics culture audit, evaluation and planning (audits of what the culture actually is, evaluations of what the culture is now, and planning for improvements).

A company= s ethical culture impacts:

• Employee commitment to the organization,

• Employee satisfaction,

• Rates of employee misconduct

• Employee perceptions of leadership,

• Employee performance,

• Organization expenses, and

• Organizational performance in achieving its business objectives.

Leaders play the primary role in the creation of an organization's ethical culture and climate.

The knowledge and ability of the corporate executives, at the highest level, to promote ethical conduct is critical to employees knowing what is right in the corporate world in which they live.

The corporate leaders, from the C-suite to the line supervisors, must demonstrate to all employees how to make make "the right thing" a priority.

Specific items for the action of the leaders:

Create a A company values@ - based ethics program that also encourages compliance with the law.

Demonstrate their concern for the interests of internal and external stakeholders

Make the needs of others a business priority.

Model and coach, which requires leaders to:

• talk corporate vision (not the mission, rather
  the vision of what we will be)

• talk corporate values,

• talk ethics as a priority,

• walk the talk

Communicate what= s happening in the company (keep people in the loop, which requires leaders to:

• encourage thoughtful dissent,
• show them that you care,
• don't sweep problems under the rug,
• celebrate the successes of everyone.  

Enforce the culture. Each member of the executive team should:

• follow procedure within the company (be procedurally fair),
• be content fair,
• make the tough calls;
• reward the right people
  (and do it so employees know it got done); and
• discipline the wrongdoers
  (and do it so employees know it got done).

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