1. DEVELOPING AND MAINTAINING AN ETHICAL CORPORATE CULTURE
Presented by
MUHAMMAD YAHYA AHMAD
College of Education and Allied Program
PCU, Manila

2. ORGANIZATIONAL CULTURE INFLUENCE CHAINS
VALUE
BELIEFES
MOTIVATION
NORM
ACTION
IDENTIFICATION AND COMMUNICATION
MONITOR, REWARDS AND PUNISHMENT
CODE, GUIDELINES AND ENFORCEMENT
CORPORATE CULTURE

3. ORGANIZATION VALUES Ethical decision criteria:
Reputation-drivers:
trustworthiness,
credibility,
reliability,
responsibility
Hyper-norms:
honesty,
fairness,
compassion,
integrity,
predictability,
responsibility;
Ethical decision criteria:
net positive or consequences of an action, rights and duties/or fairness and expected virtuosity

4. What is an ethical culture?
An organization’s culture is akin to corporate DNA
A corporate culture is the set of beliefs, norms and practices that are shared by an organization’s members.

5. What is an ethical culture?
Brooks and Selley believe that developing and maintaining an ethical culture is a key determinant of stakeholder support and success.
Ethical cultures are seen as important building blocks to help focus on and improve corporate governance.

6. What is an ethical culture?
Clifford Geertz, a prominent theorist in the field of anthropology, defined culture as “an historically transmitted pattern of meanings embodied in symbols, a system of inherited conceptions... by which [people] communicate, perpetuate and develop their knowledge... and attitudes” (1973, p.5).

7. What is an Ethical Climate?
It concerns with the “collective personality” of the organization.
Ethical climate literature investigates the ethics-related attitudes, perceptions, and decision-making processes in an organization.
Ethical climate includes several dimensions: self-interest, company profit, efficiency, friendship, team-interest, social responsibility, personal morality, rules and standard operating procedures, and laws and professional codes (Trevino et al., 2001).
Just as ethical culture can be viewed as a subset of organizational culture literature, ethical climate is an outgrowth of work done on organizational climate.

8. ETHICAL CORPORATE CULTURE v CLIMATE
ETHICAL CULTURE
Based on Anthropological Theory
Focused on examining formal and informal control systems and how those systems teach values and impact behavior
Includes formal ethics and compliance program elements, office lore, reward and punishment systems
ETHICAL CLIMATE
Based on Psychological Theory
Focused on examining the existence and impact of the organization’s “personality”
Includes collective perceptions, attitudes, and decision-making criterion and style, “who we are” as an organization

9. Creating the “Right” Culture
Implementing and sustaining a corporate culture of integrity can be challenging.
Building a proactive ethical culture requires strong and committed ethical leadership - the “tone at the top”.
Values are key “touchstones” in establishing patterns of motivation, norms and behavior among employees.
Developing the core values and issues foundation is the basis for cultural guidance.
Effective communication of organizational values and objectives is also essential
Reinforcement mechanisms are needed to ensure the employee commitment to the culture

10. Creating the “Right” Culture
Create a Governance and Leadership Framework
Develop the Core Value and Issues Foundation
Create Guidance, Communication and Framework
Develop Commitment and Understanding
Clarify Roles of Chairs, CEO , Chief Ethics Officer, Board Ethics Subcommittee, Ethics Committee
Identify Core Values, and Important issues that should drive decision and action and ensure harmonization with strategy and operation
Develop Mission Statement, Code of Conduct and other Decision Aids and Process
Ensure Commitment by Board, CEO and other Managers, Launch Ethics Programs and Encourage Employee