Ethics as Organzational Culture

Lately, ethical organizational culture has received a degree of recognition in business ethics research. It has been known that the ethical culture of an organization represents the aspects of organization culture, in which, it affects the way employees think and behave in ethics-related situation. Thus, valuing ethical practices is significant to an organization. Through this, employees feel more committed and less pressured to compromise to the organization’s standards. This shows how ethical culture plays an important role to guide and influence organizational behavior and employees’ aspirations within the organization (Huhtala et al. 2013). To create and send a consistent ethical message to the members in the organization, both the formal and informal cultural systems must be used to promote ethical behavior (Trevino & Nelson, 2010).
Formal cultural systems consist of many factors that contribute to maintaining ethical culture. They are leadership, selection and reward systems, polices and codes, training programs, authority structure in the organization and decision making processes. Informally, the norms, rituals, myth and stories and languages are an indication of the extent of reality that exists through the formal ethics-related theories (Trevino & Nelson, 2010). They help to develop and change the ethical culture. In my essay, I am going to touch on 3 factors from each of the formal and informal cultural systems to elaborate on how and why both systems are equally important in promoting ethics in an organization.
The first and the most important factor in creating an ethical organization is leadership from the formal cultural system. Employees in all contexts look up and receive messages from those in formal leadership roles. So an executive leader creates culture and an ethical organization requires ethical leadership. The term is defined as “the demonstration of normatively appropriate conduct through personal actions and interpersonal