Establishing a Strong Ethical Culture for a Firm

One of the most important things the founders of an entrepreneurial venture

can do is establish a strong ethical culture for their firms. The data regarding
business ethics are both encouraging and discouraging. The most recent
version of the National Business Ethics Survey was published in 2009. This
survey is the only longitudinal study that tracks the experiences of employees
within organizations regarding business ethics. According to the survey,
49 percent of the 2,852 employees surveyed reported that they had observed
misconduct or unethical behavior in the past year.
Of the employees who observed misconduct, 63 percent reported their
observation to a supervisor or another authority in their firm.3 The 10 most
common types of misconduct or unethical behavior observed by the employees
surveyed are shown in Table 7.1.
While the percentage of employees who have observed misconduct or
unethical behavior (49 percent) is discouraging, it’s encouraging that 63 percent of
employees reported the behavior. According to the survey, the majority of employees
also have a positive view of their leaders’ transparency and accountability. A
total of 80 percent said they were satisfied with the information they were getting
from top management about “what’s going on in my company.” Seventy-four
percent said they trusted that top management would keep their promises and
commitment. A full 89 percent said top management talks about the importance
of workplace ethics and “doing the right thing.” And when asked if they believe top
managers would be held accountable if caught violating the organization’s ethical
standards, 82 percent said yes.4 Overall, these numbers are heartening.