Module 3: The Ethical Corporate

Culture
TOPICS-TO-DISCUSS

 The Corporate Culture

 Ethical Leadership and
Management
 Setting a Corporate Code of
Conduct
 Ethical Issues
The Corporate Culture
Organizational (Corporate Culture) – is the system of shared
actions, values, and beliefs that develops within an organization
and guides the behavior of its members.
 EXAMPLE:

ONE TWO THREE FOUR

THREE:
Has Casual
TWO: Fridays
ONE:
Can clock
Work
out to have
longer and
extra time FOUR:
on
weekends Strict
Formal
Attires
Function of Corporate Culture
[Edgar H. Schein, 2010] Organizational Culture and Leadership; There are
two main reasons for culture development on organizations and these are

“EXTERNAL ADAPTATION & INTERNAL INTEGRATION”.

 EXTERNAL ADAPTATION  INTERNAL INTEGRATION

It is how the company ability to determine It is the establishing of identities to enable
in reaching their goals, accomplish their the members to work in harmony with each
tasks, and placing measures to cope with other for the advancement of the
success or failure. organization.

There are three aspects:

External/Outside challenges affects the 1. Choosing the members of each group.
determination of the organization so it should 2. Acceptance of formal and informal
be dealt with in accordance with the behaviors.
company’s culture. 3. Separation of friends and enemies.
 OBSERVABLE Cultural Analysis
CULTURE

SHARED
Layers
VALUES

COMMON CULTURAL
ASSUMPTIONS

A member who recently joined a business

organization may not easily figure out the
corporate culture. Understanding organizational
culture involves layers of cultural analysis.
Cultural Analysis Layers
 OBSERVABLE CULTURE
Refers to the way things are done in an
organization. These can be observed in
daily activities or in specific instances which
include unique stories according to the
company data.
 SHARED VALUES
Refers to the common values that are meant
to put together and motivate the members
of the organization. A deeper understanding
of what the company stands for.
 SHORT VERSION
1. OBSERVABLE CULTURE – are the
apparent daily activities of a company.
2. SHARED VALUES – are the attributes
a company associated with or is known
for.
3. COMMON CULTURAL
ASSUMPTIONS – are evident as
employees become ingrained in the well-
established corporate culture and values.

 COMMON CULTURAL ASSUMPTIONS

Refers to the taken-for-granted truths
that the members share as a result of a
collective experience with the
organization.
Ethical Leadership and
Management
Leaders of the business organization serve as the role models of the
beliefs, values, and behavior that are expected from someone who
represents the company.

There are TWO recognized types

of corporate culture:
 COMPLIANCE-BASED
CULTURE
 VALUES-BASED
CULTURE
COMPLIANCE-BASED
CULTURE
This type of corporate culture focuses on;

 Following rules, laws,

policies, and regulations as
the primary responsibility
of ethics.

It empowers legal counsel

and auditing/accounting
firms.
VALUES-BASED CULTURE
This type of corporate culture rather on focuses it reinforces on;
 Particular set of values
rather than rules.

It is presumed that a
company with this type
adopts its code of conduct
with more regard for
ethical values.
Ethical Leadership and
Management – E X T R A S
Expected tips for an ETHICAL LEADER
 PRACTICE DECISION-
MAKING:
Should care not only on profit
but also on the people.

 VISIBLY PRACTICE
COMPANTY TRAITS
AND BEHAVIORS
To influence perceptions and
actions among the employees.
Ethical Leadership and
Management – E X T R A S pt.2
Expected tips for an ETHICAL LEADER
 USE IDEAL INTERPERSONAL MEANS
Being effective by the use of coercion,
harassment, or intimidation is wrong and
deteriorates employee morale.
Setting a Corporate Code of
Conduct
A Code of Conduct/Code of Ethics is a list of guidelines and protocols
based on the organization’s values.

It articulates how an employee

should behave and implement the
values of the organization at all
times, and it also serves as a
reference when decision are to be
made.
Setting a Corporate Code of
Conduct – G U I D E L I N E S
 Understand the mission
and vision.
 Identify the values that the
organization lives for.
 Outside members or
employees must also
understand the code of
conduct.

 Spell out different

behaviors in order to
maintain values.
 Ensure proper
enforcement of the code of
conduct to maintain
culutre.
Ethical Issues
Ethical Issue– is an identifiable problem, situation, or
opportunity that requires a person to make an action based on
several options – whether right or wrong, ethical or unethical.

Usually about
financial
matters of a
business setting
Ethical Issues
Some Examples of Common Ethical Issues in Business
Organizations
Misrepresenting the benefits of a Overstating a product's benefits in order to make a sale
product is an ethical issue.

Misuse of Company Time and Employees doing this instead of working waste of time
Resource and profit for the business

Harassing fellow employees or some form of evil act is

Abusive Behavior a distruptive behavior that may demotivate the work
force and may result in less productivity.

Conflict of interest happens when an employee is

Conflict of Interest presented with a dilemma of whether to advance
personal gain or interest or that of the company's