The Ethical

Corporate
Culture
Learning Objectives:
1. Share observations on business
policies and practices; and
2. Distinguish between good
policies/practices and morally
unacceptable policies/practices
• If ethics are poor at the top,
the behavior is copied down
through the organization.
By Robert Noyce
• A certain culture exist in any
organization. As a person who wants
to fit in, you try to follow the norm in
the group-the way the other members
act, dress up, behave, speak, and
other actions that may affect your
decisions.
• What are the different groups that
you are a member of? List down the
different cultures in each group. Do
they have similarities and
differences? Do you act differently
when you are in each group? Why?
THE CORPORATE
CULTURE
• Every organization has a culture
that consists of shared pattern of
beliefs, expectations, and
meanings that influence and
guide the thinking and behavior of
the members of that organization.
• While culture shapes the
people in the organization,
the people also contribute in
shaping the culture of the
organization (Hartman 2014)
Organizational/Corporate Culture

• Is a system of shared
actions, values, and beliefs
that develops within an
organization and guides the
behavior of its members.
• While corporate culture is
built and molded over time,
it may still change
depending on the leaders
that move the company.
• Changes in policies (ex.
dress code)can alter the
way people behave or feel
toward the company.
• Ex. If a company suddenly decides
to disallow casual attire on Fridays
and require corporate attire as dress
code all week, it may harbor ill
feelings among employees who may
be looking forward to dressing up
casually once a week.
• On the other hand, if the
management decides to change the
dress code from strictly corporate to
casual, it may appear that the
current leaders are becoming
younger and bolder in their actions.
 FUNCTIONS OF
CORPORATE CULTURE
• A company’s culture guides
the thinking, behavior,
decisions of its members
according to the company’s
beliefs and values.
REASONS WHY
CULTURE
DEVELOPS IN
ORGANIZATION
External Adaptation
• Requires the organizational culture
to determine how the company will
reach each goals, accomplish its
tasks, identify methods to achieve
its goals, and place measures to
cope with success or failure.
EXAMPLES
Reaching sales targets in
order to become competitive
and profitable in the market
uses a goal shared by all
members of the organization.
External challenges, such as
economic downturn, bad weather,
political issues, and government
regulations that may effect how the
company achieves its goals, will have
to be dealt with in accordance with
the company’s culture
If there is a delay in releasing the
company’s imported raw materials
from customs, should the company
bribe customs officials in order to
expedite the process? The corporate
culture will determine the answer to
the question.
Internal integration
• Starts with the establishment of an identity
that is unique to the business
organization. Members acquire this
identity through their interaction with each
other. This will enable the members to
work in harmony with each other and to
work toward advancing the company’s
goals.
 THREE IMPORTANT
ASPECTS OF
WORKING TOGETHER
1. The members decide
who is a member of the
group or who is not.
2. The members develop
informal understanding of
acceptable and
unacceptable behavior.
3. The members
separate “friends”
from “enemies”
READ AND ANSWER
 DEF Corporation owns one of
the largest fast-food chains in
the country. The organization is
divided into a marketing
groupmind an operations group.
The marketing group is headed by Ms.
Seyden Valino, an alumna of Archer
University, while the operations group is
headed by Mr. Alex Brosas, an alumnus
of Eagle University. The two universities
were mortal enemies not just in sports
but also in academics.
Eversince, the two group heads
have had conflicts in their business
executions, Ms. Valino formulated
several marketing programs that
were not approved by Mr. Brosas
and vice versa.
Therefore, come execution time,
the most affected are the
employees and the customers.
One time, a marketing promo
was already communicated to the
customers.
One time, a marketing promo was
already communicated to the
customers where a newspaper
will be given for free if a customer
was able to purchase a meal
worth ₱100 and above.
However, the operations team did not
deliver enough supply of newspapers
to the fast-food branches. Thus,
customers complained and brought
their complaints to social media
platforms.
1. What should have done by
the management to integrate
the marketing and operations
group of the company?
2. What should have been
done by Ms. Valino and Mr.
Brosas to achieve a collective
success of their business?
 UNDERSTANDING
CORPORATE CULTURE
Observable culture
Refers to the way things are done in
an organization. This can be observed
in daily activities or in specific
instances which include unique
stories according to the company’s
history, ceremonies, and corporate
rituals.
Shared Values
Refer to the common values
that are meant to put together
and motivate the members of
the organization. These include
a deeper understanding of what
the company stands for.
Example
A company may be known for its
passion for innovation, green
practices, or providing solutions
to social issues.
Common Cultural Assumptions
Include the taken-for-granted
truths that the members share
as a result of collective
experience with the
organization.
These assumptions are at the core of
corporate culture, and are thus
difficult to discern or understand
because they exist at a largely,
unconscious level, yet they provide
the key understanding why things
happen the way they do.
• As employees become ingrained in the
culture, their actions that are based on
the company beliefs and values become
everyday routines. These include the
quality of output, morality of employees,
and innovativeness and excellence in
carrying out tasks, among others.
ETHICAL LEADERSHIP AND
MANAGEMENT
 Leaders of the business serves as the role
models of the beliefs, values, and behavior
that are expected from someone who
represents the company.
 They set the tone of the corporate culture,
and this has to be consistently adopted
throughout the firm.
2 RECOGNIZED TYPE OF
CORPORATE CULTURE
Compliance-based Culture
Focuses on following rules, laws,
policies, and regulations as the
primary responsibility of ethics.
It empowers legal counsel and
auditing/accounting firms
Example
GHI Bank in Muntinlupa City was cited
by internal audit because it was not able to
follow the company’s policy of dual control,
that is, there should always be two persons
entering the vault. The CCTV footages showed
that there were two instances in May 2017
that the branch manager entered the vault
alone.
Values-based Culture
 Reinforces a particular set of values
rather than a set of rules. It is
presumed that the company with a
values-based culture adopts its code
of conduct with more regard for
ethical values.
Values-based Culture
It also recognizes that despite the
rules set by the company’s code of
conduct, there are situations where
rules can be applied so the
organization will have to rely on the
personal integrity of its workforce
when decisions are to be made.
Example
Tina Garcia, a known actress of ABGM
Network, always goes to her teleserye tapings
on time. She got theses values from the TV
Network because all the employees of ABGM
Network give a very high regard to
punctuality. Although there is no formal log-in
process, all the employees still come on time,
all the time.
Reflect Upon
• For each of the organizations
that you are a member of,
which type of corporate
culture do you think should
apply?
 Ethical leaders are expected to practice ethical
decision-making. Their goal is not simply to
perform their job, but to perform consistently
with a set of ethical values and principles
chosen by the business organization. The
ethical leaders are expected to not just care
about company profits (internal and external
stakeholders) in the process.
 Example
• Eugenio Lapid, a supervisor of a big factory,
manufacturing electronic products, always
ensures to talk to his subordinates during
their breaks even about their personal lives
or personal problems. He treats them as
family instead of as simply subordinates.
He also gives them constructive feedbacks
every time they commit mistakes.
 A good ethical leader must be visibly practicing the
company’s traits and behaviors in order to
influence perceptions and actions among the
employees. This is important in creating, inspiring,
and transforming an ethical corporate culture
within the company. An effective ethical leader is
able to successfully and efficiently guide, direct,
and escort others toward the goals of the company,
in consideration of the ethical standards set by the
 Example
• Mrs. Pam Palma has been with JKL Corporation
for the past 10 years as executive vice president.
Ever since, she embodied punctuality, is careful
with her words, and is very meticulous with her
craft. She is also a role model as she was able to
raise her four children well and is able to balance
her career and family life. She never had any case
of fraud, employee complaint, or even one
employee resignation.
 Not all ethical leaders are effective ethical leaders.
Some effective leaders may be able to deliver the
expected output of the company with the use of
coercion, harassment, or intimidation in directing
the employees. However, an effective ethical leader
may use more ideal interpersonal means of
motivating employees by modelling ethical
behavior, gentle persuasion, or positive
reinforcement by offering incentives.
 Example
• MNO Corporation has produced two
exemplary leaders in the IT Department
and in the HR Department. The IT Head is
known as someone who can deliver IT
projects even on a very short notice. He
ensures that his team members work
overtime even on weekends and holidays
just to finish the task.
• He always threatens them that they will get a low
performance rating if they do not work overtime.
The HR head, on the other hand, is known as
someone who is very pleasant and nice to his
team. With no coercion at all, his team members
voluntarily go on overtime whenever there are
major key result areas to be finished on a tight
deadline. Regardless of the technique, both
leaders were able to deliver results.