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PHI 4301, Business Ethics 1

Course Learning Outcomes for Unit III Upon completion of this unit, students should be able to:

2. Explore the responsibilities of moral agents involved in all aspects of business. 2.1 Describe the impact of corporate culture on ethical decision-making.

3. Examine the ethical foundations for controversial issues in business.

3.1 Discuss the role of corporate leadership in establishing organizational culture.

5. Formulate ethical solutions for real-world situations using ethical theories and concepts. 5.1 Explain the real-world application of ethics and corporate culture information.

Required Unit Resources Chapter 4: The Corporate Culture—Impact and Implications In order to access the following resources, click the links below. Johnson & Johnson. (n.d.). Our credo. https://www.jnj.com/credo/ Zenger, J., & Folkman, J. (2020, December 30). Research: Women are better leaders during a crisis. Harvard

Business Review. https://libraryresources.columbiasouthern.edu/login?url=https://search.ebscohost.com/login.aspx?dire ct=true&db=bsu&AN=148025137&site=ehost-live&scope=site

Unit Lesson In Unit I, we looked at the Wells Fargo scandal and noted the cultural shift that prioritized sales over customer service, leading to overzealous and fraudulent cross-selling. It is obvious that something went very wrong with the Wells Fargo corporate culture. On the other hand, it is equally obvious—from our own experiences as employees and as customers—that getting corporate culture right is not easy. So, in this unit, we are going to focus on the concept of corporate culture and how it works, for good or for evil. The concept of culture is fundamental to our lives. Whenever a group of human beings organize themselves for whatever reason, a culture for the organization comes into existence. Hartman et al. (2024) describe culture as “a shared pattern of beliefs, expectations, and meanings that influences and guides the thinking and behavior of the members of a particular group” (p. 408). We intuitively think of an organization’s culture as something that depends on its individual members but also as a separate attribute of the organization itself. In other words, it makes sense to say members of an organization can influence its culture and vice versa. Corporate culture is no different. Every business has shared beliefs, expectations, and meanings when it comes to problem-solving, work-life balance, deference to authority, and so forth. Our concern here is corporate culture as it relates to shared ethical beliefs, expectations, and meanings. We commonly refer to these as corporate values. It is now common practice for businesses to declare their values openly. Consider USAA (originally called the United Services Automobile Association), an insurance and financial services company that appears regularly on “Best Places to Work” lists. USAA (n.d.) asserts its values as

UNIT III STUDY GUIDE

Corporate Culture

PHI 4301, Business Ethics 2

UNIT x STUDY GUIDE

Title

service, loyalty, honesty, and integrity and details the elements of The USAA Standard of Conduct on its website. Statements like these tell us a lot about a company’s culture. Importantly, they signal whether company culture centers on compliance or on values. A compliance-based culture is primarily concerned with steering clear of legal and regulatory rule violations. Anyone who takes annual “compliance training” on subjects like Title VI, Title IX, Health Insurance Portability and Accountability Act (HIPPA), International Organization for Standardization (ISO), Sarbanes-Oxley, anti-harassment, diversity, workplace safety, etc. will understand what this means. If this is the extent of a company’s commitment to ethics, then it is fair to say it has a compliance-based culture. A values-based culture sees adherence to the rules as superficial evidence of its deeper moral commitments to good consequences, principles, and character. The USAA example is illustrative of a values-based culture, as it embraces being compliant while aspiring to a more expansive ethical culture. An ethical corporate culture does not happen by itself; ultimately, it is the responsibility of senior leaders to set a consistent moral tone throughout the company culture. This has important implications for ethical leadership. Leaders must establish clear moral guidance in the form of mission statements, codes of ethics, core values, and similar commitments. Further, good leaders will act, publicly and privately, for the sake of the companies they represent and in accordance with company values. All too often, however, senior corporate executives display indifference to values, resulting in toxic corporate cultures. Most high-profile corporate ethical scandals like Wells Fargo and, more recently, Theranos, have in common a corporate culture with absent or corrupted values demonstrated at the highest level. In the absence of ethical leadership, it falls to others inside the company to take ethical action. Certain individuals, known as whistleblowers, bring the wrongdoing to the attention of the authorities or the public. The whistleblower is an indispensable—and sometimes heroic—figure in business ethics. An ethical company will implement layers of accountability that prevent or mitigate ethical lapses, thereby forestalling the necessity of whistleblowing as a last resort. It will not only communicate its corporate values but also provide incentives, like awards and training, for following them. Ethics hotlines, ombudspersons, and other reporting mechanisms will encourage employees to share concerns about unethical behavior. Some companies take this a step further by setting up systems for continuous monitoring, assessing, and auditing the ethics of their corporate cultures. As challenging as it is to create and maintain, an ethical culture is one of the most valuable assets a company can have.

References Hartman, L. P., DesJardins, J., and MacDonald, C. (2024). Business ethics: Decision making for personal

integrity and social responsibility (6th ed.). McGraw-Hill Education. https://online.vitalsource.com/#/books/9781265810153

United Services Automobile Association. (n.d.). Code of business ethics and conduct: Inspiring trust.

https://content.usaa.com/mcontent/static_assets/Media/USAA_code_of_conduct.pdf?cacheid=47233 1104_p&_ga=2.135338993.1393249540.1638201483-1056091997.1638201483