Corporate culture and ethics are interrelated in many businesses because the former often drives the latter. A company’s corporate culture is the ideas, beliefs and values that it strives to create in its working environment and employees. Ethics typically are a large part of a company culture. To make the connection between its culture and ethics prevalent, a company can create a mission statement with a direct reference to ethics. Companies must then assess business activities through the prism of its ethical code to determine the effectiveness of the corporate culture.
Ethics can be a difficult concept to define in business. In many ways, they will have a different definition to different individuals. For example, adding morals to an ethical code of conduct is possible under certain scenarios. A significant reason to link corporate culture and ethics is to ensure the same definition and understanding of ethics among a group of people. Companies can define a code of conduct based on their owners’ beliefs, the ethics of society or some other basis.
A company’s corporate culture typically is an unseen part of a working environment. It dictates how a company should act and react to both internal and external parties. For example, buying low-cost materials and passing finished goods as high quality even though they contain inferior materials might be unethical. Negotiating with other businesses will not be a hostile process when a company desires a strong, ethical corporate culture. Companies foster this behavior by creating a positive corporate culture.
Creating a bond between this culture and ethics starts with a company’s executive management team. These individuals — such as the board of directors or chief executive officer — might write an organizational mission statement and a code of ethics. These two statements should reference what they want the company’s culture to be as well as its ethics for the business. In some cases, a well-established company might need to write or change its mission statement. This allows the business to alter its corporate culture as necessary to improve its ethics.
Companies that have a strong corporate culture and ethics code often have increased employee and customer loyalty. Individuals tend to look favorably on a business that self-governs its operations. Customers might even pay a premium if a company has to charge more for products because of its ethics code. Fostering these relationships can also result in a greater market share and higher profits. Together, they can become a competitive advantage for a company.