1) Building Ethical Organisational Culture - What Is Organizational Culture?
1) Building Ethical Organisational Culture - What Is Organizational Culture?
1) Building Ethical Organisational Culture - What Is Organizational Culture?
A system of shared meaning held by members that distinguishes the organization from other
organizations. It is the basic pattern of shared assumptions, values and beliefs considered
to be the correct way of thinking about and acting on problems and opportunities facing
the organization.
Organizational culture passes down from long serving staff to new hires and becomes
embedded in how the organization operates. Thus, organizational culture is influenced
and impacted not just by written regulations, rules and policies, but also by the unwritten
code of how we really do things around here.
Ethical Organizational CultureAn ethical organizational culture is
it is what staff will rely on when there is no rule in place to address the dilemma being
faced;
it is what sustains trust when information is unclear or facts are not known.
Corporate wrongdoing and scandals can wipe millions off the value of businesses as well as
wreck reputations that have taken decades to build.
Any boss who still doubts the importance of prioritising building an ethicalculture should
note that customers and employees are increasingly choosing ethical
business with and work for.
companies to do
Ethical organisations are characterised by leaders who role model integrity,open and honest
communication, an atmosphere where people speak up about wrongdoing and a pride in high
ethical standards.
Beyond the code of conduct eight steps to building an ethical organisational culture1. The right leader: An organisation can never be ethical unless its bosses role model ethical
behaviour and set the standards. They have to be clear about their values and demonstrate
them in actions as well as words.
2. A clear purpose and strategy: Harvard Business School professor Michael Beer researched
the difference between companies that achieve high performance levels over long time
periods and those that fail when they reach a certain size. He analysed the companies that
failed in the 2009 financial crash and suggested three core reasons; the companies lacked
a higher purpose (they were focused on short term gains not long term value), they did
not have a clear strategy and they badly mismanaged risk.
3. A focus on doing the right thing :For an ethical culture to prevail, employees also need to
feel responsible and accountable for their actions. In the Ethics in the Workplace
survey , 70% of respondents believed that it is important that employees feel responsible
for and committed to ethical practice. However only just over 40% believed that
employees in their organisations actually did feel responsible.
Without a sense of personal accountability people can blame their boss, the organisation
or someone else. Creating an environment where people are expected to stand up for
what they believe is right and take responsibility is crucial. Without it there can be no
ethical culture as small and large daily wrongdoings will go unchecked.
4. Hiring the right people : Hiring people with the right values as well as the right skills and
knowledge is important. Interviews and assessment processes should explore what people
have done in certain situations as well as asking them about their rationale for their
actions.
5. Firing the wrong people : If you dont fire people for wrongdoing you send a message that
behaving ethically does not matter all that much. Actions speak louder than words and
people become very cynical if they see senior managers espouse one thing and do
another.
6. Run ethical training courses. It can be difficult to spot an ethical situation in the first place,
let alone knowing the best way to tackle it. All employees need to have the knowledge
and skills to identify and tackle ethical situations as well as the permission to raise
concerns when they have them. Running mandatory ethics training for everyone in the
company signals that ethics is a high priority.
7. Reward people for doing the right thing and challenge them when they do the wrong
thing. It can take a lot of courage to raise concerns about the actions of colleagues.
People need to be encouraged to do so by being rewarded in the form of appreciation
from management including a positive mark in their performance appraisal. People often
dont challenge wrongdoing for fear of ostracism from colleagues and management. They
need to be actively encouraged to do so.
8. Tolerate mistakes (but not when they are made repeatedly). If people are afraid to make
mistakes they will either always play it safe (which is not always good for the business)
or cover any errors up for fear of punishment. One company gives an annual award for
the best mistake made last year it is the mistake from which the corporation learned
most. It co
2) CULTURAL DIMENSIONS
GLOBE PROJECT-
Research on the relationship between culture and leadership resulted in the GLOBE
research program. GLOBE study is a major study with broad applicability.
Model underscores complexity of leadership process and how culture influences it.
Gender differentiation
In group collectivism- pride, loyalty and cohesiveness in organizations and families
Collectivism- collective distribution of resources and collective action
Power Distance
Uncertainty avoidance
Description-
AssertivenessDegree
Humane orientationdegree to which a culture encourages and rewards people for being
fair, altruistic, generous, caring, and kind to others.
Gender
In-group collectivismThe degree to which people express pride, loyalty, and cohesiveness
in their organizations and families.
APPLICATIONS
Uncertainty Avoidance
TROMPENAARS FRAMEWORK-
Universalism vs particularism
Individualism or Collectivism
Specific vs diffuse
Achievement Vs Ascription
Perspective on Time
6. Sequential vs Synchronic
Explanation
1. Universalism Versus Particularism
Universalism: People place a high importance on laws, rules, values, and obligations. They try
to deal fairly with people based on these rules, but rules come before relationships.
Followed in U.S., Canada, the U.K, the Netherlands, Germany,
Particularism : People believe that each circumstance, and each relationship, dictates the rules
that they live by. Their response to a situation may change, based on what's happening in
the moment, and who's involved.
Followed in Russia, Latin-America, and China.
2.
Individualism
Versus
Collectivism
Individualism :People believe in personal freedom and achievement. They believe that you
make your own decisions, and that you must take care of yourself.
Followed in U.S., Canada, the U.K, Scandinavia, New Zealand, Australia, and Switzerland
collectivism : People believe that the group is more important than the individual. The
group provides help and safety, in exchange for loyalty. The group always comes before the
individual.
followed in countries in Latin-America, Africa, and Japan
Contd
3.
Specific
(How Far People Get Involved
Versus
Diffuse
Specific: People keep work and personal lives separate. As a result, they believe that
relationships don't have much of an impact on work objectives, and, although good
relationships are important, they believe that people can work together without having a
good relationship.
Followed in U.S., the U.K., Germany
Diffuse : People see an overlap between their work and personal life. They believe that
good relationships are vital to meeting business objectives, and that their relationships with
others will be the same, whether they are at work or meeting socially. People spend time
outside work hours with colleagues and clients.
Followed in Russia, India, and China
4.
Neutral
Versus
Emotional
Neutral: People make a great effort to control their emotions. Reason influences their
actions far more than their feelings. People don't reveal what they're thinking or how
they're feeling.
Followed in U.K., Sweden, the Netherlands, Finland, and Germany
Emotional : People want to find ways to express their emotions, even spontaneously, at
work. In these cultures, it's welcome and accepted to show emotion.
followed in France, Spain, and countries in Latin-America.
Contd
5.
Achievement
Versus
Ascription
Achievement : People believe that you are what you do, and they base your worth
accordingly. These cultures value performance, no matter who you are.
followed in U.S., Canada, Australia
Ascription : People believe that you should be valued for who you are. Power, title, and
position matter in these cultures, and these roles define behavior.
Followed in France, Italy, Japan, and Saudi Arabia
6.
Sequential
(How People Manage Time)
Time
Versus
Synchronous
Time
Sequential Time : People like events to happen in order. They place a high value on
punctuality, planning (and sticking to your plans), and staying on schedule. In this culture,
"time is money," and people don't appreciate it when their schedule is thrown off.
followed in Germany, the U.K., and the U.S.
Synchronous Time : People see the past, present, and future as interwoven periods. They
often work on several projects at once, and view plans and commitments as flexible.
followed in Japan, Argentina, and Mexico
Contd
7.
Internal
(How People Relate to Their Environment)
Versus
External
Control
Internal
Control
People believe that they can control nature or their environment to achieve goals. This
includes how they work with teams and within organizations.
followed in Israel, the U.S., Australia, New Zealand, and the U.K.
External
Control
People believe that nature, or their environment, controls them; they must work with their
environment to achieve goals. At work or in relationships, they focus their actions on
others, and they avoid conflict where possible. People often need reassurance that they're
doing a good job.
followed in China, Russia, and Saudi Arabia
Founded in 1986 by Frederick Phillips, former President of Phillips Electronics and Oliver
Giscard dEstaing, former Vice-Chairman of INSEAD business school in Paris.
Developed in 1994 by Japanese, European and North American business leaders meeting in
Caux, Switzerland
Aimed to set a global benchmark against which individual firms could write their own
codes and measure the behavior of their executives.
The Caux Principles are grounded in two basic ethical ideals: kyosei and human dignity.
The Japanese concept of kyosei means living and working together for the common good
enabling cooperation and mutual prosperity to co-exist with healthy and fair competition.
Human dignity relates to the sacredness or value of each person as an end, not simply as
the means to the fulfillment of others purposes or even majority prescription.
The Caux Principles aim to operationalize the twin values of living and working together
and human dignity by promoting free trade, environmental and cultural integrity and the
prevention of bribery and corruption.
Caux Round Table Principles for Stakeholder Constituencies under the following topics:
Customers.
Employees.
Owners investors.
Suppliers.
Competitors
Communities.
Avoidance of illicit operations e.g.. bribery, money laundering, support for terrorists.,
gun running, drug trafficking
CAUX
Round
Table
General
Principles:
Towards
Shareholders
Health and safety of the customer and quality of his or her life not impaired by the work
CAUX
Round
Table
General
Principles:
Ergonomics in practice
CAUX
Round
Table
General
Principles:
Towards
Towards
Employees
Investors
CAUX
Round
Table
Pricing to be fair
No coercion or litigation
Long-term stability
General
Principles:
Towards
Suppliers
CAUX
Round
Table
General
Principles:
Towards
Community
Good corporate citizenship through charitable donations to educational, cultural and civic
needs of society
How
to
measure
CSR
relationships
Confidential tool designed to help Board of Directors, CEOs and Senior Managers
Arcturus evaluates a firms conduct against the aspirations of the CRT Principles for
Business
Arcturus identifies current and emerging issues in order to launch targeted improvement
initiatives.
What is Arcturus
Arcturus comprises 49 questions structured to assess performance and risks for key
stakeholders - customers, employees, shareholders, suppliers, competitors, and community
- and against the Caux Round Table Principles for Business, first published by the Caux
Round Table in 1994.
The Arcturus executive questionnaire can be completed in about 60 minutes and the
Arcturus full questionnaire can be completed in about 30 minutes per stakeholder.
Risks and opportunities are diagnosed from the perspective of the CRT seven general
principles and the stakeholders groups.
What is diagnosed is the extent to which a company has fulfilled its duties under the seven
general CRT Principles and promoted its relationship with each of its stakeholder
constituencies.
The diagnosis will allow management to consider issues the company is confronted with
from the different perspectives of all stakeholders.
Eg- Nissan Motor Co. of Japan recently completed its first use of Arcturus (known in Japan
as CSR Innovation). This assessment process served as the basis for its new focus on
implementing CSR globally.
Arcturus:
five
step
process
Step III-Investigation & Analysis: Responses to the 49 questions and the interview
content to be examined and analyzed.(Evaluation /Assessment)
Step V-Reporting
Data
collection
Completing
the
Arcturus
inventory
worksheet
The CRT staff and project team facilitate the inquiry process.
4) Environment Protection-
Environment Laws- Human pollution may harm the environment and the focus of
pollution laws is to limit or prevent humans damaging the environment.
Environmental Pollution-
It is a popular issue after World War II. It can be said that pollution is the result of our social
development through the means of science. Pollution is the product of our scientific
achievements being applied for the improvement of human facilities.
PollutionPollution is defined (Environmental Protection act 1990) as the release into the environment
medium of any process or substances which are capable of causing harm to man or any other
living organism supported by the environment.
Types of Pollution-
Air Pollution : It is caused by the release of chemicals and particulate matter into the
atmosphere. Gaseous pollutants include carbon monoxide, sulphur dioxide, CFCs, nitrogen
oxides,etc. Gaseous pollutants are usually produced by industry and motor vehicles.
Noise Pollution : includes roadway noise, aircraft noise, industrial noise and high
intensity sonar.
Water Pollution : is caused due to discharge of waste water from industrial and
commercial waste into surface waters; untreated discharge of domestic sewage, chemicals into
flowing surface waters and disposal of waste and leaching into ground water; eutrophication.
Thermal Pollution : is the change of temperature in the natural water bodies caused by
human influence.
Causes of Pollution-
Emissions from motor vehicles are one of the leading causes of air pollution.
Pollution sources that are stationary include chemical plants, coal-fueled power plants,
petrochemical plants, oil refineries, nuclear waste disposal, large live stock farms,
incinerators, factories producing PVC, metals, plastics and other heavy industry.
Pollution from agriculture comes from clear felling, burning and spraying of pesticides and
herbicides. Humans are the primary cause of global warming since 1950s.
Soil contaminants include chlorinated hydrocarbons, heavy metals, solid hospital wastes,
lead, fuel. Ordinary landfills are the source of chemical substances entering the soil
environment.
Water pollution can be caused by discharge of toxic pollutants like pesticides, heavy metals
and non-degradable chemical compounds into fresh or ocean waters.
The sources of these can be industries, chemical, heavy metal, hospital wastes. They also
can be untreated or partially treated sewage water.
The Scheduled Tribes and Other Traditional Forest Dwellers (Recognition of Forest Rights)
Act, 2006
National Green Tribunal Act, 2010 (NGT) is an Act of the Parliament of India which
enables creation of a special tribunal to handle the expeditious disposal of the cases
pertaining to environmental issues. It was enacted under India's constitutional provision
of Article 21, which assures the citizens of India the right to a healthy environment.
An Act to provide for the establishment of a National Green Tribunal for the effective and
expeditious disposal of cases relating to environmental protection and conservation of
forests and other natural resources including enforcement of any legal right relating to
environment and giving relief and compensation for damages to persons and property and
for matters connected therewith
Objectives
To tackle specific environmental problems that are peculiar to different parts of the country.
An Act to provide for the prevention, control and abatement of air pollution, for the
establishment, with a view to carrying out the aforesaid purposes, of Boards, for conferring
on and assigning to such Boards powers and functions relating thereto and for matters
connected therewith.
WHEREAS decisions were taken at the United Nations Conference on the Hum an
Environment held in Stockholm in June, 1972, in which India participated, to take
appropriate steps for the preservation of the natural resources of the earth which, among
other things, include the preservation of the quality of air and control of air pollution;
the prevention and control of air pollution at its source is the primary responsibility of
State and local governments.
Objectives
Protect public health and welfare while fostering a beneficial productive capacity.
Gives power to board for ensuring that there are proper systems for prevention of air
pollution.
Amendments created features to let industries make choices on the best way to reach
pollution cleanup goals.
Wildlife
Protection
Act,
1972
The Wildlife Protection Act, 1972 is an Act of the Parliament of India enacted for
protection of plants and animal species. Before 1972, India only had five
designated national parks. Among other reforms, the Act established schedules of protected
plant and animal species; hunting or harvesting these species was largely outlawed.
The Act provides for the protection of wild animals, birds and plants; and for matters
connected therewith or ancillary . It extends to the whole of India, except the State
of Jammu and Kashmir which has its own wildlife act
The 2002 Amendment Act which came into force in January, 2003 have made punishment
and penalty for offences under the Act more stringent.
The Indian Forest Act, 1927 was largely based on previous Indian Forest Acts
implemented under the British. The most famous one was the Indian Forest Act of 1878.
Both the 1878 act and the 1927 one sought to consolidate and reserve the areas having
forest cover, or significant wildlife, to regulate movement and transit of forest produce, and
duty leviable on timber and other forest produce. It also defines the procedure to be
followed for declaring an area to be a Reserved Forest, a Protected Forest or aVillage
Forest. It defines what is a forest offence, what are the acts prohibited inside a Reserved
Forest, and penalties leviable on violation of the provisions of the Act.
An Act to provide for the prevention and control of water pollution and the maintaining or
restoring of wholesomeness of water, for the establishment, with a view to carrying out the
purposes aforesaid, of Boards for the prevention and control of water pollution.
The act aims to prevent and control water pollution and to maintain/restore wholesomeness
of water by establishing central and state pollution control board to monitor and enforce
the regulations
Jharkhand
Forest
(Business Standard)
Dept.
Takes
Step
To
Check
Deforestation
The Jharkhand forest department has taken up a move to check deforestation by providing
Liquefied Petroleum Gas (LPG) connection in the villages with subsidy.
The villagers of these forests used to collect wood from the reserve forest areas for cooking
purposes.
The state government initiated the scheme in the villages of the wildlife inhabited areas to
check illegal felling of trees in the forest.
According to a source of the state forest department, the forest wealth especially saal
trees reduced 50 per cent within last 10 years due to illegal felling.
According to this scheme the villagers can take LPG connection paying 25 per cent of the
amount required for the connection and the balance to be borne by the government.
It is the direct attempt to manage ethical issues and problems through special policies,
practices and programs.
Components
Code of ethics
Ethics consultant
Hierarchy :
Ethics Committees
1.Chaired by an external advisor and includes key management from headquarters and group
operations.
2.Take the position that the committee is the responsible authority for ethics compliance in its
area of jurisdiction.
3.Be the final voice concerning interpretations regarding the organization's ethics and
compliance standards and procedures.
Ethics Officers
Aside from being a specialist in the field of business ethics who possesses the ability to
influence others to act or behave in a specific manner.
He/she also needs to be seen as a type of symbolic leader and somebody who is respected as
the ethical benchmark.
Being an executive of an organisation and having a seat on the executive committee, assists
in setting and integrating the ethical tone and strategy of the business from the top down.
He lends credibility to the function, as well as allows the ethics officer to effectively
discharge his/her responsibilities.
Ethics Officers
The ethics officer needs to:
monitor and report on ethics performance by the company, to the board and/or ethics (social
and ethics) committee, plus stakeholders.
Ethics Manager
Managers hold positions of authority that make them accountable for the ethical conduct of
those who report to them.
They fulfil this responsibility by making sure employees are aware of the organization's
ethical code and have the opportunity to ask questions to clarify their understanding.
Managers also monitor the behaviour of employees in accordance with the organization's
expectations of appropriate behaviour.
They have a duty to respond quickly and appropriately to minimize the impact of suspected
ethical violations.
Managers make themselves available as a resource to counsel and assist employees who face
ethical dilemmas or who suspect an ethical breach.
6) CODE OF ETHICS
What is a Codes of Ethics
A Code of conduct is a set of rules outlining the responsibilities of or proper practices for
an individual, party or organization.
Principles, values, standards, or rules of behavior that guide the decisions, procedures and
systems of an organization in a way that
Code of Conduct is the standard of expected ethical behaviour for the company's
management and employees. It is about holding oneself to the highest standards of ethical
business behaviour;
Professional codes of ethics - Professional groups also often have their own guidelines for
appropriate conduct for their members. Whilst most traditional professions such as medicine,
law and accountancy have long standing codes of conduct, it is now also increasingly
common for other professions such as marketing, purchasing or engineering to have their
own codes.
For example, in many countries the financial services industry will have a code of conduct
for companies and/or employees operating in the industry.
Similarly, at the international level, the electronics industry has developed a code of conduct
to ensure that working conditions in the electronics industry supply chain are safe, that
workers are treated with respect and dignity, and that manufacturing processes are
environmentally responsible.
The code of conduct was developed by a number of companies engaged in the manufacture
of electronics products, including Dell, Hewlett Packard and IBM.
It has since been adopted by a range of multinationals such as Apple, Cisco, Intel, Logitech,
Microsoft,
Samsung
and
Sony.
For example, a collaboration of various business leaders from Europe, the US, and Japan
resulted in the development of a global code of ethics for a business called the CAUX
Roundtable principle of Business.
For instance, companies wishing to use the Fairtrade Mark must meet international Fairtrade
standards which are set by the FLO, the international certification body, Fairtrade Labelling
Organizations International.
Too many inconsistencies and impartiality in administering code of conduct have made it
unsuccessful;
VISION
For e.g., NGO working for the poor might have vision of A world without poverty.
MISSION
Mission is the path through which the organization will achieve its goal.
It is how the organization exit the current position and work to achieve the goal.
For e.g., same NGO have mission of providing food and jobs for the homeless and
unemployed or poor.
Many companies build ethical values and goals into their mission or vision statements. This
helps senior managers and employees understand that values and ethical standards are
integral to all company operation and planning, and not simply an "add-on to be considered
after important decisions have been made.
Vision helps in setting a benchmark for ethics and mission helps in achieving that.
They create the common understanding of what the organization means and expects when it
requires employees, leaders and board to do the right thing.
For instance, Starbucks, its mission and vision statement describes 6 guiding principles that
helps this organization in being ethical.
Provide a great work environment and treat each other with respect and dignity.
Apply the highest standards of excellence to the purchasing, roasting and fresh delivery
of our coffee.
Toyota, its mission and value describes principle which helps in being ethical.
Honor the language and spirit of the law of every nation and undertake open and fair
Respect the culture and customs of every nation and contribute to economic and social
Pursue growth in harmony with the global community through innovative management.
Nutshell : Ethical organizational climate and culture rest on mission vision and values of the
organization
Ethics is a code of behavior that a society considers moral and appropriate for guiding
relationship with one another.
Ethics are standards of right and wrong, good and bad. Ethics are concerned with what
one ought to do to fulfill ones moral duty. There are two aspects to ethics:
Cooperation is easier and conflicts are limited when people share convictions. We
therefore need to look for ethical principles that are shared worldwide.
Standards and values are an integral part of any culture; hence, culture is the bedrock
supporting every development.
Culture can obstruct progress, but it can nevertheless be a tool for emancipation.
The same holds true for equal rights, responsibility for future generations, freedom of
speech, and democracy: they stimulate progress, but are also the objective of
development.
Effects Of Culture
Cultural Ethics-
There should be a set of congruent behaviors, attitudes, and policies that come together
in a system, agency, or among professionals and enables that system, agency, or those
professionals to work effectively in cross-cultural situations.
8) The International Partnership for the Satoyama Initiative (IPSI) is a partnership made up
of 167 member organizations dedicated to working together to realize societies in harmony with
nature.
In many parts of the world, people have developed ways to utilize and manage their surrounding
natural environment to sustain and improve their daily lives and production activities such as
agriculture, forestry and fisheries. Based on knowledge and practices locally accumulated in such
human-nature interactions over a long time, production activities and their management
mechanisms have created elaborate systems that have continued to support local communities by
providing foods, fuels, and other materials, nurturing traditions and culture, and maintaining
ecosystems and biodiversity. However, they have been increasingly threatened by rapid socio-
economic changes in recent years. Many have been converted into more uniform, efficient and
large-scale production systems that often cause environmental degradation and loss of cultures
and traditions. Therefore, it is important to explore ways and means for using and managing
natural resources sustainably that benefit current and future generations.
To tackle this critical issue, the Ministry of the Environment of Japan (MOEJ) and the United
Nations University Institute for the Advanced Study of Sustainability (UNU-IAS: formerly the
United Nations University Institute of Advanced Studies) jointly initiated the Satoyama
Initiative. This international effort promotes activities consistent with existing fundamental
principles including the Ecosystem Approach. IPSI was established in 2010 in order to undertake
and facilitate a broad range of activities to implement the concepts of the Satoyama Initiative by
diverse stakeholders.
Vision
The vision of the Satoyama Initiative is to realize societies in harmony with nature, comprising
human communities where the maintenance and development of socio-economic activities
including agriculture and forestry align with natural processes. By managing and using
biological resources sustainably and thus properly maintaining biodiversity, humans will be able
to enjoy a stable supply of various natural assets well into the future.
3.2 Three-fold approach
The three-fold approach of the Initiative is intended to maintain and rebuild landscapes and
seascapes in which land and natural resources are used and managed in a more sustainable
manner by:
-
and
Resource use within the carrying capacity and resilience of the environment