Creating a Learning Organization and an Ethical Organization

Gregory G. Dess

G. T. Lumpkin

Marilyn L. Taylor

Creating An Ethical Organization

•         Organizational ethics is a direct reflection of its leadership

•         Unethical business practices

•         Involves tacit, if not explicit, cooperation of others

•         Reflect the values, attitudes, and behavior pattern that define the organization’s operating culture

•         Driving forces of ethical organizations

•         ethical values

•         Integrity

•         Ethical values

•         Shape the search for opportunities

•         Shape the design organizational systems

•         Shape the decision-making process used by individuals and groups

•         Provide a common frame of reference, that serves as unifying force

Integrity-Based versus Compliance-Based Approaches to Organizational Ethics

•         Essential links between organizational integrity and individual integrity

•         Cannot be high-integrity organizations without high-integrity individuals

•         Individual integrity is rarely self-sustaining

•         Organizational integrity is beyond personal integrity, resting on a concept of

n  Purpose

n  Responsibility

n  ideals

Key Elements of Highly Ethical Organizations

•         These interrelated elements must be present and constantly reinforced

•         Role models

•         Corporate credos and codes of conduct

•         Reward and evaluation systems

•         Policies and procedures

Key Elements of Highly Ethical Organizations

•         Leaders are role models for their organizations

•         Leaders must be consistent in their words and deeds

•         Values and character of  leaders become transparent to an organization’s employees

•         Effective leaders take responsibility for ethical lapses within the organization

•         Provide a statement and guidelines for norms, beliefs and decision making

•         Provide employees with clear understanding of the organizations position regarding employee behavior

•         Provide the basis for employees to refuse to commit unethical acts

•         Contents of credos and codes of conduct must be known to employees

•         Inappropriate reward systems may cause individuals at all levels of the organization to commit unethical acts that they might not otherwise do

•         Penalties in terms of damage to reputations, human capital erosion, and financial loss are typically much higher than any gains that could be obtained through such unethical behavior

•         Policies and procedures can specify proper relationships with a firm’s customers and suppliers

•         Policies and procedures can guide employees to behavior ethically

•         Policies and procedures must be reinforced

•         Effective communication

•         Enforcement

•         Monitoring

•         Sound corporate governance practices