ICQ Log - Ethics: Culture, Ethics, Values, Beliefs 

Which comes First?

Last Updated: 29 March 2021

Ed McDonald, FCOI, MA in Ethics and Corporate Responsibility, MBS and member of the ACOI Ethics Committee, discusses ethics in the workplace; reasons people may not express their ethical views at work, why some workers make choices they consider to be unethical and how you can improve ethical standards in your organisation. 

Over the last few years the concept of corporate culture has become a major focus across many sectors in wider society, including industry and not least in financial services. Various corporate scandals and misconduct have shone a spotlight on the kind of culture that an organisation has that seems to permit, allow for, generate, even tolerate, misconduct that results in the harm of some kind to a range of parties (consumers, employees, communities, shareholders, taxpayers, and others), and to what extent are the misconduct behaviours somehow facilitated (not necessarily deliberately) by the way that organisation is structured and overseen. In this case, I use the term “overseen” to refer to people at the top in the organisation who set the tone for the organisation. And in Ireland it has become a significant focus for the Central Bank which is demanding financial service businesses improve their corporate cultures, hence why we are talking about it so much because it seems to have a touch of mystery about it.

So, what is “culture”?

Corporate Culture, that is, the culture in companies and organisations, is a topic that has been extensively researched and written about. Just think about companies who have been reported as having culture issues and what went wrong in them. There are various definitions of what “culture” covers, or more specifically, corporate culture, but two will suffice for this paper.

Ethics in your workplace (be that the organisation itself, a division, a department, a branch, a team, a subsidiary) is not your responsibility alone, but you have a part to play in it, no matter what level you are at. There is also the ethics aspect of how you relate to consumers, clients, suppliers, and the various other people you have to deal with. What you can do and what influence you can exert will depend on other factors. These include the level of authority you have in the company, the strength of your personal values and your ability or determination to argue for them, where you can present your views, and whether you have the confidence to argue in support of them. 

The famous American management writer, Edgar Schein, saw organisational culture as having three elements – Artifacts (logos, images, posters, dress codes, workplace and office designs – aspects that one can readily see), Espoused Values (what the organisation says about itself and its ways of working and its desired standards) and Underlying beliefs (the attitudes, beliefs and behaviours that really underlie the way it acts inside itself and may not be always displayed). McKinseys probably have the most concise definition, one that many people are aware of – “Culture is the way we do things around here”. Maybe the reality is one or the other or a mix of both, but they paint a picture of what this mysterious concept called “culture” might be in practice.

Many organisations have had high-sounding statements about their Values or Codes of Conduct but have still had major misconduct problems (remember Enron and Arthur Andersen in the USA, Boeing, Volkswagen, Deutsche Bank, Wells Fargo? Not to mention a number of prominent Irish companies, including financial services). There are lots of cultures at various levels and scales and they’re not necessarily bad or defective in themselves, at least at the theoretical level – but some can be and are at the practice level, the “how we actually do things” level.

Varied Cultures

I was born into a culture. You were born into a culture. But at no stage did anyone ever say that I was now entering, or part of this concept called “culture”. I didn’t ask to be born into that culture and likewise you didn’t. We each entered our respective culture with no knowledge of it. And as we went through our infanthood and then our early childhood we were taught things and learned aspects of being in that culture, what it was like to be part of it, a member of it. The first culture we each (or most of us) experienced was the culture of our family, and probably our first culture influencers were our parents and related family members. Our parents in turn probably carried with them influences or views about parenting that they got from their families and then from their practical life experiences. My family lived in a village where there was probably some kind of village culture, e.g., a commitment as part of the village, so my family could be said to be a sub-culture within the village culture. 

My village was part of a county and in turn it might have had something akin to a village culture. And when I went to school (be it primary or secondary) it in turn had a culture where I was taught things and learned how to work in that situation. Then at University I realised university was different and had a culture of its own (though at the time I didn’t think of it as having a “culture”), where I had to study, more at my own pace than being driven by a teacher as had been the case in primary and secondary school. As I subsequently joined clubs and organisations and took up different jobs on my career path, I encountered slightly different cultures, all of them with their own way of doing things, and which involved working out how to work with others, play as a team player, develop a sense of competitiveness because of playing in competitions. And all of them were within the context of there being what was called a “national culture”, the Irish culture (or whatever your nationality), a broad notion of what being Irish involved, what marked Irish people out as being a bit different from the people of other nationalities. And then I travelled overseas a lot and saw the ways things were done in other places. And I worked in England and later lived and worked in New York, experiencing different kinds of cultures. I didn’t overly think about them being called “cultures” though I was told that the New York culture was aggressive, assertive, get on with it, hit the targets. But I found my way through them all and the differences they brought to my life. I adapted and fitted in. And I could have left any of them if I didn’t like it or feel comfortable in it. Did they change me? Did I change?

Who Creates ‘Cultures’?

I paint the somewhat long-winded picture above to show that I and many other people, including you, inter-act and have inter-acted with a variety of other cultures, each with their particular sense of focus. But who set each of those separate cultures? Was there somebody (or somebodies, plural) who decided or exerted influence on creating each of those cultures? Or were there many people who contributed to them and at varying levels in any given organisation? For the purposes of this paper, let’s interpret those organisations as being in the financial services industry. And if they are really big organisations, have they got the same Corporate Culture, Mission statements, Values and Codes of Practice for every part of the organisation, every department, every branch, every subsidiary, every location, everyone in the organisation at all levels? And is that realistic? As the US magazine Compliance Week (15 June 2020) commented “Establishing a culture based on values and transparency is more effective at preventing misconduct than a robust set of rules, and it quotes the LRN (a major US corporate behavioural research company) 2020 survey: “An organization’s ethical culture determines whether its rules and procedures will be followed, ignored, or circumvented, no matter how thick the rule book may be.” The clear indication in its findings is that how a company does things in practice (its culture) is the critical element in acting and behaving, and that it will regularly outweigh any grand policy statements. They are all necessary in developing a right focus but as is often said “Actions speak louder than words”. Setting up, running, managing, doing the tasks of any organisation, is done by people, people who make decisions and choices about what to do. And those people can be at varied levels in the organisation. So if there is an organisational culture problem, then it’s for the people in it to decide what should be done about it. The question is “Who are those people who can do something about it?”

While not specifically talking about corporate culture, the famous Albert Einstein very aptly said: “The world we have created is a product of our thinking. It cannot be changed without changing our thinking…. If we want to change the world, we have to change our thinking…. no problem can be solved from the same consciousness that created it”

Author: Ed Mc Donald

FCOI, MA in Ethics and Corporate Responsibility, MBS and member of the  ACOI Ethics Committee 

REFERENCES:  

Lawrence M Hinman, Ethics – A Pluralistic approach to moral theory, 2008, 4th ed., p.5, Wadsworth Cengage Learning, Boston, USA. Former (now emeritus) professor of Ethics at San Diego University, USA.

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ICQ Spring Edition 2021

This article was taken from the ACOI's ICQ Spring Edition 2021