Organizational culture is a multi-system framework that includes formal and informal systems that must be aligned to support the firm’s values, decisions, and actions. Leadership is essential to driving ethical culture from both a formal and informal perspective. Formally, leaders provide the resources to implement structures and programs that support ethics. More informally, through their own behavior, leaders are role models whose actions speak louder than their words, conveying “how we do things around here.”
Formal systems include selection systems, policies and codes, orientation and training programs, performance management systems, authority structures, and formal decision processes. An organization’s informal systems include its role models and heroes, the norms of daily behavior, organizational rituals that support or detract from ethical conduct, the stories people tell about the organization, and the language people use.
Measuring organizational culture enables executives to gain control over a seemingly complex topic and to develop approaches to change areas that through a culture assessment may appear problematic. Measuring ethical culture also helps executives clarify the objectives of the company’s C&E programs, improve decision-making, and evaluate impact on stakeholders.
Why Culture is Important to Profits and Productivity
Many organizations know intuitively that corporate culture drives employee behavior and company outcomes. As the oft-cited strategy guru Peter Drucker has said, “Culture eats strategy for breakfast.” Researchers such as Professor James Heskett from Harvard Business School have quantified the benefits of effective corporate cultures by measuring its impact on operating profit due to lower employee turnover, which reduces costs in connection with recruiting, hiring, and training, and also improves operational continuity, thus benefiting customer relationships, customer loyalty, enhanced sales, and lower marketing costs.
With today’s employee engagement rates around 34 percent since 2018, according to Gallup research, now would be a good time to invest in aligning a company’s mission and values with employee behavior. Start by taking our Speak-Up Culture Assessment.
(See our Corporate Culture page for additional details on the theory and practice.)
The Ethical Systems culture measurement tools are a unique online resource specifically vetted through academic channels, including the peer review journal process (for survey questions) and a working group of leading practitioners and academics that Ethical Systems convened to assess the highest quality measures. We are the only collaboration of leading social and behavioral scientists who are among the top experts in the world on designing ethical organizations. By making people and companies aware of mechanisms that impact ethical culture, and how to properly design systems that reinforce positive behavior, Ethical Systems is at once an advocate, partner, and facilitator in the success and resiliency of business.
The Ethical Culture Survey pinpoints the most relevant components for concise and constructive feedback to improve the systems that comprise a truly ethical culture in organizations. By comparing results from both executive and management teams, alongside other levels and roles within the company, we can better determine any discrepancies between hierarchical levels and target groups, sections and teams that require additional resources to course-correct.
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To learn more or to schedule a call to discuss the survey and your company, please email Noel Boyland, Ethical Systems’ Corporate Engagement Director.