Company Values, Business Ethics, and Organizational Culture Dynamics

Business Ethics and Organizational Values

Business ethics defines what an organization should or should not do. It encompasses the principles and values governing the behavior of business organizations.

Types of Ethics Classes

• Descriptive Ethics: Focuses on identifying and understanding the conduct of individuals and their moral beliefs.
• Normative Ethics: Addresses what may or may not be permissible within an organization, setting standards for behavior.

Beyond Minimum Legal Requirements

A broader reflection on business ethics involves practices that implicate the norms and values of individuals and society. Ethics often goes beyond minimum legal requirements, encouraging actions that benefit more than just self-interest.

Ethical Charters

Ethical charters reflect the values and moral behavior that must be met by members of an organization.

Key Components of Ethical Charters

Ethical charters typically include:

• Commitments to the organization's members.
• Guidelines for behavior within society.

They often comprise four types of components:

• Prohibited conduct.
• A defined set of values.
• Specific guidelines and covenants.
• Sanctions for failure to comply.

Social Responsibility

Social responsibility refers to the increasing responsibilities an organization assumes beyond the production and sale of goods.

Key Areas of Social Responsibility

• Economic-Functional Contribution: The company's contribution to society through its core economic activities.
• Quality of Life: Addressing issues such as environmental degradation or contributing to the development of living standards.
• Social Investment: Allocating some of the organization's resources to solve societal problems.

Organizational Culture

Concept of Organizational Culture

Organizational culture is a set of rules, ways of thinking, and values that characterize the behavior of staff at all levels of the organization. It is often invisible and intangible.

Elements of Organizational Culture

• Shared values.
• Symbols.
• External configuration of the entity.

Functions of Organizational Culture

• Coordination Mechanism: Assists in standardization and consistency.
• Strengthens Rules and Power Configuration: Reinforces the system of rules and the distribution of power within the organization.
• Supports Success: A strong and focused culture can significantly contribute to organizational success.

Factors Influencing Organizational Culture

External Factors

Outside forces that have a direct influence on enterprise culture include:

• Market performance.
• Competition.
• Culture of employees (from external influences).

Historical Factors

Factors rooted in the organization's past that shape its culture:

• Founding values, beliefs, and attitudes.
• Business crises.
• Organizational references.

Internal Factors

Factors originating within the organization that influence its culture:

• Top management behavior.
• Organizational structure.
• Human Resources (HR) policy.

Determinants of Corporate Culture

Stage 1: Cultural Analysis and Audit

Analyzing something intangible or implied involves conducting a cultural audit. This process of observing reality includes:

• Identification of values (why they exist).
• Observation of behaviors that occur.
• Development of values and behavioral patterns of belief.
• Contrasting these with habitual behaviors.

Stage 2: Implementing Cultural Change

This stage involves the implementation of measures to change what has been identified and decided upon during the cultural analysis.