Ethical Culture Audit: Corporate Policies and Norms

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Table of Contents

Introduction
Ethical Culture Systems
Alignment
Recommendations
Conclusion

Introduction

The organizational culture is very important for the company as it enables the management to ensure that all employees are aligned to the culture and make decisions in accordance with the corporate policies concerning the behavior and norms of conduct. At the same time, weak ethical culture of the company contributes negatively to the company’s performance and employees’ commitment.

However, weak alignment to corporate ethical culture may be beneficial for individuals due to unethical behavior as a part of such organizations that becomes an integral component of an individual’s behavior as far as he/she works there.

The person I have interviewed is called Frances Jones (the name is changed as this person did not give her written consent so that I could openly present the information; so, it was agreed that I change her name and can proceed without altering information). Frances Jones worked for two years for the company American Airlines.

Analyzing the interviewee’s report and the information available on the official website of the company, I found out that the company has a strong ethical culture system based on a combination of formal and informal characteristics. A more detailed analysis is introduced in the body of the report.

Ethical Culture Systems

The formal ethical culture system includes such concepts as executive leadership, selection system, policies and codes, orientation and training, performance management, authority structure, and decision processes. The informal ethical culture system consists of such components as role models or heroes, norms, rituals, myths or stories, and language.

As such, the American Airlines company has no formal executive leader who would create or change the formal and informal ethical culture systems and the way they operate. However, absence of a formal executive leader does not give rise to the spread of unethical behavior in the company due to the strong alignment of the staff members to the ethical culture propagated in company.

At the same time, there are no such components of the informal ethical culture system as role models/heroes. However, the rules of corporate behavior presuppose that in some cases employees should address their issues to supervisors or Chief Compliance Officer concerning the ethical behavior.

Selection system is anther formal element of the system which means that people are selected in a certain manner to meet the corporate ethical culture requirement.

The main requirement of the company includes ability to act in accordance with the rules of ethical behavior and improve one’s skills in terms of operation in the company, effective performance of training procedures, and effective application of practices in operation. This practice supports ethical behavior in organization because employees are treated on the equal bases and have no special privileges.

Norms is a component of the informal corporate ethical culture system. This element is not always based on the ethical behavior and does not always support ethical behavior. This is an example when norms can be ethical or unethical and support different types of behavior. In other words, the American Airlines have no norms that support unethical behavior because for each case of misconduct (unethical behavior) there is a punishment up to termination of the employment.

The next component to be discussed for the American Airlines company is the policies/codes. There are a number of policies in this organization that enhance ethical behavior and contribute positively to the overall performance of employees and organization.

The policies include training policy which presupposes that each employee should pass the training program to be able to work further; work environment policy that excludes any harassment (as well as sexual) in the workplace; data privacy policy that prevents leakage of information to competitors; hate-related conduct policy that stipulates the rules of behavior that should be in the framework of the company’s rules; bribes/illegal payment policy that prevents the staff members from being involved in such illegal issues.

There is no evidence of rituals and their support for either ethical or unethical behavior.

The training is a strong component of American Airlines’ corporate ethical culture which contributes greatly to the ethical actions taken by staff members in all levels.

As such, employees and managers are encouraged to improve their performance after finishing their training which is recorded to keep the results about those efforts and report to supervisors or to mangers that are responsible for the training records policy. Besides, this element of the formal system is claimed to be one of the strongest components that support ethical behavior in the company.

Myths and stories are integral parts of every company’s corporate culture. However, there is no evidence of stories created and maintained as a part of the corporate ethical image by leaders of the company. New-comers benefit from stories told by staff members and behave ethically due to the nature of those stories that dwell on the cases such as ‘what happens if’.

Performance management is a part of formal corporate ethical culture system as it is aimed at improving the effectiveness of performance by a reward system. In other words, employees should report about certain misconduct and unethical behavior by other employees of different structural levels.

To ensure that no individual would be jeopardized by reporting about inappropriate behavior, anonymous reports were made possible for employees of the American Airlines company. The language of the staff members should be corresponding to their positions. For example, stewards and stewardesses are not allowed to behave unethically in terms of language when they are at work or wearing the uniform of the company.

Besides, professional language presupposes that employees are polite with customers and can use different psychological techniques such as soothing tone to reassure the customers to calm down. This informal component of the ethical culture of the company is aimed at supporting ethical behavior of staff members.

Authority structure is one of the strongest components of both formal and informal ethical culture systems because it enables managers and other staff members for strict supervision. However, the employees of the American Airlines company are encouraged to use anonymous reports to inform executives about the inappropriate behavior and misconduct. In this respect, the authority structure is weak but it contributes greatly to the ethical behavior.

Decision process is the last component of the formal ethical culture system to review. Thus, it supports ethical behavior through a number of rules enumerated in the guidelines of the company about ethical behavior of employees. As such, the guidelines offer employees to think thoroughly before making decisions and weigh up all pros and cons before doing something that can contribute negatively to the image of the company in some way.

Alignment

Alignment is a process of behaving in the way a company requires it on a day-to-day basis without feeling restrained or being in conflict with supervisors, co-workers, and customers due to unethical behavior or the behavior which is not a part of the corporate ethical culture.

In this respect, the company American Airlines has strong alignment in terms of formal and informal ethical culture systems developed and maintained within the organization. For instance, all employees follow the rules stipulated in policies because violation of those rules can result in termination of employment.

As such, all employees are encouraged to report about the inappropriate behavior, especially if misconduct takes place as violation of the policy rules that stipulate the employees’ ethical behavior guidelines. Thus, though there is little evidence about some components of the formal ethical culture system, employees are aligned to this system in a clear way which contributes greatly to the effectiveness of performance of the company.

Both formal and informal cultural systems are aligned to support ethical behavior because this behavior is the basis for effective performance. For example, customers would not use the services of the American Airlines company if they become witnesses of unethical behavior of the staff members.

Moreover, customers’ loyalty is also developed due to the alignment of cultural systems to support ethical behavior. In this respect, the American Airlines company’s performance is designed in such a way that allows ordinary customers to report on certain misconduct and share their opinion about the performance of the company to enable customers.

So, staff members conduct surveys to make sure that customers are satisfied with the company’s performance and would use its services the next time as well. Additionally, the surveys collected from customers can be considered another type of alignment that enables the company monitor its staff’s performance and make adequate decisions to improve or reward it.

As the alignment of the American Airlines of ethical culture is strong in both formal and informal systems, it can be considered a strong culture because it is designed to encourage employees behave ethically and no employee can behave unethically if others see him/her doing something inappropriate as the system of reporting is widely developed. Besides, authority structure seems to be misaligned in this company as it sends mixed messages.

For instance, employees are encouraged to report about misconduct but if a supervisor is not the person you want to report to, you can use anonymous reporting options and tell about the problems without being potentially identified. In other words, the authority structure is clear but reporting is not conducted directly from one level to another but employees can skip levels and report directly to executives.

Recommendations

The culture can be improved to be more supportive for the ethical conduct by employees of the American Airlines company. For instance, it is necessary to make sure that all components of ethical cultural systems are supportive for the ethical behavior.

As such, it is necessary to conduct recruitment with regard to the personal skills and inclinations of every applicant to make sure that he/she meets requirements of the company concerning ethical behavior and feels no stress being a part of the company and behaving in an ethical way within and outside the organization. Moreover, it is possible to introduce certain rituals that would encourage employees to behave ethically and feel emotionally comfortable with it.

For example, it is possible to introduce certain meetings weekly or monthly so that employees shared thoughts about some new policies and their perception of changes. In addition, performance management can become stronger to ensure that performance of all employees is assessed in accordance with specific evaluation criteria and all employees are informed if some problems occur with their performance to have an opportunity to improve one’s skills.

Conclusion

The performance of each company depends on a number of factors that influence its reputation, financial performance, environmental safety, participation in charity and community’s activities as well as employees’ commitment. In this respect, it is necessary to infer from the information analyzed about the job hunting, future career, and future ethical leadership.

So, it is important to know about the company’s corporate policies before applying for a job because a company may have strong selection system aimed at recruiting employees that have strong inclination for a particular type of work and specific personal skills and features that would be beneficial for this employee on specific position.

Moreover, ethical culture of a company should not conflict with a person’s beliefs and values. For example, if a corporate ethical culture is aimed at promoting the least ethically performing employees when a person is not able to conduct unethically, he/she would not get a promotion and would not be satisfied with the professional duties. On the other hand, a person that finds him-/herself in a corporate ethical culture that is not really ethical, he/she can begin behave unethically to fit the corporate standards.

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