Organizational ethics express the values of an organization to its employees and/or other entities irrespective of governmental and/or regulatory laws.
[1] An organization forms when individuals with varied interests and different backgrounds unite on a common platform and work together towards predefined goals and objectives.
A positive ethical corporate culture improves the morale among the workers in an organization, which could increase productivity, employee retention and loyalty.
Other essential benefits of an ethical culture include better internal communication and wider community development through corporate social responsibility.
Corporate downfalls would include, but are not limited to, the recent Enron and WorldCom scandals, two primary examples of unethical business practices concerning questionable accounting transactions.
Organizations focusing on encouraging ethical practices are commonly viewed with respect by their employees, the community, and corresponding industries.
More importantly, an ethical organization will have the ability to retain employees that are experienced and knowledgeable (generally referred to as human capital).
These theories and studies can range from individual(s), team(s), stakeholder, management, leadership, human resources, group(s) interaction(s), as well as the psychological framework behind each area to include the distribution of job tasks within various types of organizations.
Leadership sets the tone for organizational management (strategic actions taken by an organization to create a positive image for both the internal and external public).
In turn, leadership directly influences organizational symbolism (which reflects the culture, the language of the members, any meaningful objects, representations, and/or how someone may act or think within an organization).
[8][9] Alongside presenting the vision, values, and goals of the organization, the leader should infuse empowerment and motivation to its members.
Leaders using empowerment to motivate their subordinates, is based upon the view of: “Achieving organizational ownership of company values is a continuous process of communication, discussion, and debate throughout all areas of the organization”[10] as.
Whether it is a team, small group, or a large international entity, the ability of any organization to reason, act rationally, and respond ethically is paramount.
Leaders must have the ability to recognize the needs and desires of members (or called “stakeholders” in some theories or models), and how they correspond to the organization.
Due to each organization's culture and atmosphere being different, there is no clear or specific way to implement a code of ethics in an existing business.