April 2022
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TD Magazine

Ethical Culture Makes a Difference

Friday, April 1, 2022

Foster a workplace environment where individuals learn from failure and reflect on experiences.

Are your employees growing ethically in the workplace? Have you thought about that as something they should be doing? If not, you should. "Work is one of the areas where we are most likely to encounter moral dilemmas and temptations to behave unethically," notes the KelloggInsight article "5 Research-Backed Strategies for Building an Ethical Culture at Work." And while workers have an individual responsibility in behaving ethically, the article says employers play a part in that.


In its report LRN Benchmark of Ethical Culture: How Ethical Behavior Drives Business Performance in the New World of Work, ethics and compliance training organization LRN assesses why an ethical culture matters. It gathered data from nearly 8,000 employees worldwide in 17 industries and from frontline employees to the C-suite. According to the report, some of the elements an ethical culture embodies are corporate ethics, transparency, leadership modeling, recognition, trust, freedom of expression, and organizational justice. It also defines four cultural archetypes: inspired, competent, requisite, and nascent.

Companies with an inspired ethical culture have supportive leaders and embrace "mission and purpose, shared values, and ethical behavioral expectations." Companies within the competent archetype are developing supportive leaders and experiencing values-based performance. They have a healthy work atmosphere. Meanwhile, companies that fall into the requisite category have an established culture, but employees aren't putting forth values-driven performance. Finally, organizations in the nascent archetype may be considered toxic at times.

Those archetypes have a significant impact on many facets of business, including customer satisfaction, employee loyalty, innovation, adaptability, and business growth. Organizations with an ethical culture fare better in each category. For example, in an inspired organization, customer satisfaction resides at nearly 100 percent, whereas in a nascent organization, customer satisfaction is at 56 percent.


The report offers guidance on how companies can create an ethical culture. Employees will take their cue from leadership. If an employer can engage key stakeholders and keep them engaged, they will have won part of the battle.

Another important aspect is understanding where business culture is now. Ask employees how they see cultural dynamics. Then with transparency and honesty, leaders should address the realities they hear. Assess and track progress over time.

The KelloggInsight article likewise recommends, "Rather than treating ethics as a discrete topic, companies should strive to integrate it into every aspect of their culture, both formal and informal." Further, employers should aim to sow a culture that permits learning from failure and encourages reflection.

About the Author

Patty Gaul is a senior writer/editor for the Association for Talent Development (ATD).

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Companies who engage employees around the noble cause of serving customers profitably outperform their competitors. This is not just my opinion. This Inc article shares research on hundreds of companies that show how partnering with employees to serve customers drives superior results: https://www.inc.com/bill-fotsch/a-key-strategy-to-double-your-profitable-growth.html This Forbes article provides more background on the partner concept: Engage Your Employees in Making Money
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