Formal Cultural System Is the Most Important Factor in an Ethical Organisation

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Formal cultural systems can be said to be the most important factor in creating an ethical workplace. This is because formal systems set the foundation of an ethical organisation. There are also other factors which are significant in establishing an ethical workplace, but without a firm foundation, it will be shaky and may even crumble. This essay will be arguing that formal cultural system is the most important factor in creating an ethical workplace. The formal cultural system will be broken up into ethical leadership, code of ethics, reward systems, orientation and training programs. Other factors such as corporate social responsibility (CSR) and informal cultural systems will also be discussed. Some of the points covered will serve to show the application of the normative theories on ethics, specifically egoism, utilitarianism, and value ethics. What is ethics? Ethics can be separated into two categories, namely compliance and value. Compliance ethics emphasizes on following the law where individuals’ behaviour requirements are influenced by rewards and sanctions, while value ethics emphasizes on inspiring principles that people are expected to have such as integrity and fairness (Paine 1994). However, there can be cases where it is legal, but unethical. An example of this is from the case where Dr Susan Lim overcharged a Brunei royalty for her fees (Ho 2013). This is a legal but unethical issue. From this we can conclude that compliance ethics expects only the bare minimum, and to be a more ethical organisation, value ethics should be emphasized. Weaver and Trevino (1999) also believe that value ethics would have more of an impact and last longer in the organisation. Next is how formal culture systems promote ethics. Formal ethical systems consist of factors such as leadership, code of ethics, reward systems, orientation, and training programs. This
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