Define a right or wrong action within an organization is an aspect of the organizational ethical culture, it’s a guide for the company´s employees and external entities about the rules that regulate the ethical aspects of it.

That is why Claudia Quiroz, Ethics and Regulatory Compliance Manager of Grupo STT, in this article will address the concept of organizational ethical culture, requirements and steps that a company has to carry out for its development, job positions or positions that have the responsibility to give life to such culture, internal and external advantages for the company, metrics to measure its effectiveness and how Grupo STT can help the development of an organizational ethical culture in your company.

Concept of an organizational ethical culture

The organizational ethical culture is the set of all principles and values given by the general guidelines when carrying out activities in an organization internally; on dynamics, services or projects related to the company. 

It differs from the organizational culture, since ethics is a set of values and principles mentioned above, that are goals and were dictated by a corporate governance or senior management of the company; while the organizational culture is part of the day to day of the company and is built by all employees as of traditions, attitudes and experiences that occur in the company.

Steps for the development of an organizational ethical culture

1. Commitment of senior members: the first step and the base of the process is the commitment that the board of directors and higher management have to begin the process. Once the desire to start developing this type of culture has been defined, the next step is to communicate it to all the organization. 
2. Meet with interested parties: it is not just the fact that the higher management sends guidelines to the company’s operating controls, rather there must be proximity to operational areas, to progressively insert the organizational ethical culture. 
3. Existence or development of a code of conduct: the organization should check whether or not there is a current code of conduct, which constitutes this “back bone” of company ethics; in case it doesn’t have one, the principles and values to be included must be defined with each one. 
4. Internal communication: once the base of the code of organizational ethical culture has been developed, communication campaigns should be carried out so that the entire organization is aware; just publishing is not enough, you must be continually remembering. 

It is important to point out that ideally an Ethics and Regulatory Compliance Manager should lead the process; in case that the organization does not have this position, it is recommended that the responsibility should rest with the Country Manager or the company´s legal counsel.

Advantages of the organizational ethical culture internally 

• Clear rules: the organization in general will have clear rules and guidelines about how to carry out the duties and functions and where the organization is heading.
• Responses to objective faults: training about organization policies should be carried out at the labor level; so before an objective loss of actions on the part of an employee in the organization it can be answered objectively based on responses before the faults to the code of organizational ethical culture.
• Sense of belonging: the organizational ethical culture also creates sense of belonging in the employees, by ensuring not only the company´s interests and good acting, but also of themselves. 
• Profitability: towards the long term of the implementation of the culture, one can speak of an increase of the company´s profitability, thus each part knows how to operate to comply with its business functions and objectives covered by the code of ethics guide. 

Advantages of the organizational ethical culture externally (clients, suppliers, community…)

• Anticipate risk relationships: the development of an organizational ethical culture allows each employee to be more expert in preventing and measuring situations in which there are legal, financial or operational risks with external entities with which it relates with, for example, anti-corruption aspects.
• Governmental vision: through the legitimacy of government agencies, the company that has a code and ethical culture makes see that its board of directors cares about acting and carrying out its functions successfully and in the best manner. 
• Strengthening the organization’s image: a company that has a code and organizational ethical culture strengthens its image internally, but also with external entities that surround it and with which they have a relationship or will have a relationship. 

Metrics of the implementation of the organizational ethical culture

• Compliance with organizational objectives: not only from the profitable point of view, but also with done and accomplished activities following the code of ethics. 
• Organizational climate surveys: carry out the implementation of surveys to have a general perception of the entire organization and establish a current organizational climate.
• Risk matrix: to measure different parameters and be able to carry out a preventive analysis before any metric that is not being met or has not been met. 

Grupo STT can help you in the development of your organizational ethical culture

Grupo STT is a strategic ally in structuring your business, so it has the preventive criteria and trained employees in the organizational ethical culture topic internally as well as externally.

In case that your company requires the development of an ethical code and/or leadership in the process of creating an organizational ethical culture, we have the legal and ethics and regulatory compliance staff that can help you. 

Contact us at info@grupostt.com

Hugo Carmona Espinoza

Regional Community Manager