Perspective of women and men

Ethical culture’s impact on organisational misconduct

What is the difference in the level of observation of misconduct of organisations with a fragile versus mature ethical culture?

The results indicate that organisations with fragile ethical cultures are likely to observe a higher incidence of misconduct compared to those with mature ethical cultures. However, the difference is not as substantial as one may assume. It is crucial for employees, regardless of whether they belong to an organisation with a fragile or mature ethical culture, to be able to identify whether misconduct is being observed in their organisation. 

The Ethics Institute has been researching the relationship between different levels of maturity in organisational ethical cultures and the observed misconduct in organisations. Our research revealed a discernible difference in the observation of misconduct between organisations with fragile and mature ethical cultures. More specifically, organisations with fragile ethical cultures exhibit an average of 17% more observations of misconduct compared to organisations with a mature ethical culture. Although the difference may appear to be low, two key interesting insights can be gleaned from this difference.

  1. Perception of misconduct: Misconduct can become normalised in organisations with a fragile ethical culture, as employees might perceive such behaviour as customary in the course of business. However, there is evidence that suggests employees can differentiate between perceived actions that are unethical. On the other hand, organisations with a mature ethical culture are likely to have ethics awareness and ethics training sessions that guide employees to identify misconduct. The initial step is to be able to recognise misconduct within the organisation. It is questionable whether organisations that possess fragile ethical cultures, even if they report higher instances of unethical conduct, are genuinely able to identify all instances of unethical behaviour. In essence, there is a possibility that unethical behaviour observed in fragile ethical cultures could surpass the 17% difference reported, purely out of ignorance of what encompasses unethical conduct.
  2. Ethics accountability: Employees in organisations with a mature ethical culture are likely to be held more accountable for unethical behaviour coupled with a stronger inclination to assume personal accountability for this behaviour. Additionally, employees operating in mature ethical cultures are more inclined to hold their colleagues accountable for instances of unethical conduct. It is more likely that misconduct will be reported and dealt with immediately in organisations with more mature ethical cultures when compared to those with fragile ethical cultures. On the other hand, organisations with a fragile ethical culture may have a lack of transparency, and misconduct may be swept under the carpet, leading to employees being discouraged from taking accountability and/or reporting unethical conduct. Moreover, one cannot forget that fear of retaliation may be a serious concern for employees.

In conclusion, the research conducted by The Ethics Institute sheds light on the critical interplay between organisational ethical cultures and the prevalence of misconduct. The disparity in misconduct observation between fragile and mature ethical culture organisations underscores the importance of fostering mature ethical environments. While the percentage difference might not be substantial, the nuanced insights into perception, accountability, and reporting mechanisms highlight the need for continued vigilance. As we navigate the complex landscape of ethics within organisations, these findings encourage a proactive approach towards recognising and addressing misconduct, ultimately promoting a more ethically conscious and responsible society.