How Values Impact Ethical Behaviour - Coursework Example

Governance and Fraud Name Institution Course Date Governance and Fraud Introduction Organizational ethics has become a topic of growing interest over the past few decades. The growing interest on the subject has been triggered mainly by the increasing realization of the importance of promoting ethical behaviour for the success of a company (Akaah and Lund 1994, p. 418). The past few decades has seen increased cases of executives engage in unethical conducts that have reduced some giant companies from riches to rags as was the case with American companies, such as Enron, Adelphia, and WorldCom (Maxwell 2003, p. 4). Recently, the German leading automaker Volkswagen also found itself in a similar situation after its executives engaged in unethical conducts by cheating on its nitrogen emissions. However, even as there is increased recognition of the importance of promoting ethical behaviours for the success of a company, there has been persistent debate as to which, between an individual's values and organizational culture has the greatest impact on one's ethical behaviour (Collins 2001, p. 16). However, as much as both values and organizational culture have an influence on a person's ethical behaviour, an individual's values appear to have the greatest impact on the ethical behaviour of an individual. This paper discusses the reasons why an individual's values have the greatest impact on one's ethical behaviour than organizational culture using Richard Branson of Virgin Group and former Volkswagen CEO as contrasting case studies. How Values Impact Ethical Behaviour Ethics is one of the topics that has not just generated a lot of interest from scholars in the recent past but has also been a subject of intense debate. One of the areas that have generated intense debate has to do with the widely held belief in the modern business world that an individual's values have the greatest impact on one's ethical behaviour than organizational culture. However, in analysing the validity of this statement, one must begin by understanding what ethics, values and organizational culture means. To begin with, ethics has to do with behaviour (Maxwell 2003, p. 12). However, when a person is faced with a dilemma, ethics is taken to mean doing that which is right. Therefore, ethics generally implies the ability of a person to differentiate between right and wrong. Values, on the other hand, refer to the standards of behaviour or the principles that one stands for or a person's judgment of what is important in life (Baker et al. 2006, p. 849). Organizational culture, however, refers to the set of values, beliefs or assumptions that dictate how people are supposed to behave in the workplace. It is acknowledged that organizational culture has an influence on one's ethical behaviour considering that organizational culture have shared values and beliefs that have a strong influence on a person in the workplace and dictate how a person behave, dress or perform their duties. In this respect, there exist extensive literature that deals with organizational culture and how they relate to ethical leadership (Collins 2001, p. 16; Baker et al. 2006, p. 851). However, it must be recognized that values have the greatest impact on an individual's ethical behaviour. This is based on the fact that a person's behaviours are driven by values. In other words, values have the greatest influence on a person's ethical behaviour than organizational culture since values determine attitude of an individual, which influence one's behaviour. In fact, there are many bodies of literature that have demonstrated the existing strong relationship between values and effective leadership (Akaah and Lund 1994, p. 422). The review of the literatures clearly demonstrate that values are not just a critical component of effective managerial leadership, but also its strong influence on a person's ethical behaviour. Martin Seligman, in his book, Authentic Happiness, demonstrated how one's behaviour is driven by values (Seligman 2002, p. 16). In the book, Seligman (2002) identified different subset of virtuous values that relates to ethical behaviours and discusses them in light of how the values influenced ethical behaviour. Wisdom and knowledge is one of the values that have a great influence ethical behaviour. Wisdom and knowledge is a value that has to do with the ability of a person to receive information and make it something useful. Kerns (2003, p. 1) argues that wisdom is derived from taking advantage of personal experience to interpret information in a manner that is knowledgeable so as to come up with wise decisions. Therefore, considering that the precondition for doing that which is right when faced with ethical dilemma requires knowing the right thing to do, and being able to separate between wrong and right, it requires more of wisdom and knowledge as a value rather than just the organizational culture to do that which is right (Haughton 2015). People who are driven by value of wisdom and knowledge will always strive to do only that, which they believe is right because they are able to differentiate between right and wrong. Second, self-control is an important value that has a strong influence on a person's ethical behaviour than organizational culture. Self-control has a strong impact on ethical behaviour because it is a value that deals with a person's ability to prevent engaging in immoral or unethical conduct. In this respect, Seligman (2002, p. 18) argues that the ability of one to take an ethical decision is not determined by the culture of an organization, rather requires one's commitment to the value of acting with temperance. People who have strong commitment to the value of temperance and self-control will always resist pursuing personal gains when they consider it inconsistent with the public good or the good of stakeholders. For instance, Haughton (2015) argues that business leaders with strong commitment to the value of temperance will always avoid engaging in corrupt activities because it not for institutional benefit. Contrastingly, as much as a company might create a culture that promotes ethical behaviour, this might not make people with personal interest pursue individual gains at the detriment of the institution and stakeholders. Integrity is another value that has strong influence on ethical behaviour of an individual than organizational culture. Integrity involves separating between right and wrong and acting accordingly. Integrity has great influence on ethical behaviour in the sense that it compels one to consistently do that which is right without regard to personal consequences even in situations when it is not easy. In fact, studies have shown that people who are driven by integrity will always do that which is right regardless of the organizational culture (Baker et al. 2006, p. 854). In fact, as much as a company might have a culture that encourages moral behaviours, this might not necessarily promote ethical behaviours if individuals in the company and the managers are not guided with integrity. Therefore, integrity is a key value that drives ethical behaviour, regardless of the organizational culture. Justice and fairness are another value that has a stronger impact on the ethical behaviour of an individual than organizational culture. Justice and fairness have to do with treating people fairly. In this respect, people who believe in the value of justice and fairness will always treat other fairly regardless of the culture that an organization has developed over the years. Kerns (2003, p. 2) says that justice is served to the people when the individuals believe that they receive fair returns based on their efforts. As such, leaders that have a strong commitment to justice as a value will always ensure that no one or group is given unfair treatments, such as in the allocation of resources, which promotes ethical behaviour. Besides, Kerns (2003, p. 8) noted that ethical people not only value but also embrace fair advice and guidance. Case: Richard Branson of Virgin vs. Martin Winterkorn of Volkswagen Group Richard Branson is one of the most successful entrepreneurs and business leaders in the modern business environment. Despite his little education and having come from a humble background, the British entrepreneur has managed to create one of the most successful companies in the world, the Virgin Group (Ferrell and Ferrell 2016, p. 66). Other than the good performance that the Virgin Group of companies, such as Virgin Atlantic airline has recorded over the years, it has not gone unnoticed how ethical Virgin business has been since it was started. Currently, Virgin Group is ranked among the most ethical companies in the world. However, analysis indicates that Virgin has been ethical with regards to how business is conducted mainly because of the values that Richard Branson stands for, which he promotes in the company. Branson's first ethical value that has had a great impact on his ethical behaviour is the strong belief in promoting the greater good. Branson believes that he has the responsibility to ensure that he impact positively on the greater society, and this has had an impact on the ethical principles on which his business is run (Branson 2011, p. 13). Because of his strong commitment to promoting the greater good, Branson has established business that promotes the value that he believes in considering that the Virgin Group has been promoting the wellbeing of the people in the society. Branson, through the Virgin Group, has been promoting his value of promoting the greater good by engaging in social responsibility programs that include helping the needy in the society through charities, donating money for the fight against diseases, such as HIV/AIDS and Cancer among others. Second, Branson's value of promoting the greater good also the reason his company is dedicated to addressing the problem of climate change and conserving the natural resources. Branson argues that he believes that he as an individual has a responsibility to help in solving the problem of climate change and conserving natural resources a value that he has imparted in Virgin that has been at the forefront in the fight against climate change and natural resources conservation (Branson 2011, p. 22). For instance, Branson has introduced green initiatives, such as the use of solar to power most of the company offices as well as investing in fuel-efficient airplanes as a way of fulfilling his commitment to promoting the greater good of the society and the environment. Third, Branson's ethical behaviour is being driven by his strong support for human dignity. Branson believes that every human being is equal before God that that company should champion this by treating everyone with respect and dignity a value that he promote in his company (Ferrell and Ferrell 2016, p. 41). Outside the business arena, Branson has been championing human rights across the globe by advocating an end to execution, showing strong support for homosexuals and criminal justice reforms. In the company, Branson has been promoting these values by ensuring that every employee at Virgin is treated with respect, dignity and that they are awarded wages that commensurate with their efforts to the company. Additionally, Branson is that person who is driven by integrity. Branson believes that for any leader to succeed, he/she must observe integrity. This is a value that he has promoted in his company by ensuring that the company abide by corporate ethics in terms of financial reporting, as well as ensuring that company resources are fair, effectively and efficiently allocated for the benefit of Virgin and its stakeholders (Branson 2011, p. 34). Branson's values, however, contrast with the values of Martin Winterkorn, the former CEO of Virgin Group. Martin Winterkorn had no virtuous values like those that Branson had, resulting in him promoting unethical conducts at Volkswagen. First, unlike Branson that believed in promoting the greater good that saw him promote ethical behaviours by engaging in CSR initiatives that included promoting environmental sustainability, Winterkorn appears not to have believed in serving the greater good but was instead self-centred (Reuters 2015). During his leadership at Volkswagen, Winterkorn colluded with the automaker engineers that resulted in the installation of the "defeat device" that allowed Volkswagen to cheat on its nitrogen emission a scandal that affected more than 11 million cars (Neate 2016). This scandal happened despite Volkswagen claiming "sustainability" to be part of its core values. Besides, unlike Branson that leads with integrity, Winterkorn lacked integrity as a value considering that together with the board, he orchestrated the emission scandal and even initially lied that Volkswagen had not installed any software only for EPA to discover after investigations that the company indeed cheated on its emission, and this shows lack of integrity on the part of Winterkorn (Neate 2016). Conclusion Values and organizational culture have a huge influence on one's ethical behaviour. However, as demonstrated above, values have the greatest impact on a person's ethical behaviour than organizational culture because values influence a person's attitude that in turn influences behaviour. However, it is important that there are certain virtuous core values that have the greatest influence on one's ethical behaviour, which includes wisdom and knowledge, self-control, justice and fairness, transcendence, loves, and kindness, as well as integrity. However, values to have the greatest influence on one's ethical behaviours, there needs to be an alignment among these core virtuous values as has been demonstrated by Richard Branson. References Akaah, I. P., & Lund, D 1994, “The influence of personal and organizational values on marketing professionals' ethical behaviour,” Journal of Business Ethics, vol. 13, Issue 6, pp 417–430. Baker, T. L., Hunt, T. G., & Andrews, M. 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