Do companies with rotten corporate cultures spawn scandals

Do companies with rotten corporate cultures spawn scandals

companies with rotten corporate cultures spawn scandals

The dark side of business – Rotten corporate cultures

Do companies with rotten corporate cultures spawn scandals, like the one at Volkswagen where engineers apparently felt at liberty to rig diesel engines to fool pollution-monitoring devices? Or the unconscionable accounting lies at Toshiba, where executives reportedly overstated profits by a stunning $2 billion over seven years? Or the endless numbers of scandals at Deutsche Bank?

A polluted corporate culture that must change

Do companies with rotten corporate cultures spawn scandals

The dark side of business – Do companies with rotten corporate cultures spawn scandals

Corporate culture matters a lot

In a study from Duke University’s Fuqua School of Business, executives say corporate culture drives profitability, acquisition decisions and even whether employees behave in ethical ways:

Executives overwhelmingly indicate that an effective corporate culture is essential for a company to thrive in the modern business world

Among the findings:

  • More than 90% said that culture was important at their firms
  • 92% said they believed improving their firm’s corporate culture would improve the value of the company
  • More than 50% said corporate culture influences productivity, creativity, profitability, firm value and growth rates
  • Only 15% said their firm’s corporate culture was where it needed to be

Leadership needs to spend more time to develop the culture

The paper’s bottom line finding reinforces: Corporate culture is an essential element of success. Let’s hope that the fractured corporate culture at VW, Toshiba and Deutsche Bank opens a new discussion about the importance of corporate culture.

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About The Author

Torben Rick

Experienced senior executive, both at a strategic and operational level, with strong track record in developing, driving and managing business improvement, development and change management. International experience from management positions in Denmark, Germany and Switzerland.

Blog Comments

It is also the case that some corporate cultures which are not rotten may spawn scandalous behaviours. For example, where goals are set around customer performance, a caring worker may be drawn in to unethical behaviour. Essentially, any culture where customer behaviour is a means to and ends is at risk.

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