It all boils down to organizational culture

It all boils down to organizational culture

It all boils down to organizational culture

It all comes back to organizational culture

Organizational culture: What Volkswagen, BP, Deutsche Bank and Wells Fargo have in common

Over the past years more and more companies have been hit by scandals and it mostly boils down to organizational culture – or the lack thereof!

Indicative of a polluted corporate culture that must change

Volkswagen, BP, Deutsche Bank and Wells Fargo have all hit the headlines for all the wrong reasons. How does these companies allow such behaviour to take place?

In all cases of wrongdoing, the actions of certain individuals will be the cause.

However, it’d be naive to think that one or a collection of individuals were and are the sole cause at the root of the issue. It all comes back to organizational culture, or more specifically, the lack of an ethical/responsible culture.

Organizational culture - Below the waterline - Message in a bottle

Catalysts for an unethical organizational culture

For companies as Volkswagen, BP and Wells Fargo, it’s fair to assume that nearly all of their staff have and will act in a responsible and ethical manner. However, company or department cultures caused certain individuals to act in unethical ways. Below are five potential catalysts for an unethical culture:

  • Inappropriate goals/stretch targets – Chasing sales targets and acquiring market share are just a few goals that could create the pressure to act unethically
  • Inappropriate reward system – Companies that reward results but don’t look at how they were achieved could allow for unethical behaiours to prosper
  • Lack of transparency – If a company doesn’t encourage open dialogue or allow for bad behaviour to be reported, then an unethical culture can evolve
  • The management actions – The management team sets the tone, values and beliefs of an organization. If the management doesn’t state that responsibility comes before profits, and more importantly sets the company’s vision around this, then employees could take the culture as being one that isn’t responsibly lead, and feel that acting ethically is futile.

What leaders tolerate and do will always become the lowest common denominator in the organization. It will determine the culture around them.

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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.

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