The importance of corporate culture in financial misbehavior has become a common topic in the business press recently—companies like Valeant Pharmaceuticals, Toshiba, and Hertz have been found responsible for some of the most outrageous financial misconducts in recent years, despite their formalized ethics and compliance guidelines, and corporate culture has been identified as the main common flaw.
Why culture is key
Corporate culture has attracted a lot of attention recently because of our realization that it is one of the biggest determinants of how employees behave. Establishing a strong culture of integrity where people have common interests and shared values begins with understanding and defining an organization’s culture. A recent survey by Deloitte of more than 7,000 executives from 130 countries showed that only twelve percent think that they foster “the right” culture, while most believe culture to be a driver of strong financial performance.
Measuring corporate culture
As a result, Deloitte launched CulturePath, an HR tool that “helps organizations measure workplace culture, pinpointing cultural strengths and gaps, and offering insights to align culture with business strategy—ultimately driving a better culture and better results.”
Once the dominant culture is identified, organizations need to pay attention not only to employees’ skills but also to their character, personality and moral capability to fit within the community.
On the flip side, job-seekers should also consider potential employers’ corporate culture. As a result of these trends, a recent start-up company, focusing primarily on millennials, began matching job candidates to companies based on the best cultural fit.
In the long run, building a culture of integrity and a strong sense of purpose guards organizations against risks, such as accounting malfeasances and litigation, and creates a competitive advantage that translates into stronger financial performance.