When good culture goes bad: Ensuring a healthy and ethical work environment

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In the wake of a series of recent scandals involving high-profile organizations, corporate culture has once again emerged as a top priority for boards. A notable example is how Deutsche Bank employees spent years pressuring small and medium-sized Spanish businesses to acquire complex foreign exchange derivatives, falsely presenting them as safe and cost-effective. It was revealed that he had been These activities have brought significant profits to banks, but they have also put customers at risk and caused serious financial setbacks.

This and other high-profile incidents serve as a powerful reminder for leaders to critically examine their organizations and proactively address cultural shortcomings. One of the most harmful practices that can erode a company’s culture is blatant disregard for stated company values ​​or acts of misconduct, even if they do not violate the company’s stated values. It is to retain individuals who are For example, in the above case, the bankers were generating significant financial benefits for Deutsche Bank, even though honesty, integrity, and high ethical standards are among Deutsche Bank’s values.

Such employees may contribute to short-term financial gains. However, their actions send a message that lowers employee morale by suggesting that the organization’s values ​​are just window dressing or don’t exist at all. This can create a toxic environment and can seriously impact the morale of employees who truly embrace and adhere to these principles.

For example, research by Murray Barrick and colleagues has shown that over time, a team’s behavior tilts toward the worst player in the group, amplifying the insidious influence of one person. Research by psychologists Mark Leary and Roy Baumeister shows that bad behavior always has a greater impact on an actor’s environment than good behavior. When bad apples are allowed to exist in a group, negative emotions such as anger and feelings of injustice often pervade the team atmosphere.

A classic example of this situation was revealed in the 2021 review of workplace culture at mining company Rio Tinto. The review uncovered a prevalence of harmful practices that were known as “open secrets” among employees. Lack of accountability, particularly for senior leaders and top performers, was cited as a major concern. Since then, the company has taken steps to address the issue, including mandatory training programs, ongoing communication, and clear steps to flag conduct that violates the company’s values.

To foster a strong, healthy culture, organizations must hold all employees accountable for that culture, regardless of their financial contribution. This is not always easy to do because performance and results are so important to organizations. I have witnessed several times that leaders are hesitant to take action against these employees. Because they are concerned about how it will affect their team’s performance and how it will subsequently affect their position within the organization.

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