Culture is key to understanding wrongdoing in the workplace

Culture matters. Here's why.

Your best insurance against a rogue employee bringing your company to its knees is a strongly ethical workplace culture.

Jérôme Kerviel, the “rogue trader” who lost €4.9 billion for Société Générale, claimed that the bank knew what he was doing and even encouraged him. In his recent unfair dismissal case in France, the judge seemed to agree, awarding him €450,000 in damages. The judge remarked that the bank could not pretend it did not know what he was doing. Kerviel was fired because of the enormous trading loss, rather than for doing the wrong thing. 

Regulators and commentators are increasingly talking about workplace culture and who or what is responsible for it. It is surprising that it has taken so long, given that we have known for decades that to understand moral behaviour and wrongdoing, we are better off looking at the culture of the place rather than focusing on the individual person. 

This approach means that the organisation and its leaders would be responsible, at least partially, for misconduct – and perhaps we are not ready to accept that?

The culture of an organisation can produce ethical or unethical behaviour. While we have evidence for this, it goes against the views we have about ourselves and others.

For ourselves, we think that we are objective and strong and more ethical than others, so we do not appreciate the influence of context on our behaviour. When it comes to others, we tend to attribute responsibility for misconduct to them, rather than trying to understand how the situation has influenced their behaviour. 

Culture matters, because, depending on its strength, it can encourage, influence or even dictate our behaviour at work. Sometimes it allows actions but at other times it encourages them. This does not mean that all people will be affected in the same manner, but it does mean that the workplace influences behaviour and provides explanations for it.

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What’s a good culture? Many characteristics of culture are choices, except for one: ethics. 

An organisation may have a culture of innovation, quality or other ideals, but whatever that culture is, it’s important for an organisation to make sure that:

  • their real goals are ethical and supported by their stakeholders
  • their goals are pursued by using the right means
  • they are happy for everyone to know how they do business all the time, everywhere, by everyone

We can’t regulate for an ethical culture, so a great influence on any culture is the behaviour of those who have the power and authority – an organisation’s leaders. Given the tendency we have to overestimate our capabilities and achievements, we are likely to think that our culture is right.

"Culture can encourage, influence, or even dictate our behaviour at work."

If you think that is not true, listen to the leaders of those big organisations that have had their unethical actions exposed. Rarely do we hear them say “we motivated or allowed that behaviour”.

Instead, they suggest it was a bad apple or rogue employee who was behind the misconduct. This generally isn’t the case, and often there were numerous warning signs that were ignored.

Do you know your workplace culture? Given the explanations a culture provides about why we do the things we do, we should invest in valid measurements of our work culture so we know what it is, not what we perceive it might be.

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October 2021
October 2021

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