    A corporate culture grounded in socially approved values and ethical business principles is a vital ingredient in a company’s long-term strategic success.
     At companies where executives are truly committed to practicing the values and ethical standards that have been espoused, the stated core values and ethical principles are the cornerstones of the corporate culture.
CORE CONCEPT: A company’s values statements and code of ethics communicate expectations of how employees should conduct themselves in the workplace.
     By promoting behaviors that mirror the values and ethics standards, a company’s stated core values and ethical standards nurture the corporate culture in three highly positive ways:
a.  They communicate the company’s good intentions and validate the integrity and aboveboard character of its business principles and operating methods
b.  They steer company personnel toward doing the right thing
c.  They establish a corporate conscience and provide yardsticks for gauging the appropriateness of particular actions, decisions, and policies
     Companies ingrain their values and ethical standards in a number of different ways:
a.  Tradition-steeped companies with a rich folklore rely heavily on word-of-mouth indoctrination and the power of tradition to instill values and enforce ethical conduct
b.  Many companies today convey their values and codes of ethics to stakeholders and interested parties in their annual reports, on their Web sites, and in internal communications to all employees
c.  Standards are hammered in at orientation courses for new employees and in training courses for managers and employees
     The trend of making stakeholders aware of a company’s commitment to core values and ethical business conduct is attributable to three factors:
a.  Greater management understanding of the role these statements play in culture building
b.  A renewed focus on ethical standards stemming from the corporate scandals that came to light in 2001-2002
c.  The growing numbers of consumers who prefer to patronize ethical companies with ethical products
     Companies that are truly committed to the stated core values and to high ethical behavior standards make ethical behavior a foundation component of their corporate culture.
     Once values and ethical standards have been formally adopted, they must be institutionalized in the company’s policies and practices and ingrained in the conduct of company personnel. Imbedding the values and code of ethics entails several actions:
a.  Incorporation of the statement of values and the code of ethics into employee training and educational programs
b.  Explicit attention to values and ethics in recruiting and hiring to screen out applicants who do not exhibit compatible character traits
c.  Frequent iteration of company values and ethical principles at company events and internal communications to employees
d.  Active management involvement, from the CEO down to frontline supervisors, in stressing the importance of values and ethical conduct and in overseeing the compliance process
e.  Ceremonies and awards for individuals and groups who display the values
f.   Instituting ethics enforcement procedures
     In the case of codes of ethics, special attention must be given to sections of the company that are particularly vulnerable – procurement, sales, and political lobbying.
     Structuring the Ethics Enforcement Process: If a company’s executives truly aspire for company personnel to behave ethically, then procedures for enforcing ethical standards and handling potential violations have to be developed. The compliance effort must permeate the company, extending to every organizational unit. A company’s formal ethics compliance and enforcement mechanism can entail such actions as forming an ethics committee to give guidance on ethics matters, appointing an ethics officer to head the committee to lead the compliance effort, establishing an ethics hotline or Web site that employees can use to either anonymously report a possible violation or get confidential advice on a troubling ethics-related situation, and having an annual ethics audit to measure the extent of ethical behavior and identify problem areas.
     If a company is really serious about enforcing ethical behavior, it probably needs to do four things:
a.  Have mandatory ethics training programs for employees
b.  Conduct an annual audit of each manager’s efforts to uphold ethical standards and require formal reports on the actions taken by managers to remedy deficient conduct
c.  Require all employees to sign a statement annually, certifying that they have complied with the company’s code of ethics
d.  Openly encourage company personnel to report possible infractions via anonymous calls to a hotline or posting to a special company Web site
     While ethically conscious companies have provisions for disciplining violators, the main purpose of the various means of enforcement is to encourage compliance rather than administer punishment.
     Transnational companies face a host of challenges in enforcing a common set of ethical standards when what is considered ethical varies either substantially or subtly from country to country.
     Transnational companies have to make a fundamental decision whether to try and enforce common ethical standards and interpretation of what is right and wrong across their operations in all countries or whether to permit selected rules bending on a case-by-case basis.
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