Organizational Design, Organizational , and Corporate Responsibility

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For most organizations, effective leadership develops an organizational culture that guides the day-to-day actions of its involved stakeholders. Leadership will guide by integrating the rules, principles, or values it desires. Success is when the organization's involved stakeholders act in accordance with leadership's desires simply because "that is the way we do things around here."

The nature of an organization's program must be congruent with or "fit" its culture. If it has a compliance culture, it may easily implement a compliance program. But if it has a more values-based culture, it will find a compliance program actively or passively resisted. In any event, until the rules, principles, or values are fully integrated, anything short is still essentially a compliance program from its stakeholders' points of view.

Putting Values and Principles into Practice. Implementing an ethics, compliance, and responsibility program (referred to here as a "Corporate Responsibility Program") can be a complex and daunting task. The goal is to make ethical norms the basis for decision-making and action at all organizational levels. Implementation requires broad as well as intimate understanding of organizational culture, history, structure and systems and its external environment.

A recent study and experience find several organizational and Corporate Responsibility Program design factors that influence ethics/compliance/responsibility management effectiveness

What tends most to lead toward effective Corporate Responsibility Programs is the ethical culture of the organization, program follow-through, and program orientation. The program must integrate well within the ethical and legal context. Formal program characteristics themselves are of relatively little importance.

Within the ethical culture, what helps are the perceptions that executive and supervisory leadership is strongly committed to ethical conduct; that employees are treated fairly, that ethics issues are talked about, and that ethical behavior was rewarded. What hurts is a culture that requires unquestioning obedience to authority or that is focused on self-interest.

Within program orientation, what helps is emphasizing shared organizational values, supplemented with compliance and external stakeholder aspects. Where balance between the three lies depends upon the culture of the organization, the health of the organization, and the urgency of its situation. What hurts is perception that the program is designed to protect management.

Within program follow-through, what helps most are consistent policies and actions, and following up on reports of misconduct.

The framework described in the executive summary below is intended as a guide to implementing a Corporate Responsibility Program reflecting the above influences and others learned through experience. It is divided into seven sections, each of which identifies key issues to address in building a Corporate Responsibility Program. A detailed description of the required documents and structures follows it.

Operational Summary

1. Prepare and Plan for an Ethics/Responsibility Initiative

2. Clarify and Document the Organization's Core Purpose, Core Values and Vision

3. Clarify and Document the Organization's Mission and Standards of Conduct

4. Build a Formal Organizational Ethics Structure

5. Develop Auditing, Monitoring and Reporting Mechanisms to Support Ethical Conduct

6. Communicate the Organization's Vision, Values, Standards and so forth

7. Align Ethics/Compliance initiatives with other Organizational Systems

Corporate Responsibility Program Documents and Structures. The following are typical documents and structures and system adopted as part of a Corporate Responsibility Program.

• Organizational Documents:

• Structures and Systems that:

• Principles and practices:

Implementing a Corporate Responsibility Program. As the table in Appendix 2 suggests, the actual strategy employed to implement a cultural change will depend upon the urgency of the situation, the time available, and whether the culture of key stakeholders will support the change.

There is no one-size-fits-all Corporate Responsibility Program. The kind and degree of participation in designing the ethics initiative will depend upon the situation and the condition or health of the organization. The following questions for self-governing organizations in the attached "Nepali Model" may be helpful.

It will take attention to all aspects of organizational life to implement a Corporate Responsibility Program. As the figure below depicts, from a systems view, all tasks of the organization must be evaluated. The people who are to perform these tasks must be considered to see if the challenges of the tasks are balanced with the capabilities of the people. The formal structure must be designed and developed to provide the capacity for the people to realize their potential toward shared ends. But most importantly, the organization culture must usually be changed so that organizational aspirations can be achieved.

The dirty little secret of ethics/compliance program implementation is that it is a disruptive and long-term (3-5 years) process if the organization is not otherwise healthy. To be successful, it must often raise fundamental issues. It takes time from business as usual. Moreover, it is highly unlikely that all stakeholders will embrace it. If they did, the organization would not need the initiative. Some members, especially some of long standing, will have to leave for the initiative to take hold. It can be no other way.