It shouldn’t be a surprise, but new research has found that an ethical internal culture counts more than external statements.
Many companies put forward public statements of their ethical intent and integrity, but public trust is eroding, and actions speak louder than words.
Research from the Kellogg Institute at North Western University finds that “walking the walk” counts for more than “talking the talk”.
They found that companies where the employees did believe there was a strong culture of integrity were associated with stronger economic performance.
Many companies make public pronouncements about integrity and ethical beliefs, however, the researchers “didn’t find any correlation between the cultural values that a company advertises and what its employees perceive from the inside once they’re working there”.
A firm like Goldman Sachs, which proclaims to care about “integrity” on its website, is neither more nor less likely to be valued by its employees as an “integrity-filled” place to work than Google, which does not mention integrity in its corporate culture statement at all.
The researchers used data from the survey of employees conducted by Great Place To Work Institute, an organisation that publishes an annual list of the “100 Best Companies to Work For” in Forbes magazine.
The data included responses from employees at hundreds of public and private firms between 2007 and 2011.
“This is about perception of culture by employees within a company, not just what a company or its management publicly claims its culture is,” explains Kellogg Institute’s Professor Sapienza.
They found that “there is some tangible, measurable economic value associated with ‘good’ corporate values. It’s more than a feel-good result.”
So while many companies put out “value statements” listing integrity and ethical aims, the research suggests that the key to better performance is to actually implement these values and convince your employees it is a genuine part of the corporate culture.
To read more about how corporate culture can impact on strategy, read this BI / Research Market Insights piece from Commonwealth Bank’s head of innovation, Tiziana Bianco: ‘Customer focus and corporate culture in an age of transformation‘.
Business Insider Emails & Alerts
Site highlights each day to your inbox.