BUS-FPX4801_Assessment3-1

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Capella University BUS-FPX4801 CREATING AN ETHICAL CULTURE AMAZON

What Makes a Company’s Ethical Corporate Culture? Building an ethical company is extremely important as it will not only be an attractive place to work for employees but there is less of a concern for scandals which investors will reward. Employers need to foster an environment that encourages ethical learning for their employees. So, what components make up a company’s ethical corporate culture? There are six common components of great cultures; vision, values, practices, people, narrative, and place. A company’s vision or mission helps to guide a company’s value and give it purpose. This helps to guide employee's decisions when they have great vision statements to follow. It also helps with stakeholder and public perception as a vision or mission statement would be public information. The center of a company’s culture is its values. The values set guidelines for behaviors and mindsets to achieve the vision of the company. With the values comes the company’s practices and without the company clearly showing they are truly practicing their values, the values will lack importance to the employees, stakeholders, and the public. One of the most important things when making up a company’s ethical corporate culture is the people who are a part of it. Employees should share the core values of the company or at least be open to embracing those values. This will also help with retention as people are more likely to stay at companies that provide a culture they like or agree with. The company should also have a strong narrative, meaning a history that can show how the organization shaped its culture and will continue to shape it. Finally, place shapes culture in ways of open collaboration spaces, geography, or aesthetic design as it can help to impact the

values and behaviors of employees. These components provide a firm foundation to shape a new organization’s culture. When focusing on reshaping a corporate culture, understanding these six components of the organization is the best way to be successful. Creating an Ethical Corporate Culture When looking at creating an ethical culture, you need to redesign your culture. Looking at it as a design problem allows you to change the design with four critical features; explicit values, thoughts during judgement, incentives, and cultural norms. Starting with explicit values, any principles must be widely shared with the organization, for example, a well-crafted mission statement. Preparing a mission statement that shows how ethical principles influence the company’s practice can help employees behave more ethically. Leaders would have the opportunity to refer to this mission statement to help connect it to company principles and further reinforce the ethical system. A mission statement that is simple but actionable and emotionally resonant will help keep an organization value’s clear to employees. Thoughts during judgment mean that most people have the most difficulty keeping ethical considerations in mind when they make their final decision. If the corporate culture keeps ethics at the center of the organization, it will be much easier for employees to not have ethical lapses when making final decisions. When providing incentives, you are aligning awards with ethical outcomes, which will provide employees with opportunities for benefits and rewards. A nonfinancial incentive that will promote good ethical behavior is recognition and praise. Finding ways to highlight employees will help encourage future ethical behavior. Lastly, cultural norms just mean

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that leaders will guide the cultural norms of the organization by being good leaders. By designing an ethical culture using these examples, a strong ethical corporate culture can be achieved. Amazon’s Current Corporate Climate Amazon’s current corporate climate and ethical culture are guided by 16 leadership principles. Amazon uses these principles to describe how they do business, how their leaders lead, and how they are customer-focused. These principles help guide their mission to be the Earth’s most customer-centric company, the best employer, and the safest place to work. However, public perception may not be as great when looking at the ethics of this organization. Back in 2021, Amazon was facing several lawsuits from employees accusing the organization of discrimination and retaliation. These lawsuits accused managers and HR employees of racial, ethnic, and gender discrimination but it wasn’t limited to just that. The lawsuit also included allegations of sexual harassment, and systemic biases in hiring, promotions, and firings based on race and gender. This was not the first time that Amazon’s ethical practices were questioned and in 2022, they took steps in hopes that it would be the last time. Amazon used its mission as a guide to create a sustainability report that would describe how they are building a more sustainable company for its customers and the planet. They refer to one of their leadership principles “customer obsession” as the center of their vision, while minimizing impact on the planet, they can improve their sustainability as it is important

to their customers. But is it enough to shift the public’s perception of their ethics? Maybe, but it is important that Amazon not only focuses on the public’s perception but the perception of the employees. I have recommendations that will focus on bettering the organization's ethics from the inside and the top down. Organization Learning Strategies A top-down approach, meaning it starts with Amazon’s leaders, to help workers build moral character is where I would start when designing this plan to create an ethical corporate culture. Amazon needs to foster an environment that encourages workers to become more ethical. One way to do that is through experiential training that is hands- on and immersive unlike the traditional ethics training reading a textbook or watching a video. Training ethics to support an ethical corporate culture requires regular training in real-world situations where employees can train on ethical challenges that they would more likely encounter at work. Another way we will create an ethical corporate culture is by allowing employees to learn ethics on the job. This means encouraging employees to come forward if they witness unethical actions and allowing employees to ask questions when facing ethical decisions. This allows employees to learn by reflecting on their own or their coworker's ethical decisions. In addition to this, highlighting when employees make good ethical decisions and spotlighting those decisions to help influence future good decisions. Most importantly, we can implement incentives to encourage employees to follow their leaders. As we implement the top-down approach, we will discuss desired incentives with employees to help show how leaders will reward ethical actions. These learning strategies will be employed and help to sensitize employees to

ethical issues and give them opportunities and courage to speak up against or for ethical decisions. In addition, these strategies can be tracked to see how many employees complete the pieces of training. With the incentives, we can track where rewards are given and can also allow other employees to follow along and increase the number of employees involved. This will allow Amazon to prove the worth of these strategies to the public and the organization and continue to see and analyze the results. For Amazon, the perception they have created not only to the public but to their employees, just with the lawsuits alone, shows there is room for improvement. Considering the lawsuits were from former employees, the ethical culture within Amazon and with all employees must change. These three learning strategies would enhance the ethical culture of the employees and reflect on the public with fewer scandals, and happier employees.

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References Amazon. (2021, July 1). Leadership Principles. Retrieved from Amazon: https://assets.aboutamazon.com/d4/9b/6d5662ec4a75961ae78c473e7d03/ amazon-leadership-principles-070621-us.pdf Coleman, J. (2013, May 6). Six Components of a Great Corporate Culture . Retrieved from Harvard Business Review: https://hbr.org/2013/05/six-components-of- culture Hurst, K. (2023, July 18). 9 takeaways from Amazon’s 2022 Sustainability Report . Retrieved from Amazon: https://www.aboutamazon.com/news/sustainability/amazon-sustainability-report- 2022 Kouchaki, I. H. (2021, November-December). Building an Ethical Company. Retrieved from Harvard Business Review: https://hbr.org/2021/11/building-an-ethical- company Kumar, N. E. (2019, May-June). How to Design an Ethical Organization. Retrieved from Harvard Business Review: https://hbr.org/2019/05/how-to-design-an-ethical- organization Milanesi, C. (2021, April 20). The Role Of Diversity Equity And Inclusion In Making Amazon The Best Employer On Earth . Retrieved from Forbes: https://www.forbes.com/sites/carolinamilanesi/2021/04/20/the-role-of-diversity- equity-and-inclusion-in-making-amazon-the-best-employer-on-earth/? sh=6f59a7c870cd Sonnemaker, T. (2021, May 19). Amazon hit with 5 lawsuits from warehouse and corporate employees alleging discrimination and retaliation . Retrieved from Insider: https://www.businessinsider.com/amazon-five-discrimination-retaliation- lawsuits-warehouse-corporate-employees-2021-5

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