The role of corporate culture and ethical environment in directing individuals’ behavior

Abstract

This study is aimed at verifying the conception that a strong corporate culture supported with a positive ethical environment is central for directing and guiding the behavior of individuals toward achieving organizational objectives. The rationale for this study stems from the circumstance that formal controls systems suffer from consecutive failures, as the performance of organizations is still suffering from financial collapses. Reasons behind such failures might be related to the insufficient appreciation of the culture-based controls given that formal controls are influenced by the human nature of employees and the affixed moral side.Data subject to analysis are obtained from a judgmental sampling method using a self-completion questionnaire covering the listed companies at Jordan Securities Commission. A factor analysis and a standard multiple regression analysis have been conducted with the aim of proving the hypotheses of the research. The research results show that strong corporate culture supported with a positive ethical environment can direct the behavior of employees for the good of organizations. Results also support the importance of involvement of top management considering its role in filling the gap between the embraced and the workable values and beliefs of an entity.