Corparate Work Culture - Integrity

WORK CULTURE INTEGRITY

Table of Contents 1.1 Definition of Integrity........................................................................................ ....3 1.1.1 Sincerity............................................................................. ............................3

1.1.2 Consistency................................................................................ ....................3 1.1.3 Substance.................................................................................................. .....4 2.1 The Importance of Integrity .................................................................................4 3.1 Promoting Integrity in Work Culture......................................................................6 4.1 Integrity in Work Place................................................................................... .......7 5.1 The Measurement of Integrity..............................................................................9 6.1 Advantages of Integrity......................................................................................10 7.1 Recommendations.............................................................................. ................10 7.1.1 Fair Dealing..................................................................................................10 7.1.2 Conflicts of Interest......................................................................................11 7.1.3 Corporate Opportunity.................................................................................11 7.1.4 Confidentiality..............................................................................................11 7.1.5 Disclosure......................................................................................... ............11 7.1.6 Protection and Proper Use of Company Assets.............................................12 7.1.7 Compliance with Laws..................................................................................12 7.1.7 Reporting of Illegal or Unethical Behavior....................................................12 8.1 Conclusion...................................................................................... ....................12 9.1 References................................................................................................. .........13

1.1 Definition of Integrity Integrity is consistency of actions, values, methods, measures, principles, expectations and outcome. As a holistic concept, it judges the quality of a system in terms of its ability to achieve its own goals. A value system's abstraction depth and range of applicable interaction may also function as significant factors in identifying integrity due to their congruence or lack of congruence with empirical observation. A value system may evolve over time while retaining integrity if those who espouse the values account for and resolve inconsistencies [1]. In our opinion, integrity can be categorized into sincere and consistent, have substance and character.

1.1.1

Sincerity

Sincerity is behavior that is unfeigned and presents no false appearance. Leaders with integrity are sincere and their actions match their words. The more a leader’s behavior matches his or her words, the more loyal people will become, both to the leader and the organization [2].

1.1.2

Consistency

A single example of integrity makes an impression, but a leader’s behavior must be consistent if he or she is to successfully shape an organization. In fact, integrity is an imperative since a single breach of integrity can leave a permanent scar. Leaders must also be consistent in their enforcement of disciplinary standards. A commander who uses discriminators such as rank or friendship to determine a response to a breach of discipline has a serious integrity problem. Nothing destroys morale quite as effectively as “throwing the book” at a junior officer for a serious infraction while allowing a senior officer to retire in lieu of punishment for similar behavior. Leaders must practice what they preach and apply standards even-handedly. It is essential for discipline, for morale, and for mission accomplishment [2].

1.1.3

Substance

To be a leader, you must have more than the image of integrity—you must also have substance. President Abraham Lincoln once told a story about a farmer who had a tall, majesticlooking tree growing next to his house. One morning he saw a squirrel run up the side of the tree and disappear into a hole. Curious, the farmer looked into the hole and discovered that the tree he had always admired for its apparent grandeur was hollow inside and in danger of falling on his home during a strong storm. Like that tree, leaders who have the appearance of substance but lack internal integrity won’t have the strength to make it through the tough times. In the military, commanders with a veneer of integrity cannot build organizations capable of withstanding the unique challenges of military life, much less the trials of combat [2].

2.1 The Importance of Integrity The choice of values that a person chooses to live up to reflects the quality of the person he or she is. Integrity is one of the most important values a person can ever develop to enhance every part of his and her life. A person who has integrity has an unblemished character and one of the most important activities you can engage in, is developing your character. One of the best ways to develop your character is by consistently doing the same things that a thoroughly honest person would do in every area of his or her life. Why is integrity important? Philosophically speaking, acting with integrity on some important occasion can always be explained in broader features of a person’s life character. Considering it, in term of one’s life relation is a thing, but in Sime Darby, it is more than mere Public Relations business. It means business in literal. Integrity is important for giant conglomerates like Sime Darby as it connects the actions taken with clients, colleagues, suppliers and other possible business relationships. In the current economic downturn times, it is important that we learn from the mistakes of leaders of other conglomerates who lack the value of integrity in their work culture. We can observe the negative effect of not practicing integrity in daily work culture in the recent events of economic recession. We can simply pinpoint that the cause of the current

economic recession that has affected Meryll Linch and another prominent securities firm, Lehman Brothers is bad mortgage planning or mounting of credit card debts. However, we cannot deny the fact that the root of the most tumultuous downturn in Wall Street’s history all boils down to the values that the leaders of the said companies hold. It is obvious that the leaders of the companies fail to portray integrity in their work culture and are solely driven by greed and self-centeredness. A local example of the negative effect of not practicing integrity in work culture is the collapse of Sultan Mizan Zainal Abidin Stadium recently, just over a year after its completion. The collapse of the building has raised many controversial feedbacks regarding the approval of temporary Certificate of Fitness (CF) of the stadium involving organizations such as Public Works Department as well as the Malaysian Anti-Corruption Commission. Although the investigations of the case have not yet been finalized, the fact that the RM292 million stadium collapsed in a way is a tool of measurement of the level of integrity in the people involved in the construction of the stadium itself. The loss defined in the reconstruction of the stadium does not only cover the cost of repairing and restructuring of the stadium, but it stretches out beyond well into the hidden costs which include cost of investigative and correction time, environmental damage and loss of goodwill and image. From the scenario described above, it is obvious that the importance of engaging integrity in work culture does not only lie in the self-definition of any companies but it is an important key to ensure that the company will sustain in the future.

3.1 Promoting Integrity in Work Culture Integrity measures between actions and principle. Accountability and moral responsibility are necessary tools for maintaining integrity in business. Law professor , Stephen L. Carter stresses the idea of integrity as personal honesty means that people acting according to one's beliefs and values at all times. Integrity can emphasize on the moral value of someone. Carter sees integrity not only as a refusal to engage in behavior that evades responsibility. He sees it also as an understanding of different modes or styles in which some discourse takes place, and that tries to discover some truth. Carter states that integrity requires 3 steps, discerning what is right and wrong, acting on what you have discerned, even at personal cost, and saying openly that you are acting on your understanding of right from wrong. Integrity is not the same as honesty. [3] Integrity requires clear and simple requirements (like zero tolerance for bribes and fraud) effective procedures to check and reward compliance, and a company culture that does not tolerate dishonest or illegal practices. Corruption has probably been around as long as power has existed. That doesn't make it acceptable; nor is it a waste of time to try to do something about it. Corruption does enormous damage. It increases inequality and unfairness, hampers economic development and drives up prices for products and services. And while a refusal to bribe will sometimes lead to a loss of business.[4] As an example, Sime Darby Berhad may insist on honesty, integrity and fairness in all aspects of business and expect the same relationships with all those with whom they do business. The direct or indirect offer, payment, soliciting or acceptance of bribes in any form is unacceptable. Employees must avoid conflicts of interest between their private activities and their part in the conduct of company business. Sime Darby employees must also declare to their employing company potential conflicts of interest. All business transactions on behalf of a Sime Darby Berhad may be reflected accurately and fairly in the accounts of the company in accordance with established procedures and are subject to audit and disclosure.

Leaders in top level management should have good characteristics as in Kouzes & Posner’s “They model the way”. As an example, they should always raise awareness among colleagues so that they always practice integrity. Besides that, Sime Darby’s leaders should have integrity value so that can be role models for their subordinates.

4.1 Integrity in Work Place In the working environment, leaders are the ones who should engage integrity their work culture because they are the back bone of the company. An excellent company must have a group of good and trustworthy leaders that have sustainable relationship in the work area. A solid foundation of trust is necessary for an organization to be effective, especially in Sime Darby’s work culture. Consistency, honesty, openness, and transparency—leaders who demonstrate these behaviors demonstrate integrity and promote a trusting work culture.[5] However, leaders cannot have complete credibility unless they also have a high level of leadership competence. They must also be highly skilled at planning, managing people and resources, making sound decisions, and building strategic relationships with internal and external partners. Some of the classic example is Tom Watson, Sr. when he ran IBM. A junior executive had just made a $10 million mistake and was called into Watson’s office. The employee assumed (as any of us would) that he was about to be fired. But Watson believed that one of the most critical values at IBM was the development of people. Thus, when the junior executive asked if he was being fired, Watson quickly responded with an emphatic “No!” Then he added, “I just spent $10 million educating you, then why would I want to fire you now?”[5] On the other hand, not only just leaders and managers, integrity should also be engage to all the employees in Sime Darby, including the executives, officers, supervisors, and even the cleaners. It creates the works become more effectiveness, the job will be finish on time and they will have good relationships among workers. Honesty and openness between the employees will create good work environment where excellence jobs will be accomplished and it beneficial to the company. Apart from that, integrity among employees can be achieved from selecting new employees. In the process interviewing for new employees, there are some question can be ask to

measure their integrity, such as “how can you handle critical situation?”, and others. Gaining new employees with integrity, Sime Darby will have the benefits where employees will be likely honest and treat coworkers, vendor, customers, and Sime Darby itself to be fairly and truthfully. Apart from that, integrity also involves on way how employees treat one another and to their customers, vendors and other stakeholders. Integrity among employees relates to whether there is competition among employees that is destructive because one employee wants to be promoted over the others, or whether there is a team atmosphere that is productive as employees seek to work together and do not worry about individual glory. Integrity also extends to the way in which employees develop relationships with customers and vendors. Ideally, vendors are selected on their ability to meet delivery and cost commitments, and on the basis of their product's quality. However, if an employee lacks of integrity, he could go to a vendor which has substandard quality but which offers him discounts (or cash) to give them the business. Or else, he might lose the contract or even might go to a company owned by a family member or friend.[5] In consequence, no matter what are posts they are in Sime Darby, integrity is the main values that they should perform while carrying out the task that given to them. They must put into practice what they preach and apply standards objectively. It is crucial for discipline, for morale, and for mission accomplishment.

5.1 The Measurement of Integrity Up until this point, we have understood the definition of integrity. We also managed to discover the importance of implementing integrity in our daily work. Apart from that we also have highlighted on different roles in the management that can play part in ensuring integrity is well practice in the organization. It seems that we have the overall understanding of integrity up to now. However setting up and implementing integrity in Sime Darby is not enough. We have to measure and assess whether integrity in our organization is constantly at highest height. Systems, procedures and policies should be assess to test whether integrity in Sime Darby at the optimum level. As a big conglomerate and having its operation worldwide, Sime Darby must ensure integrity is well practice in the organization this to ensure it able to sustain at the same time become a recognizable brand. Here are some of the processes that can be taken into consideration in measuring integrity. Firstly, Sime Darby can identify the integrity-based behaviors. For example what should integrity "look like" in each area of Sime Darby’s division? In recruiting, for example, what actions or statements demonstrate integrity? We then, examine whether these behaviors are being followed. Once you identify integrity-based behaviors, you must next ensure that employees follow suit. Assessment helps create a baseline to determine whether these behaviors are being observed and taken seriously. Many companies now tie behavior to employees’ performance reviews or career goals. Finally, we evaluate the culture behind existing behavior. Identifying and measuring key behaviors may not be enough to effect the desired change. People may know the rules but be unable or unwilling to follow them when facing pressure from managers, or even peers. You will need to address any cultural impediments that prevent integrity from taking root in your company. Find out what types of work pressures encourage, if not force, people to act unethically. In the end, the key to measuring integrity is to take it out of the conceptual and make it tangible. Identify the specific behaviors that are characteristic of integrity and find out why those behaviors are not being followed to leadership’s satisfaction.

6.1 Advantages of Integrity The integrity advantage is an essential morals guide to doing business today. Integrity is consistency between values and actions. As leaders in Sime Darby, they should have good values such as integrity so that they will walk the talk. By doing so, they can be a role model to their subordinates demonstrate leadership in every aspect of Sime Darby business. Sime Darby’s staff may apply integrity in their daily performance by creating an environment of integrity within a company, making the right decision in gray areas and building trust among co-workers and employees. Besides, engaging integrity in the Sime Darby’s work culture, it can earn customer’s trust. So, it creates values meaningful, long-term relationships with customers, employees, and business partners. Integrity stresses the importance of trust and credibility within business relationships and illustrates how to juggle, power and responsibility along with wealth and still be a person of character. By engaging integrity in Sime Darby’s work culture can lead Sime Darby as a trustworthy company in worldwide. Building on that trust will allow Sime Darby to grow faster. Furthermore, by engaging integrity in the work culture of Sime Darby, it can enhance the company’s reputation or image. For example, it can build a strong image among customers. By the times, Sime Darby can expand its market as well as increase the company’s share value.

7.1 Recommendations Integrity includes doing what we say we will do--honoring commitments--every time. That being said there a certain thumb rules and basic guidelines which can be followed. The subsections a as mentioned below:

7.1.1

Fair Dealing

Each director, officer and employee should endeavor to deal fairly with the Company’s customers, suppliers, competitors and employees. No one should take unlawful and unfair

advantage of the Company’s customers, suppliers, competitors and employees through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair-dealing practice.

7.1.2

Conflicts of Interest

A "conflict of interest" occurs when an individual's private interest interferes or appears to interfere with the interests of the Company. A conflict of interest can arise when a director, officer or employee takes actions or has interests that may make it difficult to perform his or her Company work objectively and effectively. Conflicts of interest must, whenever possible, be avoided.

7.1.3

Corporate Opportunity

Directors, officers and employees are prohibited from (a) taking for themselves or diverting to others any opportunities that properly belong to the Company or are discovered through the use of corporate property, information or positions; (b) using corporate property, information or position for improper personal gain; and (c) competing with the Company. Directors, officers and employees owe a duty to the Company to advance its legitimate interests when the opportunity to do so arises.

7.1.4

Confidentiality

Directors, officers and employees must maintain the confidentiality of confidential information entrusted to them by the Company, its customers and suppliers, except when disclosure is authorized by the Company or legally mandated. Confidential information includes all non-public information that might be of use to the Company’s competitors, or that could be harmful to the Company, its customers or suppliers, if disclosed.

7.1.5

Disclosure

Each director, officer or employee involved in the Company’s disclosure process, including the chief executive officer, the chief financial officer, the chief accounting officer and the controller

(the “Senior Financial Officers”), is required to be familiar with and comply with the Company’s disclosure controls and procedures and internal control over financial reporting, to the extent relevant to his or her area of responsibility, so that the Company’s public reports and documents filed with the Securities and Exchange Commission (the “SEC”) comply in all material respects with the applicable federal securities laws and SEC rules.

7.1.6

Protection and Proper Use of Company Assets

Directors, officers and employees must, in all practicable ways, protect the Company’s assets and ensure their efficient use. All Company assets must be used for legitimate business purposes.

7.1.7

Compliance with Laws

It is against Company policy and a violation of federal securities laws for a director, officer or employee to trade in securities (or to advise others to trade) while in possession of “inside information” about the Company. Inside information is any information (either positive or negative) which a reasonable investor would likely consider important in deciding whether to buy or sell the Company’s securities, that has not been adequately publicly disclosed. This Company policy also applies to trading in securities of any companies that a director, officer or employee is familiar with by virtue of his or her work for the Company while in possession of inside information concerning such companies.

7.1.7

Reporting of Illegal or Unethical Behavior

Any director, officer or employee who believes in good faith that violations of this Code or other illegal or unethical conduct by directors, officers or employees of the Company have occurred or may occur, must promptly contact his or her supervisor, the Human Resources Department or the Legal Department, or report the conduct or potential conduct anonymously using the Company’s Ethics Hot-Line. Each director, officer or employee must not retaliate against any other director, officer or employee for reports that are made in good faith.

8.1 Conclusion

With a powerful vision and mission to support it, employers are able to bring integrity into the structure and management of the company. Employees will be and always remain hesitant to accept change and question why the division is changing a business model that has been successful for many years. That question is easily answered: For an effective conglomerate such as Sime Darby, it is important to integrity in its organization. This is to establish a three-way contract of trust, where customers can have confidence in the company's products and services, employees know what to expect on the job, and management can be confident that the staff will deliver on its promises and commitments. Trust is built upon promises made and kept, and it is preserved by forthright and honest communication. When trust has been established, it becomes the basis on which people are able to work together effectively. By the same token, when trust is squandered or lost, effective working relationships are destroyed. ”The glue that holds all relationships together -- including the relationship between the leader and the led is trust, and trust is based on integrity.” --Brian Tracy

9.1 References [1] http://en.wikipedia.org (15/7/09) [2] Fogleman, G. R. (n.d.). The Leadership-Integrity Link. Concepts for Air Force Leadership. , 39-40. [3] http://proffesional/swithintegrity.ca (15/7/2009) [4] http:// www.riotinto.com/documents/ReportsPublications/corpPub_BIGEnglish.pdf 14-15 [5] V,Vanessa, C.Pascua, Integrity, Trust in the Workplace, @ddi Newletter, Issue June 2004.