Corporate Culture Enforcement: A Law of Business Organization Report

This report provides an analysis of corporate culture and its enforcement within the context of business law. It defines corporate culture as a system of shared beliefs, values, and assumptions that influence employee behavior. The report emphasizes the importance of a healthy corporate culture in improving company performance, employee retention, and productivity. It discusses key components of corporate culture, including attraction-selection-attrition processes, leadership, and reward systems. Furthermore, the report references the Corporations Act 2001 and ASX principles to highlight legal and ethical considerations for corporate governance in Australia, including the responsibilities of employees, the importance of ethical decision-making, transparency in finances, and open communication between employees and management. The report also mentions the role of regulatory bodies like APRA in ensuring ethical conduct and financial integrity. Overall, the report underscores the significant role of corporate culture in shaping corporate behavior and contributing to a better future for organizations.

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Law of Business Organization
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Corporate culture and how it can be enforced
The concept of corporate culture is referred to as the system where there have been
beliefs, values and shared assumption that administer the behavior of individuals in a
corporation. The values that are governed usually have a strong influence as to how these
individuals must perform their activities. The employees, environment, opportunities of
bonding and actions are the basic components of a corporate culture (Carlos Pinho, Paula and
Dibb 2014). The culture of an organization is therefore created and based on such tangible
and intangible essentials. The term culture here refers to attitudes of the employees associated
in the corporation. Maintaining a healthy culture among the employees is necessary. It helps
in valuing every employee engaged in the organization despite their job duties that results in
the employees who work as a team for fulfilling their needs as well as the company’s. Having
a consistent healthy culture helps in improving the performance of the company (Liu 2016).
The reputation, employee retention, quality and productivity of the company get better due to
the healthy corporate culture. For developing the culture of the organizations, the process of
attraction-selection-attrition, leadership and the reward systems should be maintained.
However, as per Section 180 of the Corporations Act, 2001 employees must act and carry
out their duties with care and due diligence. Section 184 of the above mentioned act states
that the information of the company and position of the individuals must be used in good
faith. The principles and recommendations of ASX govern the corporate governance in
Australia. The principles discusses that the structure of the board and members associated
with the company must be valued. Secondly, healthy ethics should be promoted and
responsible decision-making must be done (Davidson, Dey and Smith 2015). Thirdly,
balanced disclosure must be made and risk should be managed with fair responsibility.
Therefore, if these principles are followed then the corporate culture can be maintained to be
healthy.

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A company should be operated with high moral and ethical values. The first and
foremost principle is the process of hiring and recruitment. There must be leadership in all the
levels of an organization including the management since it introduces the corporate culture
of the organization (Guiso, Sapienza and Zingales 2015). Secondly, the staff of an
organization must be provided information and should be educated regarding the risks
involved in the organization. Employees do face risks when they fail to perform their jobs in
an accountable manner. Ethical issues must be present when the employees are carrying out
their duties. Ethical lapses are not difficult to make especially when the corporate culture
gives a nod to the unethical behavior. Finances must be transparent in nature as in the
organization should have the knowledge about the funders and where the money of the
organization is being spent. For a better corporate culture, employees involved with the
company should feel free to speak to the management. Misconduct and mismanagement often
leads to issues and disputes in the organization. Such a situation also creates risk in the work
environment and creates an unhealthy atmosphere. Therefore, as per the news of Australian
Prudential Regulation Authority (APRA), the companies had to act in an ethical manner and
should keep a check on the funds of the company (Hodges 2015). APRA is however, funded
largely by the industries that also supervises all the spheres. The basic purpose of it is to
release findings and annual statistics related to the companies. The ASX principles lays down
solid foundations for the management and oversight. For financial reporting, integrity needs
to be safeguarded. The rights of the shareholders should be provided with respect. Along with
the shareholders, the employees, directors and other individuals should also be treated
equally.
However, for maintaining the ethical manner in an organization, the above mentioned
principles must be applied when it is related to the corporate culture. The disclosures that are
made in the company must be made in utmost good faith as per the Corporations Act, 2001.

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Thus, the concept of culture plays a significant role in the corporations and helps in
improving for a better future.

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References:
Carlos Pinho, J., Paula Rodrigues, A. and Dibb, S., 2014. The role of corporate culture,
market orientation and organisational commitment in organisational performance: the case of
non-profit organisations. Journal of Management Development, 33(4), pp.374-398.
Davidson, R., Dey, A. and Smith, A., 2015. Executives'“off-the-job” behavior, corporate
culture, and financial reporting risk. Journal of Financial Economics, 117(1), pp.5-28.
Guiso, L., Sapienza, P. and Zingales, L., 2015. The value of corporate culture. Journal of
Financial Economics, 117(1), pp.60-76.
Hodges, C., 2015. Law and Corporate Behaviour: Integrating Theories of Regulation,
Enforcement, Compliance and Ethics. Bloomsbury Publishing.
Liu, X., 2016. Corruption culture and corporate misconduct. Journal of Financial
Economics, 122(2), pp.307-327.