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An organizational culture (or climate) based on sound virtues provides a
solid foundation for rational moral judgments and actions by employees.
An explicit set of core virtues can serve as a valuable resource for
employees when they are resolving ethical dilemmas. Through ongoing
promotion and reinforcement by leaders in a business, the virtues can be
adopted by employees and become part of their routine behavior. A
culture (or climate) of virtue can positively influence employees’
personal flourishing, attitudes toward their work, job satisfaction, and
commitment (i.e., loyalty) to the business. Good leaders will understand
that a virtues-based culture must be continually supported, developed,
and renewed.
Kaptein (1998a, 1998b, 2008) has explained that an organization’s
ethical context is presented by its ethical climate and ethical culture.
He maintains that the climate constitutes ethical conduct and that the
culture stimulates ethical conduct. As sources of normativity, managers
need to communicate to all employees what is expected and acceptable and
what is not. According to Kaptein, both consistent signals and
reinforcement are needed with respect to the proper use of corporate
assets and performance of one’s functional responsibilities. A company
needs to have clear, concrete, and comprehensive expectations with
respect to employee conduct. Because these expectations need to be
feasible (or achievable), an employee requires sufficient time, budgets,
resources, information, and authority to fulfill his responsibilities.
In addition to creating the conditions that will enable employees to
comply with normative expectations, employees need to be supported and
encouraged to identify with organizational values. A company should also
provide the freedom and opportunity for employees to raise, discuss, and
debate ethical issues. The firm needs to make sure that the consequences
of one’s actions are observable, visible, and transparent. Finally,
there should be known and probable sanctions (i.e., rewards and
punishments) for various ethical and unethical behaviors.
An organization’s culture and climate are comprised of numerous distinct
and observable artifacts, forms, and behaviors. The culture and climate
are, to a certain extent, influenced, created, managed, and maintained
by the organization’s leaders. A number of managers at various levels
can lead culture and climate initiatives and design strategies and
infrastructure to shape and support the culture and climate. Those
involved can and should include the CEO, senior executive team members,
senior and mid-level functional executives, and senior and mid-level
human resources managers, among others.
Hall (2008) notes that everything that a manager does sends a message
and that employees pay attention to what is measured, controlled, and
rewarded over time. She explains that people’s exemplary actions need to
be reinforced, rewarded, and recognized. An effective reward strategy
for reinforcement might include recognition at an organizational event,
informal praise by a manager, the offering of professional development
opportunities, formal recognition by management, visibility with senior
leaders, monetary rewards, appreciation at social events and
celebrations, awards programs, newsletter recognition, and so on.
A business culture and climate built upon a virtue-based framework can
provide a powerful theoretical and practical model for a corporation. To
create such a culture and climate, it is essential to incorporate
virtues and values into the firm’s language (i.e., its in-house
terminology and slogans), symbols, traditions, meetings, ceremonies,
rituals, myths, customs, legends, stories, recognized heroes,
problem-solving methods, and so on. These can help align people with a
common vision or purpose. They can provide direction and clarity, convey
messages and resolve confusion, increase order and predictability,
maintain solidarity, socialize employees and pass along traditions,
supply role models, help employees find purpose and passion, recognize
accomplishments, aid in recruiting and hiring the right people, and
serve to guide and legitimize everyday decisions and actions.
BB&T Corporation is a
great example of a company that has successfully adopted an Objectivist
virtue-based framework.(5) John Allison, an articulate advocate of Ayn
Rand’s ideas, took BB&T, a local Winston-Salem, North Carolina bank, and
built it into the tenth largest bank in the United States. Allison began
his career at BB&T in 1971 and became CEO in 1989. During his tenure at
the top, the bank went from having $4.7 billion in assets to having $152
billion in assets. Under Allison’s leadership, BB&T bought up 60
competitors and expanded into 11 states. The bank has grown into a
multi-state financial services holding company and is considered to be a
regional leader in banking. In order to create superior long-term
economic rewards for its stockholders, BB&T has provided excellent
service to its clients. In order to do that, it has attracted, hired,
and maintained excellent employees. To accomplish all of the above, the
bank has focused on creating a corporate culture based on values and
virtues.
BB&T uses philosophical principles and values as guiding forces. Allison
has established a corporate culture of virtue that emphasizes rational
self-interest. He argues for self-interest, productivity, and
sustainable profits, and explains that those who produce more will
receive more. BB&T’s policy is to hire the best people, train them well,
assign them to appropriate organizational roles, expect high levels of
performance, evaluate them objectively, and recognize, compensate, and
reward their efforts and achievements fairly. The bank’s compensation
system is in alignment with its virtues and values. Its peer appraisal
system focuses on, and provides, feedback about how each employee is
performing in relation to BB&T’s core values. BB&T has created a culture
(or climate) of virtue that brings about trust, loyalty, consistency,
and predictable results.
A 30-page booklet (written by Allison) called The BB&T Philosophy
clearly delineates the bank’s philosophy and values. The bank’s purpose
is stated as follows: “Our ultimate purpose is to create superior
long-term economic rewards for our shareholders.”(5) To accomplish this,
the company spells out ten primary values, many of which conform to what
Ayn Rand has called virtues. These values include: reality (fact-based),
reason (objectivity), independent thinking, productivity, honesty,
integrity, justice (fairness), pride, self-esteem (motivation), and
teamwork (mutual supportiveness). It is explained that these values are
held consciously, that they are logically consistent, and that each
employee must act consistently with all of them.
BB&T employees are expected to exhibit morality and mindfulness at all
times. This begins with recruiting only the best candidates, especially
at the management level, where applicants are screened for both values
and abilities. Every employee is given a copy of The BB&T Philosophy
and is expected to read it and to live by it. Managers are also given a
copy of Ayn Rand’s Atlas Shrugged to read. In addition, managers
are regularly assigned and given books to read for their business and
personal benefit. BB&T’s ongoing training and educational programs
instill the notion of life-long learning and help to develop
virtue-based and value-based employees. The bank is committed to
developing and keeping productive, virtuous, and happy employees.
Parnell and Dent (2009, 587-96) describe how BB&T managers are taught to
“focus more” and to “evade less.” Psychological assessment and
development for BB&T’s high-level executives takes place through a
five-day structured course held by Farr Associates, a leadership
development firm. This course encourages self-awareness and potentially
reduces a person’s tendency to evade unpleasant realities in business
situations. Through this course, a manager will gain the ability to
evade less because he has been taught to understand the root causes of
evasion. Managers are encouraged to think rationally and logically based
on facts, to not let their emotions lead them to make bad decisions, and
to pursue purposes that both achieve company goals and make themselves
happy. After following this program, the managers take part in a
team-building process and attend a follow-up course on effective
thinking.
The bank’s operating policies reflect its free-market philosophy and
values well. In 2006, the Supreme Court ruled that it was legal for
local governments to condemn private property and then transfer it to
other private companies and/or citizens to use for commercial purposes.
BB&T refused to make loans to firms who obtained property through this
dubious use of eminent domain laws. BB&T also avoided subprime mortgages
and refused to grant “negative amortization loans” in which borrowers
make payments that do not even meet their interest obligations. In
addition, the bank did not need nor want to accept Troubled Assets
Relief Program (TARP) money, but was forced to accept it by the federal
government. BB&T paid back the money and interest in record time—it was
forced to pay a price for money that it neither needed nor wanted. It is
clear that the Objectivist virtues direct BB&T’s exemplary company
policies.
Since 2005, the BB&T charitable foundation has found it to be in the
company’s interest to fund 65 colleges and universities in establishing
academic programs devoted to studying the moral and intellectual
underpinnings of capitalism and free enterprise, including Ayn Rand’s
Objectivist ethics. The retired Allison has continued to work with
schools participating in BB&T’s Moral Foundations of Capitalism program
in his tireless efforts to promote the virtues of capitalism.(6)
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