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How to Change Morale and Save Your Business

Management ethics is the subject of a considerable initiative in Japan, but efficacy and goals of these efforts should be considered before further action. If the end result of enforcing management ethics is diminished employee motivation and a negative impact on innovation, we are, in effect, putting the cart before the horse.

How to Change Moral and Save Your Business

Management Ethics Enforcement In Japan

The topic of management ethics has been in the limelight since the year 2000 when a string of incidents related to product defects and substandard services offered by several major companies came into the public view. The events, which caused real harm to consumers and society as a whole, led to a major media outcry and wide criticism of the companies involved. From a business standpoint, being at the center of a scandal can mean product recalls, suspension of operations, and administrative measures – all in all, it amounts to an extremely costly situation. Many companies never survive the shock and go bankrupt. As a result, businesses have begun to operate from a defensive position and enforce management ethics as a component of risk management. While there may be differences in the degree of commitment between individual companies, it is safe to say enforcement of management ethics is now a common concern across the board.

The Perils Of Excessive Enforcement

Management ethics is not something to put in place simply as a form of scandal prevention. The object is to consider what should be done towards the relationship with the company’s various stakeholders – starting with its customers – and then to implement those steps. When companies focus on scandal prevention alone they end up with a management style that does anything and everything to avoid breaking the letter of the law as opposed to working for the greater good. The result is a proliferation of management performance indicators – and paperwork. As ever more companies let their management stretch to extremes without even knowing whether the process works to begin with, employees spend an inordinate amount of time doing paperwork to satisfy requirements. Many employees report they are losing motivation because they are no longer able to work on things that matter, such as customer satisfaction or even company profitability.

It’s safe to say that companies with ample management layers view their employees as intrinsically incompetent and malicious. In other words, their view of human nature is that, left to their own devices, people will make mistakes and act immorally. Consequently, as supervisors implement more stringent checks and balances, employees become complacent and perform the tasks that are required of their position and nothing more. A lack of innovation, morale, and motivation permeates employee consciousness.

The truth is that, for businesses in situations like this, malpractice is becoming a growing problem. Businesses who have in place systems to prevent malpractice are finding that, compared to before, covert malpractice—by individual employees and on a workplace-wide scale—is still on the rise, much to their frustration. It could be that over-management is damaging the motivation to tackle work honestly, thus encouraging malpractice. Also, it goes without saying that the decreased motivation does not help with building positive relations with stakeholders. What is happening is a total confusion of priorities. At this rate, the creativity, refinement, and innovation put into work for the benefit of the customers will be wasted.


The reality is that improper conduct is on the rise in organizations that put trends before employee morale. Organized and managed in such a way as to never run afoul of laws and regulations, managers are struggling to make sense of a growing number of incidents where employees cover up episodes of improper conduct. It is enough to make one wonder whether the blame for the growing occurrence of these incidents lies with the excessive management itself, as it slowly chips away at employees’ motivation to work for the long-term benefit of the company, or with the employees themselves. It goes without saying that lowered motivation does not have a positive effect on maintaining good stakeholder relations either. These environments are not conducive to creativity, originality, betterment, or innovation.

Towards A New Way Of Thinking: Don’t Get Tied Down By Rules; Fostering Organizational Culture

To prevent the causes leading to improper conduct, establishing rules and enforcing a strict management style is necessary, to a certain extent. Justifications and rationalizations often make their way into the workplace, requiring a level setting process to be in place. In a survey conducted by our company, we found that it was the quality of organizational culture and workplace communication that had a significant influence on the incidents of improper conduct. Issues of organizational culture, including motivation-related factors such as work satisfaction, a sense that the job is worth doing, confidence, and pride, as well as the perceived relationship with superiors and workplace communication, all have a significant bearing on the prevalence of improper conduct.

Even today, there are plenty of organizations that believe the focus of improving employee motivation and transforming the organizational culture is the domain of human resources, management, and planning departments, rather than the responsibility of the department in charge of management ethics. It is not uncommon to hear that people know such problems exist but cannot do anything about them. There are also some companies that are crossing interdepartmental boundaries and actively addressing issues of improving organizational culture. They are using methods such as a revised management style, better workplace environment, clearer communication, and raising employee self-esteem to address this long-standing problem.

How should we approach the problem of improving organizational culture? One option, which is ultimately aimed at educating management about decision-making, is to organize workshops for non-management personnel centered on cultivating a businessperson’s ethical outlook and sense of self-esteem. This kind of workshop provides a valuable learning opportunity as employees get the chance to discuss their own ethical views and the state of workplace communication among other things. If such a learning opportunity is provided on a continuous basis, the company will gradually arrive at the desired organizational culture.

The purpose of enforcing management ethics, even if handled by a single department within the company, is not to prevent improprieties by imposing a set of binding rules on employees. The primary goal is to cultivate the kind of employees that work with a sense of pride and enthusiasm, to guide the company towards being an organization replete with creative originality and innovation, and to ensure a positive relationship with stakeholders.


Written by PH

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