Top 10 Myths About Democratic Management

Why Standing Up For What’s Right Builds Deeper Employee Engagement

Companies, like people, need to come with their own ethics – but it’s more important for them to follow through with them. When a company lives and breathes what it preaches, it not only encourages their employees to be a part of the ethical culture but also creates a strong foundation of trust in the company’s brand.

Ethics are an important ingredient when it comes to a company’s efforts to create the right culture with the right kind of people. But, many companies, in their fight for growth and profit forget their core values and ethics, making it something abstract and to be upheld only on paper. When that’s the case, it creates a sense of disillusionment among employees and clients alike – a loss of trust that’s often irrevocable.

An Ethical Company Is A Happy Company
Which is why creating an ethical business culture is paramount. In other words, businesses need to create an environment where doing the right thing is not just expected but also easy; where not just employees are expected to uphold the ethics, but leaders as well; and the company stands behind its employees and defends them if necessary.

An important consequence of being ethical is the effect it has on employee morale and their sense of belonging – when employees feel like they work for an ethical company where the leaders stand by the core values and walk the talk, it automatically makes the workplace more positive and happy.

A Semco Style Sting Operation
Since the beginning, Semco has always done everything it could to ethically present its taxes to the Brazilian government. But due to rampant corruption among the officials, it was quite common for them to nitpick errors, charge huge fines and take bribes to reduce the fine. That’s exactly what one particular income tax official tried to do with Semco back in the 80s: He kept finding negligible errors and charging Semco large fines that the company kept paying.

After this had gone on for a while, Violi took the matter to Ricardo Semler. Semler, in turn, brought it to the notice of the minister who was, then, overseeing the income tax department in Brazil. According to the minister, the only way Semco could put an end to such harassment was if they caught the whole thing on camera and presented it as evidence against the official in question. In other words, Semco needed to carry out its own sting operation to nab the official red-handed.

Semco Made Headlines For The Right Reasons
So, Violi, who’d always been the representative from Semco’s end, led the officer to believe that the company had finally caved in and was willing to pay him the bribe. For a while, messages were exchanged back and forth to iron out the details of the illegal transaction and even the bank (where the officer wanted the bribe to be deposited) was roped in to play along. Finally, when the officer truly believed that the company was going to pay him the bribe, they recorded the whole transaction and used it to arrest him.

It was the first time in Brazil that a company had taken an open stand against government corruption and done something so drastic to curb it. The news made headlines in all the newspapers and magazines, garnering a lot of attention for Semco.

A Message Through Support
The officer, obviously, didn’t go down easily and issued several threats to the lives of Violi and his family members. Semco advised Violi and his family to stay out of sight until things had settled down – so he took a long vacation from work.

The company totally stood by him for helping nab a corrupt official and sending out a strong message to others like him. It also showed the company’s employees that their leaders truly walked the talk and were willing to take extreme measures to ensure that everything they did was ethical.

Build Being Ethical Into Your Culture
When they create an ethical business culture, employers eliminate double standards and cultivate trust through honesty and transparency. This allows all employees to put their work and the company’s best interests ahead of their own.


Such businesses foster work environments that make managers and employees take pride in their work and identify with the values that drive the organization. It also encourages workers to report illegal or unethical conduct, making sure that everyone in the company stands up for the right thing.