According to Guiso, Sapienza and Zingales (2015) corporate culture consists of values and behaviour which make a contribution towards the unique psychological and social environment of a corporation. It is the representation of collective beliefs, principles and values of organizational members and has been created through elements such as strategy, history, product market, employee types, national culture and the types of management. It further includes the vision, norms, languages, location, habits, belief, symbols and values of a corporation. Further organization culture refer to an emergence of a significantly complicated state which cannot be calculated which results out of combining a few elements. There are three manageable ingredients in relation to the culture of a corporation. These include employees, work and customers. A good corporate culture asks the mangers of an organization to conduct their operations in an ethical and legal matter and in the best interest of those for whom they work. Corporate culture is strongly related to corporate governance which asks an organization to operate ethically by taking into consideration the interest of its stakeholders.
In order to ensure that a healthy corporate culture is maintained there are several laws and provides in place which govern the actions of those who have the responsibility of managing corporation. In Australia these provisions includes the Corporation Act 2001, Australia Securities and Investment Commission Act 2001 and the rules and corporate governance principles provided by the Australian Securities Exchange (ASX). Under the Corporations Act the managers are provided by several guidelines which they must comply with while managing an organization in Australia. Under these guidelines the corporations must not defraud their creditors, provide the correct information and no engage in a conduct which is misleading or deceptive. The managers also have be reasonably carful while performing their functions, they have to function in the best interest of the corporation, they must also not mis utilize information and position for making personal interest and defrauding creditors. The ASX principles asks the organizations to functions ethically and have risk management practises in place. However in spite of such principles there have been various corporate frauds and principles in Australia. One of such scandals have been seen with the company Sino Australia Oil and Gas Limited. This company was a subsidiary company of a Chinese organization. The company provided several fake and false information the public to get public money when it offered its first public offering. However the fraud did not stop here alone. The director of the company Mr Shao wanted to get the 7.5 million dollars of public money transferred to Australia. The ASIC made its intervention into the situation and public money worth 7.5 Million was saved. The issue was take the court where the director who was behind the fraud had been asked to pay a hefty fine to the commonwealth and he was also banned for being a manger of an Australian company for a period of twenty years (The Australian 2018). Another example where corporate fraud had been seen in Australia was in relation to Storm Financial Limited. In this case there have been wring advice provided by the company to poor investors who were in their old age and had to mortgage their houses to get investment as asked by the company (The Conversation 2018). There was another problem in relation to dreamland amusement park where due to the defect in a ride four patrons lost their lives. These was an evident lack of risk management system within the company as it failed to inform the family members of the deceased for 24 hour which lead to a big controversy as well as hardship for the family members (Murray and Wahlquist 2018).
Form the above discussion it can be derived that a good corporate culture has to be present in relation to a corporation for its effective functioning. Corporate culture can be implemented by ensuring compliance with corporate governance principles and legal provisions. The culture can also be enhanced by following the principles of the broad view of corporate social responsibility and working ethical to ensure the best interest of the company and also the needs of its stakeholders. When the organization does so its value in the society automatically gets enhanced and it leads to overall increase in value for the corporation.
Guiso, L., Sapienza, P. and Zingales, L., 2015. The value of corporate culture. Journal of Financial Economics, 117(1), pp.60-76.
Murray, W. and Wahlquist, C. (2018). Dreamworld accident: four dead at Gold Coast theme park. [online] the Guardian. Available at: https://www.theguardian.com/travel/2016/oct/25/dreamworld-accident-gold-coast-theme-park [Accessed 13 May 2018].
The Australian (2018). [online] Available at: https://www.theaustralian.com.au/...sino-australia-oil-and-gas...fraud/.../ab757958e67dd... [Accessed 13 May 2018].
The Conversation. (2018). Financial advice reform: have we learned enough from Storm?. [online] Available at: https://theconversation.com/financial-advice-reform-have-we-learned-enough-from-storm-5299 [Accessed 13 May 2018].