Corporate Culture and Why Rupert Murdoch is at Fault

Even though you’re sure you’ve had enough of News Corp’s phone-hacking scandal, and most likely think that it has absolutely [...]

August 3 2011 by ChiefExecutive.net


Even though you’re sure you’ve had enough of News Corp’s phone-hacking scandal, and most likely think that it has absolutely nothing to do with running your company, you’re wrong. There is quite a bit to learn from Rupert Murdoch’s scandal about executive responsibility and corporate culture.

CEO Rupert Murdoch has refused to step down from his position as CEO of the worldwide media giant. And with such a large stake in the company, no one can make him. Murdoch maintains the position that he did not know about the phone-hacking and therefore should be absolved of all guilt.

An article from Dartmouth’s Tuck School of Business and the Steven Roth Professor of Management, Sydney Finkelstein, outlines why Murdoch is guilty despite the lack of knowledge that his company was routinely practicing an illegal strategy.

Finkelstein blames Murdoch’s reputation for being overly aggressive. Finkelstein says, “Even if Murdoch didn’t sanction this behavior, as the senior executive of the company, he’s responsible for the culture of the organization.” Murdoch had a reputation for “hard-nosed deal making…with a newsgathering spirit that critics contend places sensationalism ahead of truth and accuracy… Being aggressive, sensationalist, and going after your enemies is really what it’s all about, and not necessarily journalistic integrity.”

If the CEO of the company prizes these ruthless traits, his employees are going to strive to act the same; they know that in their corporate culture the end will always justify the means.

Finkelstein likens News Corp to BP’s company-wide lack of focus on safety before the oil spill disaster.

It’s important for CEOs not to underestimate the value of a healthy corporate and also to understand that their behavior will have a direct influence on the actions of their employees. If your behavior sanctions unlawful or unethical behavior, you too are complicit in the actions of your employees.

Read: Murdoch’s Own Horizon

Read: Where Rupert Murdoch’s blame ends and ours begins