The effect of implementing an ethical way of working on an organization’s innovation : How does ethical culture affect the innovative capa-bility of a company? 

Abstract Background All companies need innovation in some form and ethical rules on how the employees are ex-pected to behave. There are today too few studies on how the ethical culture in the companies affect the innovative abilities of the company. Some aspects of this link have not previously been covered. For example, will the innovative work be hindered by to extensive ethical rules? Or perhaps the innovative abilities can be improved if the ethical culture in the company shows a clear road map how act and leaves no room for personal interpretation? Furthermore, as the previous research has been quantitative studies, this qualitative study will add new in-depth insights into the employees’ perception of the mechanisms related to ethical culture and inno-vation. Objectives In this thesis the link between the ethical culture in the company and the company’s innovative abilities is studied. The study investigates the mechanisms behind idea generation and innova-tive behaviour at employee levels. Furthermore, the study includes the connection between eth-ical culture and the speed of innovation and whether the post-pandemic changes in work con-ditions have impacted the speed of innovation. Methodology The study is a qualitative, exploratory study with in-depth interviews with ten interviewees. These will be selected among the MBA students and people with similar engineering back-ground that makes different kind of innovative work in different industries. Results The study shows a clear connection between the individual’s personal interpretation of the com-pany’s ethical culture and how the innovative ideas are received by the company. Different companies have different methods of showing appreciation for successful innovation. An eco-nomic incentive for successful innovation seems to be the most successful method. It also shows that employees do not feel hindered in their work as a result of the company having an ethical culture. Larger companies have well implemented methods for keeping an ethical culture in the company and still be innovative. Recommendations for future research The study covers only ten interviewees – however, to make the group of interviewees as repre-sentative as possible, the group consisted of engineers working in different areas and in differ-ent countries. For future studies, the interview could be repeated with several people in similar role in the same companies to see the differences in the personal interpretation of ethical culture and its effect on innovative abilities.