Organizational Culture And Ethical Behavior

Dr. G C Mohanta, BE, MSc(Engg), MBA, PhD(Mgt)

Professor

Organizational Culture

The shared values, principles, traditions and ways of doing things that influence the way organizational members act.

The shared values, ways of thinking, attitudes and guiding beliefs relevant to and supportive of the organization and its goals.

The characteristic set of values and ways of behaving that employees in an organization share.

A common perception held by the organization’s members

Patterns of Behavior, Values and Beliefs

Patterns of Behavior

Ceremonial events, written and spoken comments, and actual behaviors of an organization’s members.

Values and Beliefs

Guiding standards of an organization that affirm what should be practiced, as distinct from what is practiced.

Components of Organizational Culture

Signs and Symbols

Practices and actions that create and sustain a company’s culture.

Stories

The repeated tales and anecdotes that contribute to a company’s culture by illustrating and reinforcing important company values.

Rites and Ceremonies

Traditional culture-building events or activities that symbolize the firm’s values and help convert employees to these values.

Organizational Rites & Their Social Consequences

Type of Rite Example Social Consequences

Passage

Army induction and

basic training

Commencement

Greek Pledge Period

Facilitate transition of person

into new social roles and

statuses

Enhancement Annual awards nightEnhance social identities and

increase status of members

RenewalOrganizational

Development activities

Refurbish social structures and

improve organization functioning

Integration

Office holiday party

School Picnic

Homecoming

Encourage and revive common

feelings that bind members

together and commit them to the

organization

Purpose of CultureTo help integrate organizational

members so that they know how to relate and work together effectively.

To help the organization to best adapt to its mission and to its environment.

Effects of Culture

Determines how people communicate

How people interact

How people relate to one another

What is appropriate behavior

How power and status are allocated

Guides day-to-day working relationships

Levels of Corporate CultureThe Iceberg Analogy

Observable SymbolsCeremonies, Stories, Slogans,

Behaviors, Dress,

Physical Settings

Invisible AspectsUnderlying Values,

Assumptions,

Beliefs, Attitudes,

Feelings

Stories, Symbols, & Language

They reinforce existing culture, but they

don’t create culture by themselves.

Employees learn more from observed

behavior.

Slogans, stories and symbols are useful in

reinforcing desired behaviors.

The really important thing is for managers

to display the desired values and beliefs in

their day-to-day behaviors.

How Leaders Shape Culture

By what they do

The examples they set

The types of people they hire

By what they say

Formal policies, codes of ethics, etc.

By what the organization does

Ethical training, ethics committees

VALUE-BASED LEADERSHIP

What Do Cultures Do?Culture’s Functions

1. Defines the boundary between one organization and others

2. Conveys a sense of identity for its members

3. Facilitates the generation of commitment to something larger than self-interest

4. Enhances the stability of the social system

5. Serves as a sense-making and control mechanism for fitting employees in the organization

How Culture BeginsStems from the actions of the founders:

Founders hire and keep only employees who think and feel the same way they do.

Founders indoctrinate and socialize these employees to their way of thinking and feeling.

The founders’ own behavior acts as a role model that encourages employees to identify with them and thereby internalize their beliefs, values, and assumptions.

Keeping Culture Alive

Selection Concerned with how well the candidates will fit into the

organization

Provides information to candidates about the organization

Top Management Senior executives help establish behavioral norms that

are adopted by the organization

Socialization The process that helps new employees adapt to the

organization’s culture

How Employees Learn CultureStories

Anchor the present into the past and provide explanations and legitimacy for current practices

Rituals Repetitive sequences of activities that express and

reinforce the key values of the organization

Material Symbols Acceptable attire, office size, opulence of the

office furnishings, and executive perks that convey to employees who is important in the organization

Language Jargon and special ways of expressing one’s self to

indicate membership in the organization

Ethical ValuesEthics

Ethics refer to the code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong

Managerial EthicsEthical decisions go far beyond behaviors

governed by law

Managerial ethics guide the decisions and behaviors of managers

How Managers Shape Culture and Ethics

Value-Based Leadership

Formal Structure and Systems

Structure

Disclosure Mechanisms

Code of Ethics

Training Programs

Managers play key role in providing leadership & examples of ethical behavior

What Influences Ethical Behavior At Work?

Ethical Work Behaviors

IndividualFactors

OrganizationalFactors

Top Management

Ethics Policies and Codes

How to Foster Ethics at Work

Emphasize top management’s commitment.

Publish an ethics code.

Establish compliance mechanisms. Involve personnel at all levels.

Train employees.

Measure results.