Organizational Culture & Ethics

Sumita.mishra@ksom.ac.in sumita.mishra@gmail.com

Dr. Sumita Mishra

Organization Culture is the set of shared values & norms that controls organization members interaction with each other and with people outside the organization
o Values are general criteria, standards or guiding principles that people use to determine which types of behavior, events, situations & outcomes are desirable or undesirable 1. Terminal Values Desired End States /outcomes (high quality, excellence 2. Instrumental Values Desired modes of behavior (being helpful, working hard, conservative)

Values exist in norms. Norms are standards or styles of behavior that are considered acceptable for a group of people (Courteous to people etc.)
Organizational Culture

Org. Culture Iceberg Observable symbols, ceremonies, Stories, behaviors, dress, physical Settings etc.

Underlying values, beliefs, attitude & feelings

Org. Culture serves mainly -to integrate (internally) members so that they relate to one another -to help the org. adapt (externally) to the environment by guiding behavior towards goals
Organizational Culture

Symbols Rites Org. Socializatio n

Stories

Language

Organizational Culture

Org. socialization is the process by which members learn & internalize the values & norms of an orgs culture o Van Mannen & Schein identified 12 tactics of socialization through a process of role orientation o Role orientation is the characteristic way in which new comers respond to a situation o Institutionalized vs. Individualized Role Orientation 1. Inst. Role Orientation (Tactics)
Collective Formal

Org. Socializatio n

Meaning

Example (Arthur Anderson)

Sequential
Fixed Serial Divestiture

Indoctrination of new Common learning experience to comers as a group produce a standard response Segregation of newcomers during Training of new comers at a training center socialization Explicit Information about the sequence Sequenced Timetable in which they perform activities Six week course & 8 Time table of training process hr. a day classes Org. Models as role models Indoctrination by org. members Newcomers receive ve Organizational Culture social support

2. Individualized Role Orientation (Tactics)

Individual Informal Random Variable Disjunctive

Meaning

Example (VDS India)

No formal training Training of new comers on the job

Newcomers learn new unique responses Newcomers are socialized on the job

Training is based on the needs & interests of the individual

Newcomers learn as when required Individuals figure out their own behavior Newcomers receive positive social support

On selection of job portfolios ind. are trained Informal buddy sessions No org. role models

Investiture

Organizational Culture

Institutionalized Role Orientation Strengths

Formation of a strong org. culture

Org. Socializatio n

Weaknesses
-Organization Isomorphism -Adaptation to environment changes becomes an issue

Individualized Role Orientation Strengths

-Balance of innovation vis--vis creativity -Quick response to environment issues

Weaknesses
-chaotic training & socialization

Organizational Culture

Rites

Org rites & ceremonies are elaborate, planned activities that make up a special event & are conducted for the benefit of an audience. They are used as examples to indicate what a company values o Four types of rites appear in organizations Example
Induction, Basic Training
Annual Awards Night, Convocation Appraisals, Inspections Holiday Parties, Picnics etc.

Type of Rite
Passage
Enhancement Renewal Integration

Consequences
Transition of people into roles that are new to them Increase social identities & statuses Improve org. functioning Revive common feelings to bind people to the org. Organizational Culture

Org. stories are narratives based on true events that are frequently shared among org. employees and told to new employees to inform them about the org.
-Stories are about company heroes (Narayan Murthy at Infosys) -Stories are considered legends when the events are historic & may have been decorated with fictional details (Infosyss rise to power) -Stories which are consistent with the values of the org. but are not supported by facts are myths (The advertisement campaigns of soft-drink majors such as coke & Pepsi)

Stories

Organizational Culture

Symbols
Org. symbols are certain things that represent the core values indirectly.
-Stories, rites, ceremonies are all symbols. -Physical symbols are powerful as they focus attention on a specific item Symbols of status & power at ENRON (bidding for premium parking spaces)

Organizational Culture

Companies use a specific saying, slogan, metaphor or other form of language to convey a very special meaning to employees
Having a baby Changes everything

This slogan emphasizes J&Js values of caring & support to parents

Language

You can make wild ducks tame, but you can never make tame ducks wild again (T.J.Watson, IBM)- use of the metaphor wild ducks to symbolize values of freedom & opportunity at IBM
Organizational Culture

1. People within the org.

3. Org. Structure

Org. Culture

2. Property Rights System

4. Org. Ethics

Organizational Culture

1. People within the org. -People & Org. match -Over time people become more & more similar in their values & the culture of the company becomes more & more distinct -Role of Founder Members in initiating org. culture AOL & Steve Chase (entrepreneurial culture through creativity & hard work)

Organizational Culture

Property rights are the rights that an organization gives to its members to receive & use organization resources
-Stakeholders & Top Management have the maximum

2. Property Rights System

property rights in an org. (Stock options, large salaries, Decision Making) -Employees too have property rights (Severance payments, lifetime employment, pension & benefits, employee stock option plans, participation in decision making -Top management influences org. culture through instrumental values by laying down the policies of property rights -Microsoft & Apple (Concept of an Apple Fellow, Rewarding of employees through ownership of stock) to ensure the terminal values of creativity, hard work & excellence

Organizational Culture

3. Org. Structure

-Mechanistic vs. organic structures encourage the formation of certain cultures -Centralization vs. Decentralization of authority & decision making -Four types of cultures Adaptability Culture Values: Entrepreneurship, Innovation (VDS India) EXTERNAL Clan Culture Values: Productivity, Cust. Needs, employee care (web based companies) FLEXIBILITY Mission Culture Values: Competitiveness, Performance, cust. Orientation (PepsiCo) EXTERNAL Bureaucratic Culture Values: Consistency, collaboration, obedience STABILITY
Organizational Culture

INTERNAL

FOCUS

The moral values, beliefs, & rules that establish the appropriate way for org. stakeholders to deal with one another & with the org. environment -Managerial ethics are principles that guide the decisions & behaviors of managers with regard to whether they are right or wrong in the moral sense (Social responsibility) Social Responsibility Approaches LOW
Obstructionist Approach -Unethical behavior -Suspected use of pesticides by cola majors Defensive Approach -Stay within the boundaries of law -Commitment to ethical behavior Accommodative Approach -Acknowledge the need for soc. responsibility -Balancing stakeholder interests

4. Org. Ethics

HIGH
Proactive Approach -Managers go out of their ways to be socially responsible -J&J (Tylenol Crisis) Organizational Culture

-Value Based Leadership is a relationship between leaders & followers that is based on shared, strongly internalized values that are advocated & acted upon by the leader -The notion of walk the talk -J& J (Tylenol Story)

Value Based Leadership

Formal Structures & Systems

1. 2. 3. 4.

Formal Structure of the Organization Disclosure mechanisms Code of Ethics Training programmes

Organizational Culture

Formal Structures & Systems

1. Formal Structure of the Organization -Manages can assign responsibility for ethical values to a specific position. -Allocates org. time & energy to a problem or ethical dilemma but also stresses upon the importance of ethics -Ethics Committee, Chief Ethics Officer, Ethics Hotline

2. Disclosure Mechanisms -Allowing individuals to speak up if they suspect illegal or unethical activities -The example of whistle blowing -Whistle Blowing is employee disclosure of illegal, immoral & unethical activities to the org. -Risk associated with whistle blowing
Organizational Culture

3. Code of Ethics -Is a formal statement of the companys values concerning ethics & social responsibility; it clarifies to the employees the company expectations for employee conduct -Legitimizes ethical values -Signing of the written code of conduct at Tata Refractories Ltd.

Formal Structures & Systems

4. Training Programmes -Written code of ethics can be supplement by regular raining programmes -Ethics programmes also include frameworks for ethical decision making -TRL & Texas Instruments

Organizational Culture

Organizational Culture