Approaches To Organisational Culture And Ethics Amanda .

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Approaches to Organisational Culture and EthicsABSTRACT. This paper assesses the potential of organisational culture as a means for improving ethics in organisations. Organisational culture is recognised as one determinant of how people behave, more or less ethically, inorganisations. It is also increasingly understood as anattribute that management can and should influence toimprove organisational performance. When things go wrongin organisations, managers look to the culture as both thesource of problems and the basis for solutions. Two modelsof organisational culture and ethical behaviour are evaluated.They rest on different understandings of organisationalculture and the processes by which ethics are enhanced.Firstly, the prevailing approach holds that creating a unitarycohesive culture around core moral values is the solution toenhancing ethical behaviour. Both the feasibility anddesirability of this approach, in terms of ethical outcomes, isquestioned. The second model queries the existence oforganisational culture at all, arguing that organisations arenothing more than shifting coalitions of subcultures. In thissecond model, the very porousness of the subculturesprovides a catalyst for the scrutiny and critique of norms andpractices. Such diversity and debate is construed as potentially a better safeguard for ethical behaviour than theuniformity promised by the unitary, strong culture model.Amanda Sinclairtional culture not only to explain what happens inorganisations, but to attempt to shape what happensin ways that are consistent with organisational goals— to use culture to orchestrate organisationalchange. Organisational culture has been portrayed asa particularly promising tool in the managerialkitbag (Schwartz and Davis, 1981; Deal and Kennedy, 1982;Kilmann etal, 1985).The impact of organisational culture on theethical standards and moral practices of people inorganisations has also been increasingly documented(Fisse and Braithwaite, 1983). Organisational leadersexhort the importance of managing the organisational culture to promote a high standard of etliicalconduct among organisational members (see, forexample, Akers, 1989).This paper explores two approaches to usingorganisational culture to enhance ethics in organisations. Each approach rests on different understandings of organisational culture and how, if at all, it isto be managed.Organisational cultureIntroductionOrganisational culture has become an important, ifcontentious, focus in the study of organisational life.Managers of organisations have turned to organisa-Dr. Amanda Sinclair is a Senior Lecturer in the Graduate School ofManagement. As a teacher on the MBA program of courses,including Ethics, she has a particular interest in the developmentand professionalisation of managers. Her current research focuseson organisational diversity, change and culture and administrative leadership and accountability.Journal of Business Ethics 12: 63—73, 1993. 1993 Kluwer Academic Publishers. Printed in the Netherlands.The application of the concept of culture to organisations became widespread through the 1980s, butwas pioneered by some innovative thinkers earlier(for example, Crozier, 1964; Turner, 1971; Pettigrew,1979). Subsequent researchers distinguished twobroad senses of organisational culture — the morepopular view of culture as a variable to be managedin organisations, and the view that culture is ametaphor or fundamental means for conceptualisingorganisations (Smircich, 1983). According to thislatter view, culture is not something an organisationhas, but something an organisation is and management cannot control culture because management is

64Amanda Sinclaira part of that culture (Nicholson, 1984). This debate,which culminates in querying the existence oforganisational culture at all, has attracted muchacademic interest but has not deterred widespreadacceptance of the concept. Despite the plausiblecontention that culture is not something that organisations have, there is a popular understanding thatorganisational culture exists and that it is important(Schein, 1985).Frequently understood as a 'multi-layered' phenomenon (Sathe, 1983), organisational culture includes deep-seated and enduring values, at the mostfundamental or inner level, with artefacts and symbols, procedures and arrangements, 'shared doingsand sayings' (Sathe, 1983) characterising the outerand more superficial layers of organisational culture.Some doubt that an organisation can influence thesubstantive content of its own culture, because theunderlying values of any organisational culture aredeeply rooted in broader national, racial and religious cultures (Schein, 1983; Hofstede et al., et al,1990). More amenable to moulding by managementare the outer layers of culture, the rituals, symbols,heroes and other artefacts.The pattern of cultural elements that emerges isessentially a learned and shared set of responses tothe organisational environment, tasks and problems(Turner, 1971; Schein, 1984). A working understanding of organisational culture is that it consistsof what people believe about how things work intheir organisations and the behavioural and physicaloutcomes of these beliefs.Though popularised in recent years, organisational culmre is not a new understanding. A wellestablished tradition of administrative research hasdemonstrated that organisations produce a mindsetamongst individual members (which in turn isdetermined by, for example, structure or externalpressures) which encourages people to behave inways that are not necessarily consistent vwth individual or pre-existing norms, but apparently induced byorganisational membership (Merton, 1940; Whyte,1956; Crozier, 1964; Hummel, 1982; Baum, 1987;Jackall, 1990).Neither has administrative theory been alone inits attention to culture as a determinant of the moralcontent of what goes on in organisations. Scholars ofcorporate crime (Stone, 1975; Coleman, 1985) haveconcluded that the "climate" (Clinard and Yaeger,1983) and culture of organisations exercises a powerful influence on unethical behaviour in organisations. Clinard (1983) concluded from his study ofretired middle managers in Fortune 500 companiesthat corporate crime was determined by top managers who pushed their subordinates so hard thatillegal practices were tacitly necessary to survive.Clinard (1988) concludes that corporate lawbreakingis a product of the cultural norms operating in acorporation and corporations "socialize" their members into patterns of law-obedience or law-breaking.Recent analysis of disasters, such as the Challengerincident, similarly conclude that corporate cultureswere an important piece of the puzzle of precipitating events (Werhane, 1991; Vaughan, 1990;Shrivastava, 1987).The ethics of organisationsTo talk about the ethics of organisations suffers atleast the same difficulties as speaking of the culturesof organisations. Whether the organisation has amoral status, an existence or even a moral intentindependent of its members, are questions that havereceived considerable attention (for example. Bower,1974; Goodpaster and Matthews, 1982; Velasquez,1983; French, 1984; Ewin, 1991). Further, somescholars argue that to apportion special sets of etliicsto separate spheres or arenas of activity, such asbusiness ethics, is to create an artificial distinctionbetween business and the rest of life (Drucker, 1981).These debates instill appropriate caution in envisaging the organisation as a unitary and insulateddomain in which one set of special ethical standardsapply. Etliics, like cultures, may not be somethingthat organisations "have."Rather, the focus of this paper is the ethics thatguide the members of an organisation. They are notthe expression of the organisation's "moral personality" (Ewin, 1991) but those principles of right andwrong that govern the exchanges of members of theorganisation when they are engaged in organisational activities. Inevitably these principles areformed by long-standing influences on individualswliich extend far beyond the organisational realm,though it is reasonable to suggest that some organisations shape the ethics exhibited by organisationalmembers.

Organizational Culture and EthicsAre these ethics distinguishable from morality?The ethics of organisations are not special rules,applicable only to those specific communities, butrather understood here as elaborations of pre-existing broader moral principles, which include standards of behaviour and are designed to respond tothe particular dilemmas presented by that context(Adelman, 1991). This is not to suggest that etbicalprinciples are any weaker than moral principles, butthat they may have greater specificity to the particular tasks or environment which a group orcollectivity confront.A further challenge in the shaping of ethics usingorganisational culture is determining how the quality of ethics is to be measured. Is it in standards ofoperation, the avoidance of moral disasters or inroutine decision-making practices which includeethical considerations? (Jackson, 1991). How is betterethics exhibited by individuals? Is it in virtuousbehaviour, or a lack of corruption? Is there moreinherent moral value in particular workplace practices and processes of reflection or consultation orshould measures only concern themselves with outcomes? While there is clearly no final answer tothese questions, how they are resolved will helpdetermine which avenue is selected by those tryingto improve ethics in organisations.The role of managementA primary task of management is to control theactivity of employees to best serve defmed organisational interests. They can achieve this control usingformalised rules (bureaucratic mechansisms), economic rewards and sanctions or values and normsabout how the work is to be done ("clan" or culturalmechanisms) (Wilkins and Ouchi, 1983).Disenchanted with the limitations of control bymeans of economic or bureaucratic sanctions, management theory widely promulgated through the1980s the development of corporate culture as ameans of enhancing managerial control. Through asense of purpose, a shared set of meanings and asense of involvement or ownership, organisationalculture could directly enhance organisational effectiveness (Denison, 1990; Peters and Waterman, 1982;Deal and Kennedy, 1982; Kilmann etal., 1985).65Cultural management comes to be preferred to the olddirect means of control because it appears to be inclusive,more pervasive and less identifiable (Anthony, 1990, p. 4).In their case studies of corporate offenders, Fisseand Braithwaite (1983) take a step beyond usingorganisational culture to explain unsound or undermined ethics, in identifying culture as a cure forimproving ethics in organisations. In analysing theresponses of companies, they conclude that "themost important changes were qualitative and intangible. These were the changes in the culture ofthe organization" (p. 235). They cite examples ofreforming internal controls, questioning audits moreclosely, more stringent systems of accountability,"increased staff, seniority or added powers, or allthree" (p. 232).Organisational culture then, deserves our seriousattention, even if it is all metaphor or managerialsleight of hand. An examination of organisationalculture offers a plausible explanation for the incidence of unethical behaviour and there are many whoargue that it provides the means to improve theethics of people in organisations. Organisationalculture both helps to explain the incidence of unethical behaviour (where it acts as a vicious circle), andcan be coverted by diligent and skilful managementinto a "virtuous circle" (Gagliardi, 1991).Managers confronting flawed organisational ethics and the imperative to act increasingly assert thatit is the culture that needs to be "fixed" (Reidenbachand Robin, 1991). Murphy's view "that ethicalbusiness practices stem from an ethical corporateculture" (1989, p. 81) is widely echoed, as areprescriptions of how culture should be cultivated tothis end.Two approaches to the management oforganisational culture to improve ethics inorganisationsThere are two approaches to moulding organisational culture towards ethical ends. The first andmost popular is the approach of creating a unitarycorporate culture around ethical values. It arguesthat management can and should actively manageorganisational culture. The second approach fostersthe co-existence and diversity within the organisa-

66Amanda Sinclairtion of underlying national and racial cultures aswell as professional and occupational subcultures.This approach doubts that management is able to, orshould, employ organisational culture towards management-defined ends. Each approach defines organisational culture and the nature or process of goodethics differently, and each argues a different role formanagement in the shaping of ethical values. Thefollowing discussion evaluates the two approaches.The approach of creating a unitary cultureAccording to this approach management can create aunitary and cohesive organisational culture aroundcore ethical values. Sometimes identified as "strong"or "thick," these organisational cultures are distinguished by the presence of organisational values andnorms which are shared by all employees (not just amanagerial elite), which are deeply-felt (not justadhered to superficially), and which are capable ofsubstantially determining behaviour and consistentacross organisational functions or geographic divisions.The methodology for establishing such a cultureis well-established, but tirelessly reincarnated withslightly altered emphasis (for example Deal andKennedy, 1982; Murphy, 1989). The process commences with the clear articulation of a corporatestrategy, philosophy or mission. The strategy doesnot confine itself to economic goals but includesstatements about "what kind of organisation thecompany will be — its character, the values itespouses, its relationships to customers, employees,communities, and shareholders" (Andrews, 1989, p.103). This aspect of organisational strategy is typically promulgated as a "credo," a succinct statementofthe values permeating the firm" (Murphy, 1989, p.81) and is translated into a corporate code of ethics.While the credo can be a general statement aboutthe organisational values, the code of ethics shouldbe specific, pertinent, publicised, communicated andenforced, as well as revised (Laczniak and Murphy,1991).The most important role for the leader of theorganisation is the reinforcement in word and deedof the values of the organisation (Schein, 1983). Thecommitment of die senior management team to anethical culture is critical: "the importance of seniorexecutives as role models cannot be stressed stronglyenough" (Mathews, 1988, p. 135). The task of management then becomes "the management of meaning" (Gowler and Legge, 1983; Pondy and Mitroff,1979). The impact of such role modelling is all themore potent if the organisation is blessed with acharismatic or transformational leader (Bennis andNanus, 1985).Systems of rewards, selection, appraisal, structures,physical spaces, rituals and ceremonies, should all bedesigned to reinforce organisational values andnorms. Information systems and corporate planningprocesses should also guide and reflect progress ininstitutionalising values.Cited as a shining example of this approach isJohnson and Johnson, the pharmaceuticals company,whose success in the marketplace and capacity toturn disaster into ethical "runs on the board," islegendary. Their credo affirms a "responsibility tothe doctors, nurses and patients, to mothers and allothers who use our products and services . . . to ouremployees . . . to the communities in which we liveand work . . . to our stockholders . . ." (Harvard CaseLibrary, 1983). J & J management argue that thesource of their business success is their organisationalculture, which despite their multinational operations, guarantees ethical conduct.This approach to enhancing ethical behaviourworks by reinforcing adherence to a predeterminedand clearly-defined bottom-line which tells employees how to act. It attempts to ensure ethicalconduct by eliciting behavioural conformity, notthrough explicit compulsion but through the moresubtle socialisation of organisational culture.Yet this approach to the management of organisational culture has been attacked as both infeasibleand undesirable, of itself, morally questionable. Thefirst criticism maintains that organisational culture isa figment of the managerial imagination, thoughcertainly not a harmless one. Nicholson has argued:"the practice of management is itself a component ofculture . . . Management cannot control culture forattempts to control cultural variables themselvesconstitute part ofthe culture" (1984, p. 264). Hence,this approach has been dismissed by some as amanagement construction, nothing more than theimposition by an elite of a managerial ideology(Drake and Drake, 1988).Others, however, warn against dismissing such a

Organizational Culture and Ethicspotentially powerful, if unrepresentative, ideology.Gowler and Legge, for example, argue that managerial ideology upholds its own special moralimperatives: it "presents a rational, goal-orientedimage of managerial action as a particular kind ofmoral environment" (1983, p. 201). These criticsargue that while organisational culture can be a veryeffective device for marketing the organisation andfor legitimating "managerial prerogatives" (Gowlerand Legge, 1983, p. 198), it hardly secures anyguarantees as far as ethical conduct is concerned.Indeed, it may serve to camoufiage dubious practices.Evidence that organisational culture is used bymanagement to defiect responsibility is provided byWeiss in his research on Employee Assistance Programs (EAPs) undertaken by American companies(1986). Weiss argues that a purportedly sociallyresponsible managerial ideology, designed to assistemployees with problems such as alcoholism, enables management to enhance their social control bylabelling employee problems as "medical" and unrelated to the basic structural conditions and stresses ofworklife. By developing a "socially responsible"ideology, employees and constituents of the organisation are distracted from the underlying causes ofemployee malaise, enabling management to, ineffect, escape moral responsibility for work-inducedemployee illness.Similar criticism is often directed at the codes ofethics which some organisations employ as culturaldevices for encouraging ethical behaviour. Mathews(1988) concludes from her analysis of corporatecodes of conduct that they offer no real answers tothe ethical dilemmas faced by people in organisations. Mathews found, alarmingly, a negative relationship between codes of conduct and violations.Such a finding provides a powerful antidote to theassumption of this approach that any managerialeffort is better than nothing. As Weiss' work alsosuggests, codes, credos and the other artefacts oforganisational culture could discourage individualsfrom taking personal responsibility for ethical decisions in the workplace.The second criticism of this approach focuses noton the questionable nature of organisational culturebut whether "strong" cultures necessarily producethe best organisational outcomes. An organisationalculture is understood to be strong where there is67pervasive commitment to it throughout the organisation, where there is consistency among elementsof the culture and it is powerful in determiningindividual behaviour, not just in ensuring superficialcompliance. The argument of the strong cultureapproach is that by engendering high levels ofcommitment, ownership and purpose among employees strong cultures foster good performance(Denison, 1990).However, there is a paucity of systematic, asopposed to anecdotal, research on the connectionbetween culture and economic performance. Strongcultures only produce excellent performance undersome circumstances (Calori and Sarnin, 1991).Denison's research has documented a complexrelationship between culture and effectiveness(1990). In fact, he found an inverse relationshipbetween long-term performance and strength ofculture (measured by consistency amongst groupswithin the organisation) (Denison, 1984).Hence while strong, cohesive cultures can produce commitment, this might be the opposite ofwhat the organisation needs for either its longerterm performance or ethical conduct. Researchcautions that strong organisational cultures tend touphold conformity and drive out dissension producing "strategic myopia" and rigidity (Lorsch, 1985;Bourgeois, 1984), inhibiting the organisation's capacity to scan its environment, to anticipate and respondto the rapidly changing needs of customers andother stakeholders. In the terrain of business ethics,where issues are constantly being redefined, suchinsularity can be a fatal weakness (Drake and Drake,1988).Even some of the supporters of the strong cultureapproach admit problems of overzealousness, that'For the most part, ethical problems occur becausecorporate managers and their subordinates are toodevoted to the organization' (Murphy, 1989, p. 81).An example of a highly cohesive culture producingextreme actions by organisational members is theKaren Silkwood case where a whistle blower wasallegedly murdered by other organisational employees (Schwartz, 1987). Cloning people in the organisational culture is also seen to jeopardise the ethicalrobustness of the organisation in the longer termbecause it impairs the organisation's capacity todigest dissension and respond proactively to challenge (Waters, 1978; Fitzgerald, 1989).

68Amanda SinclairResearch on organisational socialisation raisesquestions of whether culture is propaganda, andtraining is indoctrination (Pascale, 1985; Schein,1988). Berg warns of the "proximity" of effectivesymbolic management to "covert manipulation ororganizational seduction" (1988, p. 576). For thosewho embrace a strong culture, its very cohesivenesscan become a sanctuary. Insulated in the cocoon of acredo the management of the organisation candevelop a sense of omnipotence and invulnerabilityand individuals are absolved of the need to weigh upimplications and responsibilities. The organisationcan become an island of complacency, an outpost ofself-reinforcing norms.As a management strategy, the strong cultureapproach understates conflicts of interest inherent inorganisations and tends to protect the power elite(Zaleznik, 1989). Individual employees have limitedpower. While they have exit power, that is they canleave (Hirschmann, 1970), this ignores their dependence on the job and the subtle and sophisticatedways managers "manage meaning" to obscure employees' real choices.In sum, creating a strong culture doesn't guarantee ethical behaviour, within management or employee ranks, though it may impart a highly marketable veneer of ethical conformity. Opponents to thisapproach argue that the concept of a corporateculture is the antithesis of individual ethics, thatsuch a culture demands a "surrender" or "individualintegrity" to the organisation (Silk and Vogel, 1976).The subcuhural approachUsing culture to enhance control, of ethical behaviour as well as economic performance, has turnedout to be much tougher than expected. The lessonsfrom research are that you only meddle with theorganisational culture if you've got little choice, lotsof resources and lots of time — a combination ofcircumstances, some would argue, rare enough torender the approach irrelevant (Uttal, 1983; Drakeand Drake, 1988; Drucker, 1991; Lundberg, 1985).While organisational culture now has a bad namein some circles, aspects of its explanatory appealremain. Cultural forces still seem to explain, betterthan anything else, why people in organisationsbehave, ethically and unethically, as they do. How-ever, the task of influencing those cultural pressurestowards prescribed ends is more difficult.Another managerial response then, instead oftrying to create culture, is to understand the valuedifferences of subcultures and the terrain of controversy within the organisation (Gregory, 1983).Researchers have increasingly focused on the degreesof variance in values and ideologies between hierarchical and functional levels of the organisation(Arogyaswamy and Byles, 1987). They have alsoargued the need for managers to see past the attractiveness of culture as a "lever" and "to understandthe paradoxes and complexities of our belief system"(Ackroyd and Crowdy, 1990, p. 12). Reed andAnthony conclude that "[t]o the extent that culturalmanagement is to be successful, rather than cosmeticor deceptive, it will have to comprehend comparative values and belief systems" (1990, p. 18).This introduces a different, but not new, understanding of organisational culture, which recognisesthe existence of subcultures and questions the powerand prerogative of management to control organisational culture. Bridges (1986) argues:In fact culture is not a pattern of total agreement but adialogue between opposing forces that agree on thenature of their opposition. Culture change is really a shiftin the definition of the opposition . . . not a conversionprocess in which a group of Sauls see a burning bush andbecome single-minded Pauls (p. 32).Many cultural theorists have concluded that thesubcultures existing in organisations are more likelythan corporate cultures to be the repository of valuesand norms that are lasting and significant influenceson behaviour (Martin and Siehl, 1983; Wilkins andOuchi, 1983). Van Maanen and Barley (1985) definesubcultures as "a subset of an organisation's memberswho interact regularly with one another, identifythemselves as a distinct group within the organisation, share a set of problems commonly defined tobe the problems of all and routinely take action onthe basis of collective understandings unique to thegroup" (p. 38).While the spectre of subcultural confiicts mayspell nothing but trouble for the manager intent oncontrol, there is some evidence that organisationscan not only tolerate many subcultures, but alsobenefit from the discourse about values which theyinevitably spawn. Where these subcultures are part

Organizational Culture and Ethicsof, or operate as, an "occupational community" theybring to the organisation powerful potential resources of commitment and control (Van Maanenand Barley, 1984). Many professionals arrive inorganisations, already socialised into a particularsocial commitment and moral language. Instead ofoverruling such identifications and the moral imperatives they already contain, organisations could"take seriously" and help develop the professionaland the "profession as a moral actor" (Norton, 1991,p. 622). Instead of imposing corporate-derived ethical values the task for managers becomes one ofunderstanding and unleashing the moral commitment of subcultures towards goals which are consistent with, or ideally advance, those of the organisation (Martin and Siehl, 1983). By relinquishingpower to subcultures, communally-mediated controlis effectively increased; by sponsoring autonomy,commitment can be nourished; by encouraging connections between organisational subcultures andwider community groups, the organisation's reservesare enhanced, not undermined.Fostering such subcultural co-existence has produced robust and workable outcomes in a variety ofcircumstances. For example, Masel (1989) highlightsthe positive impact of judicial values and legalcultures on the determination of appropriate corporate regulation. Similarly, Thynne and Goldring(1990) argue that the process of administrativereview is best understood as the outcomes of competing administrative and legal subcultures, including pragmatic advocates, bureaucratic protectionistsand economic rationalists.Research on team behaviour in organisationssupports the conclusion that diversity of backgrounds, perspectives and values is an asset thatprotects the group from the hazards of "groupthink"(fanis and Mann, 1977). In a highly volatile environment it is essential that the members of the strategicdecision-making team have highly differentiatedperspectives (Bourgeois, 1984). A diversity of professional norms and styles is also crucial to teamperformance and creativity (Belbin, 1981).But it's more than just pooling talents that isimportant. In their comprehensive study of theeffects of threats and crises on individuals, groupsand organisations, Staw et al. (1981) conclude thatindividual, group and organisational effects combineto increase concurrence seeking, the desire for69cohesion at the expense of comprehensive information seeking and processing. Turner (1976) in hisresearch on disasters reaches a similar conclusion,noting the "collective blindness" and "exclusivity"that accompanies entrenched organisational culturesand contributes to warnings being ignored or overruled by organisation members (p. 388). A commonorganisational strategy to counter such concurrenceseeking is to give outsiders, those who do not comefrom the dominant culture, authority and the clearmandate to question (Lorsch, 1985).We can conclude then that subcultural awarenesscan stimulate more ethical behaviour if the cause ofa lack of ethics include insulated or blinkeredprofessional values. Subcultures can act as a source ofsurveillance and critique over other groupings in theorganisation, who may enjoy a privileged position.Subcultures in organisations can then be construedas sources of ethical discourse and dialectic as wellas confiict. A scholar of corporate crime similarlyhypothesised that "criminal behaviour is learned inassociation with those who define it favourably andin isolation from those who define it unfavourably."(Sutherland, 1983, p.63). Thus "(c)ultural homogeneity," close personal and power relationships, can allconspire to reinforce a subculture which definesunethical behaviour favourably. The most ris

Nov 02, 2018 · of organisational culture and ethical behaviour are evaluated. They rest on different understandings of organisational culture and the processes by which ethics are enhanced. Firstly, the prevailing approach holds that creating a unitary cohesive culture around core moral values is

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