HRER802:

Lesson 04 Organizational Culture and Ethics

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What is Organizational Culture?

It is typical in our commentaries to begin our discussion with a definition of one or more important concepts associated with the lesson's subject matter. Interestingly, our textbook avoids presenting a definitive statement of what we might believe to be "organizational culture." The author quotes Edgar Schein and then Joanne Martin, each of whom describes the concept in somewhat (although not entirely) different ways. He then adds additional information from Martin which he describes as "another perspective." Luthans finally concludes that, "…organizational culture is quite complex."

Each of you might want to take a moment and conduct an Internet search on the term, "organizational culture defined." Review the first five or so entries. Are any two identical?

Notwithstanding the complexity, let's think of organizational culture in contrast to organizational structure. Structure represents the "formal organization," that set of relationships that one might display on an organizational chart.

On the other hand, how would stakeholders behave if no formal expectation existed? Suppose a group of people were tasked with solving a problem. They are given no other instructions except, "solve this problem." How would these individuals organize themselves? How would they speak to each other? How would they make decisions? How would they convey the results of their deliberations? How would they behave if there were no explicit instructions concerning the formal expectations of individual and group behavior?

In addition, culture refers to the symbolic or expressive side of human life. Culture encompasses actions, objects, and ideas that carry specific meanings to particular groups and hence stand for something. It also provides a template on which meanings are read and actions are based.  One of the keys to understanding organization culture is symbolism. Symbols:

• are cultural objects or artifacts whose form, appearance, logic, and type can be categorized.
• produced and used by people and groups within organizations for certain purposes.
• always put forth in a particular period and context.
• mean different things to different people.

And in the end culture matters because it represents a powerful force on our behaviors.

Origins of Culture

In some cases organizational culture begins with a simple vision a founding parent might interject in the context of the organization's creation. That vision might result in the notion, inherent in the Disney organization's culture, that the purpose that every employee shared was to provide for all customers a "Magical Experience." In other cases it evolves over time as a consequence of the organization's structure. For example a highly bureaucratic organization can cause, in some, silo behaviors, where discrete offices fail to communicate horizontally, often displacing organizational purpose with a more narrow, parochial purpose. In other cases the surrounding social and demographic nature of the community in which an organization exists can cause stakeholders to value choices quite at odds with the more formal expectations that the organization deems critical to achieving desired organizational objectives. Imagine an organization existing in a relatively rural location where 25 per cent of employees are related as second cousins or closer. Suppose further that organizational policy requires reporting any episode of physical or sexual harassment, or bullying. What is the propensity of the employee population to report inappropriate behaviors when there are so many diffuse relationships – family and community--among them?

Luthans discusses the difference between a dominant organizational culture and various subcultures, one or more of which might be at odds with the dominant culture. Often such subcultures are a product of groups of employees reflecting the larger societal culture of a surrounding community.

Ethics

It is rare that a management textbook defines the word "ethics." We all know that it has something to do with right and wrong. We know it is related somehow to morality. Or is it pretty much the same? Often texts will begin with references to Enron or Martha Stewart as poster children for unethical conduct. Regardless, let's take a few moments to put the concept of "ethics" in some type of context.

What is the difference between "ethics" and "morality"? Can I be ethical but immoral? Can I be moral, but unethical? Imagine a lawyer in the following situation:

The lawyer is defending someone who, according to the police, kidnapped a child and placed his victim in an unknown location with limited food and oxygen. The accused told his lawyer the exact location of the child, but also told the lawyer that he had cut himself, leaving blood evidence at that scene. He reminded the lawyer that lawyer/client privilege made it unethical for the lawyer to disclose these facts to the police. He also told the lawyer that the child would be dead in six hours unless the police let him go free. 

When a lawyer invokes the ethics of the profession as a reason for making what many of us would declare to be an immoral choice, we demonize the entire profession. On the other hand, do business people of all stripes find themselves in similar circumstances?

For most practical purposes, most who write on this subject make little, if any, distinction between morality and ethics. Both involve situations in which one has to make difficult choices between what most of us would deem "right and wrong." The problem is that what is right and what is wrong is not always obvious. Consider the following scenario.

Your company has a policy in place that no person shall use company equipment and/materials for his or her own personal benefit. You are sitting with Fred, who is an HR Generalist, who says: "Give me a minute. I have to call my wife to let her know I can't make it home for dinner." He uses the company phone to make the call. 

Will you report Fred for his apparent misconduct?

Organizational Ethics and Culture

If only because culture represents, among other issues, an organization's values, it is connected to culture. Suppose, for example, that a pharmaceutical company has developed a well-settled belief that it must maintain tight control over all potentially damaging information. Not only do all employees learn that rule in the onboarding process, it is frequently the topic of informal conversation during the day. In addition, every employee must make a commitment in writing as follows:

No person shall disclose any potentially damaging information about XYZ Pharmaceutical Corporation except to his or her superior. If the information represents improper conduct of the superior, the person may instead disclose it to the company President.

 You sign the document. A few months later you find a document at the copy machine--a report of tests associated with a drug--indicating that the drug is not only ineffective in curing a disease, but has side effects that might be damaging to a person's health. You immediately deliver the report to your supervisor. Several months later you see a television advertisement touting the drug as a "miracle cure." You ask your boss what happened and she responds, "We talked about it with risk management and they told us there was enough uncertainty in the findings that the conclusions drawn in the report were probably not true. We had too much invested in the product and it had already been approved by the Food and Drug Administration. We decided to go ahead with the roll-out."

How would you react? The culture demanded you follow a path consistent with the oath you took when signing the document. But is it ethical to simply accept your boss's explanation?