Ethics, Culture & Its impact on
Individual and Organization
Effectiveness
Nigel Barreto
DBC PANAJI GOA
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.
Purpose of Culture
• To 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
The six characteristics of organizational
culture are:
• Innovation (Risk Orientation) - Companies with cultures that place a
high value on innovation encourage their employees to take risks and
innovate in the performance of their jobs.
• Companies with cultures that place a low value on innovation expect
their employees to do their jobs the same way that they have been
trained to do them, without looking for ways to improve their
performance
…
• Attention to Detail (Precision Orientation) - This characteristic of
organizational culture dictates the degree to which employees are
expected to be accurate in their work.
• A culture that places a high value on attention to detail expects their
employees to perform their work with precision. A culture that places
a low value on this characteristic does not.
…
• Emphasis on Outcome (Achievement Orientation) - Companies that
focus on results, but not on how results are achieved, place a high
emphasis on this value of organizational culture.
• A company that instructs its sales force to do whatever it takes to
sales orders has a culture that places a high value the emphasis on
outcome characteristic.
• Emphasis on People (Fairness Orientation) - Companies that place a
high value on this characteristic of organizational culture place a great
deal of importance on how their decisions will affect the people in
their organizations.
• For these companies, it is important to treat their employees with
respect and dignity
…
• Teamwork (Collaboration Orientation) - Companies that organize
work activities around teams instead of individuals place a high value
on this characteristic of organizational culture.
• People who work for these types of companies tend to have a
positive relationship with their coworkers and managers.
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
How Employees Learn Culture
Ethical Values
• Ethics- 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 Ethics• Ethical decisions go far beyond behaviors governed by law
• Managerial ethics guide the decisions and behaviors of managers
Effects of Culture
• An organization with a strong culture has values and standards that are
clearly defined and understood by the majority of its members.
• A strong culture has a greater impact on the behavior of the members of
an organization than a weak culture, which has vague and inconsistent
guidelines.
• a strong culture can only contribute to establishing an ethical and positive
culture in an organization
• if the content of the culture is ethical and positive.
• The combination of the strength and the content of the culture of an
organization creates an ethical climate, the mood of an organization, which
influences the behavior of organizational members to be either ethical or
unethical