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PADM505 | LESSON 5: ORGANIZATIONAL ETHICS

Introduction

Topics to be covered:

· Overview of Organizational Behavior and Culture

· Cultural Impacts

· Other Factors

· Establishing and Maintaining an Ethical Organizational Culture

To instill ethical behaviors in government organizations and agencies, those entities must be led by ethical leaders. Ethical leadership is a critical component in the establishment and maintenance of ethical organizations. But it is not enough to have ethical leadership. The subordinates in an organization also must practice ethical behavior, and the overall organizational culture must be ethical. This lesson will examine the concept of organizational culture and consider ways that ethical leaders can establish and maintain an ethical organizational culture.

Overview of Organizational Behavior and Culture

To understand how to establish and maintain an organization that practices ethical behavior, it is beneficial to understand organizational culture. The following information provides an overview of  organizational culture , which can be defined as “the system of shared actions, values, and beliefs that develops within an organization and guides the behavior of its members” (Schermerhorn, Hunt, and Osborn 2005, p.436). To be ethical, an organization must have an organizational culture that values and promotes good ethics. Even individuals who would generally never practice unethical behavior may be inclined to be less than ethical if they are working in an organization that does not have a strong culture promoting ethical behavior.

It can be challenging to develop a strong organizational culture that promotes ethical behavior. The workforce is comprised of people from various backgrounds. Men and women of all ages from various races, ethnicities, religions, sexual orientations, and education levels come together to perform their work. In addition to these differences, people in the workforce may have different values as they embrace different political beliefs and have various ideas about the best ways to live, including the optimal approach to achieve tasks and reach goals in the workplace. This includes differences of opinion about what constitutes ethics and how to practice ethical behavior.

Culture , as it pertains to groups in society, can be defined as the set of beliefs, customs, values, and way of life shared by individuals in a particular group.  Cultural diversity refers to the differences in culture among individuals and comprises more than obvious differences such as race or speaking different languages. For example, two individuals who live in the same town and attended the same schools may be culturally diverse if they have different religious backgrounds or come from households that differ in education and class. The differences that constitute cultural diversity can be varied and may not always be obvious, such as race.

Cultural Impacts

Culture impacts the values and attitudes that individuals have, which affect how they perform work, including their ethical behavior. Some of the ways culture influences people are obvious, such as religious beliefs that encourage individuals to develop a specific moral and ethical code that guides the decisions they make and the approach they take to work. But other ways that culture influences people can be less obvious. Some examples of issues established by culture that affect how people behave in the workplace include the following:

POWER DISTANCE

Power distance  refers to “the willingness of a culture to accept status and power differences among its members” (Schermerhorn, Hunt & Osborn 2005, p.57). The power distance considered acceptable in an individual’s culture will determine the level of hierarchy and rank that he or she is likely to respect and accept in the workplace.

INDIVIDUALISM-COLLECTIVISM

Individualism-collectivism  refers to “the tendency of a culture’s members to emphasize individual self-interests or group relationships” (Schermerhorn, Hunt & Osborn 2005, p.58). In the workplace, whether an individual comes from an individualistic culture or a collectivist culture influences his or her preference for working individually versus working in a group.

LONG-TERM/SHORT-TERM ORIENTATION

Long-term/short-term orientation  refers to “the tendency of a culture to emphasize values associated with the future, such as thrift and persistence, or values that focus largely on the present” (Schermerhorn, Hunt & Osborn 2005, p.58). In the workplace, this cultural orientation will influence whether individuals are more likely to conduct work using a short-term or a long-term perspective.

Other Factors

In addition to culture, other factors of individuals’ personalities impact their behavior in the workplace, including their approach to ethics. Some of the more significant factors include the following:

· VALUES

Values  refer to “broad preferences concerning appropriate courses of action or outcomes…values reflect a person’s sense of right and wrong or what ‘ought’ to be” (Schermerhorn, Hunt & Osborn 2005, p.83). Values come from a variety of sources, including family, friends, and culture, and affect an individual’s attitude and behavior.

Examples of things that individuals value include equality and equal opportunity for all people, social recognition, friendship, honesty, and self-discipline. In the workplace, individuals likely will act more favorably towards others who share a majority of their values. This is called  value congruence , and it “occurs when individuals express positive feelings upon encountering others who exhibit values similar to their own” (Schermerhorn, Hunt & Osborn 2005, p.85).

· PERCEPTION

· Perception refers to the mental processes that individuals use to gather information about their environment and form impressions of situations and events. An individual’s perception is influenced by various things including personality, values, emotions, and past experiences. Perception is important in the workplace, as different individuals can look at the same situation and have very different perceptions about it, which influences how they handle the situation, including their ethical behavior (Schermerhorn, Hunt & Osborn 2005).

According to Schermerhorn, Hunt, and Osborn (2005), the perception process has four stages:

ATTENTION AND SELECTION

The process of considering information and selecting which pieces of information need attention.

ORGANIZATION

The use of  schemas  to organize information efficiently so it can be processed. “Schemas are cognitive frameworks that represent organizational knowledge about a given concept or stimulus developed through experience” (Schermerhorn, Hunt & Osborn 2005, p.104).

INTERPRETATION

The process of determining what the selected and organized information means.

RETRIEVAL

According to Schermerhorn, Hunt, and Osborn (2005), perceptions can be distorted by several things, including the following:

STEREOTYPES

Stereotypes  refer to intellectual generalizations that enable individuals to simplify information to summarize and organize it. Stereotypes can be a useful way to quickly process information, but they also can distort perceptions if they cause individuals to overlook individual differences.

HALO EFFECT

The  Halo effect  occurs when individuals rely on one attribute of an individual or a situation to develop an overall impression.

SELECTIVE PERCEPTION

Selective perception  is the tendency to notice only the aspects of a situation or person that offer support for a perspective while ignoring anything that contradicts that perspective.

PROJECTION

Projection  is the tendency to assume that others have the same personal attributes and needs that we have and to treat them accordingly.

CONTRAST EFFECTS

Contrast effects  involve the process of forming an opinion by comparing a person or situation to other individuals or similar situations, rather than considering the person or situation for their own merits.

· ATTRIBUTION

· An  attribution  is a characteristic, quality, or right that is ascribed to an individual on the basis of other characteristics that an individual has. In the workplace, attribution theory helps with the development of perceptions.  Attribution theory  “is the attempt to understand the cause of an event, assess responsibility for outcomes of the event, and assess the personal qualities of the people involved” (Schermerhorn, Hunt & Osborn 2005, p.112).

· Attributions influence how people are perceived and treated. For example, as Schermerhorn, Hunt and Osborn (2005) explained, obese women are perceived as fat and lazy and as such, do not earn as much money over the course of their lifetimes as women who are slim. By contrast, attributions for obese men leave the perception that they are successful and have accumulated wealth. While obesity gives women a negative attribution that leads to a poor perception of obese women, it has the opposite effect for men.

· The purpose of this discussion is to explain that organizational culture is a complex issue affected by many factors, such as the ones presented here. These factors impact an organization’s ability to establish and maintain an organizational culture that makes ethics a priority. It can be done, but it is challenging.

Establishing and Maintaining an Ethical Organizational Culture

 

Once an organization hires its employees, even if those individuals are ethical people, the organization still must promote an ethical organizational culture if it expects its employees to practice ethical behavior. As Schermerhorn, Hunt, and Osborn (2005) point out, even employees who otherwise behave as “individual saints” can become unethical if they become part of a group working in an unethical environment (p.438).

To determine if an organization has an ethical culture, Ethics Quality Inc. has provided a list of ten questions that organizations should answer using yes or no. The more questions that can be answered with “yes,” the more likely it is that the organization has an ethical organizational culture. The questions are as follows (Schermerhorn, Hunt, & Osborn 2005, p.438):

· Are you proud of your group’s ethics?

· Do the group’s ethics work positively for everyone?

· Is there cooperation in resolving problems and creating opportunities?

· Is the group improving processes routinely?

· Do improvements matter and/or last?

· Is there serious resistance to change?

· Is there sufficient trust and openness to solve problems?

· Are there any damaging standards?

· Does the leadership set good examples and reward good ethics?

· Are bad ethics risking or hurting business results?

 Code of conduct

As noted in Lesson 2, a code of conduct is a written set of rules that delineates the specific types of behavior that employees are expected to practice at work. This includes specifying norms for on-the-job behavior, particularly as they pertain to each job. A code of conduct is related to the code of ethics, but it is more detailed and specific.

How do organizations create an organizational culture focused on practicing good ethics that enables them to answer the majority of these questions affirmatively? They should start with an ethical  management philosophy  to set the tone and manage their organizational culture. Management philosophy can be defined as a philosophy that links the organization’s goals and objectives with its work processes to develop guidelines for how the organization will function. To create an ethical organizational culture, ethics should be a consideration during the development of the management philosophy. Two tools to help with these efforts are codes of ethics and codes of conduct, which were introduced in Lesson Two.

Code of ethics

To review, a code of ethics is a written document that outlines an organization’s mission and values, such as the expectation that employees will give the organization’s customers the utmost respect. It explains the ethical principles that the organization promotes based on its mission and values. It also details the standards of professional behavior that employees are expected to maintain, including how they should approach problems. Codes of ethics are broader and more general than codes of conduct. Typically, codes of ethics can be found in an organization’s published materials, such as its written policies and procedures.

The totality of the leader and the follower in an organization evolves into the “culture” of the organization. How would you personally define culture in the public and nonprofit realm? Shared values and beliefs? Behavioral frameworks? “Rules of the game?” Many times when a major mishap happens, culture is blamed.

One very public example was the August 2015  US Senate Committee on Finance Bipartisan report on the IRS . Please take some time to explore the report. It will not take you long to see how the committee found culture was a major factor in the lack of efficiency of operations.

Effective codes

Scholars such as Cooper (2006) and Verschoor (2007) argue that codes of ethics and codes of conduct are effective only if they are enforced. The most successful codes are those that become an engrained part of an organization’s culture. To achieve this, Cooper (2006) recommended that employees should be trained on both the codes of ethics and the codes of conduct to ensure that they understand what the codes mean and the behavior they are expected to perform to comply with the codes.

Ethics audits

Scholars such as Verschoor (2007) also recommend that organizations should periodically undergo ethics audits and evaluations to determine if an organization has an organizational culture that promotes ethical behavior. Verschoor (2007) recommended that ethics audits should check the following:

· The effectiveness of written materials, such as codes of ethics and codes of conduct.

· Whether management has communicated this information to everyone in an organization.

· Whether management has investigated ethics violations and handled them appropriately.

· Whether whistleblowers have been treated appropriately, without retaliation.

· Whether improvements have been made when issues have been discovered.

Conclusion

Establishing and maintaining an organization that has an ethical culture can be challenging. To accomplish this, organizations, including government agencies, must have ethical leaders as well as ethical employees. These individuals must understand organizational culture, and they must be able to use codes of ethics and other tools to promote an ethical organizational culture. Once it is established, the organization must continuously promote good ethics to ensure that its leaders and employees continue to make ethics a priority.

References

Cooper, T. L. (2006). The Responsible Administrator: An Approach to Ethics for the Administrative Role, Fifth Edition, San Francisco: Jossey-Bass Publishers.

Schermerhorn, J.R. Jr., Hunt, J.G., & Osborn, R.N. (2005). Organizational Behavior, Ninth Edition. Hoboken, New Jersey: John Wiley and Sons, Inc.

S. Rep. No. 114th-114-119 at 95 (2015). https://www.congress.gov/congressional-report/114th-congress/senate-report/119/1

Verschoor, C.C. (2007). Ethics and Compliance: Challenges for Internal Auditing. Altamonte Springs, Florida: Institute of Internal Auditors Research Foundation.