Running head: SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 1
Shaping Cultures and Ethics of the Organization
Liberty University
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 2
Abstract
Organizational culture and ethics are represented in all types of organizations. Shaping an
organizations culture and ethics comes from a variety sources. These sources can range from
internal or external business environmental factors, organizational leadership, company
stakeholders, and the company’s employees. The intent of this paper is to explore how
organizational ethics and cultures are formed and how they can affect an organization.
Organizational subcultures will also be analyzed in relation to the overall culture of an
organization. This paper will focus specifically on the difference between the effects of culture
and ethics on a non-profit organization versus a for profit organization. An analysis of the
relationship between business ethics and culture to biblical verses and passages will also be
reviewed. Finally, potential resolutions to issues stemming from company culture and ethics will
be discussed. Research will show that the more positive an organizations culture and ethics are,
the greater chance an organization has to become successful.
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 3
I. What is culture?
A. Different types of culture
1. Rites and Ceremonies
2. Stories and Sayings
3. Power Relationships
B. Formation of organizational culture
1. Leadership effect on culture
2. Stakeholder effect on culture
3. Educational shaping of culture
C. Subcultures
D. Organizational Culture Effect on Business
II. What is ethics?
A. Ethics Effects on Business
B. Ethical Measures in an Organization
C. Ethical Dilemmas
D. How Leadership Shapes Ethics
III. Difference in culture and ethics in non-profit organization and for-profit organization
IV. Potential methods to improve ethics
V. Potential methods to improve culture
VI. Biblical Integration
VII. Conclusion
A. Future Research Topics
Introduction
Understanding culture and ethics is an integral part of the business environment. Those two
topics lead to the determination of a company’s success or unsuccessfulness. It can affect the
types of persons who work there and the type of consumers who will do business with specific
organization. The following literary works highlight the history of both ethics and culture and
how these business practices were derived. This literature review will also focus specifically on
the effects of culture and ethics on non-profit versus for profit organizations. Finally, a very
important biblical worldview will be integrated to ensure a full understanding of how culture and
ethics affect the workplace for Christian employees. There will also be a discussion of future
techniques on how to evolve culture and ethics in the workplace. It is important to note that the
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 4
limitations of most of the journal articles used stem from asserting that the ethical and cultural
business environment is simple and not complex.
What is Culture?
To determine how organizational culture can shape an organization it is important to have
a basic understanding of what culture is in a business environment. Pietersen (2017) cites
Barbars, Di Stefano and Scrima by defining the current definition of organizational culture as a
shared set of values, norms, assumptions, and beliefs that exist among organizational members,
which influence employee attitudes, thoughts, feelings, decisions, and behaviors. Organizational
culture has not always had a single definition. This fact is highlighted by Pietersen with a
discussion of the history of organizational culture. It is important to note that the history of this
term must be understood to interpret how the evolution of business culture has affected the
business environment.
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 5
Pietersen (2017) found that the definition of organizational culture was formed based on
the aspect in which it was being analyzed. Pietersen reviews four different fundamental types of
organizational culture in an effort to determine where this term was created and how it affects
organizations. The four fundamental types of organizational culture are the theoretical-
integrative (type I) mode, the systematic-analytical (type II) mode, the narrative-metaphorical
(type III) mode, and the action-advocacy (type IV) mode.
The theoretical-integrative mode or Type I come from Roger Harrison. Harrison (1972)
coined a term called “organization ideology” which places employees into four categories that
explain the organizational culture. The categories are power orientation, role orientation, task
orientation, and person orientation. Power orientation is defined when an organization “attempts
to dominate its environment and vanquish all opposition” (Harrison, 1972, p. 121). An
organization is classified as being role-oriented if it “aspires to be as rational and orderly as
possible” (Harrison, 1972, p. 121). An organization is task oriented seeks “achievement of a
superordinate goal” (Harrison, 1972, p. 122). A person orientation model focuses on the needs of
employees and how to serve those needs. While each of these characteristics are an important
basis, current research has found that this is not the most accurate description of organizational
culture. By comparing these models to the current definition of what business culture is, it can be
concluded that Harrison’s model does not leave room for the various types of employees that
could be working for an organization. It also does not include the complexities of a person’s
emotion and how that could affect an organizations culture.
This continues with the other modes of organizational culture. The systematic-analytical
mode or Type II is described as an empirical technique that quantifies organizational
relationships with variables like leadership. The narrative-metaphorical mode or type III focuses
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 6
on an employee’s native point of view. Finally, the action-advocacy mode or type IV focuses on
ideological viewpoints of organizational culture. Each of the modes described above lead to the
current definition of culture. An important question that arises from the history of organizational
culture is whether or not the current definition is in fact an accurate description of what
organizational culture is today. If it is how and when can the definition be changed or evolved.
Different Types of Culture
Within the construct of organizational culture Daft (2016) delves deeper into the
understanding of it to describe granular aspects that make up the ideal of organizational culture.
Each of the following topics represent a different aspect of organizational culture. The
combination of an organizations rites and ceremonies, stories and sayings, power relationships,
control systems, organization structures, and symbols define what culture is. Each of these
categories are different for each organization and sometimes is different within organizational
departments. The features of culture that will be highlighted in this review are rites and
ceremonies, stories and sayings, and power relationships. Being able to interpret organizational
culture will cause management to tailor an organizational design specific to the company and
assist with the company’s goals of success. Understanding the history of how culture is formed
and the types of organizational cultures present aides in the creation of creating better
relationships between organizational design and culture.
Rites and Ceremonies. Daft describes rites and ceremonies as being “the elaborate,
planned activities that make up a special event and are often conducted for the benefit of an
audience” (Daft, 2016). This could be things like an employee welcoming party or annual event.
Daft goes on to describe a rite of passage. In a business sense, this means that an employee
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 7
should complete a task before they transition into their new company role. This is important to
understand as this is one of the few concepts that are represented in every organization.
Stories and Sayings. Daft (2016) describes stories as events told by tenured staff to new
staff members. Sayings is described as “mottos or mantras”. This aspect of organizational culture
is also represented in every business. A limitation of this point is that not all stories are honest.
Within many companies, rumors or gossip can be spread. This can lead to a negative work
environment and cause issues amongst employees and their supervisors. Although there are
limitations, that does not mean that this aspect of business culture is not a good fact to learn.
Power Relationships. Power relationships means “deciphering who influences or
manipulates or has the ability to do so” (Daft, 2016). Daft describes different types of
relationships that are formal and informal. This is important when considering business culture
as an employee must understand the internal hierarchy of the company. A negative environment
could be created without understanding this facet of culture.
Formation of Organization Culture
Schneider and Bose (2016) analyze the relationship between the economy and
organizational corruption as it relates to company culture. Schneider and Bose describe a model
that is used to measure how much corruption is normal for an organization. The model looks at
how far from the company’s social norm is being affected by corruption and how standard
corruption is within a company. Each topic discussed in the article provides important
information regarding corruption, however, the authors attempt to measure corruption on a very
broad scale that that deals with multiple countries which could lead to inaccurate figures. The
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 8
figures in this study will not be used for numerical purposes however the ideas discussed provide
good points on corruption and organizational culture.
It is important to note that corruption is only one example of a type of organizational
culture. Some businesses thrive for some time with this type of culture. Ultimately those
companies fail due to the negative business environment. This example is being used to show
that organizational culture is formed by the people within the company. It is also formed by the
accepted polices, either legal or illegal.
Leadership effect on culture. Hodgkinson, Ravishankar, & Fischer, (2017) discuss how
ambidextrous management affects an organizations culture with both positive and negative
potential outcomes. The researchers found that by being ambidextrous, an organization is
benefitted as company leaders are able to multi-task and achieve multiple company goals.
Having the ability to be diverse can lead to both positive and negative outcomes within an
organization. Within some organizations, it could be more beneficial not to multitask depending
on the company’s business model and organizational setup. Hodgkinson et. al., found that a
negative outcome can stem from upper management who is unwilling to change. Within some
companies, leaders do not like change and would rather their subordinates stick to the internal
status quo. Hodgkinson et. al., shows the pros and cons of having ambidextrous management
within an organization. To broaden the understanding of the effects of having a manager who
can multitask, more studies should be done to find out the effects on employees themselves
rather than the business as a whole.
Stakeholder effect on culture. Zhu, Wang, and Bart (2014) discuss the various board
processes and organizational performance in non-profit versus for-profit businesses. Some of the
variables reviewed are the frequency of board meetings, the board strategic involvement, and
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 9
information availability. Each of these are important to review as they are contributing factors to
an organizations ethical make up. Conceptually, this study provides good information in
determining how board members affect a company. However, the data points found with various
statistical makeup is done so under the assumption that the few businesses used in the study
represent all. Each organization has a different mission and goals. This means that the board
within those companies also can be different than those analyzed for this study. While the
information provided is good support material, it has many limitations.
Educational shaping of culture. Matei (2016) discusses how education and leadership
affect corporate culture. Matei (2016) reviews three adaptive strategies leaders should take when
there is a major business environmental change happening. The three major environmental
changes discussed are globalization, information technology, and diverse labor force and
consumer markets. This paper also discusses how employee creativity is changing corporate
culture. Matei analyzes how creativeness is not just creating something new but the ability to
evolve a current policy or procedure. She brings up a point of how the creativeness capacity of
leadership affects how much a company’s corporate culture can be evolved. Another major point
discussed is the importance of creativity and education. She analyzes Ken Robinson’s four C’s
that should be pursued when studying creativity which is: creativity, communication,
collaboration and critical thinking. Teaching creativity has three phases which are:
encouragement, identification, and fostering. This study is important to understand as experience
in an organization cannot take place of a formal education. Learning to think outside the box will
create a more unique and well-rounded employee.
Subcultures
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 10
Researchers Limmenluecke and Griffiths (2010) examine the relationship between
corporate sustainability and organizational culture. Limmenluecke and Griffiths start by
discussing what corporate sustainability and organizational culture is. They move on to compare
the two with the competing values framework model. The model is used to determine what type
of culture a company should work on achieving. The chart has markers that ask a business owner
if they are more focused on internal or external factors within a company. It then has a marker to
discuss if the company is more flexible or controlling. The four models discussed are the: human
relations model, open systems model, internal process model, and rational goal model. Although
the focus of this article is the idea of a “sustainable culture”, it discusses if an organization can
have one unified organizational culture or multiple different subcultures. This is an important
argument to understand as this goes back to determining the true meaning or organizational
culture. The limitation of this article is the main question asked of whether or not an organization
can have one unified culture or multiple. Due to the different types of employees, departments,
and departmental goals it is almost certain that there could not be one unified culture within an
organization.
Organizational Culture Effect on Business
There are numerous facets of culture that can influence an organizations internal and
external environment. Researchers Korobeynikova and Zakharova discuss an important aspect of
organizational culture. They delve deeper into the psychological aspect of management and how
it affects a company’s culture. They focus on four types of organizational cultures: clan-
hierarchical, hierarchical, adhocratic with market elements, market-hierarchical. Some of the
areas assessed in this study were: goal-setting, planning, control, motivation, awareness of goals,
focus on the customer, organizational skills, leadership, credibility, general awareness,
delegation
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 11
of responsibilities, respectfulness, level of culture, self-control, resourcefulness, determination,
acceptance of innovations, perception of criticism, persistence. By looking at each of those areas
over multiple organizations, Korobeynikova and Zakharova could compare and contrast how
management affected company culture. What they found was that it was dependent upon the
organization type of the particular company culture. They also found that certain employees with
specific psychological traits were hired for open positions within each type of company. This
study takes into account not only the understudied psychological aspect of culture but it ties it in
with educational concepts for easy understanding.
What is Ethics?
Clark (2016) cites Merriam-Webster Collegiate Dictionary which defines ethical
behavior as “conforming to accepted standards of conduct” (p. 74). For purposes of this literature
review I will focus on positive ethics. It is important to note that there can be negative ethical
behavior in an organization. Sekerka, Comer, and Godwin (2013) discuss the relationship
between positive behavior and business ethics. It starts by analyzing the history of positive
business ethics and concludes with future opportunities to create more positive ethical outcomes.
While the history of ethics is important, this articles strength shows with the discussion of
improvement opportunities within the field of ethics. Sekerka, Comer, and Godwin ask
important questions like what moral behavior contribute to positive ethical outcomes. They also
ask how different fields like creative arts can contribute to positive ethical behavior. These
questions can be used to create alternative ideas on how to improve ethical behavior within an
organization. The limitation of this study is the lack of the analysis of the moral upbringing of an
employee.
Employees get their first understanding of what ethics is while growing up. This is something
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 12
that should be analyzed to get a full understanding of what ethics is and how to evolve the
concept.
Ethics effect on Business
Ethical effects on business can be positive or negative. Bayley (2012) discusses the
importance of ethical training and the difference between ethics and morals. By using a diagram
created by Joycelyn Pollock, Bayley found that an ethical system leads to the development of
moral rules which helps someone to make moral judgments. In order for a company to have good
business practices, managers and employees must be able to have discern between good and bad
judgement. A limitation with this study is that it does not take into account the psychology
behind what each person views as good moral judgment. This is something that is not always
easy to see during an interview process. For someone to have good moral judgement they must
have had a good moral upbringing. What is good and bad to each person is different so in order
to determine the what a company considers “good” ethical and moral behavior the organization
should have rules and guidelines in place.
Bayley also discusses the difference between being proactive and reactive when ethical
training is done within an organization. These are important points to note to gather an
understanding of the history of ethics and how it became a basic moral standard for companies
today. The discussion on being proactive versus reactive will aide in the analyzation of the
improvement of workplace ethics in the future. Being able to determine the best method to create
ethical decisions within a business should have a positive outcome in terms of how it would
affect an organization.
Ethical Measures in an Organization
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Research has found that one measure to create a positive ethical work environment comes
from understanding the emotion and how business decisions can affect an employee’s ethical
decision making. An article written by Dietz and Kleinlogel in 2013 discusses the relationship
between ethical decision making and empathy. More specifically it looks at how empathy acts as
a safety measure when making ethical decisions during hard times. The study looks at how wage
cuts can affect decision-making. While the hypothesis and conclusions are very closely related,
the researchers look at both negative and positive impacts of wage cutting and ethical decision-
making. Surprisingly researchers found that employees were not only more empathetic but were
still able to continue with the organization goal. Being able to continue with the organizational
goal in this sense means that employees did not undermine company policy.
This article adequately looks at both the positive and negative aspects of the hypothesis
and conclusion and provides a good framework for creating a respectable ethical system for a
business. Although somewhat dated, this article provides good information that relates to
measuring ethical measures in an organization. In this case an example of the effect of wage
cutting on an employee’s ethical decision making was analyzed. While wages are a very
important topic for employees, this study could be broadened to consider other factors that could
affect ethical decision making like policy change or company restructuring.
Ethical Dilemmas
Ethical dilemmas in an organization can arise from various situations, departments, or
specific employees. Hanson (2014) discusses some of the major ethical dilemmas that
organizations can face today. Some of the causes of ethical dilemmas discussed are aggressive
competitiveness, profits, executive salaries, and globalization. The ethical dilemmas that stem
from those causes are determining if the work is worthwhile, work and family balance, working
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 14
on a team, and being misled by the company’s leadership. For employees trying to determine if
work is worthwhile they may cut corners. Not abiding by the organizations set duties leads to
unethical behavior. Work and family life balance can also lead an employee to cut corners or
create an unethical mindset so that they can finish work sooner. This study is limited as it is
impossible to list all the various ethical dilemma possibilities. However, it provides a good
overview of some of the most common ethical issues facing employees today.
How Leadership Shapes Ethics
Leadership plays an integral role in shaping organizational ethics. Employees are taught
to follow their leader within an organization to ensure they are performing their role effectively
and professionally. Fairhurst (2016) discusses how persons in leadership positions shape ethics.
He does not specifically discuss one business. Fairhurst (2016) states that “ethical or not, the
individuals in authority positions cite legal, financial, or other reasons not to act with an
abundance of caution”. Not abiding by the rules of an organization can cause subordinates to
follow suit. The limitation of this article is that it is bias and compares ethical behavior to
following the rules itself. Those two things are not necessarily related. For example, if a hospital
has to move funds to ensure that it is assisting a patient that is uninsured, they may not be
abiding by the rules to do that but it can still be viewed as ethical. This action can be viewed as
ethical since the hospital is still trying to help a patient in need and it is abiding by the
company’s overall goal.
Culture and Ethics in Non-profit and For-Profit Organizations
One aspect that links together non-profit and for-profit organizations in terms of culture
and ethics is corporate social responsibility. Corporate social responsibility is defined as “a
concept whereby organizations consider the interests of society by taking responsibility for the
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 15
impact of their activities on customers, suppliers, employees, shareholders, communities and
other stakeholders, as well as the environment” (Wymer & Rundle-Thiele, 2017). Both for-profit
and not for profit organizations use various programs involved with corporate social
responsibility that provide a positive outlook on the company’s culture and ethics from an
internal and external viewpoint. Ganescu and Gangone (2017) discuss organizational culture and
how it relates to the social responsibility of an organization. More specifically authors Ganescu
and Gangone (2017) state that they have created a new concept within the study of
organizational culture that deals with a socially responsible organizational culture. A limitation
of this article is that it could be viewed as bias as it focuses on organizations within the European
Union.
However, the concepts of the discussion could still be applied to for profit and not for profit
organizations. The ideas discussed could further be used to create new ideas for organizations
social responsibility in creating the company culture.
Wal (2010) provides results of a study performed to discuss how and what ethical values
are prevalent in public and private sector organizations. While the empirical data is not related to
the topic of shaping ethical behavior in an organization, the topics discussed to gather those data
points are important to note when discussing ethical behavior in an organization. Topics
discussed are transparency, accountability, responsiveness, lawfulness, consistency, and
reliability. Each of these categories can be different for organizations in the for-profit and
nonprofit sectors of business. Depending on a company’s mission, the ethical core values can be
different. This article is somewhat dated in reference to ethical issues today however the history
behind what is discussed provides a good foundation to understand ethical history in businesses.
It also provides knowledge to create ways to increase positive ethical behavior.
Improving ethics in business
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 16
In order to improve upon ethics in business the history of ethics should be reviewed.
Bayley (2012) suggested that companies should develop proactive and reactive plans to combat
certain ethical decisions. Most companies have those things in place already. Although this
research is somewhat dated it still applies today. Organizations should have a plan set in place
for potential bad outcomes. The limitations of creating proactive and reactive plans would be that
all potential scenarios whether it is internal or external, cannot be accounted for. Another
limitation of this study is that it focuses on being more so proactive. Again, this is a wonderful
ideal but every situation cannot be accounted for before it happens. So, training employees to be
proactive would be hard to put into effect. However, these are both good ideals to teach to
hopefully put employees in the best mindset to do their best job at abiding by the company’s
ethical rules.
Improving business culture
Sergiu (2015) discusses how managerial culture can influence not only the decisions and
actions of management but the overall organizational culture. Sergiu looks at the perspective that
persons in leadership positions effect organizational cultures but the traditional study of this
facet of business creates theory stating that there is only one organizational leader. In reality, an
organization can have multiple leaders which means that multiple cultures can be represented.
Another topic discussed is the relationship between organizational culture and
performance. Sergiu states that not only should leaders be open to accepting cultural differences
of others, but they should be able to create that physical, psychological and emotional
environment for employees. This article could be used as a basis for new theories in improving
organizational culture and how it affects an organization. Sergiu looks at not only the
educational aspects of culture and performance but factors in the psychological side which gives
the reader the full perspective of organizational culture and its techniques for improvement.
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 17
Biblical Perspective
When thinking about shaping organizational culture and ethics, many bible verses come
to mind. One verse that represents how ethics is shown in the Bible is in Timothy. Timothy states
“All Scripture is breathed out by God and profitable for teaching, for reproof, for correction, and
for training in righteousness, that the man of God may be competent, equipped for every good
work” (2 Timothy, 3:16-17, English Standard Version). This verse can be interpreted to mean
that the words provided by God can be understood by man who is competent and equipped to do
good work. This is important for the ethical business person as one of the integral aspects of
ethical and moral decision making comes from prayer to God. The importance of positive ethics
is also represented in Proverbs. Proverbs states “A false balance is an abomination to the Lord,
but a just weight is his delight” (Proverbs, 11:1, English Standard Version). This verse can be
applied to a business environment with the understanding that someone who is untrue will be
considered a disgrace. This could not only hurt the business but hurt an untrue employees career
and credibility.
A verse that represent organizational culture comes from a Romans passage. “Do not be
conformed to this world, but be transformed by the renewal of your mind, that by testing you
may discern what is the will of God, what is good and acceptable and perfect” (Romans, 12:2,
English Standard Version). This verse speaks to the creativity side of organizational culture.
Employees should not be conformed by the theoretical teachings of what business culture is
supposed to be. Employees should test different methods and pray to the Lord to determine what
the best outcome should be. By doing that it will ensure that the organization has created the
most unique set of cultural values and standards that are a perfect fit for that organization.
Conclusion
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 18
In conclusion, shaping organizational culture and ethics can come from multiple sources.
Throughout history business researchers have attempted to develop a standard definition of what
each of those things should be. It is important to understand that the theories developed should
be used only for conceptual purposes. To develop the best cultural and ethical practices for a
company, managers and employees must determine what will lead them to the ultimate
company goal of success. The limitations provided by many of the articles have analysis that are
too simple to create a true empirical analysis of what an organizations culture and ethics
structure looks like today. This becomes even more apparent when the constant changing
business environment is factored in. The following section explains future research and growth
opportunities for both organizational ethics and culture.
Future Research
From the ethical viewpoint, future research should be done from the psychological point
of view. Instead of only focusing on conceptual ideals created in the past, we should move
forward to understand the actual person. Understanding a person’s emotional make up can lead
to a more company specific plan on how to train employees on how to be ethical with a
company. This also goes for the teaching of business ethics in formal education. Getting
business students in the mindset of understanding their upbringing and how to change certain
viewpoints if needed would be something that needs to be started on early in a person’s career.
In the case of the business student, the best place for this happen would be in an education
setting.
Schminke, Arnaud, and Taylor (2015) discuss the relationship between ethical values and
organizational justice. This article not only looks at the relationship between those topics from
an organizational standpoint but delves into the discussion of how these topics connect from a
societal standpoint. This article is imperative to discuss when determining future research topics
SHAPING CULTURES AND ETHICS OF THE ORGANIZATION 19
in business ethics. Analyzing how ethics and value affect society could bring studies in this field
to a new level of understanding. Understanding how employees value systems come about and
what leads them to become part of a particular organization can lead to new discoveries and
positive outcomes in the creation of ethical value learning material.
Future research for organizational culture will come from more case studies that evaluate
the employee’s psychological mindset. Research should also focus on developing more ways to
understand the complex cultural organizations today. A new model should be created that is able
to handle the complexities of today’s businesses. This means that the model should be able to
look at the full organizational culture and subcultures but the specific cultures within
organizational departments. With this model a business owner in the new hectic environment
should be able to compare the actual company culture to what it strives to be.
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