ORGANIZATIONAL

CULTURE AND ETHICAL

VALUES
Chapter 10
2hat is Organizational Culture?
‡ Shared Values...
‡ 2ays of thinking...
‡ Attitudes...
‡ Guiding beliefs«
± relevant to, and supportive of, the
organization and its goals.
 The Purpose of Culture

‡ To help `

 `
`  


 so that they know how to relate
and work together effectively.

‡ To help the organization  





   `


 þohn Chambers: CEO of Cisco Systems
(þune 2010 interview)
³When I started (At Cisco in 1995), I viewed my job as
three main areas: vision and strategy of the company,
development and recruitment of the team to implement
that vision and strategy, and the need to communicate all
of the above.´

³Within four or five years I realized there was something

that many of us do not understand when we take a
leadership role: 4
 . Great companies have very
strong and great cultures.´

³ A huge part of a leadership role is to drive the culture of

the company and to reinforce it.´
 EFFECTS OF CULTURE
‡ Determines how people communicate
‡ Determines how people interact
‡ Determines how people relate to one
another
‡ Guides day-to-day working relationships
‡ Determines what is appropriate behavior
‡ Determines how power and status are
allocated
 Rites and Ceremonies
‡ Rites of Passage
± Facilitates transition into or out of the organization
± EG: freshman week and senior week
‡ Rites of Integration
± Encourages common feelings of group identity
± EG: homecoming / sporting events
‡ Rites of Renewal
± Improve organizational functioning
± EG: team building
‡ Rites of Enhancement
± Enhance social identities common feelings
± EG: Student awards and recognition / dean¶s list
 Organizational Rites and Their Social Consequences

Ú `
 
  `   

Facilitate transition of person

Induction and basic training; US
 into new social roles and
Army
statuses
Enhance social identities and
  

Annual awards night
increase status of members
Refurbish social structures and
Organizational development
  improve organization
activities
functioning
Encourage and revive common
feelings that bind members


` Office holiday party
together and commit them to
the organization

Source: Adapted from Harrison M. Trice and Janice M. Beyer,

³Studying Organizational Cultures through Rites and Ceremonials,´
Academy of Management Review 9 (1984), 653-659. Used with permission.
 Stories, Symbols, & Language
‡ They reinforce existing culture, but they
don¶t create culture by themselves.
‡ Employees learn more from observed
behavior.
‡ Slogans, stories and symbols are useful in
reinforcing desired behaviors.
‡ The really important thing is for managers
to display the desired values and beliefs in
their day-to-day behaviors.
Organizational Chart for Nordstrom





Sales & Sales Support

Dept Managers

Store Mgrs,
Buyers,
Merchandise
Mgrs.

Directors
 Determinants of Culture
%  
 `


Stability Flexibility
Stable but with a clear Highly organic and
External external vision and focused on adapting to
focus the external
orientation. environment.
MISSION ADAPTABILITY
Ú"Ú#$ Internal efficiency & People oriented, family
stability. Mechanistic, atmosphere dealing
Internal conformity, high with external change.
focus integration, Clan controls.
collaboration
BUREAUCRACTIC CLAN CULTURE

Stable Dynamic
 !Ú
 The Learning Organization¶s Culture

‡ Each employee considers how his or her actions

will affect others and the organization.
‡ "
 `

All employees are
treated equally without status differences.
‡ "
`&'
&` ,  

` , and

`  `


. The status quo is
always being questioned.
 SUB CULTURES

‡ Organizations can have different sub cultures

just as they have different sub structures.

‡ Organic departments/divisions may well have

different cultures than mechanistic ones.
± EG: The culture of accounting students versus the
culture of theater students.
 Cultural Strength
‡ Measured by the degree of agreement about
shared values.
‡ A strong culture is associated with increased
frequency of the visible elements.
‡ A strong culture can be very hard to change
unless it is a culture of change.
± The Learning Organization must have a strong culture
that is supportive of risk taking, adaptation,
improvement and change
 Environment - Strategy ±Culture
The match between strategy, environment, and culture is very important.

³Corporate culture Environment

should embody
what the
organization Culture
needs to be
effective within its
Strategy
environment.´

Since we have little, if any, influence on the external

environment, we need to create an organizational
culture that fits with the strategy and environment.
 ETHICS versus MORALS
‡ 
`
A system of moral principles.
‡ ! 
Have to do with right and wrong
behavior. (Our principles and values
governing right and wrong behavior.)

Laws Ethics
 UIZ
‡ Your Friend has an open box of cookies
sitting out, but he or she is not there to
offer you one.
‡ 2ould you eat one?
Two?
Three?
The entire box?
 UIZ
‡ Have you ever said ³I love you.´ when you
didn¶t mean it?
Never
Once
Twice
All the time
 UIZ
‡ A very good friend asks you if you think she is
attractive. You think she is ugly as a wart.
2hat would you say?

‡ You find a bag with $1000 in unmarked bills. No

one saw you pick it up. There is a receipt inside
with the owner¶s name and address.
2hat would you do?
An Ethical Conundrum
‡ Is ethics a matter of degree?

‡ Can the same behavior be

ethical in one situation and
unethical in another?

‡ Should everyone have the

same ethics?
 Forces That Shape Managerial
Ethics
 
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 Formal Structure and
Systems of the Organization

‡ Ethics committee: A cross-functional

oversight group.
‡ Chief Ethics Officer: Oversees ethics
programs.
‡ Code of ethics: A formal statement of the
organization¶s values regarding ethics and
social responsibility
‡ Training programs
 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
³Managerial work can be viewed as
managing myth, symbols, and
labels« because managers traffic so
often in images, the appropriate role
for the manager may be evangelist
rather than accountant.´
± Karl 2eick
 Ralph Davis CEO, Travel Insurance Services

³Many years ago, I came back to my office after a

seven week absence, having entrusted the business to
those I hired. It was a mess. Cliques; infighting; no more
family team that I had developed.
I called each individual into my office and asked
what happened. Every person pointed to someone
else. Essentially, everyone was at fault for participating,
yet no one took responsibility for their individual actions.
So, I fired them all! Best thing I ever did.´
Travel Insurance Services - The Aftermath
A conversation with the CEO

³Next morning, I walked in and found a banner with everyone's

signature and apology...and a request to be rehired.
³I accepted the apologies, rehired everyone. A few week's later I
let go the office manager who was the chief culprit.
³One quit because of the manager's firing. Two years later, the
quitter called me and took me to lunch. She apologized for
quitting, realized she'd µbacked the wrong horse¶. Wasn't
asking for her job, but µwanted me to know¶ about
her conclusion.
³Never had the problem again. Some of the people are still
with my old company.´

Davis sold the company and retired in 2004

 ppdate:Travel Insurance Services
³The NASDAQ listed company that ultimately purchased my business told
everyone two months later: µYour business is about revenue, THEN
relationships.¶ So much for today's MBAs running corporate
America. When I was asked to produce my legacy notes, i.e. explain how
I got to run a profitable company, my first sentence was,
"It's all about relationships. Revenue will come later. By relationships, I mean
(1) take care of the employees; (2) help them take care of the prospect and
client; (3) then the shareholders will be taken care of. That's what made my
company successful; that's why you're happy with your profitable
purchase".
Never again heard from them. They've refused to use me as a consultant,
which has led them to lose major business unnecessarily, and 25% of
the seasoned employees have left.