ethical organizational culture
DEVELOPING AND MEASURING AN ETHICAL ORGANIZATIONAL CULTURE TABLE OF CONTENTS CHAPTER I.
DEVELOPING AN ETHICAL CULTURE II.
SIGNIFICANT ISSUES
DEVELOPING AN ETHICAL CULTURE The writer sees eight crucial steps for developing a plan for an ethical organizational culture. The following paragraphs identify and briefly explain each of the steps, which are written in active tense to demonstrate what should be done. Step One: Identify the organization’s unique goals and activities. Build a group of true believers and strengthen the organization against internal and external critics (Hesselbeir et al, 1999). Decide what to stand for, how to behave, and what behaviors to reward. Step Two: Hire carefully. Implement stringent recruitment and selection practices. Utilize personality tests to identify individuals prone to ethical or unethical behaviors and make sure that hiring policies block those with unethical tendencies. Step Three: Develop and implement a new hire socialization plan that includes orientation to organizational ethical norms in addition to role responsibilities and company policies. Develop jargon, monitor status symbols given to managers, and incorporate ceremonies such as office parties and annual award presentations. Step Four: Hire an ethics officer and give him/her authority and impartiality so that employees are comfortable sharing dilemmas without fear of retribution. Make the officer responsible for helping management develop a code of ethics. Make him/her responsible for communicating the code to all employees, teaching them how to respond to ethical dilemmas, and bringing charges of unethical behavior before an ethics review committee. Organize an ethics review committee of managerial and nonmanagerial employees and make it responsible for monitoring practices and recommending appropriate actions when unethical behavior is discovered. Disseminate the code of ethics and management’s expectations through training, group discussions, posters, and electronic messages. Step Five: Deliberately cultivate ethical values and norms. Make sure top managers demonstrate commitment to the code of ethics and become ethical role models. Publicly explain the ethical dynamics of difficult decisions. Establish honest practices and encourage whistle blowing. Implement training programs to teach personal values that promote ethical behavior (Dunham and Pierce, 1989). Step Six: Develop a control system that rewards ethical behavior. Create incentives to behave ethically, publicly reward such conduct, and punish by demoting, reprimanding, or terminating employees. Institute programs to monitor and resolve ethical issues (review by an ethics committee or use of an established action plan). Step Seven: Implement group decision-making processes at every level because research shows that groups tend to choose higher ethical decisions than individuals do (Nichols and Day, 1982). Reduce the potential for unethical behavior by considering four questions when facing ambiguous decisions: 1) Is it legal? 2) Is it ethical? 3) Is it economically feasible? and 4) Is it practical? Step Eight: Continually evaluate organizational policies and practices. Monitor changes in the legal environment, workplace diversity, and cultural values. Build in flexibility to easily modify the plan without compromising fundamental ethics. Managerial Responsibilities [top] Managers at each level share some responsibilities for developing an ethical culture. They should “sell” ethics as part of the management process and identify ethical norms. They should commit to a performance-based reward system and should not abuse power or tolerate unethical behavior. They should lead by example, repeatedly and publicly state that ethical behavior is important and expected, and behave ethically toward all stakeholders. All managers should be sensitive to the potential for unethical behavior and take appropriate steps to avoid it (Dunham and Pierce, 1989). Top managers should influence values and norms by choosing those best suited to the organization’s strategy, technology, and task and general environments. They should specify ethical objectives and consider the organizational outputs to determine if ethical behavior is built into standard operating procedures (SOPs). Middle managers should ensure performance-based reward systems and demonstrate ethical practices in acquiring organizational resources. They should communicate top management’s goals, expectations, and practices by sharing stories of their behavior and statements. They should provide a complaint forum for those who have been treated unethically. First-line managers should monitor employees and not tolerate unethical practices. They should provide support and recognition for employees who behave ethically. They should seek out ethical behaviors and should continually improve SOPs.
SIGNIFICANT ISSUES Is An Ethical Culture Important? [top] The writer identifies with Cicero’s statement in De Officiis, “To everyone who proposes to have a good career, moral philosophy is indispensable.” She believes there are three reasons why organizational ethics are important. First, an ethical culture is crucial to establishing and maintaining a solid reputation. Second, an ethical culture is likely to produce long-term bottom-line profitability. Third, ethical behavior allows the organization to continue operating without wasting time hiding unethical practices. What Is Ethical Responsiveness and How Can It Be Judged? [top] The writer defines ethical responsiveness as the ability to respond ethically to unclear situations. The degree of responsiveness is evident in decisions made and behaviors exhibited. The writer has searched unsuccessfully to identify a proven benchmark for judging ethical responsiveness. Lacking an objective tool, she has concluded that hindsight is the only effective standard. Responsiveness can only be determined by looking back at the organization’s responses to ethical dilemmas and comparing them with other organizations’ responses to similar situations. As employees internalize the code of ethics the likelihood of ethical practices and behaviors increases. Who Should Judge Ethical Responsiveness? [top] Three groups of people are able to judge an organization’s ethical responsiveness: top management, stakeholders, and independent researchers. In the writer’s opinion, the latter group is the most effective. While top managers know the internal components of various decisions, they are less able to be objective. Stakeholders can usually only determine how a decision directly influences them. In contrast, independent researchers can see the big picture of a decision’s affect on society and stakeholders and can be more objective because they lack a direct interest in the organization.
CONCLUSION The writer believes that ethical behavior is increasingly important in the marketplace. Dunham and Pierce said, “…ethical judgments [often] affect only…the people in [an] organization [or its] stakeholders, rather than society as a whole.” The writer strongly disagrees. She believes that ethical and unethical decisions do affect society. The public success of ethical decisions raises the global standard of acceptable behavior for individuals and organizations. In contrast, unethical decisions lower the standard because they harm individuals and create holes in the fabric of society’s values, creating the need for righting wrongs and mending values. Organizations can cultivate an ethical culture by considering both long- and short-term factors. An ethical culture cannot be created overnight, but steps can be taken to immediately implement ethical practices. A commitment to refining practices and behaviors will result in long-term success. A strong ethical culture requires not only strong leaders and codes of ethics, but also honest employees who internalize those codes and consider personal, professional, and societal ethics when making organizational decisions. Dunam, R. and Pierce, J. (1989), Management, Glenview, IL: Scott, Foresman and Company, 96-131. Retrieved April 12, 2001 from the World Wide Web: http://instruction.bus.wisc.edu/rdunham/mhr420/readings/ethics/ social_responsibility_ethics.htm. Hesselbeir, F., Goldsmith, M., and Somerville, I. Leading beyond the walls. San Francisco: Jossey-Bass, 1999. Jones, G., George, J., and Hill, C. Contemporary management. Boston: Irwin/McGraw-Hill, 1998. M. L. Nichols and V. E. Day (1982), A comparison of moral reasoning of groups and individuals on the "defining issues test," Academy of Management Journal, 25, 201-8. Retrieved April 12, 2001 from the World Wide Web: http://instruction.bus.wisc.edu/rdunham/mhr420/readings/ethics/ social_responsibility_ethics.htm. |