Organizational Culture And Ethical
Dr. G C Mohanta, BE, MSc(Engg), MBA, PhD(Mgt)
The shared values, principles, traditions and ways of
doing things that influence the way organizational
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
Patterns of Behavior, Values
Patterns of Behavior
Ceremonial events, written and spoken
comments, and actual behaviors of an
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
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.
Organizational Rites & Their Social
Type of Rite Example Social Consequences
Army induction and
Greek Pledge Period
Facilitate transition of person
into new social roles and
Enhancement Annual awards night
Enhance social identities and
increase status of members
Refurbish social structures and
improve organization functioning
Office holiday party
Encourage and revive common
feelings that bind members
together and commit them to the
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
Stories, Symbols, & Language
They reinforce existing culture, but they
don’t create culture by themselves.
Employees learn more from observed
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.
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
What Do Cultures Do?
1. Defines the boundary between one organization and
2. Conveys a sense of identity for its members
3. Facilitates the generation of commitment to
something larger than self-interest
4. Enhances the stability of the social system
5. Serves as a sense-making and control mechanism for
fitting employees in the organization
How Culture Begins
Stems from the actions of the founders:
Founders hire and keep only employees who
think and feel the same way they do.
Founders indoctrinate and socialize these
employees to their way of thinking and feeling.
The founders’ own behavior acts as a role model
that encourages employees to identify with
them and thereby internalize their beliefs,
values, and assumptions.
Keeping Culture Alive
Concerned with how well the candidates will fit into the
Provides information to candidates about the
Senior executives help establish behavioral norms that
are adopted by the organization
The process that helps new employees adapt to the
How Employees Learn Culture
Anchor the present into the past and provide
explanations and legitimacy for current practices
Repetitive sequences of activities that express and
reinforce the key values of the organization
Acceptable attire, office size, opulence of the
office furnishings, and executive perks that
convey to employees who is important in the
Jargon and special ways of expressing one’s self to
indicate membership in the organization
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
Ethical decisions go far beyond behaviors
governed by law
Managerial ethics guide the decisions and
behaviors of managers
How Managers Shape Culture
Formal Structure and Systems
Code of Ethics
Managers play key role in providing
leadership & examples of ethical behavior
What Influences Ethical
Behavior At Work?
How to Foster Ethics at Work
Emphasize top management’s commitment.
Publish an ethics code.
Establish compliance mechanisms. Involve
personnel at all levels.