Organizational Culture and Ethical Decision Making

Organizational Culture and Ethical Decision Making

Melinda L Hutton

Chadron State College

Abstract

Business culture, values, and leadership is what is believed to establish ethics in the workplace.  Organizational managers need to be knowledgable about all aspects of business ethics.  This includes codes of conduct, leadership, ethical decision-making, and culture differences which surround ethics.  Communication and awareness are keys to implementing and maintaining ethics in the workplace.  Organizational culture, decision making, and managerial roles each aid in the understanding of upholding corporate ethics. There are many ways to understanding these components as well as the effects they have on a business in all decision making processes. This paper addresses the connection of business ethics and organizational culture as well as the influences corporate culture has on ethical decision-making.

Organizational Culture and Ethical Decision Making

        What business factors play a part in encouraging ethical decision making in businesses?  There are different factors, as well as some still yet to be identified, that are believed to encourage ethical decision making within organizations.  Organizational culture and ethics are directly related. Ethics are highly considered in many organizational decisions, and therefore, many managers and employees ask the question of whether their decision is ethical prior to making the decision final. The relationship between organizational culture and ethics is that the organizational culture guides employees when faced with ethical dilemmas.  The organization may be put in risk if employees do not act ethically in their decision making process. These decisions also deal with power and control along with company leaders.  There are many situations that influence decisions.

        Organizational culture is one of these influences and is an intricate part of any business structure.  A company may better predict and control behavior by way of how organizational behavior effects ethical decision making. Organizational culture deals with employees’ interaction with each other inside the organization as well as outside. It also plays a significant role in any business decision making process. In order for a company to adhere to their values and beliefs, they must base each decision with keeping their organizational culture in mind.  This includes decisions in hiring and training of employees, as well as all other decisions made on every level of management.         

        The organizational culture may have a strong impact on the decision-making process. This culture consists of norms, values, and beliefs that guide employee behavior, while focusing what is perceived to be right and wrong.  Managers need to lead by example and prevent unethical behavior. The more someone is exposed to activity that is considered unethical by other employees, the more chances the employee will begin to act in an unethical manner.  All levels of management are expected to communicate to the employees their expectations of them.

        They must be a good example by demonstrating their ethical decision making in their daily work life.  Managers and other employees can be a great influence, creating organizational pressure, which is vital in the ethical decision making process (Babai, 2013). For instance, if an employee makes an unethical decision and is rewarded for it, it is more likely that this unethical actions will be repeated.  The management of the company should announce and explain the values, philosophy, and principles that employees are expected to follow during decision-making.

        Formal systems should be formed in order to guide the employees in their daily decision making with the use of the new culture.  These systems could be a new codes of conduct, ethics surveys, employee helplines, and ethics oversight committees. It is important for the organizations to provide ongoing education and communication to employees regarding the decision making strategies.  This will enable employees to fully understand their behavioral expectations. The organization utilizes critical events to prove their organizational culture and how it is utilized in crucial decision-making events.  Management needs to avoid any indication that their decisions are based on hidden agendas and self satisfaction (Ethic, 2003).

        “For a company to achieve the desired result, its culture - what people think and do - must be aligned with the result” (Ethic, 2003).        

        It is not only vital to create and defining corporate culture, but maintaining the culture is essential by aligning it with ethics.  Every organization must develop a set of core values to follow. These values are important when making ethical decisions within the organization.  Proper decision making must include ethically thoughtful and conscious activity.  The effects of the decision should be taken into effect so that the decision maker understands what and who the decision will effect.