Life is about choices. We deal with choices in our personal lives every day. Most of us are guided by such questions as, "Is this the correct thing to do? Is this the right decision to make?" We are guided by our own sense of morality, and the difference between right and wrong.
Organizational culture consists of values and assumptions shared within an organization. It determines the significance in the company of doing things in a "right way". An organizational culture can potentially influence ethical conduct. An organization's culture should be consistent with society ethical values, and the culture should not be as strong as it would kill individual freedom. Organizational business ethics work much the same way. Here, we are dealing with choices, also, about anything and everything related to organizational activities and business situations. We apply our own personal set of values, standards, rules, principles, strategies, and even knowledge of what is lawful to every decision, and these are the things that guide us.
Organizational business ethics occupy a prominent role in the modern spectrum of a running business. Society's greater consciousness of ethics gives rise to how it permeates and influences every aspect or organization activity. For example, employees have a role in ethical behavior and their commitment to the organization. They share a role in shaping the ethical image and reputation of an organization just by their actions and the way they represent the organization. Leadership and management would prefer that the actions and activities of their employees be driven by loyalty to the organization. We can only hope that management behaves ethically, because oftentimes employee behavior reflects the behavior of the leadership in the organization.
How about investors? Organizational leaders hope that investors will see the company as an upstanding organization committed to responsible behavior so that they (the investors) will be more prone to invest in the company. If they invest in the organization, they are putting their trust in the organization and its leadership. In short, investors want to be confident that their financial commitment will be used responsibly and appropriately cared for.
Likewise, we as customers need to be having a degree of confidence in the organization too. What does the company brand represent? Are we getting fair value for our money? Do we have an adequate level of trust in the company to stand behind its products and services? If our image, as customers, is not positive from an ethical perspective (nor any other perspective, for that matter), then we are not likely to patronize that company nor their products and services.
In reality, a negative ethical image of a company could from any number of sources or occur for any number of reasons. It may come from some legal problem the company had. It may come from some bad publicity. It may simply come from one customer who has had a bad experience with the company. If someone tells you that a company gouges prices or does not stand behind their products, wouldn't you be prone to do business somewhere else? All of this affects performance, productivity, efficiency, and profitability may all be tied to organizational ethics, as well as its reputation and image among customers, competitors, and even its standing in the industry. One of the organization's most prized assets is it reputation. "One of an organization's most prized assets is its reputation," said by S. Waddock, Ph.D.
There are three distinct levels in organization culture, such as shared value, shared assumptions and artifacts. Shared values guide decisions and behaviors' of the employees and management. Shared assumptions are the unconscious belief or theories in use on which people rely to guide their perceptions and behaviors. Artifacts are the visible elements such as rituals, stories, language and physical structure.
The four categories of artifacts are organizational stories and legends, rituals and ceremonies, organizational language and physical structures and symbols. An organizational stories are very powerful indeed it's creates emotions to listeners and greatest impact when the corporate describe the real people. The rituals and ceremonies are usually the one they do daily as a routine task. Going for lunch break at the same hour or having birthday bash every month. An Organizational language is about how an employee's speaks in their working environment-aggressive, humble, or polite. Physical structures and symbols is a physically structures of a company. It's also represents the company size, shape, location and the age of the building.
A strong corporate culture increases a company's success by three important functions, the functions are control system, social glue and sense making. Control system is the method that the organization is being controlled. These include financial systems, quality systems, and rewards given to an employee. Culture works like a social bonding or glue that helps in holding the organization together. Sense-making refer as the structures in which an individual's knowledge and potential are retained and organized. Corporate cultures will make easier for the employees to understand what expected from them.
The majority of corporate mergers and acquisition fails due to corporate leaders pay more attentions to other matters mainly on financial and marketing. They should take these four strategies into consideration before merging different corporate cultures - assimilation, deculturation, integration and separation. Assimilation merger happens when the acquired company adapts the culture of acquiring since the culture of acquiring is better and effective compare to their existing culture. Deculturation mergers happen when employees resist the organizational change. Integration merger is to combine or create a new culture. The purpose of this integration culture is to provide a better and strong culture since the existing culture is weak and ineffective. Separation merger is to remain a minimal of cultures from both side of company maybe due to geographical or unrelated industries.
The ultimate source of an organization's culture is its founders. Culture is created in three ways. Firstly, the founders will only hire and keep those who think and feel the same way they do. Then, they indoctrinate and socialize these employees to their "style" of thinking, reacting and feeling. Finally, their behavior acts as a role model encouraging employees to identify with them.
There are seven characteristics of organizational culture, such as innovation and risk taking, attention to detail, outcome orientation, people orientation, team orientation, aggressiveness, and stability. Organizational culture is concerned with how employees perceive the seven characteristics of an organization's culture, not whether or not they like them. A dominant culture shows the core values that are shared by a majority of the organization's members, while the subcultures bring up to develop in large organizations to reflect common problems, situations, and experiences facing by those employees. In a strong culture, the organization's core values are both intensely held and widely shared. A strong culture will have huge influence on the behavior of an employee and result in lower employee turnover.