Basic Theories Related To Organizational Ethics Commerce Essay


Ethics is a moral philosophy, usually referred as a set of mores, practices or unwritten rules upon which a certain body of people follows, or it is expected to follow. Organizational ethics can be defined as the application of ethical principles to organizational relationships and activities. The distinction between a right and wrong choice concerning acting and decision-making is defined by the organization's culture.

Currently, numerous firms are dealing with various businesses globally. Nevertheless, standards related to the customs, social behavior and ideas of one nation occasionally conflict with the cultural standards for trading in the particular nation. Moreover, the mixture of the human resources-the mixture of workforce- in numerous business corporations can generate significant advantages, such as better decision-making and advanced marketing action plans for dissimilar categories of consumers, and at some cases greater inventiveness. However, issues may arise, such as communication difficulties, intra-organizational conflicts and stuff turnover.

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The Greek manager of a certifying authority of an international computer skills certification program faced such difficulties when she had to establish and start operating a corresponding branch of the foundation in Turkey. Although these two countries have a lot in common, they also have many cultural differences that could get some consequences with strong effects on the success of the project.

The present study will attempt to analyze basic ethical concepts and indigenous national frameworks. The aim of this analysis is to understand and become more sensitive towards societal and regional ethical issues as well as to suggest strategies that could or should be used within this particular organization, to overcome uprising ethical issues.


1.1. Significance and aim of the research

The objective of this research is to examine which actions an organization can take to resolve in a satisfactory way the problems occurring from multi-cultural conflicts and to illustrate measures or tactics to develop better moral attitudes and to exploit for the benefit of the organization the cultural differences.

Turkey is one of the countries that lately attract a large number of foreign investors. Turkey is also a country in transition as a result of a general trend towards globalization and the adaptation of EU-norms. Although most of the middle managers and employees in the private sector in Turkey are highly educated people (a growing percentage of them having received their education abroad) who have adopted or are comfortable with western way of thinking and life styles, these developments, however, are not taking place at the same pace throughout the country at large. In general the west (Marmara Region: Istanbul, Izmir, Bursa) and the coastal regions are more advanced in this respect than e.g. the south-eastern province of Diyarbakır.

Knowledge of how certain societies morally develop may assist managers in international negotiations and corporate policy decisions regarding ethical matters.

In conclusion, the purpose of this paper was not to question either cultural or ethical theory, but to work within the bounds of the chosen theories to develop an applicable model which utilizes both culture and ethics as important constructs within its framework.

Research Structure

This research is divided into two parts.

The first part consists of chapters 1, 2 and 3. In these chapters, we will refer to some concepts and theories related to organizational ethics, such as utilitarianism, deontology, and social values, as well as cultural characteristics.

More specifically, in chapter 1 is presented the aim of the study and explained the reasons that can lead to difficulties and conflicts. Chapter 2 examines the various theories related to organizational ethics and Chapter 3 examines cultural characteristics such as power distance, uncertainty avoidance, individualism and masculinity.

The second part of the research consists of chapters 4 and 5. Chapter 4 presents the main cultural differences between Greece and Turkey and the difficulties that the manager under study had to deal with. Also, chapter 4 attempts to suggest ways to overcome these difficulties.

To finish, in chapter 5 the conclusions of the study are presented.

Basic theories related to organizational ethics

Before advancing in exploring the ethical issues of the case under study, it is important to comprehend some of the basic terms - principles related to organizational ethics.

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More specifically, we will refer to the following terms:



Social values


The principle of Utilitarianism focuses on an act that produces the greatest ratio of good to evil for everyone. According to the English writer Jeremy Bentham, "Nature has placed mankind under the governance of two sovereign masters, pain and pleasure. It is for them alone to point out what we ought to do, as well as determine what we shall do. On the one hand, the standard of right and wrong, on the other, the chain of causes and effects, are fastened to their throne."

According to utilitarianism theory, the moral worth of an action is determined only by its resulting outcome (consequentialism) although there is debate over how much consideration should be given to actual consequences, foreseen consequences and intended consequences. Furthermore, the only thing that is good in itself is pleasure and the only thing that is bad in itself is pain, so, utilitarianism equates good with the pleasurable and evil with the painful (hedonism).


Deontology is an ethical theory according to which, the morality of an action should be based on whether that action itself is right or wrong under a series of rules. In contrast to utilitarianism theory, deontological theories judge the morality of choices by criteria different than the states of affairs those choices bring about. Some choices cannot be justified by their effects, no matter how morally good their consequences, some choices are morally forbidden.

For deontologists, what makes a choice right is its compliance with a moral rule. In this sense, for deontologists, the Right has priority over the Good. If an act does not conform to the Right, it may not be undertaken, even if it might produce great Good.

Social values

Values is a general term referring to those things which people regard as good, bad, right, wrong, desirable, justifiable, etc.

Social values (also called social value orientations), is a social psychology motivational theory of choice behavior based on the assumption that individuals pursue different goals when making decisions for which the outcomes affect others. Social psychologists generally distinguish between five types of social value orientations. The main difference between each category is the level to which one cares about his or her own welfare and that of the other in social dilemma situations.

Altruistic: Characterized by the desire to maximize the welfare of the other.

Cooperative: Desire to maximize joint outcomes.

Individualistic: Desire to maximize own welfare with no concern of that of the other.

Competitive: Desire to maximize own welfare relative to that of the other.

Aggressive: Desire to minimize the welfare of the other.

Cultural characteristics

Places and people differ. The Japanese tend to be very polite, the Australians characteristically blunt. Red means "danger" or "stop" to the British, but in Turkey it signifies death and in China, good fortune.

Patterns of global diversity and the implications of these differences have been studied from a range of perspectives, by sociologists, psychologists, anthropologists, and political scientists. In the present study, we are concerned with how cultural diversity and related differences in the behavior, norms, and expectations of particular groups of employees, managers, colleagues, or customers affect management decision making and corporate organizations.


The entire set of social norms and responses that dominate the behavior of a population. It is a conglomeration of beliefs, rules, institutions and artifacts that characterize human population. It is transmitted by symbols, stories and rituals over generations.

In other words, culture is acquired knowledge that people use to filter the life experiences and to generate social behavior. It is:







See Appendix I for the levels of culture.

Corporate culture

At the most general level culture can refer simply to the lifestyle and behavior of a given group of people, so corporate culture is a term used to characterize how the managers and employees of particular companies tend to behave. But the term is also used by human resource managers and senior management in their attempts to proactively shape the kind of behavior (innovative, open, dynamic, etc.) they hope to nurture in their organizations. Promoting a distinctive corporate culture is also expected to enhance the sense of community and shared identity that underpins effective organizations.

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According to the above, we could define corporate culture as the shared values, traditions, customs, philosophy, and policies of a corporation; also, the professional atmosphere that grows from this and affects behavior and performance.

Cultures vary and these variations lead to real and significant differences in the ways that companies operate and people work. Moreover, because of globalization more and more firms are coming head to head with the added complexity of doing business globally, which stems from the huge amount of variety in the world that still exists (and arguably will always exist).

Hofstede's four dimensions of culture

Geert Hofstede is a Dutch psychologist who conducted one of the earliest and best-known cultural studies in management, on IBM's operations in 70 countries around the world.

Getting answers to 32 statements from over 116,000 questionnaires, he mapped key cultural characteristics of these countries according to four value dimensions (See Appendix III):

Power distance

Uncertainty avoidance



Among his most important contributions, Hofstede provided strong evidence for the significance of national culture over professional role, gender, or race, as a determinant of variation in employees' attitudes, values, and behaviors, accounting for 50 percent of the differences his study observed. However, his studies have come in for significant criticism, despite widespread adoption of the four-dimensional framework. Three common criticisms are:

That the dimensions developed from data collected between 1968 and 1973 were relevant only for that particular period.

That corporate cultural and other influences from this one-organization (IBM) study created significant bias.

That the sole use of attitude-survey questionnaires was not a valid basis for the resulting values and dimensions his study concluded with.

The GLOBE project's nine dimensions of culture

More recent research has built on the Hofstede's research. The Global Leadership and Organizational Behavior Effectiveness (GLOBE) project began in 1992 and continues today. It has involved 150 researchers collecting data on cultural values and management and leadership attributes from 18,000 managers across 62 countries in the telecommunications, food, and banking industries.

The GLOBE project, however, ends up with nine key cultural dimensions:

Assertiveness. The United States, Austria, Germany, and Greece are high; Sweden, Japan, and New Zealand are low.

Future orientation. A propensity for planning, investing, delayed gratification: Singapore, Switzerland, and the Netherlands are high; Russia, Argentina, and Italy are low.

Gender differentiation. The degree to which gender role differences are maximized: South Korea, Egypt, India, and the China are high; Hungary, Poland, and Denmark are low.

Uncertainty avoidance. A reliance on societal norms and procedures to improve predictability, a preference for order, structure, and formality: Sweden, Switzerland, and Germany are high; Russia, Bolivia, and Greece are low.

Power distance. Russia, Thailand, and Spain are high; Denmark, the Netherlands, and Israel are low.

Institutional collectivism (individualism vs. collectivism). Promoting active participation in social institutions: Sweden, South Korea, and Japan are high; Greece, Argentina, and Italy are low.

In-group/family collectivism. A pride in small-group membership, family, close friends, etc.: Iran, India, and China are high; Denmark, Sweden, and New Zealand are low.

Performance orientation (much like achievement orientation). Singapore, Hong Kong, and the United States are high; Russia, Argentina, and Italy are low.

Humane orientation. An emphasis on fairness, altruism, and generosity: Ireland, Malaysia, and Egypt are high; Germany, Spain, France, Singapore, and Brazil are low.

Different styles of communication and interaction result from the cultural differences listed above. These can lead to workplace misunderstandings, poor interpersonal and intergroup relationships, inefficiency, and higher costs.

Cultural differences between Greece and Turkey

Turkey and Greece, being neighbor countries, share a great deal of their cultures as a result of the history. They lived together for over 400 years. The two nations have a lot of things in common. Traditional clothes, traditional dances and music, food culture, language even the physical appearances of the people are so much alike that it is hard to distinguish one from the other. Unfortunately, the citizens of these two countries are prejudiced against each other. It is always imposed on people that "the other" is "the enemy", but when they live together they see that there is no enmity between them, it is sympathy and hospitality that they find.

The main difference between the two countries is religion and the attitudes towards religion. In Turkey most of the population consists of Muslims while in Greece it is Christians. However, there is a minority in Turkey who are Christians and minority in Greece who are Muslims. Again a living-together exists.

Another major difference is the daily schedule of people. To begin with Turkey, it is really strict. Even at 6 o'clock in the morning markets are open and they close really late at night. People start to work for government departments at 8 in the morning and they work till 17.00 o'clock with a lunch break at 12.00 o'clock. In Greece the working hours of civil servants is 8 hours. In the private sector the number of working hours varies from 4 (part-time work) to 8 (full-time work) or more (10 or over 10 in certain occasions). And the "siesta" breaks during the day overall Greece is from 14.00 to 17.00. Except for Tuesdays, Thursdays and Fridays it is very rare that one can find an open shop in the afternoon. On Sundays it is just the Kiosks that work during the day. On the contrary in Turkey, most of the markets are open on Sundays.

Business culture in Turkey

National history and culture are the determining forces in shaping the values that will be dealt with in this research. In the case of Turkey the main characteristics of business culture can be summarized as follows.


Trust in general and more specifically personal trust is one of the main characteristics in doing business in Turkey. Personal trust still dominates system trust in Turkey. Turks still put more trust in people then contracts, bureaucratic procedures, international regulations etc. Building a strong (personal) network therefore is one of the most fundamental preconditions for being successful in Turkey. Investing time in personal relations is the key to it. Always accept invitations to visit people at home. Don't expect to have the 'evening free' after your business is concluded and try to be as hospitable as possible in return whenever the occasion arises. Most of the decisions will be taken in an informal atmosphere and not necessarily during work hours.

Time awareness

In general, Turkey is ranked among countries were time is perceived as polychromic and where time pressure is low. Deadlines are less dominant, people prefer to undertake more tasks at the same time, the distinction between private life and work is diffuse. The study's results show that these culturally defined characteristics are changing rapidly. This can be explained as follows. Because of the transition in Turkey and with the impact of economic crisis, market conditions in various sectors are getting more competitive.

State-owned firms are still more bureaucratic and do not often care for deadlines. Newly established firms with more global minded managers, however, have adapted western values for deadlines. This leads to a greater degree of time efficiency: in the private sector employees face a huge work load. This is also related to the high unemployment rates in Turkey and the competition on the labour market. Fear of losing one's job is dominating older, more socially oriented habits on the work floor.

High hierarchy/power

High hierarchy/power distance and connected with this saving face is still important and loss of it will result in depreciation of status and will therefore have to be avoided at all costs. Employees will go through great lengths to protect their superior and will refrain from contradicting or correcting him/or her in public. The reverse also applies, reproaches to staff members can best be made in a private session, to do this in a public meeting could have grave consequences.


Formality plays an important role in doing business in Turkey. Like in most other countries, academic and other titles meet with great respect and should therefore be used, especially in the initial phase of your contacts. The dress code is also somewhat more formal. Exchange of business cards is very common. Often people might ask for more than one card and this will in most cases turn out to be very useful in building up a network. Contrary to the custom in most western European countries, using jokes to create an informal atmosphere is a relative new phenomenon in Turkish business contacts.

Case under study

The Greek manager under study faced a lot of difficulties in her effort to establish and start operating the corresponding branch of the certifying foundation in Turkey.

Trust was a problem since she was an unknown female manager who had to gain the trust of the owners of computer centers in order to conclude agreements with them. Finally she decided to hire a Turk personal assistant and with his help to create personal relations with the managers of the centers she wanted to negotiate with.

Another problem she had to deal with was the establishment of the foundation's working hours as well as scheduling the exam periods. The Greek employees of the foundation were complaining about the long working hours, since they were used working less time. She had to let go some of the Greek employees and hire a greater percent of Turkish staff to resolve this problem.

Fortunately, she had no additional operational problems, since the devotion of the employees was obvious after a short period of time. On the other hand she showed great zeal in trying to acclimate to the Turkish culture and was able to prove her intention is to respect the customs and traditions of the country, without deviating from the company's business ethics and rules.


After having read the above, one might arrive at the conclusion that doing business in Turkey is an adventurous undertaking. That can sometimes indeed be the case, but more often than not a very pleasant and rewarding adventure, which will not only bring professional satisfaction (rapid return of investment, sustained profits and unprecedented growth) but also personal reward in terms of warm and personal relationships and long term commitments and visual and other experiences without precedent. The immense growth of the number of Greek firms in Turkey and the rise in trade volume are the best indicators for the excellent opportunities that Greek-Turkish commercial relations have to offer.

Cultural differences between groups of people in the one firm, or between the employees of two firms engaged in a joint venture, are not necessarily a problem. However, when they do create difficulties in terms of communication, teamwork, motivation, or coordination, the impact on company performance can be significant, despite the fact that clear causeand-effect relationships are often difficult to identify precisely.

The best way to deal with these difficulties is a combination of movements that combine respect for the culture of each country and fidelity to the principles of the company. The Greek manager under study, following these steps, managed to discover business customs in Turkey, Turkey business negotiations, Turkey business gifts and Turkey business protocol.