What Is the Relationship between Organizational Culture and Ethics?

Carrieanne Larmore

There is a direct relationship between organizational culture and ethics. Organizational culture affects the way employees respond and react when placed in ethical dilemmas. The study of an organization’s culture can reveal the unwritten ethical standards that guide employees in their decision-making. Using this information, businesses can avert risky ethical behavior by changing their organizational culture.

Organizational culture represents the intangible force that centers on a company's values and beliefs.
Organizational culture represents the intangible force that centers on a company's values and beliefs.

Organizational culture is the study of the attitudes, beliefs and psychology within an organization. It not only encompasses how employees interact with each other, but also how they communicate with others outside of the organization. Ethical standards are the code of conduct required by the organization for employees to follow. The relationship between organizational culture and ethics is that the organizational culture guides employees when faced with ethical dilemmas. If the organizational culture counters what they are required to do ethically, employees may put the organization in risk by not acting ethically.

Some organizational culture push employees toward unethical practices like bribing potential clients.
Some organizational culture push employees toward unethical practices like bribing potential clients.

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When an employee is faced with a decision that others within the organization deem as appropriate, though it is unethical, the employee may follow what is acceptable as per the culture. For instance, if the organization rewards employees for gaining the most contracts at any cost, an employee may start bribing potential clients in order to gain more deals. If the corporate culture is to gain the most contracts but through normal techniques, an employee may not be as easily persuaded to do something unethical. It is this relationship that can get businesses into significant trouble in the long term. An organizational culture that supports risky decisions and unethical behavior will need to change its culture.

Changing a business’s organizational culture is difficult but often necessary when a business is having trouble with employees making ethical decisions. Organizational culture and ethics are both psychologically linked, so employees must change their ways of thinking in order to accept a new direction. This is often difficult to do when employees have worked with the organization for a long time or are not provided with acceptable methods of doing business ethically.

For instance, if the business wants employees to stop bribing foreign officials in order to gain contracts, it should provide employees with other effective methods that will work to gain the same results. If there are no other ways to gain the same results, the company needs to make sure it does not punish employees for not being able to sustain the old same results. Since organizational culture and ethics are linked, the business must change its culture in order to see results in its employees' ethical decision making.

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Discussion Comments


I guess the real questions are, should organizational ethics match the ethics of that society? And how should employees act when these clash?


I've always wondered how law enforcement deals with this issue.

For example, if a law enforcement agency allows torture to get answers from a detainee, does torture become okay because that organization doesn't mind it? Or will someone who is personally against torture make an exception because he needs to find out the location of a bomb to save many people's lives?


The relationship between organizational culture and ethics is very interesting. I took an ethics and politics class in college. Every week, our instructor would present us with a situation in class and ask us to make a decision. We either chose the ethical option or the unethical option but the decision was never easy. This is when I realized that the difference between right and wrong can sometimes be vague, especially when a situation is very complicated. Sometimes choosing the ethical decision means choosing the lesser evil and it can have repercussions.

The same applies for ethical decision making within organizations. It's not easy. Doing the right thing may mean losing your job. So what does one do?

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