An organisations culture is a body of its beliefs, culture and code of conduct, which influences employee behaviour in an organisation (Trevino & Nelson 2010). Cultural systems in organisations are divided into formal and informal systems. It is hard for organisations to specify written rules that cover all aspects of their work hence; the formal system presents us with limited direction (Ouchi 1977). Under formal cultural systems leadership, values and selection systems are discussed in this essay. While, the informal cultural system reflects on the flow of communication systems informally through an organisation. Myths and stories, informal norms and heroes are discussed in the essay below. Formal Cultures in an organisation
The formal ethical system of a company includes formal written policies, which direct behaviour towards reaching the organisation’s goal (Letherwood & Spector 1991; Ouchi 1977). The formal cultural systems aim to create and manage an ethical culture in an organisation (Trevino & Nelson 2010). The three formal culture categories discussed in this essay are executive leadership, selection system and values and mission statement. Ethical executive leadership – Leaders can affect the culture of an organisation in both formal and informal approaches. They influence formal culture by creating and supporting new policies and beliefs (Trevino & Brown 2004). The founders or owners of organisations can be a part of shaping the culture of an ethical organisation. Taking example of the CEO of online clothing retailer Zappos, Tony Hsieh. Hseich happiness was more than having money and so he made it his mission when he became CEO that he would do everything in his authority to assure employee and customer happiness. Zappos is one know known for its wonderful employee culture and customer satisfaction. Hseich was also voted number 3 by an online survey on onlinemba.com. Newly appointed CEO’s can either change the culture of an organisation if they feel it lacks something or keep it unchanged. An example of this would be Yahoo’s new CEO Marissa Mayer. She made changes to Yahoo’s culture in order to increase efficiency of employees and increased Yahoo’s profit by USD $103 million. Employees don’t know top executives of a company personally and hence, executives higher up in the chain of command need to grow a reputation ethical leadership by being visible on ethical issues and promoting ethics. Being an ethical leader is innate, but there are many executives who fake being ethical or are unethical in an organisation (Trevino & Nelson 2004). Moral people and moral executives could be two different people. Moral people, who are ethical by nature and lead in visibly ethical ways in an organisation, are deemed to be ethical leaders. They have qualities such as honesty, integrity care for people etc. (Jones 1995) said that for assuring consistent ethical leadership we needed to discover people who feel that high moral standards are a way of everyday life. People like Tony Hseich come under this category. Unethical leaders are those who are unethical personally and in a company by practicing unethicality. They are dishonest, untrustworthy and uncaring. The third type is a hypocritical leader and they are unethical in person but act ethically in an organisation to present and influence ethicality. The last type would be a Silent leader, they are leaders who are ethical personally and have good intentions for the organisations but cannot portray or influence ethicality by leading in an organisation. A moral leader can influence an organisation in a positive and ethical by being visible in his views towards issues of ethicality while unethical leaders tend to influence an unethical culture in a company by visibly being uncaring, dishonest, unfair and maybe even violent (Trevino, Hartman & Brown 2000). (Strong Ethical Work Environment) documented that 83% of HR professionals believed that most of ethics-related problems...
References: Jones, H. B. (1995). The ethical leader: An ascetic construct. Journal of Business Ethics, 14, 867-874.
Ouchi, William G. 1977 "The relationship between organizational structure and organizational control." Administrative Science Quarterly.
Treviño, L. K., Hartman, L. P., & Brown, M. (2000). Moral person and moral manager: How executives develop a reputation for ethical leadership. California Management Review, 42, 128–142.
Czaja, M., & Lowe, J. (2000, Fall). Preparing leaders for ethical decisions. The AASA Professor, 24, (1), 7-12
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