Ethics in organisations

Powerful Essays
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



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 http://dc.etsu.edu/cgi/viewcontent.cgi?article=1866&context=etd

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