Every organization has its own unique defining culture. This defined culture bring people from diverse backgrounds into an organization to form cohesiveness in achieving an organisational goal. Each culture, when well-structured, serves as a guideline for each employee in an organization to live and act by. Therefore, organisational culture is a set of shared assumptions that guide what happens in organizations by defining appropriate behavior for various situations (Ravasi & Schultz, 2006).
For proper efficiency of an organizational culture, ethics must exist. Each individual ethics are known to be shaped by what is learnt from the home and the environment. These learnt behaviours serves as a benchmark to how things are perceived, received and reacted to. With the existence of an ethical culture in an organization, each employees are required to adhere to the fundamental rules placed in the organization.
According to Trevino and Nelson (2011); ethics are the principles, norms and standards of conducts governing an individual or group. It is imperative as a manager to possess the right ethical conducts necessary to manage situations that may arise in an organisation to avoid conflict of interest. Therefore, personal ethical standards are the morals and values we as individuals place on ourselves to serve as a guideline to how we should respond to an event or situation. An individual ethics includes: reliability, transparency, honesty, fairness among others. The objective of this study is to critically evaluate how an organisational culture causes managers to lose sight of their personal ethical standards.
IMPORTANCE OF A MANAGER’S PERSONAL ETHICAL STANDARDS IN AN ORGANISATION.
A manager’s personal ethics can serve as a yardstick in influencing his employees. Whether a manager practices a good ethical culture or bad ethical culture; solely depends on the manager’s personal ethical standards. When a manager understands and aligns his personal ethics with the organisations culture, his or her role seamlessly influences the people around him. It helps both the manager and employees of an organisation define their strengths and weaknesses, thereby cultivating the right attitude towards their job. But if the manager has not identified or understood his or her personal ethics, then an imbalance occurs. This act may be detrimental to the organisation. For example, Standard Bank South Africa, code of ethics( page 17, 5.7: 5.7.3), clearly states that “employees should never accept cash as a gift, and non-cash gifts or entertainment should not be accepted if the impression is created that an improper business advantage could be secured. In addition, employees should follow business unit policy on prohibition or limits, in terms of value and infrequency, above which employees should declare acceptance of non-cash gifts and entertainment”. To effect cohesiveness with the organisation’s culture, it is the duty of the manager to educate the employees on how important it is to comply with declaring any gifts and items received to the management to avoid conflict of interests. In other words, it shows the manager possesses good moral behaviour as an individual and his ethics are aligned with the organisation’s culture of being transparent and honest. On the other hand, if a manager fails to educate the employees on being transparent and honest, then the organisational culture loses its credibility and same goes for the manager.
WHAT ARE PERSONAL ETHICS AND ITS INFLUENCE ON A MANAGER’S DECISION MAKING IN AN ORGANISATION.
Personal ethics are the values and principles that guide us as individuals in relating to situations around us. This moral ethics help a manager distinguish between what is “Acceptable” and what is “Unacceptable” in an organisation. Effective Decision- Making is defined here as the process through which alternatives are selected and then managed through implementation to achieve business objectives (Drucker, 1967). In every organisation, the vital decisions made by a manager is expected to be ethical at all times and they should be open to the beliefs of the management and to each employee if they wish to remain significant in their respective organisation. In doing so, the managers helps either himself or herself, the employee and the organisation as a whole maximize their potentials to reach a common goal. To effectively curb abuse of power and corruption in an organisation, a manager must endeavour not to use his position and affluence to influence any decisions made by the management. For example, in the early 1970’s, Ford motors, a rival to a Japanese car manufacturing company, developed a new model of car known as Ford Pinto. What distinguished this car from other cars manufactured was its unique engine capacity no more than 2000 pounds (907kg), not a penny over 2000 and a delivery deadline of just 25 months (Wojdyla 2011). This car gave Ford motors an edge over other competing car manufacturing companies at that time. But soon Ford Pinto was discovered to have an issue with its fuel tank during the development stage which could cause to accidents leading to loss of lives. After a careful review of either recalling the cars which could cost approximately $113 million or pay a severance fee of approximately $49 million in any lawsuit received by the company; the company decided to go with the latter plan of paying severance settlement fee to the families affected. By so doing, the management of Ford motors concluded that paying for lawsuit was more important than the millions of dollars they would lose and the safety of people lives; if the cars were recalled. Although, the management of Ford Motors used their influence as the leading car manufacturing company to settle lawsuit brought up against the company, but briefly lost their prestige as a reputable manufacturing company due to greed, lack of integrity, fairness and honesty . The decisions made by the management of ford motors depicts a poor ethical standard of both the managers and employees of the company.
NECCESSITY OF HIGH ETHICAL STANDARDS: MANAGERS ROLE
The role of organisational culture in a company is to create a sustainability behaviour for both a manager and its employees to build on. It gives the manager’s decision a sense of value in meeting the needs of the organisation. Based on this factor, a reason why an organisation must have high ethical standards is to create a sustainability behaviour. A sustainable behaviour assists a manager in strategizing what is role entails and how the role can help improve an organisation’s performance. By so doing, helps managers identify, value and measure the ethics needed to performance effectively in an organisation. The manager invariably learns to become part of the decision making process of the organisation. For example, in the early 1970’s, Ford Motors developed a new car known as Ford Pinto. This car unique in its form and structure. Despite its style, the car had issue with its fuel tank that caused accidents leading to loss of lives. To minimize the effects the car had on the performance of the company, the management weighed the option of either recalling the cars which will cost billions of dollars as against paying for damages caused by the car costing the company less. The outcome of the decision lead to a negative outcome that affected the performance of the organisation. The above example, clearly shows that the managers of Ford Motors applied a “win-lose situation” to save the company financially thereby giving little consideration to their belief of retaining their ethics when faced with decision that could jeopardize the culture of the organisation.
In conclusion, ethics defines us as individuals. It’s what distinguishes an individual from the norms of the society. Every organisation is bound by a defining culture. A culture that defines what is acceptable and unacceptable in the organisation. How a manager decides to conform to the rules solely lies in his moral beliefs. Once the goal and objective of an organisations culture is well understood, the manager either fine-tunes his or her ethical standards to meet the needs of the organisation or refrains from coming to the need of the organisation.