Approaches to Organisational Culture and Ethics Amanda Sinclair

ABSTRACT. This paper assesses the potential of organisa-tional culture as a means for improving ethics in organisa-tions. Organisational culture is recognised as one deter-minant of how people behave, more or less ethically, inorganisations. It is also increasingly understood as anattribute that management can and should influence toimprove organisational performance. When things go wrongin organisations, managers look to the culture as both thesource of problems and the basis for solutions. Two modelsof organisational culture and ethical behaviour are evaluated.They rest on different understandings of organisationalculture and the processes by which ethics are enhanced.Firstly, the prevailing approach holds that creating a unitarycohesive culture around core moral values is the solution toenhancing ethical behaviour. Both the feasibility anddesirability of this approach, in terms of ethical outcomes, isquestioned. The second model queries the existence oforganisational culture at all, arguing that organisations arenothing more than shifting coalitions of subcultures. In thissecond model, the very porousness of the subculturesprovides a catalyst for the scrutiny and critique of norms andpractices. Such diversity and debate is construed as poten-tially a better safeguard for ethical behaviour than theuniformity promised by the unitary, strong culture model.

Introduction

Organisational culture has become an important, ifcontentious, focus in the study of organisational life.Managers of organisations have turned to organisa-

Dr. Amanda Sinclair is a Senior Lecturer in the Graduate School of

Management. As a teacher on the MBA program of courses,

including Ethics, she has a particular interest in the development

and professionalisation of managers. Her current research focuses

on organisational diversity, change and culture and administra-

tive leadership and accountability.

tional culture not only to explain what happens inorganisations, but to attempt to shape what happensin ways that are consistent with organisational goals— to use culture to orchestrate organisationalchange. Organisational culture has been portrayed asa particularly promising tool in the managerialkitbag (Schwartz and Davis, 1981; Deal and Ken-nedy, 1982;Kilmann etal, 1985).

The impact of organisational culture on theethical standards and moral practices of people inorganisations has also been increasingly documented(Fisse and Braithwaite, 1983). Organisational leadersexhort the importance of managing the organisa-tional culture to promote a high standard of etliicalconduct among organisational members (see, forexample, Akers, 1989).

This paper explores two approaches to usingorganisational culture to enhance ethics in organisa-tions. Each approach rests on different understand-ings of organisational culture and how, if at all, it isto be managed.

Organisational culture

The application of the concept of culture to organ-isations became widespread through the 1980s, butwas pioneered by some innovative thinkers earlier(for example, Crozier, 1964; Turner, 1971; Pettigrew,1979). Subsequent researchers distinguished twobroad senses of organisational culture — the morepopular view of culture as a variable to be managedin organisations, and the view that culture is ametaphor or fundamental means for conceptualisingorganisations (Smircich, 1983). According to thislatter view, culture is not something an organisationhas, but something an organisation is and manage-ment cannot control culture because management is

Journal of Business Ethics 12: 63—73, 1993.

© 1993 Kluwer Academic Publishers. Printed in the Netherlands.

64 Amanda Sinclair

a part of that culture (Nicholson, 1984). This debate,which culminates in querying the existence oforganisational culture at all, has attracted muchacademic interest but has not deterred widespreadacceptance of the concept. Despite the plausiblecontention that culture is not something that organ-isations have, there is a popular understanding thatorganisational culture exists and that it is important(Schein, 1985).

Frequently understood as a 'multi-layered' phe-nomenon (Sathe, 1983), organisational culture in-cludes deep-seated and enduring values, at the mostfundamental or inner level, with artefacts and sym-bols, procedures and arrangements, 'shared doingsand sayings' (Sathe, 1983) characterising the outerand more superficial layers of organisational culture.Some doubt that an organisation can influence thesubstantive content of its own culture, because theunderlying values of any organisational culture aredeeply rooted in broader national, racial and reli-gious cultures (Schein, 1983; Hofstede et al., et al,1990). More amenable to moulding by managementare the outer layers of culture, the rituals, symbols,heroes and other artefacts.

The pattern of cultural elements that emerges isessentially a learned and shared set of responses tothe organisational environment, tasks and problems(Turner, 1971; Schein, 1984). A working under-standing of organisational culture is that it consistsof what people believe about how things work intheir organisations and the behavioural and physicaloutcomes of these beliefs.

Though popularised in recent years, organisa-tional culmre is not a new understanding. A well-established tradition of administrative research hasdemonstrated that organisations produce a mindsetamongst individual members (which in turn isdetermined by, for example, structure or externalpressures) which encourages people to behave inways that are not necessarily consistent vwth individ-ual or pre-existing norms, but apparently induced byorganisational membership (Merton, 1940; Whyte,1956; Crozier, 1964; Hummel, 1982; Baum, 1987;

Jackall, 1990).Neither has administrative theory been alone in

its attention to culture as a determinant of the moralcontent of what goes on in organisations. Scholars ofcorporate crime (Stone, 1975; Coleman, 1985) haveconcluded that the "climate" (Clinard and Yaeger,

1983) and culture of organisations exercises a power-ful influence on unethical behaviour in organisa-tions. Clinard (1983) concluded from his study ofretired middle managers in Fortune 500 companiesthat corporate crime was determined by top man-agers who pushed their subordinates so hard thatillegal practices were tacitly necessary to survive.Clinard (1988) concludes that corporate lawbreakingis a product of the cultural norms operating in acorporation and corporations "socialize" their mem-bers into patterns of law-obedience or law-breaking.Recent analysis of disasters, such as the Challengerincident, similarly conclude that corporate cultureswere an important piece of the puzzle of pre-cipitating events (Werhane, 1991; Vaughan, 1990;Shrivastava, 1987).

The ethics of organisations

To talk about the ethics of organisations suffers atleast the same difficulties as speaking of the culturesof organisations. Whether the organisation has amoral status, an existence or even a moral intentindependent of its members, are questions that havereceived considerable attention (for example. Bower,1974; Goodpaster and Matthews, 1982; Velasquez,1983; French, 1984; Ewin, 1991). Further, somescholars argue that to apportion special sets of etliicsto separate spheres or arenas of activity, such asbusiness ethics, is to create an artificial distinctionbetween business and the rest of life (Drucker, 1981).These debates instill appropriate caution in envisag-ing the organisation as a unitary and insulateddomain in which one set of special ethical standardsapply. Etliics, like cultures, may not be somethingthat organisations "have."

Rather, the focus of this paper is the ethics thatguide the members of an organisation. They are notthe expression of the organisation's "moral person-ality" (Ewin, 1991) but those principles of right andwrong that govern the exchanges of members of theorganisation when they are engaged in organisa-tional activities. Inevitably these principles areformed by long-standing influences on individualswliich extend far beyond the organisational realm,though it is reasonable to suggest that some organ-isations shape the ethics exhibited by organisationalmembers.

Organizational Culture and Ethics 65

Are these ethics distinguishable from morality?The ethics of organisations are not special rules,applicable only to those specific communities, butrather understood here as elaborations of pre-exist-ing broader moral principles, which include stand-ards of behaviour and are designed to respond tothe particular dilemmas presented by that context(Adelman, 1991). This is not to suggest that etbicalprinciples are any weaker than moral principles, butthat they may have greater specificity to the par-ticular tasks or environment which a group orcollectivity confront.

A further challenge in the shaping of ethics usingorganisational culture is determining how the qual-ity of ethics is to be measured. Is it in standards ofoperation, the avoidance of moral disasters or inroutine decision-making practices which includeethical considerations? (Jackson, 1991). How is betterethics exhibited by individuals? Is it in virtuousbehaviour, or a lack of corruption? Is there moreinherent moral value in particular workplace prac-tices and processes of reflection or consultation orshould measures only concern themselves with out-comes? While there is clearly no final answer tothese questions, how they are resolved will helpdetermine which avenue is selected by those tryingto improve ethics in organisations.

The role of management

A primary task of management is to control theactivity of employees to best serve defmed organisa-tional interests. They can achieve this control usingformalised rules (bureaucratic mechansisms), eco-nomic rewards and sanctions or values and normsabout how the work is to be done ("clan" or culturalmechanisms) (Wilkins and Ouchi, 1983).

Disenchanted with the limitations of control bymeans of economic or bureaucratic sanctions, man-agement theory widely promulgated through the1980s the development of corporate culture as ameans of enhancing managerial control. Through asense of purpose, a shared set of meanings and asense of involvement or ownership, organisationalculture could directly enhance organisational effec-tiveness (Denison, 1990; Peters and Waterman, 1982;Deal and Kennedy, 1982; Kilmann etal., 1985).

Cultural management comes to be preferred to the olddirect means of control because it appears to be inclusive,more pervasive and less identifiable (Anthony, 1990, p. 4).

In their case studies of corporate offenders, Fisseand Braithwaite (1983) take a step beyond usingorganisational culture to explain unsound or under-mined ethics, in identifying culture as a cure forimproving ethics in organisations. In analysing theresponses of companies, they conclude that "themost important changes were qualitative and intan-gible. These were the changes in the culture ofthe organization" (p. 235). They cite examples ofreforming internal controls, questioning audits moreclosely, more stringent systems of accountability,"increased staff, seniority or added powers, or allthree" (p. 232).

Organisational culture then, deserves our seriousattention, even if it is all metaphor or managerialsleight of hand. An examination of organisationalculture offers a plausible explanation for the incid-ence of unethical behaviour and there are many whoargue that it provides the means to improve theethics of people in organisations. Organisationalculture both helps to explain the incidence of uneth-ical behaviour (where it acts as a vicious circle), andcan be coverted by diligent and skilful managementinto a "virtuous circle" (Gagliardi, 1991).

Managers confronting flawed organisational eth-ics and the imperative to act increasingly assert thatit is the culture that needs to be "fixed" (Reidenbachand Robin, 1991). Murphy's view "that ethicalbusiness practices stem from an ethical corporateculture" (1989, p. 81) is widely echoed, as areprescriptions of how culture should be cultivated tothis end.

Two approaches to the management oforganisational culture to improve ethics inorganisations

There are two approaches to moulding organisa-tional culture towards ethical ends. The first andmost popular is the approach of creating a unitarycorporate culture around ethical values. It arguesthat management can and should actively manageorganisational culture. The second approach fostersthe co-existence and diversity within the organisa-

66 Amanda Sinclair

tion of underlying national and racial cultures aswell as professional and occupational subcultures.This approach doubts that management is able to, orshould, employ organisational culture towards man-agement-defined ends. Each approach defines organ-isational culture and the nature or process of goodethics differently, and each argues a different role formanagement in the shaping of ethical values. Thefollowing discussion evaluates the two approaches.

The approach of creating a unitary culture

According to this approach management can create aunitary and cohesive organisational culture aroundcore ethical values. Sometimes identified as "strong"or "thick," these organisational cultures are distin-guished by the presence of organisational values andnorms which are shared by all employees (not just amanagerial elite), which are deeply-felt (not justadhered to superficially), and which are capable ofsubstantially determining behaviour and consistentacross organisational functions or geographic divi-sions.

The methodology for establishing such a cultureis well-established, but tirelessly reincarnated withslightly altered emphasis (for example Deal andKennedy, 1982; Murphy, 1989). The process com-mences with the clear articulation of a corporatestrategy, philosophy or mission. The strategy doesnot confine itself to economic goals but includesstatements about "what kind of organisation thecompany will be — its character, the values itespouses, its relationships to customers, employees,communities, and shareholders" (Andrews, 1989, p.103). This aspect of organisational strategy is typi-cally promulgated as a "credo," a succinct statementofthe values permeating the firm" (Murphy, 1989, p.81) and is translated into a corporate code of ethics.While the credo can be a general statement aboutthe organisational values, the code of ethics shouldbe specific, pertinent, publicised, communicated andenforced, as well as revised (Laczniak and Murphy,1991).

The most important role for the leader of theorganisation is the reinforcement in word and deedof the values of the organisation (Schein, 1983). Thecommitment of die senior management team to anethical culture is critical: "the importance of senior

executives as role models cannot be stressed stronglyenough" (Mathews, 1988, p. 135). The task of man-agement then becomes "the management of mean-ing" (Gowler and Legge, 1983; Pondy and Mitroff,1979). The impact of such role modelling is all themore potent if the organisation is blessed with acharismatic or transformational leader (Bennis andNanus, 1985).

Systems of rewards, selection, appraisal, structures,physical spaces, rituals and ceremonies, should all bedesigned to reinforce organisational values andnorms. Information systems and corporate planningprocesses should also guide and reflect progress ininstitutionalising values.

Cited as a shining example of this approach isJohnson and Johnson, the pharmaceuticals company,whose success in the marketplace and capacity toturn disaster into ethical "runs on the board," islegendary. Their credo affirms a "responsibility tothe doctors, nurses and patients, to mothers and allothers who use our products and services . . . to ouremployees . . . to the communities in which we liveand work . . . to our stockholders . . ." (Harvard CaseLibrary, 1983). J & J management argue that thesource of their business success is their organisationalculture, which despite their multinational opera-tions, guarantees ethical conduct.

This approach to enhancing ethical behaviourworks by reinforcing adherence to a predeterminedand clearly-defined bottom-line which tells em-ployees how to act. It attempts to ensure ethicalconduct by eliciting behavioural conformity, notthrough explicit compulsion but through the moresubtle socialisation of organisational culture.

Yet this approach to the management of organisa-tional culture has been attacked as both infeasibleand undesirable, of itself, morally questionable. Thefirst criticism maintains that organisational culture isa figment of the managerial imagination, thoughcertainly not a harmless one. Nicholson has argued:"the practice of management is itself a component ofculture . . . Management cannot control culture forattempts to control cultural variables themselvesconstitute part ofthe culture" (1984, p. 264). Hence,this approach has been dismissed by some as amanagement construction, nothing more than theimposition by an elite of a managerial ideology(Drake and Drake, 1988).

Others, however, warn against dismissing such a

Organizational Culture and Ethics 67

potentially powerful, if unrepresentative, ideology.Gowler and Legge, for example, argue that man-agerial ideology upholds its own special moralimperatives: it "presents a rational, goal-orientedimage of managerial action as a particular kind ofmoral environment" (1983, p. 201). These criticsargue that while organisational culture can be a veryeffective device for marketing the organisation andfor legitimating "managerial prerogatives" (Gowlerand Legge, 1983, p. 198), it hardly secures anyguarantees as far as ethical conduct is concerned.Indeed, it may serve to camoufiage dubious prac-

tices.

Evidence that organisational culture is used bymanagement to defiect responsibility is provided byWeiss in his research on Employee Assistance Pro-grams (EAPs) undertaken by American companies(1986). Weiss argues that a purportedly sociallyresponsible managerial ideology, designed to assistemployees with problems such as alcoholism, en-ables management to enhance their social control bylabelling employee problems as "medical" and unre-lated to the basic structural conditions and stresses ofworklife. By developing a "socially responsible"ideology, employees and constituents of the organ-isation are distracted from the underlying causes ofemployee malaise, enabling management to, ineffect, escape moral responsibility for work-inducedemployee illness.

Similar criticism is often directed at the codes ofethics which some organisations employ as culturaldevices for encouraging ethical behaviour. Mathews(1988) concludes from her analysis of corporatecodes of conduct that they offer no real answers tothe ethical dilemmas faced by people in organisa-tions. Mathews found, alarmingly, a negative rela-tionship between codes of conduct and violations.

Such a finding provides a powerful antidote to theassumption of this approach that any managerialeffort is better than nothing. As Weiss' work alsosuggests, codes, credos and the other artefacts oforganisational culture could discourage individualsfrom taking personal responsibility for ethical deci-sions in the workplace.

The second criticism of this approach focuses noton the questionable nature of organisational culturebut whether "strong" cultures necessarily producethe best organisational outcomes. An organisationalculture is understood to be strong where there is

pervasive commitment to it throughout the organ-isation, where there is consistency among elementsof the culture and it is powerful in determiningindividual behaviour, not just in ensuring superficialcompliance. The argument of the strong cultureapproach is that by engendering high levels ofcommitment, ownership and purpose among em-ployees strong cultures foster good performance(Denison, 1990).

However, there is a paucity of systematic, asopposed to anecdotal, research on the connectionbetween culture and economic performance. Strongcultures only produce excellent performance undersome circumstances (Calori and Sarnin, 1991).

Denison's research has documented a complexrelationship between culture and effectiveness(1990). In fact, he found an inverse relationshipbetween long-term performance and strength ofculture (measured by consistency amongst groupswithin the organisation) (Denison, 1984).

Hence while strong, cohesive cultures can pro-duce commitment, this might be the opposite ofwhat the organisation needs for either its longer-term performance or ethical conduct. Researchcautions that strong organisational cultures tend touphold conformity and drive out dissension produc-ing "strategic myopia" and rigidity (Lorsch, 1985;Bourgeois, 1984), inhibiting the organisation's capac-ity to scan its environment, to anticipate and respondto the rapidly changing needs of customers andother stakeholders. In the terrain of business ethics,where issues are constantly being redefined, suchinsularity can be a fatal weakness (Drake and Drake,1988).

Even some of the supporters of the strong cultureapproach admit problems of overzealousness, that'For the most part, ethical problems occur becausecorporate managers and their subordinates are toodevoted to the organization' (Murphy, 1989, p. 81).An example of a highly cohesive culture producingextreme actions by organisational members is theKaren Silkwood case where a whistle blower wasallegedly murdered by other organisational employ-ees (Schwartz, 1987). Cloning people in the organisa-tional culture is also seen to jeopardise the ethicalrobustness of the organisation in the longer termbecause it impairs the organisation's capacity todigest dissension and respond proactively to chal-lenge (Waters, 1978; Fitzgerald, 1989).

68 Amanda Sinclair

Research on organisational socialisation raisesquestions of whether culture is propaganda, andtraining is indoctrination (Pascale, 1985; Schein,1988). Berg warns of the "proximity" of effectivesymbolic management to "covert manipulation ororganizational seduction" (1988, p. 576). For thosewho embrace a strong culture, its very cohesivenesscan become a sanctuary. Insulated in the cocoon of acredo the management of the organisation candevelop a sense of omnipotence and invulnerabilityand individuals are absolved of the need to weigh upimplications and responsibilities. The organisationcan become an island of complacency, an outpost ofself-reinforcing norms.

As a management strategy, the strong cultureapproach understates conflicts of interest inherent inorganisations and tends to protect the power elite(Zaleznik, 1989). Individual employees have limitedpower. While they have exit power, that is they canleave (Hirschmann, 1970), this ignores their depend-ence on the job and the subtle and sophisticatedways managers "manage meaning" to obscure em-ployees' real choices.

In sum, creating a strong culture doesn't guaran-tee ethical behaviour, within management or em-ployee ranks, though it may impart a highly market-able veneer of ethical conformity. Opponents to thisapproach argue that the concept of a corporateculture is the antithesis of individual ethics, thatsuch a culture demands a "surrender" or "individualintegrity" to the organisation (Silk and Vogel, 1976).

The subcuhural approach

Using culture to enhance control, of ethical behav-iour as well as economic performance, has turnedout to be much tougher than expected. The lessonsfrom research are that you only meddle with theorganisational culture if you've got little choice, lotsof resources and lots of time — a combination ofcircumstances, some would argue, rare enough torender the approach irrelevant (Uttal, 1983; Drakeand Drake, 1988; Drucker, 1991; Lundberg, 1985).

While organisational culture now has a bad namein some circles, aspects of its explanatory appealremain. Cultural forces still seem to explain, betterthan anything else, why people in organisationsbehave, ethically and unethically, as they do. How-

ever, the task of influencing those cultural pressurestowards prescribed ends is more difficult.

Another managerial response then, instead oftrying to create culture, is to understand the valuedifferences of subcultures and the terrain of con-troversy within the organisation (Gregory, 1983).Researchers have increasingly focused on the degreesof variance in values and ideologies between hierar-chical and functional levels of the organisation(Arogyaswamy and Byles, 1987). They have alsoargued the need for managers to see past the attrac-tiveness of culture as a "lever" and "to understandthe paradoxes and complexities of our belief system"(Ackroyd and Crowdy, 1990, p. 12). Reed andAnthony conclude that "[t]o the extent that culturalmanagement is to be successful, rather than cosmeticor deceptive, it will have to comprehend compara-tive values and belief systems" (1990, p. 18).

This introduces a different, but not new, under-standing of organisational culture, which recognisesthe existence of subcultures and questions the powerand prerogative of management to control organisa-tional culture. Bridges (1986) argues:

In fact culture is not a pattern of total agreement but adialogue between opposing forces that agree on thenature of their opposition. Culture change is really a shiftin the definition of the opposition . . . not a conversionprocess in which a group of Sauls see a burning bush andbecome single-minded Pauls (p. 32).

Many cultural theorists have concluded that thesubcultures existing in organisations are more likelythan corporate cultures to be the repository of valuesand norms that are lasting and significant influenceson behaviour (Martin and Siehl, 1983; Wilkins andOuchi, 1983). Van Maanen and Barley (1985) definesubcultures as "a subset of an organisation's memberswho interact regularly with one another, identifythemselves as a distinct group within the organisa-tion, share a set of problems commonly defined tobe the problems of all and routinely take action onthe basis of collective understandings unique to thegroup" (p. 38).

While the spectre of subcultural confiicts mayspell nothing but trouble for the manager intent oncontrol, there is some evidence that organisationscan not only tolerate many subcultures, but alsobenefit from the discourse about values which theyinevitably spawn. Where these subcultures are part

Organizational Culture and Ethics 69

of, or operate as, an "occupational community" theybring to the organisation powerful potential re-sources of commitment and control (Van Maanenand Barley, 1984). Many professionals arrive inorganisations, already socialised into a particularsocial commitment and moral language. Instead ofoverruling such identifications and the moral im-peratives they already contain, organisations could"take seriously" and help develop the professionaland the "profession as a moral actor" (Norton, 1991,p. 622). Instead of imposing corporate-derived ethi-cal values the task for managers becomes one ofunderstanding and unleashing the moral commit-ment of subcultures towards goals which are con-sistent with, or ideally advance, those of the organ-isation (Martin and Siehl, 1983). By relinquishingpower to subcultures, communally-mediated controlis effectively increased; by sponsoring autonomy,commitment can be nourished; by encouraging con-nections between organisational subcultures andwider community groups, the organisation's reservesare enhanced, not undermined.

Fostering such subcultural co-existence has pro-duced robust and workable outcomes in a variety ofcircumstances. For example, Masel (1989) highlightsthe positive impact of judicial values and legalcultures on the determination of appropriate corpo-rate regulation. Similarly, Thynne and Goldring(1990) argue that the process of administrativereview is best understood as the outcomes of com-peting administrative and legal subcultures, includ-ing pragmatic advocates, bureaucratic protectionistsand economic rationalists.

Research on team behaviour in organisationssupports the conclusion that diversity of back-grounds, perspectives and values is an asset thatprotects the group from the hazards of "groupthink"(fanis and Mann, 1977). In a highly volatile environ-ment it is essential that the members of the strategicdecision-making team have highly differentiatedperspectives (Bourgeois, 1984). A diversity of pro-fessional norms and styles is also crucial to teamperformance and creativity (Belbin, 1981).

But it's more than just pooling talents that isimportant. In their comprehensive study of theeffects of threats and crises on individuals, groupsand organisations, Staw et al. (1981) conclude thatindividual, group and organisational effects combineto increase concurrence seeking, the desire for

cohesion at the expense of comprehensive informa-tion seeking and processing. Turner (1976) in hisresearch on disasters reaches a similar conclusion,noting the "collective blindness" and "exclusivity"that accompanies entrenched organisational culturesand contributes to warnings being ignored or over-ruled by organisation members (p. 388). A commonorganisational strategy to counter such concurrenceseeking is to give outsiders, those who do not comefrom the dominant culture, authority and the clearmandate to question (Lorsch, 1985).

We can conclude then that subcultural awarenesscan stimulate more ethical behaviour if the cause ofa lack of ethics include insulated or blinkeredprofessional values. Subcultures can act as a source ofsurveillance and critique over other groupings in theorganisation, who may enjoy a privileged position.Subcultures in organisations can then be construedas sources of ethical discourse and dialectic as wellas confiict. A scholar of corporate crime similarlyhypothesised that "criminal behaviour is learned inassociation with those who define it favourably andin isolation from those who define it unfavourably."(Sutherland, 1983, p.63). Thus "(c)ultural homoge-neity," close personal and power relationships, can allconspire to reinforce a subculture which definesunethical behaviour favourably. The most risks liewhere a dominant subculture is insulated from thosewho offer a different definition of ethical actions.

This view of organisational culture is consistentwith a particular understanding of ethics in organ-isational life. Denhardt (1988) defines administrativeethics as a process of independently critiquing deci-sion standards, based on core social values which canbe discovered and subject to personal and profes-sional accountability. The essential steps in theprocess of being ethical are firstly, self-scrutiny,weighing up individual obligations and responsibili-ties, then weighing up professional and organisa-tional responsibilities, taking personal responsibilityfor a decision and critically analysing the underlyingassumptions of each course of action to betterunderstand value choices, before finally applyingdecision standards and deciding.

A key ingredient of ethical behaviour we couldargue then, is the process of moral thought and self-scrutiny that precedes it. This understanding ofethics puts weight on the process of thought thatprecedes action, to qualify behaviour as ethical. If it

70 Amanda Sinclair

is argued that being ethical requires a level ofrefiexivity and ongoing self-inspection, then it is notenough to adhere simple-mindedly to standards ofbehaviour prescribed by others. Being ethical mayrequire doing the opposite of what is "comfortable. . . acceptable . . . or expected" by the culture.Managers must "be wary of simply doing things 'theway we do things around here' " (Toffier, 1986, p.346).

The subcultural approach has several advantagesover the unitary or strong culture approach. It isconsistent with findings about the nature of organi-sational culture and it promises to provide a spur tomore reasoned ethics in organisations where ahierarchy is entrenched. The major shortcomingswith the subcultural approach are that of imple-mentation. Difference, if valued for its own sake, is arecipe for organisational anarchy: "accepting thelegitimacy of differences in organisational culturecannot and should not lead to the kind of culturalrelativism which presumes there is somejustificationfor any and all cultural differences" (Metcalfe andRichards, 1987, p. 82). Further, nurturing processesof self-inspection and critique among subcultures ofthe organisation may induce a morally self-awaregroup, which satisfies ethicists in its processes, butdoes not produce virtuous behaviours or outcomes.How then do organisations make the most of thesubcultures which exist within them without creat-ing a prison of pluralism, in which there is no netbenefit of understanding, simply endemic confiictand confusion?

The first step is to develop an understanding ofthe "native" subcultures (Gregory, 1983), of theterrain of existing ethics and values and the points ofdifference. In identifying areas of controversy, pointsof potential consensus are developed or a cohesionprofile (Arogyaswamy and Byles, 1987) and this canbe the basis of a core of ethics for the organisation.For example, in a professional organisation, bothprofessional and managerial subcultures typicallyshare a commitment to quality and chent service(Sinclair, 1991). While these subcultures wdll dis-agree vociferously on how this service is achieved,the identification of common core values serves as abenchmark against which operating norms can beevaluated. Finally, the organisation needs to devoteconsiderable resources to working out how various

subcultural practices and norms are to be reconciledwithout compromising core values and ethics.

Such an approach does not impose a corporateculture. Instead it aims to stimulate more ethically-aware behaviour of members of subcultures bycollaboratively surfacing an awareness of subculturaldifferences, competing and common values and theireffects on outcomes. The subcultural approach doesnot rely on management as the architects of themoral code, but works by encouraging individuals tounderstand and challenge the ethics and values theybring to the organisation.

Peters and Waterman (1982) identified this capac-ity to celebrate diversity around some shared co-mmon values as "loose-tightness." But there are verysignificant obstacles to the reahsation of this ap-proach, paralleled in attempts to manage workforcescomprised of more racially-diverse groups and morewomen. The management of diversity by recogniz-ing and valuing difference and strategically sponsor-ing the cultivation of complementary contributionsis a new and unfamiliar managerial paradigm, whichconfronts many obstacles (Adler, 1988). People inorganisations and especially managers are uncom-fortable with ambiguity and tend to view such aprocess as abdicating managerial prerogatives andresponsibilities and relinquishing power.

Conclusion

Two approaches for managing organisational culturetoward better ethical ends have been explored. Theyderive from two fundamentally different under-standings of organisation and the role of manage-ment (Burrell and Morgan, 1979). While the strongculture approach adopts a more instrumental per-spective envisaging the organisation as a whole, withan existence, goals and interests independent of itsmembers, the second approach sees the organisationas a shifting coalition of people who agree to par-ticipate in a relationship to advance their individualinterests (Georgiou, 1973).

The first approach of management taking the leadin creating a unitary and cohesive culture assumesthe corporate moral conscience can be upheld byrational and enlightened decision-making and basiccontractual agreements. The second approach envi-

Organizational Culture and Ethics 71

sages the task of management as sponsoring the co-existence of subcultures, the surfacing and debate ofvalue differences and the porousness of the organisa-tion to changing external values.

Both approaches contain different risks for busi-ness ethics. In the first approach, the risks are thatthe ethics are those of a managerial elite, out oftouch with the environment in which the organisa-tion operates, or alternatively that these ethics arenot internalised, but just given lip service by muchof the organisation. The risks in the second approachare that the plethora of competing values of subcul-tures allows deviant groups to flourish, leavingmanagement unable to find a common basis onwhich to proceed and an anarchic or paralysedorganisarion.

Each approach offers the promise of a differentkind of ethics. A unitary cohesive culture encouragesadherence to acknowledged and enforced standardsof behaviour. This approach recognises ethics in thepresence of certain virtues in espoused word anddeed. It does not, of course, necessarily producemorality. While conformity need not exclude moralreflection, the essence of this view of organisationalculture is that it removes the need to be reflecdve.Values and norms become so entrenched that self-inspection is unnecessary.

in contrast, the subcultural approach eschewsimposing standards but vests efforts in nurturingindividual processes of self-inspecdon, cridque anddebate. While this debate occurs in a broadly man-aged framework, it uldmately relies on individual,rather than institudonal processes, to produce betterethics.

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