Write a short paper that demonstrates a brief analysis on the attached Ethics and Organizational Culture Article
ECOFORUM
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Loredana TEREC -VLAD 18
Stefan cel Mare University of Suceava, 720229, Roman ia,
Lumen Research Center in Social and Humanistic Sciences
Marius CUCU
Stefan cel Mare University of Suceava, 720229, Romania
mariuscucu [email protected]
Abstract
The aim of this paper is to analyse the organizational culture within the business environment. The paper
analyzes the ethical criteria of the entrepreneurs and the way they relate to the consumer, as well as the
reinforcement of th e moral values so that the final result of the economic activity is represented by sustainability
and economic profit. We thought it would be important to point out that promoting an ethical firm can ensure the
well -needed trust capital in a constantly cha nging society. In this context, corporate responsibility is a key
element that ensures both the sustainability of the company as well as the sustainability of the relations with the
business partners.
In our view, a strong corporate culture must integrate ethics and responsibility in all its activities, since the
focus is often laid on obtaining profit, not on t he values that should lead the organization towards success over a
long period of time. Since our society provides both positive and negative information regarding any company or
organization, the focus should be laid increasingly more on the ethics and responsibility of the human resources
in regard to the external environment of the company.
We thought it would be appropriate to bring up these issues since the issue of building an organizational culture
is at a very early stage in our country, and most entrepreneurs only aim at obtaining short -term profit. The fees
and taxes are high and the thick legislation often does not provide alternatives; therefore, one must take into
account the fact that the real profit is not represented by the short -term benef its, but rather by the benefits
obtained in a constant manner over medium -long periods of time.
Key words: ethics, organizational culture, trust capital, profit, economic activity
JEL Classification: L20
I. INTRODUCTION
In a constantly changing society, wh ere the needs of the individual are becoming increasingly
diversified and the products and services can be substituted at any time, the main interest of the entrepreneur is
to obtain profit and ensure sustainability over time. The manager’s actions and the way he and implicitly the
organization he is managing relate to the consumer can make the difference between success and failure in
business. A first aspect that the focus is laid on is related to the entrepreneur’s behaviour, since the responsibility
tow ards the business partners should by no means affect the environment or the community. Nowadays people
talk increasingly more about business ethics, business responsibility or about the responsible behaviour towards
the business partners. All these aspects are, in our opinion, purely theoretical, given that in practice the vast
majority of the business people from the former communist countries largely excel at lack of culture (Botescu, I.,
Nicodim, L., Condrea E., 2008). The main ethical issues of business are closely related to the economic
indicators of the organization’s activity - the measurable revenues, the expenses and the profit; we can also add
the responsibility indicators, expressed by obligations towards the other persons wherewith one comes int o
contact within the business environment (Botescu, I. Nicodemus, L., Condrea E., 2008). Due to these issues,
business ethics does not enjoy a clear status, given that the association between the terms business and ethics
may seem inadequate Maxim, S.T., D ascălu, I.D., Hapenciuc, V., 2008): on the one hand, one seeks to maximize
the profit and, on the other hand, the responsibility towards the products or services that the company is
providing to the consumers.
18 This work has been supported through the project “Interdisciplinary excellence in the doctoral scientific research in Romania - EXCELLENTI A”, co -funded from the European Social Fund through the Human Resource Development Operational Program 2007 -2013, contract no. POSDRU/187/1.5/S/155425.
ETHICS AND ORGANIZATIONAL CULTURE – KEY ELEMENTS REGARDING THE
DEVELOPMENT OF ECONOMIC ACTIVITIES ECOFORUM
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In a society where everyone can find out anyth ing, the question of business transparency is raised.
Business ethics is not just about fair competition or responsibility; it also involves many other aspects, including
a strong code of ethics. Ethical codes are written documents that refer to values, no rms and behaviour, which are
legally connoted (Miller, V., 2006); however, this does not mean that they require exclusively complying with
the legal framework; they are simply a set of decision tools which are useful for solving the conflicts that might
arise between employees and employers, between managers and shareholders (Dinu, V., 2008) or between the
organization and the business partners . The bigger the organization is, the greater are expectations of the society
regarding that organization, since t he ethical behaviour is a consistent action, with an accepted code of behaviour
(Purcărea, T.V., Purcărea, A., 2008)
Business ethics requires a particular approach, given that the decisions have economic implications. On
the one hand, it is about ethical d ilemmas, and on the other hand about the legal aspect of the organization's
actions. Since the question of institutionalizing ethics is raised within organizations, we cannot talk only about
business ethics, but also about the ethics of organizations. This involves “an articulation, application and
assessment of the organization's values and moral positions” (Agheorghiesei, DT,, 2011); these issues “derive
and develop within an organizational culture where the vision and the mission consist of professional and
managerial performances and in reaching the organization’s objectives upon the current practices”
(Agheorghiesei, DT, 2011). In this context, besides institutionalizing ethics, one raises the issue of integrating
ethics within the organizational cultur e of the companies.
Business organizational ethics does not only involve an ethical behaviour or a behaviour that complies
with the legal framework in force (Terec -Vlad, L., Trifu, A., Terec -Vlad, D., 2015). On the contrary, one can
talk about aspects rela ted to the internal and external communication. However, communication is closely
related to ethics, which is why we thought it would be appropriate to bring into question the fact that ensuring
the comprehension of the messages must take account of the to ne, time, moment and completion of the
communication. From the managerial perspective, communication is one of the tools that the leader most often
appeals to in order to coordinate his subordinates; it includes items such as:
- The emergence of a thought or idea that the issuer is going to structure in a logical form (Burciu,
A., 2008);
- As a result of this structuring, one can say that the idea was decoded under the form of an explicit
message (Burciu, A., 2008)
- The explicit and complete transmission of the message towards the receiver (Burciu, A., 2008);
- The type of channel used - oral, telephone, e -mail (Burciu, A., 2008);
- Preliminarily preparing the recipient for receiving the message (Burciu, A., 2008);
- Decoding and understanding the message (Burciu, A., 2008).
As previously mentioned, we can talk about ethics within communication as well; when transmitting the
message, one should not use manipulation and persuasion strategies or phrases with double meaning for
everyone to understand what they want. Commun ication ethics must be based on a series of values such as
honesty, trust, integrity and respect for the organization's internal and external environment. Since ethics is most
often confused with professionalism, we believe that communication should be tac tful, without resorting to
manipulation, even when solving conflicts. One of the most important values that organizations focus on is the
truth and along with it freedom, responsibility and autonomy.
Ethics and communication do not only refer to issues rel ated to the transmission of messages (Posteucă,
N., 2015) or related to the society where the organization carries out its activities; thus, the issue of becoming
rich over night is raised, especially since the economy is currently quite unstable. Vasile Morar believes that the
main types of issues are: determining the fairness of resource distribution, the way of converting a clear principle
of equity to particular cases, the conflicts of values, the consequences of the new technologies and problems that
arise due to the development of moral intuitions and the task of putting them into practice (Morar, V., 2006). On
the other hand, another set of problems faced by business ethics involves:
- Is an organization forced to help fight the problems faced by the society? (Shaw, W., Barry, V.,
1992);
- Is it legitimate for the employees to use the positions they hold within companies in order to
advance their own interests? (Shaw, W., Barry, V., 1992);
- Is passing a personality and honesty test a justifiable criterion for hiring a person? (Shaw, W.,
Barry , V., 1992);
- Should the producers show the flaws of their products? (Shaw, W., Barry, V., 1992)
- What are the obligations of an employee towards the parties outside the company such as
customers, competitors and the society in general? (Shaw, W., Barry, V., 1992)
These are just some of the issues that the researchers in the field of organizational culture argue upon in
order to analyze the firms’ behaviour in relation to the issues listed above. Nowadays people talk increasingly
more about ethical education. ECOFORUM
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In this context, Monica Petcu and Eduard Dinu believe that through ethical education one aims, on the
one hand, to ensure certain knowledge that enables the integrative -systemic approach of the problems, the
deceleration of the interdependencies and speci fic conditionalities, the critical analysis and sustainable design of
the business, handling the ethical dilemmas based on ethical theories and, on the other hand, to train
professionals that adhere to the values of the company, are open to cooperation, ar e concerned with self -
education, create added value and are good communicators within the company’s activities and in the public
space and to form adhocracies (Petcu, M. Dinu, E., 2014)
II. GENERAL ASPECTS OF THE ORGANIZATIONAL CULTURE
The organizational cul ture refers to the values, beliefs and practices accepted by the members of an
organization, which are transmitted from generation to generation by the employees ((Deaconu, A., Podgoreanu,
S., Rasca, L., 2004). They are required - we could say – by the org anization's manager, given that one
specifically aims to obtain long -term profit, together with loyalty and responsibility towards the business
partners. Not all the organizations have the same organizational culture and they do not all focus on the same
types of values; the organizational culture acts as a reference system which allows the members to act in
accordance with the external environment (Cîrnu, D., Boncea, A., 2010); for this reason, the elements that
characterize the organizational culture are difficult to define, they are multi -dimensional and focus on the group
or the individual; on the other hand, they involve: integrating the subunits, which can be independent or
interdependent, risk tolerance, awards and rewards, focusing on the goals or th e means, the degree of openness,
and the need to analyse and change the organizational culture (Cîrnu, D., Boncea, A., 2010).
Although there is no universally accepted definition of the organizational culture, the term can be
defined as the values, attitud es, beliefs and practices promoted within an institution or organization. Going
further into this issue and taking into account the fact that even since year 1952 there were around 164
definitions, we shall present the components outlined by Huczynski and Buchanan:
- Slogans: they are ideas that highlight the company's current activity; they change periodically
(Huczynscki, A. Buchanan, D., 2001);
- Symbols - are a sign that suggests one of the company’s goals (Huczynscki, A. Buchanan, D.,
2001);
- Artefacts or b uilding designs – are issues whereby the organization is individualized in the view of
the public opinion (Huczynscki, A. Buchanan, D., 2001);
- The language or technical vocabulary (Huczynscki, A. Buchanan, D., 2001);
- Myths and heroes from the history of th e organization, which enable the exemplification of the
values that actually define the organizational culture (Huczynscki, A. Buchanan, D., 2001);
- Rituals from the organization’s activity, which involve incorporating the elements of the
organizational c ulture in the employees’ thinking and behaviour (Huczynscki, A. Buchanan, D.,
2001);
- The values, which are the essential component of the organizational culture and influence the firm's
view regarding business ethics (Huczynscki, A. Buchanan, D., 2001);
Since the values are the most important aspects of the organizational culture, one must note that they are
strategic doctrines that are stable over time; they are the basis for the assessment of the organization’s members,
whereby situations, objects and peo ple are being assessed (Dominguez Silva, I., Rodriguez Dominguez, B.B.,
Navarro Dominguez, J.A., 2009). Luminita Oprea believes that each organization must first determine the values
that guide the company's existence. In this respect, each organization mu st:
- Focus on the individuals in the organization (Oprea, L., 2005);
- Build a corporate conceptual legacy, by integrating ethics into the learning and training process
(Oprea, L., 2005);
- Put employees first (Oprea, L., 2005);
- Know the communities where it ca rries out its activities (Oprea, L., 2005);
- Develop a system whereby the debates remain transparent (Oprea, L., 2005);
- Form wise partnerships (Oprea, L., 2005);
- Measure the impact of its activity (Oprea, L., 2005);
- Report the obtained results inside and ou tside the company (Oprea, L., 2005).
There are several differences between the organizational culture and the organizational climate, which
refer to the social context that influences the internal and external adaptation, the nature of the phenomena and
the holistic nature of the phenomena (Năstase, M., 2004). The cultural phenomena that occur within the
organization are related, on the one hand, to the national and local culture, and on the other hand to the
professional communication and the practices pr omoted by the members of the organization (State, O., 2004).
We believe that the analysis of the organizational culture is extremely important, given that there are a lot of
factors, including the political, geographic and economic factors, which may adver sely affect the activity of the ECOFORUM
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firms, thus generating deficit and implicitly huge losses. A strong organizational culture together with
organizational ethics can make the difference between performance at enterprise level and the optimum climate
for achie ving the goals.
Besides these aspects, one must take into account the fact that the development of techniques and
technologies also involved the emergence of several problems related to the image of the organizations. Because
the mass media daily broadcast s news and events regarding the unethical behaviour and the lack of transparency
of the companies, the development and penetration within the international markets has become increasingly
difficult. We are stating this in the context where the legislation changes every day and adapting to the customer
needs can be difficult especially since certain products are often substituted with cheaper ones. Hence, the fact
that organizations must strictly relate to the requirements of the consumers, through a strong organizational
culture, based on professionalism and transparency.
Our suggestion regarding the organizational culture refers to the fact that the issues related to the
applicability of the ethical laws are both theoretical and practical given that, once t he consumer requirements
have been identified, the respect for the consumer and implicitly for the company must evolve in predictable
directions. Taking into account the fact that every company must face various changes, the analysts in the field
of organi zational culture are focusing increasingly more on the organizational diagnosis. The organizational
diagnosis should be determined not only in crisis situations, but also in those periods when the company is
profitable, since it helps identify the appropri ate actions in accordance with the requirements of the market where
they are competing.
III. CORPORATE RESPONSIBILITY
Reputation is considered the image that the society perceives regarding a company or organization.
Reputation is closely related to the trust capital granted to the business partners and to the social sphere in
general. Building a solid reputation can be achieved through socially responsible actions (Sandu, A., 2009), since
moral behaviour is considered one of the main strategies of the company within the markets. Nowadays the
focus is laid increasingly more on the social and environmental aspects; this is why most speeches and public
debates refer to these issues.
The concept of corporate social responsibility arose as a result of several econom ic practices that
affected the social sphere; they thought that the absence of a legal framework allowed for the violation of the
moral norms. In the developed countries, where there are legal norms, companies and organizations comply with
them; however, i n some developing countries the legal framework allows the performance of fraudulent or at
least immoral actions. Today, social responsibility (Sandu, A., 2012) is based on elements such as transparency,
orientation towards innovation, broad vision, verifi ability and continuous improvement (Moneva, J., 2005); it is
believed that socially responsible behaviour is measured through the sustainability of the organizations’
activities.
The social responsibility of the firms involves a new model of productive rel ationships,
interconnections between the public and private strategies, and involvement of the various agents within the
socioeconomic system (Perez Gonzales, M.C., Blanco Canto, M., Tocino, M., 2013). Responsibility involves an
internal and external compr omise; for this reason, as an element of continuous improvement within the
organizational dynamics, adapting to the endogenous factors and agents is essential. The evolution of corporate
social responsibility involves social marketing issues, and a new man agement area within the company’s
organization chart.
Talking about corporate social responsibility involves several aspects:
- Responsibility towards the legal framework
- Responsibility towards the environment
- Responsibility towards the human rights
- Responsi bility towards the profession
- Responsibility towards the organization the individual belongs to
- Responsibility towards the future of the planet and the generations to come
- Responsibility towards one’s own actions, towards one’s own person.
Besides these as pects, one must take into account the values such as: equity, respect, honesty and
integrity. Researchers in the field believe that CSR is voluntary and involves creating long term relationships
with the market and the social environment so as to ensure ec onomic prosperity and the improvement of social
cohesion (Hristea, A.M., 2011). Because there is no universally accepted definition of the corporate social
responsibility, specific literature provides a wide range of terms that could amount to this concept : on the one
hand, we talk about corporate responsibility and corporate governance and, on the other hand, about responsible
entrepreneurship and corporate citizenship (Barbu, I.A., Chirea, G., Constantinescu, L., 2011, apud Grigore, G.,
Grigore, Ghe, 2009 ). ECOFORUM
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Given that it has become increasingly difficult for companies and organizations to enter the market and
remain there, corporate responsibility faces a number of difficulties especially on the part of the firms: on the one
hand, the issue of obtaining pr ofit is raised, and on the other hand, the issue of resisting on the market in the
context of fierce competition. Maxim, A. identified several obstacles regarding the orientation towards
responsible behaviour:
- Adapting to CSR requires continuous efforts an d adaptations
- A steep learning curve
- Difficulties in terms of getting help
- CSR is a complex area, with social, environmental and economic impact and influences
- The boundaries are not clear
- There are difficulties in terms of establishing a credible and effe ctive CSR approach
- The time required for CSR activities
- The CSR language must be materialized especially when it comes to SMEs (Maxim, A., 2006)
The analysis conducted during this study led to the conclusion that the firm’s social responsibility and
the or ganizational culture complement each other; thus, we can talk about creating a positive image of the
organization within the society. Promoting an ethical company that provides respect and trust both for the
business partners as well as for the employees i s the key to profitability and sustainability over time. In the
context of fierce competition and ever -changing needs, the only aspect that should remain permanent in business
is ethics. Given the postmodern condition of our society (Guliciuc, V., 2014), r esponsible behaviour and ethics in
business relationships involve transparency and internal and external compromise.
For this reason, we believe that before talking about the financial issues, we should talk about internal
and external compromise, ethical behaviour and responsibility for the actions undertaken. A responsible
organization aims at maximizing the profit only through a type of behaviour that highlights the social value.
Social responsibility as a part of the organizational culture and the busin ess strategies is closely related to justice
and the way organizations act.
The business environment can often bear changes and therefore the actions should be based on social
dialogue. One of the constant concerns of the companies and organizations is the level of consumer satisfaction.
Investigations must take into account the quality -price ratio, the geographic area and the type of customers.
Involving the organizations in this type of activities requires focusing on the business partners, since creating
benefits for all the parties involved may entail their satisfaction.
IV. CORPORATE CULTURE AND THE COMPETITIVE ENVIRONMENT
Within a constantly changing society, a strong corporate culture that integrates ethics in all its activities
is essential. We are stati ng this because the focus is often laid on obtaining profit, not on the values that should
lead the organization towards success over a long period of time, while at company level the employee’s
commitment and loyalty towards the company start to fall af ter less than six months from the date of
employment, and after maximum two years many employees start considering the possibility of changing the job
(Rogojanu, A., Badea, L., 2009).
This happens most often due to lack of values, the lack of motivation an d implicitly the lack of
performance, since a drop in the company’s revenues that is visible to the employees may reduce their
efficiency. Development and performance are extremely important, especially for start -up companies, and the
entrepreneurs' percep tion regarding the business environment includes, among others, the ability to solve
problems (Nicolescu, O., Nicolescu, C., 2013). However, when it comes to competition, we must keep in mind
the fact that the human resources make the difference between su ccess and failure because:
- Commercials are made by PR specialists – thus, human resources
- Sales are made by sales specialists - thus, human resources
- Purchases are made by the purchasing department, which is composed of human resources, etc.
In this cont ext, if all the activities of a firm or organization are undertaken by the available human
resources, then they need to be trained so as to reach maximum efficiency in all the activities they conduct. For
this reason, ethical and deontological codes, such as the codes of: public notaries, architects, doctors and
academics prevent and combat unfair practices, promoting equitable, fair and honest actions ( Ioncică, M.,
Petrescu, E.C., Ioncică, D., 2008). Rogojanu A and Badea L believe that a clear philosophy is a very important
element that eases the decision -making process, since it guides all the firm’s actions in the market in order to
beat the competito rs (Rogojanu, A., Badea, L., 2009). Therefore, human resource management must become a
strategic function of the company, as important as finance or marketing, since responsibility is the key value
(Niculescu, N., 2006). In addition, the ethical value is g iven by the way the company promotes the ethical
values, given that moral behaviour is only possible in a free society (Trifu, A., Terec -Vlad, L., 2013). We believe ECOFORUM
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that the strategies of the organizations must comply with the requirements of the business partners in order to
build sustainable businesses that lead to obtaining benefits such as: trust capital, motivation of the human
resources, market share increase, etc. Since our society aims to obtain maximum benefits in exchange for as
small payments as possible, the dilemmas of the managers regard choosing the most appropriate strategy, which
ensures the sustainability of the business (Ganescu, MC, 2012):
- Social and societal strategies
- Ecological and environmental strategies
- Responsible distribution and supply strategies
- Corporate image creation strategies
- Strategies for obtaining competitive advantages
- Strategies for obtaining added value (Ganescu, MC, 2012)
In our opinion, they can be built only through a strong organizational culture that ensures eth ics and
communication within these strategies and implicitly the responsibility in the organization's internal and external
environment. Regarding communication, it plays an extremely important role in solving the conflicts, because it
can increase the und erstanding and reduce the risk of jumping to conclusions or making generalizations (Hener,
G., 2010). On the other hand, nowadays we need moral education and reflexive thinking in the context of
permanent changes at any level (Lenta, O., 2015), as well as methodologies and pragmatic strategies within the
learning process ( Eși, M.C., Posteucă, N.L., 2014).
V. CONCLUSIONS
The aim of this paper was to emphasize the importance of organizational culture in a society which
focuses increasingly more on ethics and responsibility. If until recently the focus was laid on profit, lately
corporate responsibility towards the business partners, the environment, the consumers, etc. has become a largely
talked about issue. We thought it would be appropriate to analyze these aspects not only because organizational
culture is a key element, but also because promoting an ethical company can ensure the well -needed trust capital
in a constantly changing society.
A good reputation can be built only through socially responsible actions, since moral behaviour is
considered one of the main strategies o f the company within the markets. We also thought it would be
appropriate to bring into question the importance of the human resources within organizations, since they
represent the engine of the economic activities and we may say that they can make the di fference between
success and failure in business. In this context, the motivation of the human resources and a strong
organizational culture are key elements that every firm should take into account if it also aims at sustainability
over time besides obtai ning profit. Social responsibility and internal and external compromise are elements of
continuous improvement within the organizational dynamics; therefore, the evolution of corporate social
responsibility involves creating a new management area within th e firm’s organization chart.
We thought it would be appropriate to bring these issues under discussion since the legal framework of
our country, as well as the heavy fees and taxes often do not provide any other alternative but the attempt to
obtain short -term benefits. However, we believe that the real benefits can be obtained based on the trust capital
that the company or organization provides for the business partners. Trust capital implicitly leads to obtaining
profit for extended periods of time; for t his reason, the change in mentality should be as fast as possible in order
to ensure the financial benefits expected by the entrepreneurs.
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