Relationship between Employee Perceptions of Corporate Ethics and Organizational Culture: An Exploratory Study

Abstract

Organizational research in the last two decades has paid greater attention to the topic of culture as a potential key or critical lever for better understanding of organizations. Culture has drawn attention to the long-neglected, subjective, or ”soft” side, of organizational life. In functionalist thinking, culture is considered a component of an integrated social system which promotes the effectiveness of the organization and the well-being of all its stakeholders. Organizational culture refers to the assumptions, beliefs, goals, knowledge and values that are shared by organizational members. Culture represents the high-information ”ideal factors” in a system or organization that exert significant and partly independent influence on human events. When an individual is faced with an ethical dilemma, his or her value system will color the perception of the ethical ramifications of the situation. This study, then, seeks to explore and have a basic understanding of the relationship between such value systems and employees' perceptions of organizational ethics. Analysis of a survey of 136 MBA students who are managers in Philippine companies regarding their firms' culture and their organizational members' perceptions of ethics reveals that there is a slightly significant relationship between particular cultural characteristics and employee perceptions of organizational ethics. This finding provides modest support for the theory that organizational values are associated with organizational members' perception of ethical business dilemmas. It likewise confirms the suggestion in the literature that organizations take on various cultural characteristics along the different stages of their life cycle, and that individual values and ethical perceptions do interact with the organizations' value systems.