Organizational culture plays a fundamental role in the functioning of modern organizations. It serves as the factor moderating behaviors and decision-making processes of employees. Moreover, it presupposes a specific code of ethics to determine the nature of individuals’ behaviors and solutions. However, shaping and sharing these two concepts might be complex and demand much effort. This literature review aims to define the organizational culture and ethics, their current types, as well as their impact on work and motivation and explains how to cultivate the desired framework. Organizational culture is a set of values, norms, beliefs, visions, and attitudes shared by members of a unit and affecting their behaviors. Leaders select among adaptability, mission, clan, and bureaucratic types regarding the firm’s nature and its focus. The review emphasizes that founders and leaders are responsible for creating the culture as the basis for further evolution and selecting the method of its sharing. It might presuppose creating specific traditions, customs, and models explained to newcomers. Many researchers focus on organizational culture because of its positive impact on motivation and employees’ performance levels. The literature review proves the direct correlation between established traditions and climate within a collective and its ability to achieve goals. The paper also defines ethics as a framework for analyzing acts and their background. The review proves its vital role in organizations as it helps to establish the code of conduct for decision-making and cooperation with other employees. The literature review evidences the importance of organizational culture and ethics for modern organizations.
Shaping Cultures and Ethics of the Organization
The stable functioning of an organization and its ability to evolve critically depends on values it has and relations between employees. However, the shift towards diversity and the emergence of big international companies introduce the additional complexity of managing big teams and preserving high motivation and performance levels. Under these conditions, the corporate culture and ethics are fundamental for successful functioning and outstanding performance. The existing literature also recognizes the central role these two aspects play within organizations and emphasizes the need for their cultivation.
The primary goal of the given literature review is to investigate the concept of organizational culture and ethics, their basic aspects, and how they can be cultivated in modern organizations. The scope of the selected problem presupposes that there is an extensive body of knowledge devoted to the chosen terms. For this reason, it is vital to structure this information and discuss it to improve the understanding of the role two phenomena play in organizations today and how they can be cultivated. At the same time, new trends in shaping and sustaining culture are discussed. The paper also focuses on types of organizational culture, their use in different cases, and how managers should select among the available frameworks.
Altogether, the proposed research is devoted to organizational ethics and culture. It offers the central information about how they can be cultivated and employed to attain better performance and results. The study structures the existing data and ends with the conclusion section summarizing all provided information and outlining the basis for future research.
Definition of Organizational Culture
Every organization has its unique nature, which is explained by its goals, peculiarities of functioning, and sphere to which it belongs. It also means that their values and views are also different and alter regarding the context. Under these conditions, organizational culture becomes a complex notion depending on multiple factors. Daft (2015) defined it as a set of values, norms, beliefs, visions, and attitudes shared by members of a unit and explained to all newly hired employees as an appropriate way to respond, work, and behave. This definition proves the significance of the concept for groups and its impact on all spheres of an organization’s work.
Types of Organizational Culture
The firm should cultivate organizational culture regarding the current goals and the dominant ideas to promote further growth. Researchers differentiate the four central types of culture such as adaptability, mission, clan, and bureaucratic (Schein & Schein, 2016). Adaptability type provides more flexibility, innovation, and focuses on the external environment to fulfill current clients’ demands (Daft, 2015). The mission culture appreciates the achievement and clear vision of the purpose (Daft, 2015). Units with the clan culture devote more attention to employees, viewing them as a critical part of the organization and fulfilling their needs to boost performance (Daft, 2015). Finally, the bureaucratic type presupposes focus on the internal environment, stability, and observation of current traditions (Daft, 2015). Leaders should be responsible for choosing the appropriate organizational culture as it might either facilitate or hinder the rise of a unit.
The existing literature outlines several critical elements that should be considered when selecting among available types of organizational culture. These include the desired outcome, planned leadership styles, peculiarities of the collective, nature of tasks, and degree of innovativeness (Ugheoke, 2021). For instance, the adaptability type is beneficial for organizations promoting innovation and working with customers requiring unusual solutions and constant contact (Daft, 2015). At the same time, its employment for units with strict schedules and minimal cooperation with clients might result in the decreased effectiveness and inability to meet current goals (Walker, 2021). For this reason, researchers are sure that the performance of companies critically depends on the type of organizational culture chosen as the dominant one and the way it is taught (Pizam, 2020). It explains the necessity of devoting many resources to selecting the most applicable model.
The clan culture is another model that can be employed by leaders to boost the functioning of organizations; however, it also has specific limits. The fact is that it establishes a friendly and trustful atmosphere within a collective and helps to minimize the level of conflicts between team members. It also cultivates creativity and innovativeness via effective sharing practices and communication patterns. However, Walker (2021) has admitted that for organizations with authoritative leadership and the need to follow instructions, it might be unacceptable and deteriorate outcomes. For this reason, the organizational culture and its type should be aligned with the existing requirements and practices used by the top management. Otherwise, there is a high risk of failure and worsening of relations between team members.
Innovation and Culture
The modern approach to organizational culture often views it through the prism of innovation. For instance, Berte and Narapareddy (2018) were sure that leaders today should focus on creating a digitalized framework that helps to promote better performance and align improved cooperation. Because of the rise of technologies and means of communication, leaders acquire the chance to share dominant values and approaches by using local networks, e-mail, and videoconferences (Berte & Narapareddy, 2018). It means that top management can remain in touch with workers in distant regions and guarantee that the dominant corporate values and views are accepted by all team members. At the same time, this approach demands the creation of a unique environment and involvement of all workers in cooperation and collaboration, which is vital for outcomes.
Innovation organizational culture also presupposes the attempt to shift towards unorthodox thinking. Berte and Narapareddy (2018) assumed that the cultivation of this framework fostered the idea that innovation and use of technologies was not the task of the top management only, but everyone belonging to a particular organization should be ready to involve in the process to enjoy better outcomes. Under these conditions, creating a specific culture of creativity and innovation is vital for introducing new ways to perform traditional tasks, increasing profits, employee engagement, motivation, and health of the business. Furthermore, Berte and Narapareddy (2018) were sure that innovativeness could be established only if a unit has a developed culture supporting all incentives offered by the top management. In such a way, the correlation between culture and innovation is proven by the existing literature. Shaping this framework becomes critical for organizations aimed at generating a completive advantage and future evolution.
Moreover, innovativeness is often viewed as a unique type of organizational culture that emerges in companies today. Berte and Narapareddy (2018) said that digitalization of most important activities, the introduction of mediated means of communication within units via networks, and a specific approach for creativity were vital elements of the working environment in a significant number of modern organizations. They are focused on boosting performance by integrating technologies and educating specialists on how to use them. Under these conditions, it becomes vital to introduce alterations to existing organizational culture to adapt it to new terms and ensure it meets the requirements associated with innovations. Otherwise, the unit might fail, and employees will have high resistance levels because of the lack of understanding and vision.
Shaping, Sharing, and Sustaining Culture
The existing body of literature emphasizes that organizational culture does not emerge independently. On the contrary, its appearance, development, and existence depend on leaders and founders (Daft, 2015). Their vision of the company’s future and its mission impact the formulation of the values, ideas, and business strategy affecting the behavior of all employees and the tools they use to attain existing goals. For this reason, the creation of the culture is a complex process depending on top management and the firm’s goals. Daft (2015) has found that objectives should be viewed as the central factors influencing the establishment of the environment and its cultivation. Creating a successful group is a complex process that demands much effort and resources; however, it is vital for shaping the culture during the initial stages (Daft, 2015). The appropriate goal-setting and the use of communication tools to explain the company’s nature play a fundamental role in shaping the organizational culture. Men and Sung (2019) were sure that the quality of employee-organization relationships had a direct impact on the functioning of a unit. It means that the cultivation of culture through different communication channels is an effective approach to establish the desired framework.
At the same time, the creation phase should be followed by sharing and sustaining stages. It means it is vital to create rituals, traditions, and customs employees can share with newcomers to modify their behaviors and ensure their involvement in the process (Schein & Schein, 2016). It will guarantee a better climate and cooperation between workers. Discussing the role of traditions in the work of a group or organization, Schein and Schein (2016) assumed that they could be used as powerful encouragement and motivation tools to show the correct direction for the evolution of a unit. For instance, an organization with rituals that are appreciated and followed by employees looks more attractive for newcomers and increases the speed of being engaged and inclusion (Schein & Schein, 2016). In other words, the existence of customs helps to shape the mentality of fresh workers and make them the part of the collective. Such rituals simplify the task of becoming a part of a team for individuals as they are provided with methods to do it. From this perspective, the existence of such behaviors and models is vital for shaping and sustaining the organizational culture and should be given much attention by the top managers responsible for the successful work of the company.
Another approach to sustaining culture presupposes continuous communication with members of teams. Men and Sung (2019) have viewed symmetrical partnership and cooperation as the central approach to shaping culture. It can be used as the primary data collection tool available for top managers and used by them to improve the current understanding of how the collective works and what alterations are required to enhance its evolution. At the same time, research shows that employees who have the chance to discuss important questions with the top management are more satisfied with their current position and are ready to support the existing culture. For this reason, shaping and sustain activities demand cooperation, communication, and mutual understanding to avoid conflicts or problematic situations.
Coaching, Conversation, and Transformation
Speaking about organizational culture, researchers also admit the importance of coaching and conversation as a significant transformation tool that can be employed to improve performance and attain better outcomes. For instance, Junggren et al. (2018) discussed the correlation between organizational culture, coaching practices, and results. They revealed that the approach incorporating specific cultural artifacts, values, and relevant philosophy contributes to better talent management and shaping of the environment beneficial for the evolution of teams (Junggren et al., 2018). It means that correctly selecting aspects and visions that should be shared and cultivated, coaches, or managers can attain better progress in educating individuals on how to behave in particular situations and be ready to follow the proposed code (Junggren et al., 2018). At the same time, effective coaching practices should rest on appropriate communication styles accepted by most team members and helping to align the beneficial cooperation between them (Gochhayat et al., 2017). Following this approach, it is possible to establish the desired culture.
Furthermore, coaching and communication are viewed as important tools of self-transformation, which is also vital for organizations. McClellan (2020) stated that although organizations were viewed as social constructions and communication was considered a tool helping to promote change within these units, the role of an individual should not be diminished. Self-transformation plays a critical role in forming the desired organizational culture, while the correct use of language and its power helps to stimulate individuals and outline the current goals for them (McClellan, 2020). McClellan (2020) was sure that meaning-making practices were critical for boosting performance in the organization through driving positive change in existing values and beliefs. Under these conditions, the positive transformation is closely linked to the organizational culture and, at the same time, can be modified and improved by utilizing the correct communication forms.
Finally, the role of coaching, or personal conversation and training, is emphasized regarding the necessity to establish a new culture. Men and Sung (2019) were sure that a company aimed at promoting radical change or altering the vector of its evolution should focus on working with all team members to ensure they possess the correct understanding of how the goal should be achieved. For this reason, managers should play coaching roles and cultivate the desired organizational culture through conversation and communication (Schoeneborn et al., 2019). The consideration of culture, religion and social background can help to increase the effectiveness of this communication and attain better results. Altogether, the existing body of literature proves the critical importance of coaching practices and their fundamental role in cultivating the appropriate organizational culture, which can help to improve performance and attain better outcomes.
Impact on Work and Motivation
Numerous sources outline the correlation between the strong organizational culture and the company’s performance. Schein and Schein (2016) admitted that units with an established system of values demonstrated better outcomes and achieved existing goals more frequently than firms with weak philosophies or views. It means that culture positively affects the work of organizations as it provides all employees with rules and tools that can be used in complex situations and improve decision-making or planning. From this perspective, it becomes a potent tool that top managers should employ to boost performance and attain better results.
A strong organizational culture is a central factor for boosting performance and generating a competitive advantage. Joseph and Kibera (2019) analyzed the work of microfinance institutions in Kenya to determine the role the climate in the collective played in achieving the existing goals. Thus, Joseph and Kibera (2019) concluded that competitive advantage and better outcomes were linked to the organizational culture. It promoted better decision-making among workers and helped to minimize mistake rates by outlining the appropriate decisions and offering guidelines on how to resolve some problematic issues (Joseph & Kibera, 2019). The given example proves the assumption that cultivating a culture appropriate for a particular unit can help to attain higher performance levels or eliminate existing problems that occur due to the lack of confidence or inability to make correct decisions.
A strong organizational culture can also be viewed as a potent tool for cultivating inclusion and diversity. For instance, Roebuck et al. (2019) compared the performance of female managers and supervisors and their ratings by other team members. They concluded that in numerous cases, males were rated higher because they fit the existing norms peculiar to the unit (Roebuck et al., 2019). In such a way, there is a gender dissimilarity peculiar to the work of various organizations and impacting the objectivity of judgments and outcomes. However, Roebuck et al. (2019) stated that for units with a better and strong culture, the ratings were almost equal. It means that an effective organizational structure can mitigate lower ratings of females and be used as a powerful tool for promoting diversity and tolerance (Roebuck et al., 2019). This assumption is vital for establishing the climate within a collective.
Moreover, diversity, as one of the most important factors influencing the work of modern companies, can also be mediated by using the appropriate organizational culture. Joseph and Kibera (2019) said that units with no attention to such issues as gender, race, culture, and equality suffered from multiple conflicts between employees. It means that the absence of strict guidelines and models that should be followed by all specialists might precondition the emergence of discriminative patterns and their cultivation. That is why managers should devote much attention to shaping organizational culture in a way that promotes diversity and acceptance of other customs and traditions by other members of the collective (Roebuck et al., 2019). This demand becomes central for current organizations regarding their focus on going global and hiring specialists from various countries to boost performance.
Numerous authors also admit that organizational culture can shape motivation and workers’ engagement. For instance, Gochhayat et al. (2017) were sure that companies with an established system of values encouraged their employees to be more responsive, involved, and focused on achieving goals. Additionally, it showed the importance of every employee and their contribution to the company. Groups with clan type of culture motivate workers by feelings of being a part of a family and doing the same job (Joseph & Kibera, 2019). It helps to avoid problems with the absence of stimulus for attaining high performance and guarantees better results.
From another perspective, organizational culture can be viewed as a potent advertising tool. Today, brand reputation is a unique force influencing the attractiveness of a firm and specialists’ readiness to cooperate with the firm and promote its evolution. Joseph and Kibera (2019) admitted that corporations such as Google attracted the most creative and talented workers mainly because of the popularization of the idea that their organizational culture was the best one. It results in the income of young specialists with new and innovative ideas, who are ready to share them and become part of the collective (Joseph & Kibera, 2019). The example demonstrates the critical importance of culture and its shaping. Investing multiple resources in creating a specific image and cultivating an unusual atmosphere, a company manages to acquire new resources for its further development. This interdependence is taken as the central factor for improving the work of companies and boosting their performance.
At the same time, companies with weak or poorly developed organizational culture might lose their attractiveness for workers and suffer from the lack of specialists. Speaking about such organizations, Daft (2015) said that the failure to form an appropriate atmosphere and cultivate a climate increases the turnover rate and burnout among employees. Furthermore, such companies acquire a bad reputation which limits their chances for sustainable growth and becoming one of the leaders in the market. Finally, workers’ motivation to do their best reduces as they view their position as the temporary one and try to look for new options (Daft, 2015). To avoid such situations, top managers and founders should focus on establishing an appropriate corporate culture offering multiple benefits to employees.
Ethics, Framework, and Training
Ethics is another phenomenon vital for the work of organizations and closely related to the idea of culture. It is a field of knowledge analyzing various acts and their motifs to determine whether they can be considered good or bad (Johnson, 2018). For organizations consisting of multiple individuals, the establishment of an ethical framework is vital as it will outline the conduct that top management and other workers appreciate and view as the only positive manner of behavior and cooperation (Johnson, 2018). Established ethics ensures a reduced number of conflicts and biases.
Founders, leaders, and top management of companies are responsible for cultivating the ethical framework and sustaining it. For instance, they should be committed to values to serve as an example and encourage other workers to act in the same way (Daft, 2015). Additionally, the existing framework should be used as the central criteria for decision-making and problem-solving methods (Daft, 2015). It will ensure the absence of discrimination or harassment issues and cultivate a better climate within an organization. It means that ethics remains a fundamental part of the modern business world.
The importance of ethics justifies the need for its cultivation and sustaining. For instance, Daft (2015) offered the idea of an ethics committee or a cross-functional group consisting of top management monitoring current ethics and analyzing issues related to this sphere. This body has the authority to punish wrongdoers and encourage employees who follow the code (Daft, 2015). It will help to shape the current framework and ensure there are no misunderstandings or workers’ unwillingness to function within the existing environment.
Ethics and Conflicts
Organizational ethics should also be viewed as one of the factors affecting the stability of companies and the climate within a collective. Thus, Ermasova (2021) stated that the existing body of literature emphasized the role institutional environment and national culture played in the work and development of organizations. For instance, cross-cultural issues in business ethics were among the most common questions arising during the cooperation between workers (Ermasova, 2021). However, there is still little understanding of how to manage differences between developed and developing countries regarding culture (Ermasova, 2021). The lack of effective tools and the poor ethics serve as the basis for new conflicts and the inability to establish an appropriate working atmosphere. For this reason, Ermasova (2021) empathized the need to cultivate an appropriate ethical framework as the key for the enhanced work of any organization and its ability to meet current goals. This idea proves the fundamental role of ethics and the direct correlation between this factor and conflict rates within a collective.
Moreover, the robust ethical framework is a central requirement to better management of emergent or conflict situations which are inevitable for any organization. Johnson (2018) was sure that it was impossible to avoid complex cases because of the human factor and the existence of critical differences in people’s perspectives on how particular tasks should be performed. However, by training and cultivating the desired model, top management can ensure specialists acquire a chance to succeed and demonstrate higher performance rates due to the ability to find a common language with other employees surrounding them (Johnson, 2018). From this perspective, ethics is correlated with the organizational culture as these are two elements playing a central role in the work of organizations and their ability to attain existing goals.
Ethics, Diversity, and Organizational Culture Differences
As stated previously, ethics and organizational culture are also vital for managing diversity and sustaining the appropriate relations between workers. However, this factor is also critical for ensuring a high level of comfort for new specialists who already have their own visions established by previous employers. Tarba et al. (2019) said that the effectiveness of post-acquisition integration depended on the development of the ethical and cultural framework. In other words, newcomers with cultural differences demonstrate better performance and higher success rates (Besio et al., 2020). The so-called synergy potential can be improved by combining both ethics and organizational culture to create the ground for reintegrating workers and making them a part of the collective (Tarba et al., 2019). Autonomy issues and the need to follow hierarchy or patterns can also be mediated by introducing specific changes into the current ethical framework (Tarba et al., 2019). Under these conditions, the literature emphasizes the correlation between ethics and the ability to manage the growing diversity of companies.
Differences in organizational culture can also be the factor affecting the readiness of employees to cooperate or observe outlined decision-making patterns. For instance, Besio et al. (2020) admitted that the established climate within a collective with the focus on beneficial cooperation between individuals promoted higher responsiveness to the needs of other members and the desire to help them. At the same time, the code of ethics particular to a certain unit influences the organizational culture and preconditions the choice of methods to educate workers and ensure they are ready to consider the existing diversity and differences in people’s demands. Under these conditions, most authors see ethics as the tool for attracting new workers and providing them with positive conditions for evolution.
Altogether, culture and ethics are two pillars of any organization’s work. These two phenomena might support the evolution of companies by motivating employees and ensuring the absence of conflicts or hinder its rise because of the lack of philosophy and the code of conduct related to various situations. Under these conditions, it becomes vital to share and shape these elements by creating traditions, rituals, and beliefs. It is the prior task for leaders and Chief Executive Officers (CEOs) responsible for the future rise of various organizations.
The literature review differentiates the four central types of culture such as adaptability, mission, clan, and bureaucratic. All these frameworks have their advantages and disadvantages, and their applicability depends on the current state of a unit, its goals, and peculiarities of relations within the collective. The correct choice of the model is critical for organizations and their success. Multiple authors state that the lack of attention to this aspect can result in undesired outcomes and deteriorate outcomes. For this reason, the top management and founders should be ready to plan the company’s rise regarding the organizational culture type they select.
The cultivation, sharing, and sustaining of the discussed phenomenon are also complex tasks. The given literature review shows that the most effective approaches presuppose communication and interaction with team members. These two methods are vital for collecting information about workers, their needs, and visions. Most researchers agree that using specific coaching methods, it is possible to initiate the process of transformation, presupposing shaping workers’ mentality, their readiness to engage in the evolution process, and the recognition of the need to follow the existing code.
The existing body of literature also shows that there is a direct correlation between organizational performance and culture. Numerous authors state that units with an established framework and developed environment demonstrate better outcomes compared to firms where no effective model exists. For this reason, cultivation of the appropriate culture acquires the top priority as one of the methods to acquire enhanced results and generate a competitive advantage. At the same time, this factor can affect brand reputation and attract new specialists ready to cooperate, which is also vital for competition and improving results.
Researchers also devote much attention to innovativeness as one of the critical components of the modern organizational culture. The shift towards cultivating a creative environment and encouraging workers to offer their unusual visions can contribute to the increased competitiveness of the unit and its ability to compete with other firms. The establishment of this paradigm demands additional resources and training activities to ensure all team members correctly realize their tasks and are ready to use available technologies to attain desired outcomes.
It can be recommended to continue investigating these concepts because of their relevance and significance for the organization’s work and multiple dimensions associated with the phenomenon. Future projects can analyze the correlation between culture and employees’ satisfaction and burnout rates as these factors are interconnected and influence outcomes and stability of units’ work. Furthermore, the role of ethics in problem-solving activities or conflict management can also be discussed. The existing literature proves its importance for organizations, meaning that it is possible to outline how this phenomenon can be modified or improved to attain better results and more stable work of the organization.
Berte, E., & Narapareddy, V. (2018). Building a culture of innovation in a health-care organization. Entrepreneurship Education and Pedagogy, 1(4), 330–348. Web.
Besio, C., du Gay, P., & Serrano Velarde, K. (2020). Disappearing organization? Reshaping the sociology of organizations. Current Sociology, 68(4), 411–418. Web.
Daft, R. (2020). Organization theory & design (13th ed.). South-Western College Publishing.
Ermasova, N. (2021). Cross-cultural issues in business ethics: A review and research agenda. International Journal of Cross Cultural Management, 21(1), 95–121. Web.
Gochhayat, J., Giri, V. N., & Suar, D. (2017). Influence of organizational culture on organizational effectiveness: The mediating role of organizational communication. Global Business Review, 18(3), 691–702. Web.
Johnson, C. (2018). Organizational Ethics: A practical approach (3rd ed.). SAGE Publications Inc.
Joseph, O. O., & Kibera, F. (2019). Organizational culture and performance: Evidence from microfinance institutions in Kenya. SAGE Open, 9(1). Web.
Junggren, S. E., Elbæk, L., & Stambulova, N. B. (2018). Examining coaching practices and philosophy through the lens of organizational culture in a Danish high-performance swimming environment. International Journal of Sports Science & Coaching, 13(6), 1108–1119. Web.
McClellan, J. G. (2021). Organizational culture, discipline, and the politics of self: Transformation through responsive conversation. International Journal of Business Communication, 58(2), 152–168. Web.
Men, L. R., & Sung, Y. (2019). Shaping corporate character through symmetrical communication: The effects on employee-organization relationships. International Journal of Business Communication. Web.
Pizam, A. (2020). Hospitality as an organizational culture. Journal of Hospitality & Tourism Research, 44(3), 431–438. Web.
Roebuck, A., Thomas, A., & Biermeier-Hanson, B. (2019). Organizational culture mitigates lower ratings of female supervisors. Journal of Leadership & Organizational Studies, 26(4), 454–464. Web.
Schein, E., & Schein, P. (2016). Organizational culture and leadership (5th ed.). Wiley.
Schoeneborn, D., Kuhn, T. R., & Kärreman, D. (2019). The communicative constitution of organization, organizing, and organizationality. Organization Studies, 40(4), 475–496. Web.
Tarba, S. Y., Ahammad, M. F., Junni, P., Stokes, P., & Morag, O. (2019). The impact of organizational culture differences, synergy potential, and autonomy granted to the acquired high-tech firms on the M&A performance. Group & Organization Management, 44(3), 483–520. Web.
Ugheoke, S. O. (2021). Does organizational culture matter in managerial role and high-performance achievement? Lessons from Nigeria SMEs. Business Perspectives and Research. Web.
Walker, R. (2021). Communication perspectives on organizational culture and organizational identification. International Journal of Business Communication, 58(2), 147–151. Web.