This is “What Culture Should a Leader Choose to Instill?”, section 9.4 from the book Business Ethics (v. 1.0).
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For those starting a business, the first question about the values and culture of the new workplace is the simplest: What should they be? There’s no right or wrong answer, but there are different ways that any set of values may be justified.
Diverse fields of work will lend themselves more naturally to one or another organizational style and tone. A fish seller delivering to markets, restaurants, and homes, for example, one entrusted with providing food for others to sell and cook, will need to value punctuality and reliability. This kind of firm must honor its contracts by getting orders delivered to clients when promised and by making sure the quality (at least the quality that consumers perceive) is up to standard. Further, the physical workplace—which stretches from the office where orders are received to trucks delivering goods—will probably function best if the values of fairness, respect, and openness are enforced. The various individuals entrusted with any one account must be able to work together well and produce results individually that the entire group stands behind.
On the other hand, if the small company you’re forming happens to be a rock band, then creativity (as they say in the business world, the ability to think outside the box) steps forward as a cardinal value. When trying to get a nightclub or bar to book your group, you may lie about (or “exorbitantly exaggerate”) the response your songs have gotten from people who’ve listened to you in the garage. You may promise that you’ve got material to present a forty-five-minute show and run out after half an hour. You may not foster mutual respect in the workplace: the lead guitarist may secretly instruct the soundman to reduce the hapless bass player’s volume to near zero or the drummer may show up for work blind drunk and flinging expletives. All those failures in reliability and respect will wash away, though, if you’ve got a new sound and people like hearing it. Fish sellers and rock bands, finally, are different kinds of businesses and the organizational values surrounding them may be similarly divergent.
Even within the same pursuit, even when two corporations are producing comparable products, there’s no requirement that their cultures be similar. In fact, that’s a central point of the “I’m a Mac, I’m a PC” advertising campaign. The appeal being made in these ads isn’t that Apple is better because their processors run a gigahertz faster than a PC’s or because the screen images are crisper or the battery life is longer. Fundamentally, Apple is making the case that the values—as displayed by the style of clothes the actors wear and their way of standing and speaking—are ones the purchaser may want to participate in. Apple, in essence, turns corporate culture into a selling point.
Refocusing on the problem of determining a set of values for an organization, there’s a two-step process: decide the values, then justify them. One way to proceed is by posing some questions aimed at the core of workplace culture.
In some organizations (especially nonprofits and political groupings), success gets defined socially. Perhaps it’s an effort to eradicate homelessness, or diminish the effects of poverty, or advance a legislative agenda. In this kind of endeavor, one existing to serve the greater good, a utilitarian ethical perspective could be employed to justify the organization’s existence and goals. The reason for the organization’s existence fits well with the theory that acts are ethically good if they bring the greatest good to the greatest number.
By contrast, if success for an organization is economic not social, if it’s about me getting rich and not the general welfare, other theoretical foundations may be more recommendable. A culturalist ethics—one that defines moral right and wrong as just what the larger society dictates—might work in this case, at least in the United States where private enterprise and the pursuit of wealth have customarily been regarded as a virtue. Alternatively, a rights-based theory, one that maximizes individuals’ liberty to pursue their own happiness (as long as the rights of others aren’t infringed upon in the process) may work well for those choosing to establish a corporate culture that raises profit as the main goal of the business.
If I believe that people work best when they work together, then I may choose to raise collectivism as a central virtue. Individuals are rated professionally in terms of their workgroup’s accomplishments. This kind of organization would recognize a single person’s accomplishment only when it served the efforts of others and individual rewards like bonuses and similar would be severely limited. By contrast, benefits received by one member like health insurance or a year-end bonus would likely be received by all. In the business world, finally, assembly-line work would be a good candidate for collectivism because any finished product is only as good as the weakest part.
On the other hand, someone starting their own business may believe that individuals don’t work best when teaming up with colleagues but when competing against them. In this case, an individualistic corporate culture might be established with workers granted incentives to outperform their colleagues. Pay and benefits in this kind of organization would likely be closely linked to performance and success; those who do well for the company would receive a healthy percentage of the revenue they generate. Further, on the other side, employees shouldn’t make the mistake of thinking that just because the organization is doing well, they’re doing well. They’re not, at least not unless they can show how they contribute personally and significantly to the success. Finally, this orientation of values may be constructed by someone starting up a wholesale fish-selling operation, and hiring a sales force to go out and lure restaurants away from their current providers and give the new company a chance.
One of the curious aspects of the farmed or wild salmon story is that for many (though definitely not all) consumers, there’s really no difference. Their palettes aren’t sufficiently trained, their cooking expertise insufficiently developed for the distinctions between the two kinds of fish to register inside their mouth. If that’s right, if a consumer really can’t distinguish farmed from wild salmon, then is there any harm in selling the farmed variety as wild (at a 200 percent markup)? Some people will answer yes and others no. If you’re on the yes side, if the kind of organization you want to set up will be ruled by what members do more than the results of what’s been done, then an ethics based on duties suggests itself as the right way to go. Within this kind of enterprise, the basic ideas of honesty and respect for others will prevail; they will guide the way people act inside the workplace and also the way the business interacts with customers. You can take people at their word inside this business because telling the truth is a basic element of the organization’s culture.
On the other side, if you look at this and say, “well, consumers are just as happy either way, but selling the farmed fish as wild makes me a lot happier because my profit margin jumps,” then you’ll find a more comfortable spot on the consequentialist side of the ethical spectrum. Here, what people do is less important than the outcome. Decisions about whether an act is acceptable or not are answered by looking at the act’s consequences and nothing else. In this case—and assuming people really can’t tell the difference between the two fish—the way opens to affirming that the general welfare really is improved by the sleight of hand. The fish seller is better off, and no one else has grounds for complaining.
This ethical dilemma—one between valuing the sincerity and the ethical protocol of the actual transaction, and one valuing just the end result and consumer satisfaction—plays out in many and diverse organizational environments. There’s the fish seller debating selling cheap product that tastes expensive. In 2004 Ashlee Simpson got caught lip-synching on Saturday Night Live when the soundtrack kicked in before she opened her mouth and Tom Petty’s 2008 Super Bowl halftime performance looked fishy. Does it really matter, though? In Simpson’s case, it obviously does because she got caught and it ruined her show, but if everything had fit together right, do you think it’s OK for her to pretend she’s live and then go to the tape without anyone noticing? Are people who paid money to see her sing getting cheated?
One organization where this dilemma plays out in quite dramatic terms is police work. It’s an old-time policing phrase that more good has been done with the business end of a nightstick than through every courthouse in the land. It’s unclear whether that’s true, but it gets right to the heart of the question about means or ends. Should a police department be more focused on going by the book, treating all suspects as the written law dictates, or should they be more focused on the ends—that is, punishing criminals and minimizing crime in a community? Take a situation where an officer knows a man is guilty of a violent assault but the evidence isn’t there. Is it OK to plant something? As is the case of the fish seller and the stage performer, the basic values—the way the members have learned to live and act within organization—will dictate what ultimately happens.
Many small businesses have only one employee: the owner who doubles as the employer. Others, however, require a workforce. If people need to be hired, the question about how they’re to be valued can’t be avoided. Are they paid mercenaries? Something closer to extended members of a family? Somewhere in between? One type of business where this question can rise quickly is a franchiseA form of business where a company with a successful operation (called the franchisor) offers others (called franchisees) the opportunity to function under the franchisor’s trade name in exchange for a fee or similar compensation.. In a franchise operation, a parent company sells the rights to a certain name and kind of product to an individual to start their own branch. Domino’s Pizza is a good example. Though there are corporate-owned stores, many of the local Domino’s are owned by their managers. These entrepreneurs agree to buy basic material from the mother business—the pizza dough and so on, as well as the signage and participation in advertising campaigns—and in exchange they’re allowed to command their own small outpost of the pizza empire. The extent of corporate control over particular franchises varies from one business to another, but since the actual owner is the person there from day-to-day and in charge of hiring and firing, the culture surrounding the place is going to be largely determined by the values the owner installs.
With respect to employees, what are the possibilities? A libertarian culture comes close to the mercenary system. Under this ethical umbrella, freedom and the individual pursuit of his or her own happiness become guiding values. Ethical good is defined as that freedom and pursuit, while reprobation is assigned to those acts interfering with others doing the same. In this case, the owner may (though not necessarily) adapt a somewhat disinterested attitude with respect to employees. A certain job is offered at a certain wage and the applicant is free to accept or decline. Acceptance means nothing more than assuming the responsibilities in exchange for a paycheck. Initiating a Domino’s Pizza business, of course, requires hiring many drivers to deliver the product. These aren’t great jobs, driving around and knocking on doors with pizzas, but they may work for students and others who need a little income. Neither the employer nor employee expects any loyalty from each other and the relation continues forward just as long as both benefit, nothing more.
Alternatively, a franchise owner may want to welcome employees as integral parts of the business. An ethics of care suits this purpose. Within this theory, good is defined not as freedom or the pursuit of happiness but as the maintenance and fortifying of social networks and relationships. The workplace becomes paternalist (or maternalist) as workers begin seeing themselves participating in an organic unit. In this case, the owner is much less likely to fire workers who foul up (bring pizzas to the wrong address, incorrectly input customer orders into the computer), and probably more likely to share revenue and benefits with workers as much as possible. Drivers are likely to be trained at other tasks (making pizzas and taking orders being the main opportunities) so that they can participate more fully in the enterprise.
The above questions posed and answered are only a beginning, only the first of many steps on the way to defining and implementing a corporate culture. It’s also true, however, that in the real world people don’t have time to sit down and extensively draw up every detail of their ethical business plan before commencing; every new manager will have to decide for him or herself how far to go on paper before actually beginning to run their operation, whether it’s a Domino’s Pizza franchise or something else. Many will probably just go ahead with the enterprise and pick up ethical things along the way. This isn’t necessarily a bad idea: it’s hard for anyone to know what they believe until they’ve experimented a bit. It is worth noting, however, that these kinds of decisions will have to be made at some point. Staying with the Domino’s example, every franchise has a few drivers who mess up more than the rest and every manager has to draw a line somewhere to mark the point where the driver is let go. When that happens, a decision about the values of the organization—the extent to which drivers are more like mercenaries or members of a big business family—will have to be made.
Some further questions that a manager may ask to help sort out the organizational culture of the operation include the following:
Conclusion. If you’re starting your own business or joining up with friends to put something together, the first ethical questions you’re likely to face are those concerning the organizational culture of your enterprise. It’s true that you can put decisions off, but for most businesses at some point, there’ll need to be a coherent response.