The Effect of Organizational Culture

The organizational culture is very important to every person, especially to someone that works in a professional environment. Recognizing and acknowledging a firm’s organizational culture, its benefits and weaknesses before starting employment is one of the most important necessities. This helps a person to find out if they might be a good fit for the company and if that company will satisfy their personal values and beliefs. For me, as a future accountant in the professional public firm, some of the most important characteristics are ethical values and their practices within the company. I am very interested in learning how ethical values promoted by professional accountants’ impact organizational culture, how organizational culture affects accountants’ ethical judgments and how espoused organizational cultures influence public accounting firms. To analyze and look deeper into these issues, I evaluated and studied the following articles:

Daniela, Ţogoe Greti, Mateş Dorel, and Mănescu Dragotoiu Mileva Valentina. Impact of Ethical Values Promoted by Professional Accountants on the Organizational Culture. Annals of the University Of Oradea, Economic Science Series 22.1 (2013): 1280-1285.

Douglas, Patricia Casey, Ronald A. Davidson, and Bill N. Schwartz. The Effect of Organizational Culture and Ethical Orientation on Accountants' Ethical Judgments. Journal of Business Ethics 34.2 (2001): 101-121.

Holmes, Scott, and Stephen Marsden. An Exploration of the Espoused Organizational Cultures of Public Accounting Firms. Accounting Horizons 10.3 (1996): 26-53.

Ethical values and organizational culture

In the article "Impact of Ethical Values Promoted by Professional Accountants on the Organizational Culture" authors Ţogoe Greti Daniela, Mateş Dorel, and Mănescu Dragotoiu Mileva Valentina look and analyze what impact professional accountants have on organizational culture. Authors state that ethical and moral values and behaviors of professional accountants increase and contribute unlimited significance to organizational culture. In addition, these characteristics lead to vital accomplishments and achievements and are very important for an organization’s success.

In the first part of the article "Impact of Ethical Values Promoted by Professional Accountants on the Organizational Culture" authors define and explain what organizational culture is by analyzing and using various descriptions provided by international researchers. Evaluating these descriptions and explanations of what organizational culture is, it is clear that every organization has their own culture with their own important principles, values, views and ideals which are inherent and specific to their business success. In addition, in article “What You Need to Know about Organizational Culture” Edgar Schein writes from his personal observance and experience and speaks of the differences in organizational cultures and concludes that “that every organization has its own particular pattern of assumption about the word”. Subsequently, because of dissimilarities in organizations, it is very important to analyze, identify and recognize a potential employer’s organizational culture. Acknowledging and evaluating a company’s organizational culture is very important to every person, including me. Finding a company with suitable organizational culture that fits a person’s individual values and beliefs, helps him/her to achieve more professionally, grow faster in the organization, will result in being more satisfied professionally, and can lead to a more prosperous professional and personal life.

In the second part of the first article authors Ţogoe Greti Daniela, Mateş Dorel, and Mănescu Dragotoiu Mileva Valentina analyze the interrelationship between organizational culture and ethical values. According to the authors, “The ethical decision is a process meant to explore all aspects of choosing between several possible actions, depending on the organization’s recognized moral values, and then weigh those options and recommend a course of action.” Furthermore, authors allege in their research paper two more solid statements: (1) “business ethics plays a fundamental role in promoting or undermining the image of the corporation” and (2) accountants “are the ones that who add value to the business”. Authors’ statements and research shows and guides me to the conclusion that professional accountants’ ethical behaviors are very important to organizational culture. This study also demonstrates to me that my ethical values and beliefs can improve morale in the organization between employees and that could result in an increase of productivity and better financial benefits for the company. Moreover, the ethical behavior can lead to self-improvement and leaderships skills that could help others to improve and grow within the company and personally as well. This study was very helpful to me, a future professional accountant, in recounting the importance of ethical values for the organization and the organizational culture.

Ethical judgment and organizational culture

In the article “The Effect of Organizational Culture and Ethical Orientation on Accountants' Ethical Judgments” authors Patricia Casey Douglas, Ronald A. Davidson, and Bill N. Schwartz analyze their study of two large international CPA firms that involved three hundred sixty eight practicing accountants. The study’s focus was on auditors’ personal values, ethical orientation, and judgments in ethical dilemmas. According to this study, “ANCOVA and path analysis results indicated that: (1) Ethical judgments in situations of high moral intensity are affected by personal values and by environmental variables, such as the professional code of conduct (direct and indirect effects) and previous ethics instruction (direct effect only). (2) Corporate ethical culture, and relatively strong firm rules-orientation, affect auditors’ idealism but not relativism, and therefore indirectly affect ethical judgments.” In addition, to prove validity of their study, authors relied on many other various models, studies and surveys.

According to the authors, this study concentrated on ethical dilemmas and decision making that accountants face in every day professional life. Authors used in their research various factors, such as “demographic variables, previous ethics constructions, familiarity with the profession’s code of conduct, professional experience, position within the firm and, most significantly, organizational culture as it is represented by perceptions of the firm’s shared values and practices”. As a result of their research, authors established an interrelation between ethical judgment and organizational culture. They concluded and showed that personal values, organizational culture and education are the most important influences on professional’s ethical decision.

In this article authors state that “personal values provide the basis for moral judgments’. They deeply analyze those personal values and their impact on the ethical judgment. Authors state that those personal values can be changed by various influences in the professional environment and individual life. One of changes that influence ethical behavior is motivation. As a future professional, it is very important to me to conduct myself in a professional manner and to make ethical decisions. I am driven by a code of ethics in my personal life and this is what motivates me to behave ethically in my professional life as well.

Moreover, personal values can be changed through coaching acknowledged received from peers, significant others, colleagues, various professionals in business field and from other community members. This study is significant to me because it showed me the importance of communication and interaction with others. In addition, because of this research I learned that other people can help me grow in my professional and personal life. Hopefully, by using my ethical values and beliefs, I will be able to be a positive influence in someone else’s personal or professional life.

Authors also analyze how organizational culture can influence a professional accountant’s ethical decision. This study showed me that it is very important to know what principles and philosophies are valued in the organization of a future employer. As a result of this research, I have found that in an organization with highly ethical management, every professional has more opportunities to achieve more, develop himself faster and come to a solution of challenged ethical decision easier. In addition, highly ethical management will usually promote within the company an organizational culture that follows principles, rules and policies of the code of professional conduct will promote and reward ethical behavior and will punish unethical ones. Analyzing this research, I can come to my personal conclusion that if management esteems and promotes high ethical values and beliefs, this business will have more productivity, better financial benefits and less employee turnovers.

Another important factor for ethical decision making is the influence of ethical education. According to the authors, most professional business field employees do not receive much education to reinforce ethics and values. Because of this lack of ethical education, a person has only what he or she brought with them when they entered the professional business world. This study really solidifies to me the importance of my education received in University of Houston. Throughout my studies at Bauer College, ethics has been discussed continuously. I feel that this has reinforced ethics and values that I have learned from my parents and through my life experiences. Ethics is always discussed in the syllabus and at the start of every class. By hearing this on a regular basis, it really started to sink in and gave me a real sense of pride in my achievements. In a way, I feel that Bauer really helped to influence my definition of ethics and integrity. In conclusion, I found that this research really stresses the importance of ethics and organizational culture and I am so grateful that my education at Bauer College is preparing me for the professional world.

Espoused organizational cultures Scott Holmes and Stephen Marsden in “An Exploration of the Espoused Organizational Cultures of Public Accounting Firms” analyze “the internal organizational documents (including strategic plans) of eleven professional accounting practices, so as to facilitate some understanding of espoused organizational cultures which prevail within these firms”. In this research were collected internal and external organizational documents and used for cluster analysis to show how the organization is sending message to “outside” and “within company” parties and what these messages influence and accomplish. Following this study, authors stated and classified “each firm’s espoused organizational culture into one of four “ideal” culture types – namely, elite, leadership, meritocratic, or collegial, on the basis of their value profiles”. Authors through their studies found out and came to a conclusion that organizational culture “can be primary decision to merge” and that “three ingredients for a successful merger were “a compatible culture, business philosophies and strategic direction”. Although there can be some changes in the company’s organizational culture after a merger, this change will not be very drastic and extreme. This can be more confirmed by Maral Muratbekova-Touron research of French multinational company. In her research paper “Permanence and Change: Case Study of Changes in Organizational Culture at a Multinational Company”, she concluded that “while preserving traditional organizational values the company could change from one type of behavior to another within the existing culture without provoking change of the culture itself”. These two studies and research papers helped me to understand and come to the conclusion that if an organization has plans to merge with another company in the future; the transition will not be as stressful or as hard as involved parties expected. Since the new company will be having similar values and beliefs, there should not be many issues involving employees and their job dissatisfaction, performance, motivation, and commitment. Information learned through this study also helps to minimize my fears about a potential employer making a merger in the future. Additionally, Holmes and Marsden in their research looked at documents, collected from these 11 accounting firms and assigned them to specific types of organizational types. Since external documents are mostly focused on the overall organizational performance, rewards, firm’s authority and leadership, “the majority of accounting firms are classified as either “elite” or “leadership” focused cultures”. In contrast, analysis of accounting firms’ internal documents led these firms to be classified as either collegiate or meritocratic or both. The reason for these was that the tone and message towards team orientation, activities in the firm, and equal people treatment in the organization. This study makes me conclude that some companies’ external transmitted documents can lead to misbelief, misconception and misjudgment of company’s organizational culture. Moreover, this study proves the importance of getting to know a company not only from external documents but if possible to analyze internal documents too. Another study that shows the importance of getting to know an organization from inside as well as the outside was provided in the article “The Sources and Accuracy of Job Applicants’ Beliefs about Organizational Culture” by authors Daniel M. Cable, Lynda Aiman-Smith, Paul M. Mulvey, and Jeffrey R. Edwards. Authors’ research showed that firms in their external documents, such as various recruiting fliers, tend to “overstate the positive cultural attributes and understate unfavorable attributes”. Conclusion All these researches and studies provided me with valuable information and showed me that organizational culture is very important for person’s professional and personal development, for ethical decision making, and in choosing a firm that fits best personal values and beliefs. In addition, I came to the conclusion that a human’s ethical, professional and individual development involves many factors including culture, society, and many others. Moreover, the attributes of organizational culture that complements an individual’s personal ethical values and beliefs help every person to grow, mature, advance and develop him or herself in personal, professional and spiritual aspects of life. Most importantly, a fit organizational culture brings happiness, satisfaction and enjoyment and minimizes immoral actions, dishonest thoughts and corrupt behaviors in the organizations. So following all studies, I realized that organizational culture is very important in choosing a correct firm for employment and should be taken seriously and cautiously in making this choice.