Corporate culture: preach water, drink wine?

Corporate culture today is called "corporate policy with integrity. Corporate leaders are convinced of their "value-oriented leadership. In general, a "moral stance" is sought at every level. Companies are now establishing the position of Chief Integrity Officer. Administrations are launching comprehensive programs to promote integrity among employees. Hospitals are distributing questionnaires that help employees assess before each decision whether they will follow the

The moral of the world is not the same as the moral of the world. How did this popularity of morality come about? And what are the consequences of morality being so offensively demanded as a yardstick for organizational action?

Reasons for the popularity of integrity

The reason for the popularity of integrity is seen in the "failure" of classical systems for rule compliance (Grüninger et al. 2015: p. 2). Under the term "compliance", all larger organizations have introduced rule systems to ensure adherence to government laws, industry-wide standards and internal organizational requirements.

Departments were set up, not infrequently with hundreds of employees, whose sole task is to ensure compliance with the rules, and separate career paths for compliance managers were formed. The logic of these classic compliance review systems is simple. Organizations set up programs that members must follow if they want to remain members of the organization.

A decision that is covered by the program is right. A decision that contradicts the program is wrong (Luhmann 1972: p. 88). An example: In the case of invitations to tender for more than 20,000 euros, several offers must be obtained - if one does this and observes the implementation regulations, one is on the safe side as a member; if one does not follow this, one is under pressure to justify oneself when it becomes known.

The task of compliance management is then simply to monitor compliance with these requirements as best it can.

The perception that such compliance systems are not sufficient to combat corruption, money laundering, cartelization and environmental violations has led to the popular demand that organizations should be guided by "moral values." Organizations, the argument goes, should not just follow rules, but should be specifically guided by values. The goal, they argue, cannot be mindless compliance with rules - avoiding violations of government laws, industry-specific standards, or internal laws. Rather, it is a matter of developing a "specifically value-oriented attitude" that goes far beyond the rules set by the organization (Schöttl/Ranisch 2016; see earlier in this sense, e.g., Badaracco/Ellsworth 1989; Srivastva 1988; Paine 1994).

The problem with the values

At first glance, the commitment to values has a certain plausibility. It would be surprising if the CEOs of a company openly advocated a "corrupt corporate policy," called for an "immoral attitude" on the part of their employees and propagated a leadership that was "liberated from values.

The advantage of values is that they have "high chances of consensus" (Luhmann 1972: p. 88 f.). In the abstract, one can quickly agree that human rights, environmental protection and justice, peace and freedom are to be striven for.

The problem, however, is that values, unlike programs, provide only very vague clues for decisions: It remains largely unclear which decision must be preferred to another (Luhmann 1972: p. 88 f.; see also Luhmann 1997: p. 343). How is one to react when the freedom to move about at will in a car results in the premature death of thousands of residents living near expressways from sting oxides and particulate matter pollution?

In the event of conflict, should war be waged to enforce human rights? The orientation on values - unlike the orientation on programs - leads to a multitude of very practical contradictions in concrete decisions.

The moralization of the organization

The demand for integrity is first of all a call for employees to behave in a morally exemplary manner (see Paine 2006). Employees would have to show the "strength of character" to stand up for "what is right and just" even in difficult situations, and even if this behavior is associated with a high price for themselves (Kuhn/Weibler 2012: p. 72).

Employees are expected to adhere to moral guidelines out of "insight into what is right" and not because their violation is associated with sanctions (Grüninger et al. 2015: p. 7). The moral catalog of requirements for employees becomes an almost endless list (see Kuhn/Weibler 2012b for an example). Employees are supposed to act "in accordance with their own values" while permanently striving for a "fair balance" between what benefits them personally and what benefits others. A contradiction.

The call to hypocrisy

If organizations emphasize the value of integrity to their employees, this does not lead them to behave more morally as well. Morality does not work like a trivial machine, where you put in the demand for morally guided attitudes on one side and then moral action comes out on the other.

The effect of integrity campaigns is merely that employees have to present their actions differently. In view of the charging with values pursued by the top management of the organization, they no longer have to present their actions only as conforming to rules, as efficient and innovative, but additionally as morally exemplary.

Such campaigns for integrity produce exactly what they actually want to prevent - hypocrisy. Certainly - no organization can afford to do without a certain mss of hypocrisy (Brunsson 1989: p. 194 ff.; see also Brunsson 1986; Brunsson 1993). Every company, every administration, every hospital, every party, and every non-governmental organization depends on always presenting an embellished image of itself to its environment in addition to its actual achievements (see Kühl 2011: p. 136 ff.). Hypocrisy and hypocrisy are merely the terms established in organizational science, but which may at first sound unkind to practitioners, for such prettification of the appearance of organizations.

But there are good reasons for leaving this prettification of the organization, which is necessary for establishing legitimacy, to specialists. It is a central part of the (sometimes implicit) job descriptions of marketing experts and PR departments, and it is part of the managing director's knowledge to build up, maintain and, if necessary, also repair a pretty facade of the organization.

But their professionalism also includes not confusing the spruced-up front stage with the reality of the organization. However, if the top of an organization demands that all employees commit to values, morals and integrity, this blocks the necessary disputes within the organization. Integrity becomes an abstract formula to which one - if one wants to make a career in the organization - must commit oneself.

At meetings, which sometimes already resemble worship services to a surprising degree, people rehearse the formulations of values imposed from above. Micro-political conflicts are morally charged and the controversies that are inevitable in any organization are linked to aspects of personal respect. All this changes an organization. But it certainly does not make it one thing - a better organization from a moral point of view. (Above is only a shortened version. Source: Stefan Kühl: "The moralizing company - How the demand for integrity turns employees into hypocrites", Work Paper May 17, 2018)

Stefan Kühl is a professor of organizational sociology at Bielefeld University and works as a senior consultant for the consulting firm Metaplan. On the topic, his book "Influencing Organizational Cultures. A Very Short Introduction" (Wiesbaden: Springer VS) appeared.