Literature review

Literature Review

Introduction

The organizational culture which facilitates the movement, meaning and behavior in a company, is a wide field of study (Ravasi & Schultz, 2006). The scholarship that is based on the culture of the organization may be traced back to the starting of the twentieth century, with the research of Max Weber and the advancement of the bureaucracy model (Worth, 2009). Some other scholars after that, for example, McGregor, Maslow and Lewin, also adjusted their focus on the humanistic nature of the organizations; however, the views of the culture remained influenced by bureaucratic theories of Weber (Worth, 2009).

Currently, the theorists have focused their research and studies to a more holistic approach, by considering the organizations as open, ever changing and integrated institutions where the pressures and limitations of social environment have an immense impact (Senge, 2006; Worth, 2009). As the nonprofits organizations are based on the decisions of people to be involved; whether as donors, employees or something else, the identity of a nonprofit organization culture is hugely important (Ravasi & Schultz, 2006; Worth, 2009). The ethics in the organization climate and the appropriate people in the hierarchy of the organization have intense impacts on the organizational culture, whether negative or positive, which results in the effectiveness of the organization (Jaskyte, 2004; Malloy & Agarwal, 2001). The literature review will discuss the exact level of these aspects which leaves a fingerprint on the preservation or development of the organization culture.

The Ethical Climate of the Nonprofit Organization

The culture of the organization has been considered as the most significant variable which influences the ethical behavior of an organization (Strickland & Vaughn, 2008). This ethics is an essential ingredient for improving the climate of an organizational culture. As a consequence, the ethics in the climate of the organizational culture also influences the morality and behavior of the members of that organization (Rasmussen, Malloy & Agarwal, 2003).

Ethical climate of an organization which is nonprofit is different from a for-profit organizational culture. While, the ethics represents the mutual assumptions of the members of the organization about how the company should operate; on the other hand, the climate reflects the shared perspective of the organization's members concerning the moral styles and norms of behaviors which are used for addressing the arising issues (Rasmussen et al., 2003; Schneider, 1975; Victor & Cullen, 1988). Therefore, ethics in the climate is proved to be an important factor which motivates the groups and individuals in an organization to behave ethically (Cullen, Victor & Stephens, 1989; Malloy & Agarwal, 2003; Schneider, 1975; Victor & Cullen, 1988). Victor and Cullen (1988) have found out that the ethical culture of a company is a vital factor to determine the way in moments when the word does not match action. Non-profit companies, on other hand, are known for experiencing a dramatic different ethical culture instead of the companies that are for-profit (Malloy & Agarwal, 2003).

In a profit company, the determinant of ethical culture revolves around independence, caring, rules, instrumental interests and law ...