Organisational culture and expectations

Organisational culture can be described as an organisation's “personality – sometimes overt but often unstated – that guides the decision-making process at all levels of an organisation”.[1] A popular definition that is also useful for understanding organisational culture is “the way things are done around here”.[2]

Underlying most descriptions of organisational culture is the idea that, “official policies specify what management wants to happen. Corporate culture determines what actually happens, and which rules are obeyed, bent or ignored”.[3]

Much effort is required to understand the complexity that underpins an agency’s culture, including the interplay between peer pressure, sanctions and rewards, and group protection of itself. Nevertheless, the way that an agency's senior executives, middle managers and supervisors behave directly influences the conduct of staff by conveying expectations of how staff ought to act. This is something that affects an agency’s culture.

Expectations of behaviour develop over time, in part through employees recognising what behaviour is acceptable and what is not. Once established, the culture of an organisation is perpetuated through the selection and recruitment of staff, the socialisation of new employees and the way that staff actions are rewarded.

If an organisation has a strong workplace ethos, employees can feel significant pressure to comply with the prevailing expectation and act in the same way as other staff. When that culture allows or rewards improper behaviour, then corrupt conduct is more likely to occur.

In addition to senior executives, middle management and supervisors are in a good position to influence the ethical climate of an organisation by promoting and enforcing its accountability controls on the frontline. Middle management and supervisors have a specific responsibility to ensure that certain standards of behaviour are applied, and are seen to be applied.

Organisational culture cannot be changed with a single training course or a code of conduct. Cultures are created over time through habitual behaviour and long practice, so, before an attempt can be made to change a culture, it is essential to understand it and how it has been shaped. In any organisation, each work area is likely to have its own subculture, which should be considered in any cultural change program.

[1] The Hon Justice Owen, Commissioner, The Failure of HIH Insurance Volume 1: A corporate collapse and its lessons, Commonwealth of Australia, 2003, p 13.

[2] Institute of Internal Auditors et al, Managing Culture: A good practice guide, December 2017, p 9.

[3] Committee of Sponsoring Organisations for the Treadway Commission, Internal Control – Integrated Framework, AICPA, Jersey City, 1992, p 19.