Bridging the gap between talk and action in organisational culture

Friday, 01 November 2024

Dr David Penklis GAICD photo
Dr David Penklis GAICD
Deputy CEO, UN Joint Staff Pension Fund
    Current

    Dr David Penklis GAICD is deputy CEO of the UN Joint Staff Pension Fund, a former university professor and an author. He says directors should recognise and navigate the “organised hypocrisy” that can occur when competing, inconsistent and conflicting norms and demands are acting on or within their organisation — it is both a dangerous and a valuable tool. 


    1. Understand culture and disconnects

    Organisational culture is complex and diverse, encompassing attitudes, beliefs, behaviours and group dynamics that guide employees subtly or cohesively. Employees can conform, embrace or reject their work culture. A leadership style can have positive or negative effects on culture. Leadership and employees have been known to take part in organised hypocrisy involving criminal acts in organisations with an authoritarian, insular or fearful culture, with limited open dialogue or moral questioning.

    Directors need to understand organisational culture and identify disconnects. What is occurring and why? What are the potential consequences? What type of culture is prevalent? Is there a leadership style of authoritarianism or a climate of fear and humiliation?

    2. Drive targets aligned with behaviour

    A highly competitive business or work environment and a desire to be successful can drive people to push the boundaries and undertake unethical behaviour. Factors that can contribute to unethical conduct in an organisation include a dominating or fearful culture that supports immoral acts, inappropriate leadership or management styles, and the setting of unrealistic targets.

    A disconnect between organisational strategy and realistically achievable targets may inadvertently or deliberately encourage employees to decouple ethics and regulatory practices to produce the desired outcome, even if it is immoral or criminal.

    Directors need to know the impact of their strategy, targets and demands. Are targets realistic? How are they being achieved? How do they affect organisational behaviour? Are they driving and delivering the strategy in a moral, ethical and compliant way? Are there objectives or performance ambiguities?

    3.Need to survive

    The survival of an individual’s job or an organisation may be emotive, complex and dynamic. Loss of income or market share, impossible tasking and crisis can create situations or behaviours that would not normally be acceptable due to the need for survival. Employees have a vested interest in an organisation continuing to exist, so deviations from the norm to encourage this can take place.

    When internalising competing irreconcilable demands to ensure survival, fragmentation and disconnects can occur, resulting in organised hypocrisy. An organisation and its individual employees can institutionalise organised hypocrisy by loosely coupling or decoupling their outputs. A strong desire to survive, ambiguous directives, limited capacity, inability to say no to tasking and the incompatibility of the right and needs-based norms can contribute to the use of organised hypocrisy as a concealed institutional norm to the detriment of an organisation’s programs.

    Directors need to understand the internal workings and connections between their organisations’ objectives and the deliverables. Is the structure fragmented? Are norms, tasks and workloads competing or under duress? Are there any reasons or signs the organisation is stressed to survival mode? Are employees under extreme stress, in survival mode or trying to implement irreconcilable or unrealistic demands?

    4.Stakeholders and influential actors

    Stakeholders and influential actors can influence an organisation’s leadership, decisions and actions through their aligned or conflicting demands. Balancing conflicting or irreconcilable expectations 

    from stakeholders or influential actors can result in fragmented strategies, weak internal consistency and a loss of behavioural integrity. Organisations have been found to use organised hypocrisy as a strategy to meet competing and irreconcilable demands from stakeholders and influential actors.

    Directors must be aware of the conflicting demands and their impact on the organisation. Are unrealistic, competing stakeholder demands being placed on the organisation?

    5. Sustainability, social and environmental commitments 

    Sustainability, social and environmental obligations, activities and reporting are linked to organisations’ moral obligations and the need for social acceptance to conduct business and exist. A disconnect can reduce profits and potentially lead to directors’ removal.

    Sustainability, social and environmental reporting are mechanisms that create impressions, influence opinions or perceptions, and disclose information, thus assisting organisations in building societal legitimacy. Directors need to be aware there can be significant gaps between the corporate social responsibility discourse, statements or talk to appease society, and the practices or actions of organisations. The competing demands from society, governments, shareholders and others can place organisations in a situation where ethical fading, facades and organised hypocrisy can provide space to manoeuvre and achieve short-term objectives. From an organisation’s view, this may allow time to manage conflicting demands and strategies. Through a societal lens, this can be viewed as corporate greed, a facade of lies or a manipulation of the truth.

    Directors should ensure their organisation’s sustainability, social and environmental reporting truly reflects their organisation’s talk, decisions and actions.

    Dr David Penklis GAICD is the deputy chief executive of the UN Joint Staff Pension Fund and author of Organized Hypocrisy. 

    This article first appeared under the headline 'Five ways the talk/decision/action disconnect impacts an organisation’ in the November 2024 issue of Company Director magazine.  

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