This paper undertakes to investigate the rich documentary material which has putforth or suggested that the improvement process of corporate practices continues and that there aremore and more companies, firms, etc. and even countries interested in understanding andimplementing these principles. This interest stems from these entities’ desire to become reliablepartners for the countries with tradition in the field, which in time will lead to an increasingalignment of different cultures in the field of corporate governance.The opening of the markets, globalization, the access to advanced technology, determine new formsof ethics. These new forms of ethics, as well as the ethical management tools, ethical standards,codes of ethics, reports of corporate social responsibility or social labels related to them, generateprestige and joint stock that are in turn converted into opportunities for sustainable developmentand long-term profit. In addition, the widespread use of the computer began to substantially modifythe management decisions and to shape the organizational culture along new directions ofelectronic culture.The concept of electronic culture refers to the organizational culture that forms within acommunity. This community widely uses the computer as an important tool in the process of intra-and extra- organizational communication, as well as the basis for decisions and actions of itsconstituents, influencing the major attitudes, behavior and performance of its members.Business, Culture, Decision making, Electronics, Ethics, Globalization, Information,Management, Responsibility.

Mihaela Sabina Jucan

Nicolae Cornel Jucan

English

Research Papers in Economics

Annales Universitatis Apulensis Series Oeconomica, 12(1), 2010 
 
 
  248
THE IMPACT OF THE ELECTRONIC CULTURE ON ETHICS AND 
MANAGERIAL CULTURE 
 
 
Jucan Cornel Nicolae
 1  
Jucan Mihaela Sabina
 2  
 
 
ABSTRACT: This paper undertakes to investigate the rich documentary material which has put 
forth or suggested that the improvement process of corporate practices continues and that there are 
more  and  more  companies,  firms,  etc.  and  even  countries  interested  in  understanding  and 
implementing these principles. This interest stems from these entities’ desire to become reliable 
partners for the countries  with tradition in  the field, which  in  time will  lead  to an  increasing 
alignment of different cultures in the field of corporate governance. The opening of the markets, 
globalization, the access to advanced technology, determine new forms of ethics. These new forms 
of ethics, as well as the ethical management tools, ethical standards, codes of ethics, reports of 
corporate social responsibility or social labels related to them, generate prestige and joint stock 
that are in turn converted into opportunities for sustainable development and long-term profit. In 
addition,  the  widespread  use  of  the  computer  began  to  substantially  modify  the  management 
decisions and to shape the organizational culture along new directions of electronic culture. The 
concept of “electronic culture” refers to the organizational culture that forms within a community. 
This community widely uses the computer as an important tool in the process of intra- and extra- 
organizational communication, as well as the basis for decisions and actions of its constituents, 
influencing the major attitudes, behavior and performance of its members. 
 
Key  words:  Business,  Culture,  Decision  making,  Electronics,  Ethics,  Globalization,  Information, 
Management, Responsibility. 
 
JEL codes: A13 
 
 
Moral or ethical responsibility in business 
In the last decades, the business sphere has undergone essential changes that will affect 
decisively the idea of commercial enterprise. Joseph Badaracco, professor of business ethics at 
Harvard Business School, explains that these transformations through the closed firm versus open 
firm opposition (Badaracco, J., 1994). 
A classic company is an autonomous and individualized organization, separated from the 
rest  of  the  companies  through  four  types  of  borders:  financial,  administrative,  social  and 
contractual.  These  companies  rely  heavily  on  internal  financial  resources,  trying  to  reduce  its 
dependence on external sources of capital. In such firms, the administrative structure is of a military 
type  characterized  by  a  hierarchical  decision  system  and  subordination  between  different 
hierarchical  levels.  The  groups  of  closed  companies  have  strong,  authoritarian  leaders.  These 
groups are not constituted through affinity or moral values, but are purely formal groups, created 
according to business objectives. The sphere of managerial power in the closed firms is bounded 
also  by  what  the  economics  call  traditional  contractual  relationship,  a  secluded  and  restrictive 
business relationship,  which requires the creation of  formal,  accurate,  comprehensive and  very 
                                                    
1 Faculty of Economics Sciences, „Lucian Blaga” University of Sibiu, 550324 Sibiu, Calea Dumbrăvii 17, ROMANIA, 
cnjucan@yahoo.com 
2 Faculty of Economics Sciences, „Lucian Blaga” University of Sibiu, 550324 Sibiu, Calea Dumbrăvii 17, ROMANIA, 
cnjucan@yahoo.com 
 Annales Universitatis Apulensis Series Oeconomica, 12(1), 2010 
 
 
  249
detailed agreements that define the company’s rights and obligations as well as those of its partners. 
The traditional business environment is a world regulated by the evolutionary principle of survival 
of the strongest through the elimination of the weakest. 
To  describe  the  modern  company,  John  Welch,  former  head  of  General  Electric 
Corporation, proposed the concept of business without borders. 
The modern company has highly mobile and porous borders. The contemporary business 
world no longer understands competition in terms of a fight for survival, but of an opportunity to 
identify new opportunities, new forms of new types of business partnerships, innovative products 
and services. The modern business environment emerges as a network in which each company is 
aware that it can increase its opportunities of profit not by breaking rules or eliminating competitors 
on the market through immoral practices, but by working in collaboration with other companies and 
respecting  rules  generally  accepted  in  the  society  and  in  the  business  communities.  The  new 
concepts of business environment are management orientated to the interested groups, network 
business,  ethical  management,  corporate  social  responsibility,  sustainability,  social 
entrepreneurship, civic global corporate. 
All these changes can be described in relation to one concept: moral or social responsibility 
in business. To a large extent, changes in modern management are determined by a single factor: 
the management objectives aimed not only at the investor’s interests but at the interests or the so-
called expectations of all  interested groups, groups that may be affected by decisions made by 
companies or that can have a long-term influence on the evolution of companies. Thus, corporate 
strategies  and  policies  include  not  only  the  short-term  profit  target  but  also  the  objective  of 
sustainable development; not only  the  owners’  or  shareholders’  interests,  but  also  those  of  the 
customers and employees, communities and society as a whole; not only the legal rules imposed, 
but also the ethical, voluntary standards. 
The sphere of responsibilities of management today is expanding, and companies seek to 
find  profit  and  development  opportunities  precisely  in  these  new  responsibilities.  Firstly,  the 
opening of markets, globalization and increasing competition require companies to assume more 
and  more  responsibilities,  providing  enhanced  quality,  better  working  conditions,  and  social 
benefits  to  communities.  Moreover,  this  expansion  of  the  sphere  of  ethics  and  responsibility 
generates,  in  the  long  run,  prestige,  employee  loyalty,  consumer  loyalty  to  the  brand.  It  can 
therefore be stated that the market creates ethics, while companies and advanced managers find 
business and profit opportunities exactly in these new types of responsibilities expected from the 
companies. 
Natalia  Yakovleva  (Corporate  Social  Responsibility  in  the  Mining  Industry,  Ashgate 
Publishing,  Ltd.,  2005)  outlines  the  history  of  this  trend  of  the  expansion  of  the  sphere  of 
responsibilities in business. The milestones Yakovleva defines bring to light the growth of ethics 
that modern management determines, translated into new ethical and social responsibilities put into 
play in the business environment (Yakovleva, N., 2005). 
At  the  same  time,  these  milestones  in  fact  define  the  very  paradigm  shift  in  business 
environment today mentioned above: the shift from the traditional, closed, autonomous company, 
described by the metaphor of medieval castle, to the modern, open company that seeks to gain 
market  advantages  not  through  isolation  but  through  interaction.  New  types  of  responsibilities 
obligate firms to take into account the social interactions caused by their activities. 
The  modern  management  transforms  these  interactions  into  joint  stock  which,  in  turn, 
generates  economic  opportunities  through  various  means:  public-private  partnerships  between 
companies and local communities meant to identify new business opportunities; partnerships with 
NGOs for research projects that lead to the development of new products and services; partnerships 
with universities in educational projects to prepare a qualified workforce, etc. Annales Universitatis Apulensis Series Oeconomica, 12(1), 2010 
 
 
  250
The  ethical  dimension  of  the  Corporate  Social  Responsibility  (CSR)  thus  refers  to 
behaviors  and  activities  that  are  approved or prohibited  by organization  members,  community, 
society, even though not necessarily codified by law (Jucan, C.N.; Jucan, M.S., 2010). 
 
Assumptions underlying business ethics 
In short, the free market creates ethics. New advantages of the free market, the opening of 
markets, globalization, access to technology, create new forms of ethics. These new forms of ethics, 
as  well  as  the  ethical  management  tools,  ethical  standards,  ethical  codes,  corporate  social 
responsibility  or  social  labels  associated  with  them,  generate  prestige  and  joint  stock  that  are 
converted into sustainable development opportunities and long-term profit. 
Given this relationship between ethics and profit, four premises of business ethics can be 
identified (Bishop, M., 2009). 
 
Ethics can be seen as a theory of decision. As a philosophical discourse about morals, 
ethics seeks to rationalize the process through which individuals and organizations make decisions. 
To this end, ethics grounds the general framework for ethical reasoning (deontological ethics and 
Kantianism,  consequentialism/  utilitarianism,  contractualism,  etc.),  defines  the  basic  concepts 
(good-bad or right-wrong, rights-debts, responsibility, utility, values, norms, ethical principles, etc.) 
and proposes theories that can be developed into decision-making tools, into algorithms for solving 
various types of moral conflicts. 
 
Business ethics is a decision theory applied in management. Business ethics is not just an 
academic discipline, an opportunity for intellectual debate. It also has to do with applied ethics and 
management. Thus, it provides theories necessary for understanding business as an economic and 
social phenomenon, as well  as useful tools in the decision-making process in the activity of  a 
company. 
 
The non-contradiction between ethics and business: ethics and businesses are not and are 
not  based  on  concepts,  values,  anti-ethical  ideas.  On  the  contrary,  ethics  and  business  are 
compatible. Free market principles - private property, free exchange, the principle of freedom of 
contract - are compatible with the ethical principles. Businesses produce not just profit for investors, 
but also goods and services for consumers, working places for the community, innovation and 
values for the society as a whole. Therefore, businesses produce ethics. 
 
Ethics management is a long-term profitable management. Ethics is useful to businesses, 
at least in so far as: 
(a) it aims to rationalize and, thus, to optimize the decision-making process; and 
(b) it proposes and justifies rules of conduct that guide relations among economic agents. 
The ethical tools of decision-making streamline the  interactions between companies and 
their interested groups. Therefore, ethical management can become efficient in the long term from 
the economical point of view (De George, R.T., 1990). 
 
The impact of the electronic culture on ethics and managerial culture 
Computers began to gain importance in the activity and life of firms and companies as early 
as 1950 - 1960, with the introduction by IBM of the 360 series computers. The first family of 
microprocessors  manufactured  by  Intel  made  the  computers  industry  face  an  explosive 
development. 
As early as 1993, a research conducted in the United States showed that 45.8 percent of the 
workforce was already using the computer. The figure becomes even more impressive given the Annales Universitatis Apulensis Series Oeconomica, 12(1), 2010 
 
 
  251
specifics  of  some  activities  in  which  computer  -  use  was  very  low  (e.g.  food  preparation, 
construction, agriculture, mining, etc.). 
The  electronic  revolution  has  thus  imposed  a  set  of  new  conditions,  such  as  the 
familiarization  and creation of the necessary environment  for  the  use of the computer  and  the 
emergence of a new labor market - that of the agents with computer skills. 
The  introduction  of  computers  into  all  the  fields  of  a  company’s  activities  marked 
substantially  the  intrinsic  work  content  as  well  as  the  social  relations  established  within  the 
organization. 
The development of some automated technological lines, in which the largest part of the 
workers’ tasks is that of supervising a series of control panels, has led to the replacement of specific 
sets of skills, knowledge, and experience necessary to achieve a particular set of products with new, 
less numerous and less sophisticated ones. In many firms, the worker, like a physician, monitors, 
clicks on some buttons, and the end product, for which he/she is responsible, is produced. 
A  similar  phenomenon  occurred  also  at  the  “white  collar”  level,  where  traditional 
knowledge, methods and techniques, have now been replaced with knowledge of some computer 
processes. The managers and specialists’ modes of work have changed as a result of the fact that a 
series of direct relations, “face-to-face” communications have been replaced with the transmission 
of messages over the Internet. Even the handing or receiving of information from one colleague to 
another - which is also an opportunity for social interaction - has been replaced by the same kind of 
impersonal contact. 
Through their design and modes of operation, electronic systems tend to isolate the members 
of a community; oral communication and common actions are converted into electronic impulses 
and displayed in the form of drawings or text. Informal organization thus gains greater prominence, 
the employees’ activity is enriched in new ways, but, at the same time, it is much impoverished in 
terms of the human dimension and basic knowledge of that activity. 
There  is  another  negative  perception  of  the  expansion  of  the  computer  use:  the 
managements’ capacity to adequately monitor and evaluate the employees. It is often difficult to 
rely only on a series of cold, impersonal data that you get from a microprocessor or that someone 
sends through a database. Employees are increasingly afraid of being under permanent surveillance 
as a result of the development of video and audio surveillance and of techniques of processing on 
the computers. 
It  is  obvious  that  the  era  of  the  computer  and  information  technology  increasingly 
determines radical  changes  in  the  behavior  and the communication patterns  of  employees  and, 
implicitly, in culture. 
Until a few years ago, in the “traditional” firms, the cultures were creations that offered a 
special - human - significance to the time spent at the firm. 
The cultures contained many rituals of daily activity, reinforced by a direct, often informal, 
communication among its components. Routine activities were frequently interspersed with social 
gatherings - a means of communication and consolidation of cultural values. 
The widespread use of the computer has begun to change these aspects and to shape the 
organizational culture along new directions - those of the electronic culture. 
The electronic culture is defined as the organizational culture that forms within a community 
which  widely  uses  the  computer  as  an  important  extra  -  and  intra  -  organizational  means  of 
communication, as well as the basis for the decisions and actions of its constituents, influencing in a 
major way the attitudes, behavior and performance of its members. 
One of the major transformations occurred in recent years is the intellectualization of the 
labor and the increase in the number of specialists. This newly-constituted “white collar” layer now 
exceeds 50 percent of the active labor. 
Work used to be mostly a social experience with occasional conflicts that arose between 
different  parties  and  were  settled  directly  by  a  person  considered  neutral,  but  whose  informal Annales Universitatis Apulensis Series Oeconomica, 12(1), 2010 
 
 
  252
authority was recognized. In this working environment, people were telling jokes, talking about 
diverse things during coffee breaks or lunch. This type of environment offered opportunities for the 
exchange of ideas.  
Today, by contrast, work is more intensive, the requirements are higher, and time seems to 
pass more quickly. The world is constantly in a hurry, running out of time, and increasingly tied to 
the computer; even coffee is served in the office, while the worker is completing tasks in front of 
the computer. For jokes there are special sections on different sites. It thus seems that the ability and 
desire for direct communication of the members of a community are atrophied a cold, impersonal 
communication, carried out from the shelter of the screen, has come to predominate. 
Without  doubt,  the  emergence  of  the  computer  and  the  development  of  information 
technology offer a multiplicity of benefits to a firm. At the same time, however, in order for these 
advantages to be accurately and successfully delineated, the negative aspects of these changes must 
also be taken into account. 
 
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THE IMPACT OF THE ELECTRONIC CULTURE ON ETHICS AND MANAGERIAL CULTURE

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THE IMPACT OF THE ELECTRONIC CULTURE ON ETHICS AND MANAGERIAL CULTURE

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