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Lidl : Surveillance Case Study

As long as there has been employment, employees have been monitored (Nebeker & Tatum, 1993). However as the progress of technology becomes more rapid and equipment for monitoring is available to all, surveillance in the workplace has become a more alarming issue and the boundaries of what is necessary and what is an invasion of privacy are very vague. A case study presented for scrutiny is that of the ‘German supermarket chain Lidl accused of snooping on staff’.

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Many employers appoint surveillance within the workplace for a variety of reasons such as safety, prevention of theft or misuse and performance checks. The issues identified within this article are that of whether the monitoring that was carried out was necessary or whether it breaches privacy rights and has a negative effect on the employee. Although this is the main issue highlighted in the article, there are many underlying problems within Lidl as an employer and an organization; which will be presented and scrutinized in this essay.

The media source of the article is The Guardian which presents the occurring matters in a very negative light. However, the merging topics I will be using to provide impartial insight and further analysis into the subjects at hand are that of: stress at work, ethics and organizational culture. As mentioned above, to further understand the article and the issues within it, it is useful to explore it through focus of stress at work.

Cartwright and Cooper (1997, page 4) discuss the more modern concept of stress as “a person’s response to a disturbance” whereas Perrewe and Crandall (1995, page 5) say that “a transaction between the person and the environment is stressful only when it is evaluated by the person as a harm, threat or challenge to that persons well-being”. Intrinsic to job Role in organization Relationships at work Career Organizational Structure Non-work factors Individual Individual symptoms -blood pressure up -Depression -Excessive drinking -Irritability -Chest Pains

Organizational symptoms -High absenteeism -High staff turnover -Industrial relations problems -Poor quality work Figure 1 – Dynamics of work stress – Cartwright and Copper The model below portrays the different sources of stress an individual may acquire and the effects that these can have both on the individual and the organization they are a part of. In relation to the Lidl case-study the factors that are intrinsic to the job include that of working conditions that arise from surveillance, such as close monitoring and restrictions (appendix 1).

Nebeker and Tatum (1993) carried out experiments to investigate the effects of computer monitoring on productivity, work quality, satisfaction and stress. They found that there were no significant negative effects of computer monitoring on the individuals. This would suggest that the surveillance that occurred in Lidl would not be part of the intrinsic factors to cause stress to the employees, if there was any.

However a criticism of their study was that it was in an experimental setting and it can be argued that it is the intention behind the surveillance and the consequence of it in the workplace (that was absent in the experiments) that has negative effects on employees. Although stress may not occur from the surveillance itself, it can from the issues that arise from it such as inspection of employee’s coats and handbags when leaving the store (appendix 1. 1).

In a real work setting the over-stimulation from managerial work can cause stress to the employee where as within manual work, it is the factors of under-stimulation such as boring, repetitive work and lack of control or autonomy that are the source of stress (Bosma et al; cited by Wilson 2004). This interlinks with the section of Organizational Structure in figure 1 “Just being a part of an organization can present threats to a person’s sense of freedom and autonomy” (Cartwright and Cooper, 1997, page 20) which is what seems to be happening in Lidl as a consequence of the surveillance and the culture of the organization.

As this is one of the things that is monitored via the cameras and then such action being taken as (in the extreme) a ‘worker being forbidden to go to the toilet during working hours’ creates a sense of restriction for the employees. The employees are faced with a very controlled environment leading to them being stripped of control and their actions being dictated and monitored by managerial staff. The words of a former employee ‘when one needs the money, one lets many things pass’ (appendix 1. ) show she views the disturbances caused to her as harm and therefore Lidl could be a potential source of stress. The culture of discouraging creativity and initiative (see appendix 1. 1) that Lidl creates results as a further lack of control for the employee and no sense of belonging. As can be seen from paragraph one in appendix 1 Lidl didn’t just monitor the employees but held personal information about their love lives and finances.

Also women having to wear a headband if on their period to be allowed to go to the toilet can increase stress as they may not want private information such as this revealed to the public. The way each individual copes with this will be different and according to the Cooper-Cummings framework (cited in Cartwright and Cooper 1997) if there is failure to cope there is an occurrence of continued stress. Referring back to figure 1, Cartwright and Cooper (1997) argue that non-work factors are one of the sources of stress. The supporting source (appendix 1. ) states that ‘there are almost only women workers at Lidl’ which means that there is a high possibility that they have dual needs of work and domestic responsibilities and therefore are more exposed to the likeliness of stress (Ginn and Sandell, 1997; Wheeler and Lyon, 1992; cited by Wilson 2004) Especially as many Lidl employees are ‘divorced, single parents’ it means that the domestic burden is even greater so they may be experiencing vast amounts of stress from a non-work source as well as intrinsic (figure1) to the job at Lidl.

This burden could then be even further intensified by the ‘20 percent lower wages’ (appendix 1. 1) the employees receive. This acts as both an intrinsic factor as it lowers employee job satisfaction and moral; as well as adds stress from the non-work aspect due to having low finances and the employees not being able to support their families. Refer to a quote from one of the employees ‘when one needs money, one lets many things pass’.

This fear of job loss from employees can further add to the non-work sources of stress as “tensions of the job are not left behind and soon affect the family” (Cooper and Cartwright, Managing workplace stress, page 21). Cartwright and Cooper’s model (figure 1) includes long hours as part of the intrinsic factors as they “appear to take a toll on employee health” (Cartwright and Cooper 2007, page 15). Lidl workers are ‘pressed to work additional hours’ (appendix 1. 1) which will therefore cause stress to the employees and further more adding to it, they are made to do so ‘without pay’.

Supporting that extra hours cause stress and stress related illness is a study carried out by Russek and Zohman (1958) (cited by Cartwright and Cooper, 1997) where they found that 25percent of young coronary patients had been working two jobs, and an additional 40percent worked for more than 60 hours a week. If the employees of Lidl are experiencing stress, which from the analysis seems probable, this could have negative connotations for both the individuals and the organization (figure 1). Referring back to the definition of stress, if the employees of Lidl view the occurrences as damaging to themselves they will experience stress.

However even though the potentially ultimate reason that Lidl is inflicting the stress upon the employee is to stay ahead in the market place, these ‘competition approaches’ (appendix 1. 1) could result in decreased efficiency from the employees due to the depreciation of their health (figure 1, individual symptoms) and therefore the opposite of the desired effect for Lidl (figure1, organizational symptoms). This brings us to think about whether Lidl as an organization incorporate morality within their strategies or just work towards the goal of profitability for the company.

In order to informatively analyse this it is necessary to look at it from the perspective of business ethics. As Parker (1998) describes, the categories of ethics fall into descriptive and prescriptive. Whereas descriptive ethics merely explains what people actually do, perspective goes into theorizing what people should do. Within this essay, a combination of the two will be used in conjunction with relevant theories to attempt to prove Lidl as an ethical or unethical organization and to question whether the surveillance carried out is moral.

However, as Chryssides and Kaler (1999) discuss, due to the subjective nature of this topic, arriving at conclusions about “moral rights and wrongs in business” is done “with difficulty” (page 14). Therefore they argue that the possible solutions should be put to the test of “agreement with the evidence” presented, “internal coherence” and “compatibility with out more general system of belief” (page 15). With the issue at the surface of the case-study being that of surveillance, it is wise to differentiate this in terms of ethics. There are a number of theories that can aid this conclusion.

As described by Parker (1998) those that are of a deontological nature place emphasis on the rules and principles that guide actions; where as those that are teleological evaluate actions depending on the end result and the utility or disutility created. If we analyse the case-study from a teleological perspective the positive utility is created because of the progression of the organizations efficiency due to the monitoring. Murray (1997) mentions business ethics being a contradiction in words because if the business is being ethical* then they are not working to their full efficiency.

This is supported by Aiello and Svec’s (1993) research, who found that job performance on simple tasks improved with the presence of another person. However, because the surveillance is imposed onto the employers we have to look at the utility or rather disutility that is caused to them. As is explained above, this is significant as the consequences from the surveillance are that of control and create stress on the individuals. However, if the security has improved due to the monitoring this will create a utility due to the safety improvement; therefore making it difficult to judge whether the action of surveillance is ethical in this case.

To fully be able to interpret it however, we have to look at it through the perspective of deontological theories. As Marx T. (1998) argues the ethics of monitoring should be reviewed according to the means, the context and conditions of data collection and the uses. Relating to the collection of data within the case-study, there were details of the employees’ ‘love lives, personal finances and menstrual cycles’ (appendix 1) therefore making that aspect a breach of privacy and unethical.

Ballinger (2002) found that advance notice of monitoring reduces the invasion of privacy perceptions so the fact that Lidl conducted it without the employees knowing causes further breach of privacy rights within the employee’s minds. However, even if they had been given advance notice, according to deontological theories it wouldn’t make it ethical as it is only perception that it is moral. Looking into the means and uses of it, such as to control the employees and forbidding them to go to the toilet (appendix 1), makes it seem unethical.

The different aspects of the two theories draw us to an ethical dilemma of surveillance, as in the words of Sewell and Barker 2004 it ‘is useful but harmful; welcome but offensive; a necessary evil but an evil necessity’ (page 1). Especially looking at the Lidl case it makes us question who is monitoring the monitor and ensuring that the surveillance isn’t exploited? Further conclusions about ethics can be drawn after the following section. However, as Chryssides and Kaler (1999) explain, any conclusion drawn on the topic of ethics cannot be proven definitely right or definitely wrong.

Both the stress caused to the employees, and the ethical aspects of Lidl’s actions can be argued to be brought on by the culture of the organization. Robbins (1998, page 595) defines the concept of culture as “a system of shared meaning held by members that distinguishes the organization from other organizations. This is a set of characteristics that the organization values. ” It is possible to, through knowing about the culture of Lidl’s organizations have a better insight into whether the surveillance that was carried out was for reasons that Lidl stated, or to control the workers.

This then gives better insight into whether the employees did experience the stress outlined above, and whether the organization is unethical. As it was with ethics, it is difficult to fully analyse and understand an organization’s culture. This is depicted through Grint’s (1995) analysis stating that “culture is like a black hole: the closer you get to it the less light is thrown upon the topic” (cited by Wilson, 2004, page 180). However, there are theories and models that allow us to get better insight into it. The most recognised is that of Edgar Schein who forms a unctionalist view to put forward a model (figure 2) which because of the clear demarcation of the three levels makes it easier to relate to real life organizations such as Lidl. Underlying assumptions Human behaviour, relationship to environment Values Artefacts Training, practices, behaviour Conscious Level Core of the culture Unconscious Level Implied rather than stated openly but shared and understood 1 2 3 Observable and tangible Figure 2 – Model for Cultural Analysis – Schein 1982 It is Schein’s (1985) argument that by analysing the artefacts we are able to gain superficial understanding of the organization.

These are easily discerned but can be hard to decipher unless the individuals are asked about what they mean. Within relation to the case-study they would involve things such as having mostly part-time, women workers and the dress. In an attempt to analyse this, we can say that due to there being a uniform in Lidl, where everyone has to wear exactly the same dress apart from the manager they are trying to make it almost robotic. This will become more apparent with analysis of further two levels of Schein’s model, but in isolation of these, this dress code isn’t of a significant nature.

The level below is that of espoused values and Schein (1985) argues that these may be tapped into through the construction of questionnaire surveys of culture. These involve conscious strategies and goals of the firm. However, a criticism of this is that the outcome of the survey may not be fully reliable due to experimenter bias, so we have to be careful that we are not getting false values. For example, Lidl wouldn’t openly admit that their goal was just to achieve lower prices and that they didn’t care about employees.

This could however be implied through Lidl’s ‘aversion against publicity’ and having low wages to compensate for the low prices (appendix 1. 1). The third, and arguably most important level, is the underlying assumptions (figure 2). These are difficult to discern as they exist mostly at an unconscious level. As Wilson (2004) explains, the unconscious forms our norms like standards of behaviour, our values and beliefs. Mary Hatch (1993) argues that the different elements of Schein’s model need to be made less central so that the relationships linking them become more focal.

Due to them interlinking, it allows us to view the dynamics of the organization as a whole. Applying this to the case-study we can see that due to the strict hierarchies and methods of punishment if mistakes are made (appendix 1. 1) the assumptions in Lidl are that the highest managers have to be listened to and that the individuals are discouraged from forming own opinions. The artefacts and values of the organization seem to suggest that that there is an underlying assumption of mechanization, and that things in Lidl have to be done exactly the way that they were ‘trained’ to do.

This analysis shows that Lidl has many characteristics of a bureaucratic organization**. Schein’s model is criticised by researchers such as Collins (1998; cited by Wilson 2004) for not being open to change and organizations. They should be subject to change as the employees attempt to bend the rules. This does not seem to happen in Lidl due to fear of the employees losing their jobs (described earlier), the strict managers and the surveillance in place. Even though Schwarz is no longer in charge of the organization the culture he instilled into it seems to be still applicable.

This is portrayed through appendix 1. 1 as ‘workers tell about how his presence in stores can still be felt, unchanged’. As a consequence of this, the management still remains buearocratic. However this does not mean that the culture is not open to change, just that it has not occurred. This then leads us to question whether these basic assumptions are actually there within the employees’ unconscious values. As mentioned above, it seems that the culture of Lidl tried to be imposed by Schwarz as appendix 1. concludes that in Lidl, ‘management by pressure and fear is the approach to handling human resources’. “The ideal employees are those who have internalized the organization’s goals and values and no longer require rigid control” (Wilson 2004, page 181). Analysing this quote, because of the tight control installed within Lidl through the ‘extensive espionage’ (appendix 1) it is implied that the employees do not have the culture of the organization within their underlying assumptions and therefore still need to be regulated.

It can thus be argued that the reason Lidl spied on its employees was to find out detailed information to see whether they were the right people to keep on and to be able to control in order to fulfil the goals and values of the organization. This is supported by appendix 1. 1 stating that the new leader ‘holds the company in tight reins, on behalf of Dieter Schwarz’. As one of the employees in the supporting article says that when ‘one needs the money, one lets many things pass’ therefore strengthening the argument above. However, looking into the idea about Fordism (Dick P. Ellis S. 2006) where the labour force is unskilled and the actions carried out by employees standardized we can relate it to the case-study. Although the situation in Lidl isn’t exactly the same as it is not a production line, there are similarities in that the tasks are simple and can be controlled easily. This is why it may not be necessary for the employees working on the shop floor to buy into the culture of the organization in order for it to be carried through and the goals achieved. However, in Lidl, even the managers are held on ‘tights reins’ (appendix 1. ) with very few given some freedom. The power of the company is also centralized therefore portraying underlying assumptions (figure 2) of questioning trust, credibility and faith in competence. As a consequence of the analysis of the culture of Lidl, we are able to make further conclusions within the ethics aspect of the essay. From the basic assumptions of the organization that, below the higher management level everything is to be tightly controlled and no room left for mistakes (which in turn means the employees have to do everything according to the rules and ot develop own ideas or ways of carrying out tasks), it is now much more evident that the reason behind the monitoring was a form of control over employees and not ‘to establish possible abnormal behaviour’. This brings us closer to drawing the conclusion that the surveillance was unethical and that Lidl as a company have very few ethical considerations with their managerial actions. It also means that the culture aspect of the organization will cause further stress to the employees and therefore presenting Lidl as a very unmoral organization.

As is portrayed from all the presented evidence, the actions carried out and strategies implemented lack in ethical consideration. Looking at sources of surveillance within media, the consistently negative language choice reflects that the attitude towards surveillance in general is that it is a breach of privacy. Especially in the case of Lidl, who do not seem to care about the human aspect of their employees and appear to just be worried about profits, the surveillance carried out was unnecessary and seemingly not for the reasons that the firm puts forward.

Through this issue, and others highlighted in the article it seems that there are many underlying issues within Lidl that need to be addressed and perhaps a form of culture change needs to occur whilst the organization amends its values and goals. Appendix 1 German supermarket chain Lidl accused of snooping on staff * Kate Connolly in Berlin * The Guardian, Thursday March 27 2008 Lidl was accused of recording how many times staff went to the toilet, as well as intimate details of their personal lives.

Photograph: Graham Turner The German discount supermarket chain Lidl has been accused of spying on its employees, including recording how many times they went to the toilet as well as details about their love lives, personal finances and menstrual cycles. An investigation by the German news magazine Stern uncovered an extensive espionage system in its shops across Germany. It obtained hundreds of pages of documents gathered by detectives allegedly employed by the chain to find out about its staff.

The surveillance took place via mini-video cameras installed by detectives. The official reason given to store managers was to reduce shoplifting. Critics have accused Lidl of using “Stasi methods”, referring to the secret police of the former communist East German state who kept track of the most banal and intimate details of hundreds of thousands of citizens’ lives. The detectives’ records include details of precisely where employees had tattoos as well as information about their friends. “Her circle of friends consists mainly of drug addicts,” reads one record.

The detectives also had the task of identifying which employees appeared to be “incapable” or “introverted and naive”. While most incidents seem to have occurred in Germany, the most shocking one allegedly occurred at a Lidl store in the Czech Republic, where a female worker was forbidden to go to the toilet during working hours. An internal memorandum, which is now the centre of a court case in the republic, allegedly advised staff that “female workers who have their periods may go to the toilet now and again, but to enjoy this privilege they should wear a visible headband”.

Recording how a German employee identified as Frau M spent her break, one report read: “Frau M wanted to make a call with her mobile phone at 14. 05 … She received the recorded message that she only had 85 cents left on her prepaid mobile. She managed to reach a friend with whom she would like to cook this evening, but on condition that her wage had been paid into her bank, because she would otherwise not have enough money to go shopping. ” A Hamburg labour lawyer, Klaus Muller-Knapp, said the transcripts were “scandalous to the highest degree” and breached laws on freedom of expression.

Human rights groups and trade unions pledged to take up the case. While denying any knowledge of the Czech case, Lidl, which has more than 7,500 stores in 24 countries, including Britain, confirmed that surveillance had taken place in Germany. It said the purpose was “not to monitor staff, but to establish possible abnormal behaviour”. It added that in retrospect the company distanced itself from the transcripts. “The references and observations are not in keeping … with our understanding of how people should treat each other. ” Source: http://www. uardian. co. uk/world/2008/mar/27/germany. supermarkets Appendix 1. 1 – Supporting information on Lidl UNI Commerce Jan Furstenborg 1 March 2004 The Schwarz Group (Lidl) There are few retailers that can match the Schwarz Group’s fast and aggressive expansion on the European markets. The German retailer was number 25 in world rankings in 2002 with estimated sales of 21,6491 Billion USD. The Schwarz Group’s discounter chain Lidl sold for an estimated 15. 92 Billion Euro in 2002. Lidl’s sales in 2003 are estimated to reach 203 Billion Euro (22 Bill USD).

As a comparison, the closest competitor and world leader among the hard discounters – Aldi, which consists of Aldi Nord and Aldi Sud – ranked number 11 with estimated sales of 33,7134 Billion USD. Lidl Through an aggressive price policy, Lidl tries to take market shares particularly from its main competitor Aldi. Spectacular special offers give the impression of particularly low prices, but normally they are applied only for short periods of time. Both competitors and consumer representatives have criticised the company for this approach, which they consider to be misleading and unserious marketing.

In Spain, the consumers’ organisation OCU reacted sharply when Lidl used its name in advertising, telling that they had been found by OCU to have the lowest prices. OCU called this “intolerable conduct”. 20 Suppliers are under hard pressure when Lidl is pushing prices down. “Whereas the deeply catholic Aldi-brothers become unpleasant only when there are quality problems, but otherwise are fair with their suppliers, the Lidl buyers exert enormous pressure”, writes Managermagazin. 23 As Lidl is a very large buyer, few suppliers can afford to tell them off.

Longer shop opening hours than Aldi is another of Lidl’s German competition approaches. When the Aldi stores close at 14. 00, Lidl keeps its doors open until 20. 00. Managermagazin says that this is made possible by the 20 per cent lower wages that Lidl is paying. The total amount of working hours that are allocated to a Lidl store are tied to turnover, which means that cashiers can be pressed to work additional hours without pay. Employment conditions and labour relations in Lidl in Germany In Lidl, management by pressure and fear is the approach to handling human resources.

Hierarchies are strict, and creativity and initiative are discouraged. Management demands permanent availability from the personnel, and when someone gets ill, he or she can expect a home visit by a supervisor. „For years she had stood out with all of this, the humiliations by customers, the constant lack of confidence“, writes Suddeutsche Zeitung about a discussion with a former Lidl cashier, who worked ten years for the company. „When one was ill, one had to visit the district supervisor. After work, in her store, coats, handbags and cars were inspected. Then I came always without a coat or handbag, I was afraid that they would put something into them“, the ex-worker said: „One had to be on the job 15 minutes before the working time began. On Fridays, one did often not yet know when one should work on Monday. “ As a punishment, one could be placed for weeks in a store which was 80 kilometres away, the woman said. The cash machines are used to control the workers. There are almost only women workers at Lidl, most of them part-timers, many divorced, single parents, from the former GDR. “Then nobody protests.

When one needs the money, one lets many things pass”, says the former Lidl worker, who was interviewed by Suddeutsche Zeitung on the conditions of strict anonymity. Looking at her hands she says to the newspaper: “I know from what Dieter Schwarz has become so rich”. A typical Lidl store in Germany employs between 10 and 12 staff. The cashiers, who often work part time, are paid according to tariffs. Their wages are on average 20 per cent lower than in Aldi, where the workers have additional wage benefits in addition to the basic minimum.

Not surprisingly, like Wal-Mart, Lidl goes to great lengths to keep trade unions out. When ver. di tries to establish works councils, management moves fast to destroy these attempts. Workers are scared up by management – “and we can only protect shop stewards” says ver. di representative Christian Paulowitsch from Stuttgart to Suddeutsche Zeitung. In 2002, ver. di worked particularly hard to organise in Lidl. To make it impossible for the union to establish Works Councils (Gesamtbetriebsrat), management grouped the stores into more than 400 ‘independent’ companies.

When the workers in seven Lidl stores in a region of Germany were invited to a meeting to set up an election committee for the works council election, nobody came. The workers had been invited by the company on the same day to an internal training session. Instead, managers and regional supervisors sat as a threatening panel in the meeting room. “The message was clear”, says ver. di’s regional secretary in Hamm, Norbert Glassman. “Who comes, will be shaved away”. When union representatives have tried to make Dieter Schwarz himself to intervene, he has let them be told that he has pulled back from operative management.

A ver. di representative said to Suddeutsche Zeitung that strictly legally he is out, but “as before, he is the godfather. ” Christian Paulowitsch says: “He has never yet dirtied his fingers” “Schwarz gave over the management of his empire simultaneously to two chief executives, but still workers tell about how his presence in the stores can still be felt, unchanged: In many warehouses and many stores, he has already showed up unexpectedly, to look after his rights. SOURCE: http://www. union-network. org Bibliography Aiello, J. R. , & Svec, C. M. (1993). Computer monitoring of work performance: Extending the social facilitation framework to electronic presence”, Journal of Applied Social Psychology Ballinger, G. A. (2002) “Privacy and procedural justice reactions to internet monitoring under different job roles and task deviance conditions: a field experiment”, Purdue University, found in: Organizational Behaviour/Organizational Theory Track Cartwright, S. Cooper, C. L. (1997) Managing Workplace Stress, London and Newbury Park, Sage Publications Chryssides, G. D. , Kaler, J. H. (1999) Introduction to Business Ethics, London, International Thompson Business Press

Crandall, R. Perrewe, P. L (1995) Occupational Stress, Washington, DC: Taylor & Francis Dick, P. Ellis, S. (2006) Introduction to Organizational Behaviour, Maidenhead, McGraw Hill Education Nebeker, D. M. and Tatum, B. C. (1993) “The effects of computer monitoring, standards and rewards on work performance, job satisfaction and stress”, Journal of Applied Social Psychology Hatch, M. J. (1993) “The dynamics of organizational culture”, Academy of Management Review Marx, G. T. (1998) “Ethics for the new surveillance”, The Information Society Murray, D. (1997) Ethics in Organizations, London, Kogan Page: Coopers and Lybrand

Parker, M. (1998) Ethics and organizations, London, Sage Robbins, S. (1998) Organisational Behaviour: Concepts, Controversies and Applications, New Jersey: Prentice Hall Sewell G. Barker J. R. (2004) “Neither good, nor bad, but dangerous: Surveillance as an ethical paradox”, Ethics and Information Technology Somers, M. J (2004) “Ethical Codes of Conduct and Organizational Context: A Study of the Relationship between Codes of Conduct, Employee Behaviour and Organizational Values”, Journal of Business Ethics Wilson F. M. (2004) Organizational Behaviour and Work, Oxford, Oxford University Press