corporate culture, ethics and leadership. corporate culture organizational culture values, beliefs,...
TRANSCRIPT
Corporate Culture, Ethics and Leadership
Corporate Culture
Organizational Culture
Values, beliefs, behaviors, customs, and attitudes that help the members of the organization understand what it stands for, how it does things, and what it considers important
Corporate Culture
The Importance of Organization Culture
Culture determines the overall “feel” of the organization, although it may vary across different segments of the organizationCulture is a powerful force that can shape the firm’s overall effectiveness and long-term success
Corporate Culture
Determinants of Organizational Culture
Organization’s founder (personal values and beliefs)Symbols, stories, heroes, slogans, and ceremonies that embody and personify the spirit of the organizationCorporate success that strengthens the culture.Shared experiences that bond organizational members together
Corporate Culture
Managing Organizational CultureUnderstand the current culture to decide whether to maintain or change itArticulate the culture through slogans, ceremonies, and shared experiencesReward and promote people whose behaviors are consistent with desired cultural values
Corporate Culture
Changing Organizational CultureDevelop a clear idea of what kind of culture you want to createBring in outsiders to important managerial positionsAdopt new slogans, stories, ceremonies, and purposely break with tradition
Ethics and CultureEthics
An individual’s personal beliefs regarding what is right and wrong or good and bad.
Ethical BehaviorThis behavior is in the eye of the beholder. However, it also refers to behavior that conforms to generally accepted social norms.Problems occur in ambiguous situations that can be interpreted in different ways.
Examples of Unethical Behavior“Borrowing” office supplies for personal use, “Surfing the Net” on company time.Filing falsified or inflated business expense reports.
Ethics and Culture
Managing Ethical BehaviorMust begin with top management Top management establishes the organization’s culture and defines what will and will not be acceptable behaviorProvide training on how to handle different ethical dilemmas
Ethics and Culture
Managing Ethical Behavior (cont’d)Develop a written code of ethics• A formal, written statement of the values
and ethical standards that guides a firm’s actions
Individual issues• Behavior and conscience• Privacy
Employees Organization
• Conflicts of interest• Secrecy and
confidentiality• Honesty
• Hiring and firing• Wages and working
conditions• Privacy and respect
Subject to ethical ambiguities• Advertising and promotions• Ordering and purchasing• Bargaining and negotiation• Financial disclosure• Shipping and solicitation• Other business relationships
Economic Agents• Customers• Competitors• Stockholders• Suppliers• Dealers• Unions
Three basic areas of concern for managerial ethics are the relationships of the firm to the employee, the employee to the firm, and the firm to other economic agents.
Figure 4.1
Actors:
Individual ValuesIndividual Values
++
Organizational ValuesOrganizational Values
==
Managerial ValuesManagerial Values
Ethics in Organizations
Applying Ethical JudgmentsModel for deciding whether or not a particular action or decision is ethical
Gather relevant factual information.Determine the most appropriate moral values.Make a judgment based on the rightness or wrongness of the proposed activity or policy.
Ethical Norms Affecting ActionsUtility—act optimizes what is best for its constituencies (benefits only or primarily those who are directly involved)Rights—act respects the rights of others involvedJustice—act is consistent with what is considered fairCaring—act is consistent with people’s responsibilities to each other
Social Responsibility and Organizations
Social ResponsibilityThe set of obligations (to behave responsibly) that an organization has to protect and enhance the social context in which it functions.
Areas of Social ResponsibilityStakeholders• Customers, employees, and investors
The natural environment• Environmentally sensitive products, recycling, public safety
The general social welfare• Charitable contributions, support for social issues such as
child labor and human rights
Arguments For and Against Social Responsibility
1. Business creates problems andshould therefore help solve them.
2. Corporations are citizens in oursociety.
3. Business often has the resourcesnecessary to solve problems.
4. Business is a partner in oursociety, along with the govern-ment and the general population.
SocialResponsibility
4. The purpose of business in U.S.society is to generate profitfor owners.
2. Involvement in social programsgives business too much power.
3. There is potential for conflictsof interest.
1. Business lacks the expertise tomanage social programs.
Arguments For Social Responsibility Arguments Against Social Responsibility
Figure 4.4
Approaches to Social Responsibility
Degree of Social Responsibility
Accommodativestance
Obstructioniststance
Defensivestance
Proactivestance
Lowest Highest
Figure 4.5
Approaches to Social Responsibility (cont’d)
Obstructionist Stance (Unconcerned)Do as little as possible to solve social or environmental problems.
Defensive Stance (Damage Control)Do only what is legally required and nothing more.
Accommodative Stance (Compliance)Meet legal and ethical obligations and go beyond that in selected cases.
Proactive Stance (Ethical Culture)Organization views itself as a citizen and proactively seeks opportunities to contribute to society.
How Business and the GovernmentInfluence Each Other
TheGovernment
Business
The government influences businessthrough direct and indirect regulation:• Environmental protection legislation• Consumer protection legislation• Employee protection legislation• Securities legislation• The tax codes
Business influences the government through:• Personal contacts and networks• Lobbying• Political action committees (PACs)• Favors and other influence tactics
Figure 4.6
Managing Social Responsibility:Formal DimensionsLegal Compliance
Extent to which the organization conforms to local, state, federal, and international laws.
Ethical ComplianceExtent to which members of the organization follow basic ethical/legal standards of behavior.
Philanthropic GivingAwarding of funds or gifts to charities and other social programs.
Managing Social Responsibility:Informal Dimensions
Organizational Leadership and CultureLeadership practices and the culture of the organization can help define the social responsibility stance an organization and its members will adopt.
Whistle BlowingThe organizational response to the disclosure by an employee of illegal or unethical conduct on the part of others within the organization is indicative of the organization’s stance on social responsibility.
Leadership
LeadersPeople who can influence the behaviors of others without having to rely on forcePeople who are accepted as leaders by others
What leaders actually doUsing non-coercive influence to shape the group’s or organization’s goalsMotivating others’ behavior toward goalsHelping to define organizational culture
Leadership
Leadership Activity Management
Establishing direction and vision for the organization
Creating an agenda Planning and budgeting, allocating resources
Aligning people through communications and actions
that provide direction
Developing a human network for achieving the agenda
Organizing and staffing, structuring and monitoring
implementation
Motivating and inspiring by satisfying needs
Executing plans Controlling and problem solving
Produces useful change and new approaches to challenges
Outcomes Produces predictability and order and attains results
Leadership
Power and LeadershipLegitimate power is granted through the organizational hierarchyReward power is the power to give or withhold rewardsCoercive power is the capability to force compliance by means of psychological, emotional, or physical threatReferent power is the personal power that accrues to someone based on identification, imitation, loyalty, or charismaExpert power is derived from the possession of information or expertise
LeadershipUsing Power
Legitimate request• Compliance by a subordinate with a manager’s request
because the organization has given the manager the right to make the request
Instrumental compliance• A subordinate complies with a manager’s request to
get the rewards that the manager controlsCoercion
• Threatening to fire, punish, or reprimand subordinates if they do not do something
Rational persuasion• Convincing subordinates that compliance
is in their own best interest
Leadership
Using Power (cont’d)Personal identification
• Using the referent power of a superior’s desired behaviors to shape the behavior of a subordinate
Inspirational appeal• Influencing a subordinate’s behavior through an
appeal to a set of higher ideals or values (e.g., loyalty)
Information distortion• Withholding or distorting information
(which may create an unethical situation) to influence subordinates’ behavior
Exerting Strategic Leadership
Stay on top of how well things are going
Stay current with internal and external information, reports, etc.Communicate regularly with colleagues, subordinates and customersKeep abreast of rivals’ initiativesMBWA
Exerting Strategic Leadership
Establish a strategy-supportive cultureStakeholders are kingChallenge the status quoManagement must listen to customersSell the strategic initiatives to groups and individuals throughout the organizationRecognize and reward those who lead the change
Exerting Strategic Leadership
Keep the organization responsive and innovative
Empower “champions”• Encourage creativity and innovation• Allow champions to fail• Offer organizational support• Make rewards large and visible
Lead the process to develop new capabilities
Exerting Strategic Leadership
Exercise ethics leadershipLead by exampleHave written policies and guidelinesEnforce complianceEncourage whistleblowersPromote good corporate citizenship
Make corrective adjustments as needed