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CHAPTER 2:THE ENVIRONMENT: CULTURE, ETHICS,
SOCIAL RESPONSIBILITY AND SUSTAINABILITY
CH 2© 2015 SAGE Publications
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Five Internal Environmental Factors• Mission
• The organization’s reason for being• Management & Culture
• Values, beliefs and assumptions the members of an organization share
• Resources• Human, Financial, Physical and Informational
• Structure• The way an organization groups its resources to accomplish its
mission• Systems Process
• How an organization structures resources to transforms inputs into outputs
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Systems Process Components• Inputs
• Organizations resources: human, financial, physical, and informational
• Transformation• Turning inputs into outputs
• Outputs• The products or services offered to customers
• Feedback• Means of control to ensure that the inputs and
transformation process are producing the desired results
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Total Quality Management• Stressing quality within an organization
• Focus on the customer to continually improve product value
• Continually improving the system and its processes
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Organizational Culture• Core values and principles of leaders• Behaviors, practices and attitudes of employees
• Culture can be learned but it must be understood first
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Learning the Organizational Culture• Organizational Culture can be learned through
observing people and events in the organization• Artifacts are physically observable elements of
culture• Heroes• Stories• Slogan• Symbols• Ceremonies
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Three Levels of Culture• Behavior
• What people do and say• Values and Beliefs
• Guide decision making and shape behavior• Assumptions
• Values and beliefs that are so deeply ingrained that they are considered unquestionably true and taken for granted
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Strong & Weak Cultures• Strong Cultures
• Employees subconsciously know the shared assumptions as well as the values and beliefs
• Behave as expected• Results in easier communication and cooperation
• Weak Cultures• Employees do not behave as expected
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The External Environment• The factors outside an organization’s boundaries that
affect its performance
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The Nine Major External Factors• Customers• Competition• Suppliers• Labor force/unions• Shareholders• Society• Technology• The economy• Government
Task Factors
General Factors
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Ethics• Standards of right and wrong that influence behavior
• Ethical: Right behaviors• Unethical: Wrong behaviors
• Ethical standards are closely tide to cultural values
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Moral Development• Developing ability to distinguish right from wrong and
choosing the right thing• Three Levels of Moral Development
• Pre-conventional• Conventional• Post-conventional
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Three Levels of Moral Development• Pre-conventional Level:
• Choose behavior based on self interest and the likely consequences of the behavior (reward or punishment)
• Conventional Level:• Seek to maintain expected standards and live up to
the expectations of others• Post-conventional Level:
• Make an effort to define moral principles for themselves regardless of leaders or the groups ethics
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Pre-conventional and Conventional Moral Justifications• Displacement of Responsibility: blaming ones unethical
behavior on others• Diffusion of Responsibility: behaving unethically and no
one person is held responsible• Advantageous Comparison: comparing oneself to others
who are worse
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Pre-conventional and Conventional Moral Justifications• Disregard or Distortion of Consequences: minimizing the
harm caused by the unethical behavior• Attribution of blame: claiming the unethical behavior
was caused by someone else's behavior• Euphemistic Labeling: using “cosmetic” words to make
the behavior sound acceptable
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Enforcing Ethical Behavior• Whistle blowing: encouraging employees to expose
unethical or illegal behaviors within the organization.
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Corporate Social Responsibility• Corporate Social Responsibility (CSR): exploring the
responsibilities of business and its role in society• Environment• Society• Customers• Suppliers• Employees
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Sustainability• Meeting the needs of the present world without
compromising the ability of the future generations to meet their own needs