Ferrell7e Student Ch07


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Ferrell7e Student Ch07

  1. 1. <ul><li>O.C. Ferrell </li></ul><ul><ul><li>University of New Mexico </li></ul></ul><ul><li>John Fraedrich </li></ul><ul><ul><li>University of Wyoming </li></ul></ul><ul><li>Linda Ferrell </li></ul><ul><ul><li>University of New Mexico </li></ul></ul>Business Ethics Ethical Decision Making and Cases, Seventh Edition For in-class note taking, choose Handouts or Notes Pages from the print options, with three slides per page.
  2. 2. Chapter 7 Organizational Factors: The Role of Ethical Culture and Relationships
  3. 3. Corporate Culture <ul><li>Values </li></ul><ul><li>Beliefs </li></ul><ul><li>Goals </li></ul><ul><li>Norms </li></ul><ul><li>Groups </li></ul><ul><li>Corporate history </li></ul><ul><li>Founder </li></ul>
  4. 4. Corporate Culture <ul><li>A set of values, beliefs, goals, norms, and rituals that members or employees of an organization share. </li></ul><ul><li>A company’s history and unwritten rules are a part of its culture. </li></ul><ul><li>An organization’s failure to monitor or manage its culture may result in unethical behavior. </li></ul>
  5. 5. Two Basic Dimensions Determine an Organization’s Culture <ul><li>Concern for people—the organization’s efforts to care for its employees’ well-being </li></ul><ul><li>Concern for performance—the organization’s efforts to focus on output and employee productivity </li></ul>
  6. 6. Ethical Framework and Audit <ul><li>Caring </li></ul><ul><li>Apathetic </li></ul><ul><li>Exacting </li></ul><ul><li>Integrative </li></ul>
  7. 7. Organizational Culture Ethics Audit <ul><li>Does the culture reward unethical behavior? </li></ul><ul><li>Does the organization hire people with values perceived as unethical? </li></ul><ul><li>Is the company’s objective to make as much profit as possible? </li></ul>
  8. 8. Role of Leadership <ul><li>To guide and direct others toward the achievement of a goal </li></ul><ul><li>To motivate others and enforce organizational rules and policies </li></ul><ul><li>To influence the corporate culture and ethical posture of the organization (rewards and punishment) </li></ul>
  9. 9. Interpersonal Relationships <ul><li>One of the biggest challenges in business is getting diverse people to work together efficiently and ethically while coordinating their skills. </li></ul><ul><li>Relationships among individuals and within groups are an important part of the proper functioning of a business organization. </li></ul>
  10. 10. Interpersonal Relationships in Organizations <ul><li>Corporation as a moral agent </li></ul><ul><li>Variation in employee conduct </li></ul><ul><li>Role relationships </li></ul><ul><li>Significant others </li></ul><ul><li>Differential association </li></ul><ul><li>Whistle-blowing </li></ul>
  11. 11. Interpersonal Relationships in Organizations <ul><li>Organizational pressures </li></ul><ul><ul><li>Opportunity and conflict </li></ul></ul><ul><ul><li>Conflict resolution </li></ul></ul><ul><li>How to improve ethical decision making </li></ul>
  12. 12. Corporation as a Moral Agent <ul><li>Organizations can be held accountable for the conduct of their employees and for all business decisions and outcomes. </li></ul><ul><li>The organization is responsible to society for its collective decisions and actions. </li></ul><ul><li>Organizations must be responsible for the correctness of all policies. </li></ul>
  13. 13. Variation of Employee Conduct <ul><li>10% of employees follow their own values and beliefs </li></ul><ul><li>40% try to follow company rules and policies </li></ul><ul><li>40% go along with the work group </li></ul><ul><li>10% take advantage of the situation if the penalty is low and risk of being caught is low </li></ul>
  14. 14. Role Relationships <ul><li>Total of all relationships in which a person is involved because of his or her position in the organization (role) </li></ul><ul><li>Peers and top managers are the most influential factors in organizational ethical decision making </li></ul>
  15. 15. Differential Association <ul><li>The idea that people learn ethical or unethical behavior while interacting with others who are part of their role-set or other intimate personal groups </li></ul><ul><li>Association with those who are unethical, combined with the opportunity to act unethically, is a major influence on ethical decision making </li></ul>
  16. 16. Whistle-Blowing <ul><li>Exposing an employer’s wrongdoing to outsiders, such as the media or government regulatory agencies </li></ul><ul><li>Whistle-blowers often receive negative performance appraisals, become organizational ‘outcasts,’ and lose their jobs </li></ul><ul><li>Companies often establish internal whistle-blower reporting mechanisms </li></ul>
  17. 17. Organizational Pressures <ul><li>Time </li></ul><ul><li>Middle managers </li></ul><ul><li>Pressure to perform </li></ul><ul><li>Pressure to increase profits </li></ul><ul><li>Top managers </li></ul><ul><li>Low level managers </li></ul>
  18. 18. Opportunity and Conflict Create Ethical Dilemmas <ul><li>Opportunity is the set of conditions that limits unfavorable behavior or rewards favorable behavior </li></ul><ul><li>A person who behaves unethically and is rewarded (or not punished) is likely to continue to act unethically </li></ul>
  19. 19. Conflict Resolution <ul><li>Personal-organizational </li></ul><ul><li>Personal-societal </li></ul><ul><li>Organizational-societal </li></ul>
  20. 20. Role of Motivation <ul><li>To focus employees’ behavior toward goal achievement within the organization </li></ul><ul><li>To understand an individual’s hierarchy of needs and how they influence motivation and ethical behavior </li></ul>
  21. 21. Centralized Organizations <ul><li>Decision making is concentrated at the upper management levels </li></ul><ul><li>Works well in high-risk industries with fewer skilled lower-level employees </li></ul><ul><li>Ethical issues: very little upward communication, less understanding of the interrelatedness of functions, and transferring blame to those who are not responsible </li></ul>
  22. 22. Decentralized Organizations <ul><li>Decision making is delegated as far down the chain of command as possible. </li></ul><ul><li>Control and coordination are relatively informal and personal, and the organization is adaptable and sensitive to external changes. </li></ul><ul><li>Employees are empowered to make decisions; therefore decentralized organizations tend to have fewer formalized ethics programs and policies. </li></ul>
  23. 23. Group Influence on Organizational Culture <ul><li>Formal groups </li></ul><ul><ul><li>Committees </li></ul></ul><ul><ul><li>Work groups, teams, quality circles </li></ul></ul><ul><li>Informal groups </li></ul>