MGMT 374 Week 8 Lecture Presentation

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MGMT 374 Week 8 Lecture Presentation

  1. 1. <ul><li>Organizational Factors: The Role of Culture and Relationships </li></ul>C H A P T E R 7
  2. 2. Ethical Corporate Culture <ul><li>Corporate culture includes the behavioral patterns, concepts, values, ceremonies, and rituals that take place in the organization </li></ul><ul><ul><li>Gives members of the organization meaning and the internal rules of behavior </li></ul></ul><ul><li>All organizations have culture </li></ul>Source: © Jack Hollingsworth/Corbis
  3. 3. Corporate Culture <ul><li>May be formal statements of values, beliefs, and customs </li></ul><ul><ul><li>Coming from upper management in the form of memos, codes, manuals, forms and ceremonies </li></ul></ul><ul><li>May be informal through direct or indirect comments conveying management’s wishes </li></ul><ul><ul><li>Dress codes, promotions, extracurricular activities </li></ul></ul>
  4. 4. Two Dimensions of Organizational Culture <ul><li>Concern for people </li></ul><ul><ul><li>The organization’s efforts to care for its employees’ well-being </li></ul></ul><ul><li>Concern for performance </li></ul><ul><ul><li>The organization’s efforts to focus on output and employee productivity </li></ul></ul>Source: Digital Vision
  5. 5. Perceived Tone and Culture of the CEO and Other Executives
  6. 6. Four Organizational Culture Types <ul><li>Apathetic : Shows minimal concern for people or performance </li></ul><ul><li>Caring : Exhibits high concern for people, but minimal concern for performance </li></ul><ul><li>Exacting : Shows little concern for people, but high concern for performance </li></ul><ul><li>Integrative : High concern for people and performance </li></ul><ul><li>A cultural audit is an assessment of the organization’s values </li></ul><ul><ul><li>Usually conducted by outside consultants </li></ul></ul>
  7. 7. A Framework of Organizational Culture Typologies
  8. 8. Ethics and Corporate Culture <ul><li>Corporate culture is a significant factor in ethical decision making </li></ul><ul><li>If a firm’s culture encourages/rewards/does not monitor unethical behavior, its employees may act unethically </li></ul><ul><li>Ethical issues can arise because of conflicts between the culture perceived by management and that actually at work in the organization </li></ul>Source: Digital Vision
  9. 9. Compliance versus Value-Based Culture <ul><li>Compliance-based cultures use their legal departments to determine ethical risk </li></ul><ul><ul><li>Revolves around risk management, not ethics </li></ul></ul><ul><li>Values-based cultures relies on an explicit mission statement that defines the firm and stakeholder relations </li></ul><ul><ul><li>Focus on values, not laws </li></ul></ul>
  10. 10. Differential Association <ul><li>The idea that people learn ethical/unethical behavior while interacting with others </li></ul><ul><ul><li>Studies support that differential association affects ethical decision making </li></ul></ul><ul><ul><li>Superiors have a strong influence on subordinates </li></ul></ul>Source: S. Pearce/PhotoLink
  11. 11. Whistle Blowing <ul><li>Exposing an employer’s wrongdoing to outsiders (external to the company) </li></ul><ul><ul><li>e.g. the media or government regulatory agencies </li></ul></ul><ul><li>Interpersonal conflict ensues when employees think they know the right course of action, yet the company promotes a different decision </li></ul><ul><li>The Sarbanes–Oxley Act and the FSGO has institutionalized whistle-blowing to encourage discovery of misconduct </li></ul>
  12. 12. Reasons Why Employees Do Not Report Misconduct Some employees remain reticent to be a whistle blower and to report misconduct.
  13. 13. Leaders Can Influence Corporate Culture <ul><li>Power refers to the influence that leaders and managers have over the behavior and decisions of subordinates. </li></ul><ul><ul><li>An individual has power when his/her presence causes people to behave differently </li></ul></ul><ul><li>Power and influence shape corporate culture </li></ul>Source: Triangle Images
  14. 14. Five Power Bases <ul><li>Reward power : Offering something desirable to influence behavior </li></ul><ul><li>Coercive power : Penalizing negative behavior </li></ul><ul><li>Legitimate power : Titles and positions of authority </li></ul><ul><li>Expert power : Knowledge based </li></ul><ul><li>Referent power : Exists when goals or objectives are similar </li></ul>
  15. 15. Motivation <ul><li>A force within the individual that focuses behavior toward achieving a goal </li></ul><ul><li>An individual’s hierarchy of needs may influence motivation and ethical behavior </li></ul><ul><ul><li>Relatedness needs are satisfied by social and interpersonal relationships. </li></ul></ul><ul><ul><li>Growth needs are satisfied by creative or productive activities. </li></ul></ul><ul><li>Needs or goals may change over time </li></ul>
  16. 16. Organizational Structure and Business Ethics <ul><li>In a centralized organization, decision-making authority is concentrated in the hands of top-level managers </li></ul><ul><ul><li>Little authority delegated to lower levels </li></ul></ul><ul><li>In a decentralized organization, decision-making authority is delegated as far down the chain of command as possible </li></ul>
  17. 17. Examples of Centralized/Decentralized Corporate Cultures
  18. 18. Groups in Corporate Structure and Culture <ul><li>Formal groups </li></ul><ul><ul><li>Committees, work groups and teams </li></ul></ul><ul><li>Informal groups </li></ul><ul><ul><li>The “grapevine” </li></ul></ul><ul><li>Group norms </li></ul><ul><ul><li>Standards of behavior acceptable in the group </li></ul></ul><ul><ul><li>Define acceptable/unacceptable behavior within the group </li></ul></ul>
  19. 19. Variation in Employee Conduct (The 10/40/40/10 Rule)
  20. 20. Can People Control Their Own Actions Within a Corporate Culture? <ul><li>Organizational ethical decisions often made by committees and formal and informal groups </li></ul><ul><li>Many decisions are beyond the influence of individuals </li></ul><ul><li>Individuals entering the business will need several years of experience to understand how to resolve ethical issues </li></ul>
  21. 21. The Importance of Corporate Culture <ul><li>According to the Ethics Resource Center, corporate culture is the number one most important factor in limiting misconduct </li></ul><ul><li>Executives must make maintaining an ethical culture a top priority </li></ul>Source: © Jack Hollingsworth/Corbis

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