Ls 601 ppt 10

1. CHAPTER 10.
CREATING AN
ETHICAL
ORGANIZATIONAL
CLIMATE

2. Chapter 10. Creating an Ethical Organizational
Climate
 The Leader as Ethics Officer
Leaders are largely responsible for creating the
organizations we admire for their ethical behavior.
Leaders are the ethics officers of their organizations, casting
light or shadow in large part through the example they set.
Leaders are generally seen as legitimate, credible, and
attractive because they occupy positions of authority with
power and status. Ethical leaders build on this foundation.
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
2

3. The Leader as Ethics Officer
• The unethical leader falls short as both a moral
person and a moral influence agent.
• The hypocritical leader talks a lot about ethical
values but doesn’t live up to the rhetoric.
• The ethically neutral leader is not clearly seen as
either ethical or unethical. This person doesn’t
send out strong messages about ethics and
leaves followers unsure about where he or she
stands on moral issues.
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
3

4. Ethical Climates
• Management professors Bart Victor and John Cullen argue
that ethical climates can be classified according to the
criteria members use to make moral choices and the
groups that members refer to when making ethical
determinations.
• Five primary climates, according to Victor and Cullen:
– 1. Instrumental
– 2. Caring
– 3. Law and order
– 4. Rules
– 5. Independence
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
4

5. Signs of Healthy Ethical Climates
• There is no one-size-fits-all approach to
creating an ethical climate.
• Key markers of highly ethical organizations
include
– recognition of risk,
– zero tolerance for individual and collective destructive behaviors,
– justice,
– integrity,
– trust,
– process focus,
– structural reinforcement, and
– organizational citizenship.
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
5

6. Recognition of Risk
• Seven signs that a company may be in
ethical danger:
– Sign 1: Pressure to Maintain Numbers
– Sign 2: Fear and Silence
– Sign 3: Young ‘Uns and a Bigger-Than-Life CEO
– Sign 4: Weak Board
– Sign 5: Conflicts of Interest
– Sign 6: Innovation Like No Other
– Sign 7: Goodness in Some Areas Atones for Evil
in Others
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
6

7. Zero Tolerance for Destructive Behaviors
 Most of us will experience the shadows cast
by dark-side behaviors.
 These are destructive or antisocial actions
that deliberately attempt to harm others or the
organization.
 Those who engage in such unethical
behaviors are driven to meet their own needs
at the expense of coworkers and the group
as a whole.
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
7

8. Zero Tolerance for Destructive Behaviors
• Common categories of misbehaviors in an
organization:
– Incivility
– Aggression
– Sexual harassment
– Discrimination
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
8

9. Zero Tolerance
• Moral leaders:
– Create zero-tolerance policies that prohibit antisocial
actions.
– Obey guidelines.
– Constantly monitor for possible violations.
– Move quickly when standards are violated.
– Address the underlying factors that trigger destructive
actions.
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
9

10. Justice
• Justice in the workplace takes three forms:
distributive, procedural, and interactional.
• Moral leaders treat people with dignity and respect
and share information about how decisions are
made.
• Perceptions of justice or injustice have been found
to have powerful effects on the attitudes and
behaviors of organizational members.
• In contrast, perceptions of unfair treatment
increase such withdrawal behaviors as neglecting
job responsibilities, absenteeism, and quitting.
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
10

11. Integrity
• Integrity is ethical soundness, wholeness,
and consistency.
• All units and organizational levels share a
commitment to high moral standards, backing
up their ethical talk with their ethical walk.
• Consistency increases the level of trust,
encouraging members and units to be
vulnerable to one another.
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
11

12. Integrity
• According to business ethicist Lynn Paine, managers
who act with integrity see ethics as a driving force of an
enterprise.
• Paine believes that any effort to improve organizational
integrity must include the following elements:
– There are sensible, clearly communicated values and
commitments.
– Company leaders are committed to and act on the values.
– The values are part of the routine decision-making process and
are factored into every important organizational activity.
– Systems and structures support and reinforce organizational
commitments.
– Leaders throughout the organization have the knowledge and
skills they need to make ethical decisions.
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
12

13. Trust
• Ethical organizations are marked by a high degree of trust.
• Organizational trust describes the collective set of positive
expectations members hold about the intentions and
behaviors of other stakeholders (coworkers, superiors,
followers, other departments), which are based on their
experiences and interactions as organizational members.
• Over the past several decades, trust has moved from the
periphery to the center of organizational studies, primarily
because it has been linked to so many positive outcomes.
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
13

14. Process Focus (Concern for Means and Ends)
• Concern for how an organization achieves its goals is
another important indicator of a healthy ethical climate.
• When leaders pressure employees to produce sales
and profits by whatever means possible, followers can
feel alienated and powerless.
• Sociologists use the term anomie to refer to this sense
of normlessness and unease that results when rules
lose their force.
• Leaders can address the problem of anomie by
making sure that goals are achieved through ethical
means.
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
14

15. Structural Reinforcement
• Four elements of an organization’s structure
have a particularly strong impact on moral
behavior:
– 1. Monetary and nonmonetary reward systems
– 2. Performance and evaluation processes
– 3. Decision-making rights and responsibilities
– 4. Corporate governance
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
15

16. Organizational Citizenship
 Three components of organizational
citizenship:
Stakeholder focus
Corporate social responsibility (CSR)
Sustainability
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
16

17. Climate-Building Tools
 To build or create ethical organizational
climates, leaders rely heavily on four tools:
Core ideology
Codes of ethics
Socialization
Ethical learning
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
17

18. Discovering Core Values
• Core Ideology
– Management experts James Collins and Jerry Porras
use the term core ideology to refer to the central
identity or character of an organization.
– Core values are the first component of core ideology.
– Core purpose is the second part of an organization’s
ideology.
– Your organization’s purpose statement should inspire
members.
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
18

19. Discovering Core Values
• Appreciative Inquiry (AI)
– Participants in the AI process set out to discover the
organization’s “positive core” and use the group’s
strengths to guide individual and collective action.
– AI begins by choosing an affirmative topic, based on the
assumption that what organizational members study will
determine the kind of organizations they create.
– The discovery phase identifies “the best of what has
been and what is.”
– In the dream phase, participants look to the future to ask
“What might be?”
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
19

20. Leadership Ethics at the Movies: Spotlight
• Discussion Questions
– Why didn’t the Globe investigate charges of
priest sexual abuse earlier?
– How did the legal system protect abusive
priests and the church?
– What should be the mission and values of
journalists? Who do they serve?
– Who are the heroes of this story?
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
20

21. Codes of Ethics
• Codes of ethics are among the most common ethics tools.
• Skeptics offer criticism of ethics statements.
• Defenders of ethical codes point to their potential benefits. These
benefits include:
– A code describes an organization’s ethical stance
both to members and to the outside world.
– A formal ethics statement can improve the group’s
image while protecting it from lawsuits and further
regulation.
– Referring to a code can encourage followers and
leaders to resist unethical group and organizational
pressures.
– A written document can have a direct, positive
influence on ethical behavior.
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
21

22. Codes of Ethics
• Most codes of ethics address the
following:
– Conflicts of interest
– Records, funds, and assets
– Information
– Outside relationships
– Employment practices
– Other practices
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
22

23. Box 10.3: Ethics Codes—A Sampler
– Conflicts of Interest (Cummins, Inc.)
– Records, Funds, and Assets (PPG Industries)
– Protecting Information (Citigroup)
– Outside Relationships (Hewlett-Packard)
– Employment Practices & Treatment of Each
Other at Work (Cummins, Inc.)
– Other Practices & Personal Political Activity
(Coca-Cola)
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
23

24. Ethical Socialization Processes
• Socialization occurs in three phases:
– Anticipatory socialization
– Encounter socialization
– Metamorphosis socialization
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
24

25. Ethics Training
• Effective ethics training can make a positive
difference. Effective training does the
following:
– Focuses on the organization’s unique ethical problems.
– Taps into the experiences of participants.
– Actively engages participants.
– Reinforces the organization’s ideology and standards.
– Is integrated into the entire curriculum.
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
25

26. Case Study 10.1: Temporary Visas/Permanent Job Loss
• Discussion Questions:
– Would you agree to train your replacement if you knew
your job was going to be outsourced? Why or why not?
– Is it unjust to force employees to train their replacement?
Does doing so take away the dignity of workers?
– Is using the temporary visa program to outsource jobs
unethical or good business? Why?
– Should Congress end the H-1B temporary visa program?
– What changes should Congress make in the H-1B
program if it continues?
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
26

27. Case Study 10.2: Life in the Combat Zone: Working at
Amazon
• Discussion questions:
– Do you buy products from Amazon? If so, what has been
your experience as a customer?
– Will you continue to purchase from Amazon knowing its
corporate culture?
– Would you want to work for Amazon? Why or why not?
– Would Amazon be as successful if it changed its culture to
be less driven and combative?
– Is “purposeful Darwinism” an ethical approach to hiring
and promotion?
– What ethical danger signs or weaknesses do you see at
Amazon?
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
27

28. Case Study 10.3: Conscious Capitalism at The Container
Store
• Discussion questions
– Do you agree with Tindell that the company’s success
is based on treating employees and suppliers well?
– Can CEO Tindell continue to resist pressure from
stockholders to reduce costs?
– Should businesses have a purpose in addition to
making money?
– Are you more likely to shop at The Container Store
after learning about its culture?
– What elements of an ethical climate do you see at
The Container Store?
Johnson, Meeting the Ethical Challenges of
Leadership, 6e. SAGE Publishing, 2018.
28