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Management ch-4 and ch-5


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CH-5:-Social responsibility and Managerial ethics

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Management ch-4 and ch-5

  2. 2. Parameters of Managerial Discretion
  3. 3. ORGANIZATIONAL CULTURE– A system of shared meanings and commonbeliefs held by organizational members thatdetermines, in a large degree, how they acttowards each other.– “The way we do things around here.”• Values, symbols, rituals, myths, and practices– Implications:• Culture is a perception.• Culture is shared.• Culture is descriptive.
  4. 4. DEFINITION OF ORGANISATIONALCULTURE• According to Ralph Linton, culture refers tothe set of values that help membersunderstand what the organization standsfor, how it does things, and what itconsiders important.• According to Linda Smircich, organizationalculture is a system of shared values,assumptions, beliefs, and norms that unitethe members of an organization.
  5. 5. • Ricky W. Griffin states that organizationalculture is the collection of shared (stated orimplied) beliefs, values, rituals ,stories,myths and specialized language that fostera feeling of community among organizationmembers.
  6. 6. Dimensions of Organizational Culture
  7. 7. Characteristics/ Attributes ofOrganizational Culture• It is distinctive: mission , vision , goal• It is based on certain norms.• It promotes dominant and stable values.• It leads to common behavioral aspects.• It shapes philosophy rules.• Its strength varies.
  9. 9. Strong Culture– Are cultures in which key values are deeplyheld and widely held.– Have a strong influence on organizationalmembers.– Commit members to do things that are inthe best interests of the organization.– Discourage dysfunctional work behavior.– Encourage functional work behavior.
  10. 10. • The best organizations have strongcultures that:–Are performance-oriented.–Emphasize teamwork.–Allow for risk taking.–Encourage innovation.–Value the well being of people.
  11. 11. Factors Influencing the Strength ofCulture1. Size of the organization2. Age of the organization3. Rate of employee turnover4. Strength of the original culture5. Clarity of cultural values and beliefs
  12. 12. Benefits of a Strong Culture• Creates a stronger employee commitmentto the organization.• Aids in the recruitment and socialization ofnew employees.• Fosters higher organizational performanceby instilling and promoting employeeinitiative.
  13. 13. Creation and Maintenance ofOrganizational Cultures13Organizational HeroesOrganizational StoriesCompany Founder
  14. 14. How Employees Learn Culture• Stories– Narratives of significant events or actions ofpeople that convey the spirit of the organization• Rituals– Repetitive sequences of activities that expressand reinforce the values of the organization• Material Symbols– Physical assets distinguishing the organization• Language– Acronyms and jargon of terms, phrases, andword meanings specific to an organization
  15. 15. How an Organization’s Culture IsEstablished and Maintained
  16. 16. Organizational Socialization ProcessIt refers to the process that helps newemployee adapt to the organizations culture.Org uses several resources to the same whichinclude company newsletter, manual,handbook, orientation and training , citation ofrole models.Stories can also play vital role as it is powerfultolls for conveying values.Another method for conveying values is theparticipation of senior officer in trainingprogram designed to help new employees
  17. 17. • Culture is often defined by the system that areused, the processes that are followed., andthe rituals, symbols, and stories that aboundin the organization.• It is also reflected in how meetings are held inthe organization
  18. 18. Steps in the Socialization ProcessThe organization should identify and selectthose candidates whose values are compatiblewith the organizations culture.The new employee should be moved closeremotionally and make them cohesive as agroup.They will be given practical training, leading tomastery of the core discipline of the business.The performance should be measured andreward the individual performance.By adopting the company’s values , the
  19. 19. • The last step is acknowledging the good workof employees by promoting them to higherposition. These people can act as role modelsfor the new employees.
  20. 20. Managing the organizational Cultureand Change• There are seven dimensions of an organizationalculture, namely, attention to detail, innovation andrisk taking, outcome orientation, stability, peopleorientation, aggressiveness, and team orientation.• Every single person comes from different backgroundand lifestyle , so there are various factors whichaffect managing organizational culture.:-
  21. 21. Factors Affecting Org Culture• Organizational Change• Communication• Service• Compensation• Organizational Culture• Decision-Making• IndividualCompetencies• Morale• Performance Evaluation• Quality• Supervision• Training & Development• Mission
  22. 22. CHANGEChange Management is a structured approachto shifting/transitioning individuals, teams andorganizations from a current state to a desiredfuture state. It is aimed at empowering employee to acceptand embrace change in existing businessenvironmentIt allows for new technology and new ways ofdoing the same task more efficient and costeffective manner.Change can be un comfortable but surre can
  23. 23. Process of Change ManagementIdentifying the need for change inorganization.Designing need specific changes to curb withthe requirement of the organizations.Making others understand why changes isnecessary for the purpose.Altering the organizational process likeprocesses, technology and performancemeters to incorporate the changesManaging the production and changes toensure that customer and the stake holder
  24. 24. How is Change EffectiveSuccessful change management is more likely tooccur if the following are included.:-• Effective communication that informs variousstakeholder of the reason for the change (why?),thebenefits of the successful implementation (What is init for us, and you) as well as the details of the change(When ? Where ? How much will it cost ?)
  25. 25. • Devise an effective education, training and skillupgrading schemes for the organization.• Counter Resistance from the employees ofcompanies and align them to overall strategiesdirection of the organization.• Provide personal counseling to alleviate any changerelated fears.• Monitoring of the implementation and fine-tuning asrequired.
  26. 26. Resistance to Change• Fear of the unknown• Fear of Failure• Disagreement with thee need for change• Losing something of value• Leaving a comfort zone• False beliefs• Misunderstanding and lack of trust.• Inertia.
  27. 27. Group• Two or more people/individuals coming into contacton a continuing basis, personally & meaningfullycould be referred to as a group.• Informal Group– Informal group comprise of a small number ofpeople who frequently participate in activities andsharre feelings for the purpose of a meeting theirmutual needs
  28. 28. • Formal Group– Formal group and institution on the other handcould be defined as the rules that are readilyobservable through written documents or rulesthat are determined & executed through formalposition such as authority or ownership.– They include explicit incentives, contractual terms,& firm boundaries as defined by equity position,organizational charts and job description generallyreflect the formal structure or prescribed networkin a given organization
  29. 29. Leadership• Leadership is a process by which a personinfluences others to accomplish an objectiveand directs the organization• Leadership is a process where an individualinfluences a group of individual to achieve acommon goal.• Leadership Style– Leadership style is the manner and approach ofproviding direction, implementing plans, andmotivating people.
  30. 30. Leadership Style• Authoritarian or Autocratic• Participative or democratic• Delegative or Free Reign
  31. 31. Authoritarian or Autocratic• Here, leader tell their employees what he want doneand hoe he want it to accomplished, without gettingthe advice of his followers.• It used when leaders have all the information tosolve the problem, they are short on time, and theiremployees are self motivated.• This style can be vehicle for yelling, using demeaninglanguage, and leading by threats and abusing theirpower.• It is about ‘Bossing People Around’
  32. 32. Participative or democratic• This style involves the leader including one ormore employees in the decision makingprocess (determining what to do and how todo it).• However leader maintain the final decision.• It is normally used when employees areknowledgeable and skillful.• Using this style is of mutual benefit-it allowsthem to become part of the team and allows
  33. 33. Delegative or Free Reign• Here, the leader allows the employees tomake the decisions. However , the leader isstill responsible for outcome of the decision.• It is useful when employees are able toanalyze the situation and determine whatneeds to be done and how to do it.• A Leader must set the priorities and delegatecertain tasks..• This style is helpful when leader s have fulltrust and confidence in employees.
  34. 34. Managerial Decisions Affected byCulture•Planning•The degree of risk that plans should contain•Whether plans should be developed byindividuals or teams•The degree of environmental scanning in whichmanagement will engage•Organizing•How much autonomy should be designed intoemployees’ jobs•Whether tasks should be done by individuals orin teams
  35. 35. •Leading•The degree to which managers are concernedwith increasing employee job satisfaction•What leadership styles are appropriate•Whether all disagreements—even constructiveones—should be eliminated•Controlling•Whether to impose external controls or to allowemployees to control their own actions•What criteria should be emphasized in employeeperformance evaluations•What repercussions will occur from exceedingone’s budget
  36. 36. Defining the External Environment• External Environment◦ Those factors and forces outside theorganization that affect the organization’sperformance.• Components of the External Environment◦ Specific environment: external forces that havea direct and immediate impact on theorganization.◦ General environment: broad economic, socio-cultural, political/legal, demographic,
  37. 37. The External Environment
  38. 38. Managing Stakeholder Relationships1. Identify the organization’s externalstakeholders.2. Determine the particular interests andconcerns of the external stakeholders.3. Decide how critical each externalstakeholder is to the organization.4. Determine how to manage each individualexternal stakeholder relationship.
  39. 39. Organizational Stakeholders
  40. 40. Social responsibility andManagerial ethicsChapter – 5MGT/M5/SS
  41. 41. “Business of Business is Business”-Milton Friedman
  42. 42. CORPORATE SOCIAL RESPONSIBILITYCorporate Social Responsibility is thecontinuing commitment by business tobehave ethically and contribute toeconomic development while improvingthe quality of life of the workforce andtheir families as well as of the localcommunity and society at large42
  43. 43. Arguments in Favor of CSR• It is in best interest of business to promote &improve the communities where it doesbusiness• It is an ethical• Long –run survival of the business concerns• Profitable for the business concerns• Moral and social commitment• Improvement in public image• Helps in avoiding government regulation43
  44. 44. Arguments Against CSR• It violates profit maximization• Social actions can not be measured• Cost –benefit analysis• Business Lack skill and competence to solvesocietal problems• Transfer of social costs(a) Increase in price(b)Reduction in wage(c) Reduction in profitresources 44
  45. 45. Is CSR the same as business ethics?• There is clearly an overlap between CSR andbusiness ethics• Both concepts concern values, objectives anddecision based on something than the pursuit ofprofits• And socially responsible firms must act ethically• The difference is that ethics concern individualactions which can be assessed as right or wrongby reference to moral principles.• CSR is about the organizations obligations to allstakeholders – and not just shareholders.45
  46. 46. There are four dimensions of corporateresponsibility• Economic - responsibility to earn profit forowners• Legal - responsibility to comply with the law(society’s codification of right and wrong)• Ethical - not acting just for profit but doingwhat is right, just and fair• Voluntary and philanthropic - promotinghuman welfare and goodwill• Being a good corporate citizen contributing tothe community and the quality of life46
  47. 47. Business firm’sResponsibilitiesOwners/ShareholderGovernmentSocietyEmployeesCustomer/ConsumerCompetitorsBusiness firm’s Responsibilities towards different group
  48. 48. Responsibilities towards Customer• Fair Price• Product must meet the need of the group• Superior Quality• Followed by Superior Service• Superior Product Design• Quick & Complete Information
  49. 49. Responsibilities Towards Employees• Meaningful work• Fair Salaries & Benefits• Job Satisfaction• Participation in Key Decisions• Succession planning & Development• Best quality of work life• Member of Trade Union• Collective Bargaining• Right to strike
  50. 50. Responsibilities Towardsowners/Shareholder• Fair & Reasonable Dividend• Solvent & Efficient Business• Optimum use of Resources• Planned Growth• Effective Communication by report
  51. 51. Responsibilities Towards Competitor• Fair Competition• Cooperation for sharing of scare resources andfacilities• Good Advertisement• Collaboration for maximization
  52. 52. Responsibilities Towards Government• Payment of Taxes, Custom Duties etc• Abide by the Laws• Observe the politics• Maintain Law & Security
  53. 53. Responsibilities TowardsSociety/community• Employment without discrimination• Employment to disadvantaged person• Community welfare services• Business Morality of Business Efficiency• Maintaining Pollution free environment• Maintaining ecological balance
  54. 54. Ethics• Derived from ‘ethos’ means character• It’s science of Morals, being right, just, honest, good.• A study concerned with human character andconduct, Principles or ideals of human conduct.
  55. 55. Business Ethics• Refers to the application of moral values,accepted character and behavior duringperformance of all business activities,dealings, offers, practices and other corporateissues.
  56. 56. Tools of Business Ethics• To protect the interest of the society and tomaximize human welfare• To convince the business to respect itscompetitors role in the economy• To respect customer’s interest and their role inthe business• Improves the confidence of customer,employers, suppliers, bankers etc in theprocess of protecting their interest
  57. 57. • Regulate the roles and activities of all theplayers in business activities.• Make the business to discharge its role towardgovernment more fairly.• To perform fair role in the social issues,ecology and environmental protection,consumerism, energy crisis, technologydevelopment and unemployment, resourcesutilization and the like.
  58. 58. Principle of Ethicsby: Mr Woodrow Wilson• The rule of publicity• The rule of equivalent price• The rule of conscience in business• The rule of spirit of service