Corporate%20Culture,%20Ethics%20and%20Leadership

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Corporate Culture, Ethics and Leadership
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Corporate Culture

• Organizational Culture
• Values, beliefs, behaviors, customs, and
  attitudes that help the members of the
  organization understand what it stands for, how
  it does things, and what it considers important

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Corporate Culture

• The Importance of Organization Culture
• Culture determines the overall feel of the
  organization, although it may vary across
  different segments of the organization
• Culture is a powerful force that can shape the
  firms overall effectiveness and long-term
  success

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Corporate Culture

• Determinants of Organizational Culture
• Organizations founder (personal values and
  beliefs)
• Symbols, stories, heroes, slogans, and ceremonies
  that embody and personify the spirit of the
  organization
• Corporate success that strengthens the culture.
• Shared experiences that bond organizational
  members together

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Corporate Culture

• Managing Organizational Culture
• Understand the current culture to decide whether
  to maintain or change it
• Articulate the culture through slogans,
  ceremonies, and shared experiences
• Reward and promote people whose behaviors are
  consistent with desired cultural values

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Corporate Culture

• Changing Organizational Culture
• Develop a clear idea of what kind of culture you
  want to create
• Bring in outsiders to important managerial
  positions
• Adopt new slogans, stories, ceremonies, and
  purposely break with tradition

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Ethics and Culture

• Ethics
• An individuals personal beliefs regarding what
  is right and wrong or good and bad.
• Ethical Behavior
• This behavior is in the eye of the beholder.
  However, it also refers to behavior that conforms
  to generally accepted social norms.
• Problems occur in ambiguous situations that can
  be interpreted in different ways.
• Examples of Unethical Behavior
• Borrowing office supplies for personal use,
  Surfing the Net on company time.
• Filing falsified or inflated business expense
  reports.

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Ethics and Culture

• Managing Ethical Behavior
• Must begin with top management
• Top management establishes the organizations
  culture and defines what will and will not be
  acceptable behavior
• Provide training on how to handle different
  ethical dilemmas

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Ethics and Culture

• Managing Ethical Behavior (contd)
• Develop a written code of ethics
• A formal, written statement of the values and
  ethical standards that guides a firms actions
• Individual issues
• Behavior and conscience
• Privacy

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Actors
Three basic areas of concern for managerial
ethics are the relationships of the firm to the
employee, the employee to the firm, and the firm
to other economic agents.
Figure 4.1
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Ethics in Organizations
Individual Values Organizational
Values Managerial Values
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Applying Ethical Judgments

• Model for deciding whether or not a particular
  action or decision is ethical
• Gather relevant factual information.
• Determine the most appropriate moral values.
• Make a judgment based on the rightness or
  wrongness of the proposed activity or policy.
• Ethical Norms Affecting Actions
• Utilityact optimizes what is best for its
  constituencies (benefits only or primarily those
  who are directly involved)
• Rightsact respects the rights of others involved
• Justiceact is consistent with what is considered
  fair
• Caringact is consistent with peoples
  responsibilities to each other

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Social Responsibility and Organizations

• Social Responsibility
• The set of obligations (to behave responsibly)
  that an organization has to protect and enhance
  the social context in which it functions.
• Areas of Social Responsibility
• Stakeholders
• Customers, employees, and investors
• The natural environment
• Environmentally sensitive products, recycling,
  public safety
• The general social welfare
• Charitable contributions, support for social
  issues such as child labor and human rights

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Arguments For and Against Social Responsibility
Figure 4.4
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Approaches to Social Responsibility
Figure 4.5
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Approaches to Social Responsibility (contd)

• Obstructionist Stance (Unconcerned)
• Do as little as possible to solve social or
  environmental problems.
• Defensive Stance (Damage Control)
• Do only what is legally required and nothing
  more.
• Accommodative Stance (Compliance)
• Meet legal and ethical obligations and go beyond
  that in selected cases.
• Proactive Stance (Ethical Culture)
• Organization views itself as a citizen and
  proactively seeks opportunities to contribute to
  society.

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How Business and the GovernmentInfluence Each
Other
Figure 4.6
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Managing Social ResponsibilityFormal Dimensions

• Legal Compliance
• Extent to which the organization conforms to
  local, state, federal, and international laws.
• Ethical Compliance
• Extent to which members of the organization
  follow basic ethical/legal standards of behavior.
• Philanthropic Giving
• Awarding of funds or gifts to charities and other
  social programs.

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Managing Social ResponsibilityInformal
Dimensions

• Organizational Leadership and Culture
• Leadership practices and the culture of the
  organization can help define the social
  responsibility stance an organization and its
  members will adopt.
• Whistle Blowing
• The organizational response to the disclosure by
  an employee of illegal or unethical conduct on
  the part of others within the organization is
  indicative of the organizations stance on social
  responsibility.

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Leadership

• Leaders
• People who can influence the behaviors of others
  without having to rely on force
• People who are accepted as leaders by others
• What leaders actually do
• Using non-coercive influence to shape the groups
  or organizations goals
• Motivating others behavior toward goals
• Helping to define organizational culture

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Leadership
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Leadership

• Power and Leadership
• Legitimate power is granted through the
  organizational hierarchy
• Reward power is the power to give or withhold
  rewards
• Coercive power is the capability to force
  compliance by means of psychological, emotional,
  or physical threat
• Referent power is the personal power that accrues
  to someone based on identification, imitation,
  loyalty, or charisma
• Expert power is derived from the possession of
  information or expertise

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Leadership

• Using Power
• Legitimate request
• Compliance by a subordinate with a managers
  request because the organization has given the
  manager the right to make the request
• Instrumental compliance
• A subordinate complies with a managers request
  to get the rewards that the manager controls
• Coercion
• Threatening to fire, punish, or reprimand
  subordinates if they do not do something
• Rational persuasion
• Convincing subordinates that compliance is in
  their own best interest

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Leadership

• Using Power (contd)
• Personal identification
• Using the referent power of a superiors desired
  behaviors to shape the behavior of a subordinate
• Inspirational appeal
• Influencing a subordinates behavior through an
  appeal to a set of higher ideals or values (e.g.,
  loyalty)
• Information distortion
• Withholding or distorting information (which may
  create an unethical situation) to influence
  subordinates behavior

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Exerting Strategic Leadership

• Stay on top of how well things are going
• Stay current with internal and external
  information, reports, etc.
• Communicate regularly with colleagues,
  subordinates and customers
• Keep abreast of rivals initiatives
• MBWA

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Exerting Strategic Leadership

• Establish a strategy-supportive culture
• Stakeholders are king
• Challenge the status quo
• Management must listen to customers
• Sell the strategic initiatives to groups and
  individuals throughout the organization
• Recognize and reward those who lead the change

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Exerting Strategic Leadership

• Keep the organization responsive and innovative
• Empower champions
• Encourage creativity and innovation
• Allow champions to fail
• Offer organizational support
• Make rewards large and visible
• Lead the process to develop new capabilities

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Exerting Strategic Leadership

• Exercise ethics leadership
• Lead by example
• Have written policies and guidelines
• Enforce compliance
• Encourage whistleblowers
• Promote good corporate citizenship
• Make corrective adjustments as needed