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Organizational Culture and Ethical Decision Making


Chapter 6 Organizational Culture and Ethical Decision Making Organizational Structure & Business Ethics in centralized organizations, decision-making authority is ... – PowerPoint PPT presentation

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Title: Organizational Culture and Ethical Decision Making

Chapter 6
  • Organizational Culture and Ethical Decision Making

Organizational Structure Business Ethics
  • in centralized organizations, decision-making
    authority is concentrated in the hands of top
    level managers little authority is delegated to
    lower levels
  • in decentralized organizations, decision making
    authority is delegated as far down the chain of
    command as possible
  • each structure has a unique influence on ethical
    decision making behavior

Centralized Organizations...
  • stress formal rules, policies procedures
    supported with systematic control systems
  • codes of ethics may specify the techniques for
    decision makers
  • tend to be very bureaucratic
  • the division of labor is well defined

Ethical Issues That May Arise in Centralized
  • blame-shifting or scape-goating-transferring
    blame for ones actions to others
  • specialization limits the ability of the
    individual to understand how their actions affect
    the overall organization
  • because of minimal upward communication, top
    level managers may not be aware of problems

Decentralized Organizations...
  • have few formal rules, and coordination and
    control are usually informal and personal
  • are adaptable and are very aware of external
  • managers can react quickly to changes in the
    external and internal environment

Ethical Issues That May Arise in Decentralized
  • difficulty in responding quickly to changes in
    policy procedures established by top management
  • employees have extensive decision making

The Role of Corporate Culture in Ethical Decision
  • culture gives members of an organization meaning
    provides them with rules for behaving within
    the organization
  • a companys history unwritten rules are a part
    of its culture
  • some cultures are so strong they dictate the
    character of the entire organization to outsider

Organizational Culture...
  • may be explicit statements of values, beliefs,
    and customs coming from upper management in the
    form of memos, codes, handbooks, manuals, forms
  • may be expressed informally through direct
    indirect comments that convey managements
    wishes dress codes, promotions, legends,
    extracurricular activities

Ethics as a Component of Corporate Culture...
  • top management provides the blueprint of what a
    corporate culture should be
  • organizational ethical decisions have a strong
    impact on corporate culture
  • a failure to monitor manage corporate culture
    may lead to questionable behavior
  • rewards punishment need to be consistent with
    the corporate culture

Two Basic Dimensions Determine an Organizations
  • concern for people-the organizations efforts to
    care for its employees well being
  • concern for performance-the organizations
    efforts to focus on output and employee

Four Different Cultures Can Emerge
  • apathetic-shows minimal concern for people or
  • caring-exhibits high concern for people, but
    minimal concern for performance
  • exacting-shows little concern for people, but
    high concern for performance
  • integrative-high concern for
    people and performance

Role of Leadership
  • a leader must respect followers and provide a
    standard of ethical conduct
  • leadership style influences how employees act
  • leadership influence affects ethical behavior
  • managers can use rewards
    punishment to encourage
    employees in behaviors that
    support the organizations goals

Reward Punishment Dimensions
  • performance contingent reward behavior -positive
    reinforcement for good behavior
  • contingent punishment behavior-negative
    reinforcement for poor behavior
  • noncontingent reward behavior-positive
    reinforcement regardless of behavior
  • noncontingent punishment behavior-negative
    reinforcement regardless of behavior

Role of Motivation
  • offers incentives to encourage employees to work
    toward organizational objectives
  • career stage, age, organization size,
    and geographic location influence
  • an individuals hierarchy of needs
    may influence motivation
    ethical behavior

The Role of Power
  • exerting power is one way to influence ethical
  • reward power
  • coercive power
  • legitimate power
  • expert power
  • referent power

Group Influences
  • formal groups-committees, work groups, teams,
    quality circles
  • informal groups-grapevine
  • group norms-standards of behavior acceptable in
    the group, define acceptable behavior, fosters
    conformity, may conflict with the organizational
    culture, sanctions may be necessary to bring a
    nonconforming group into line with organizational