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Organizational Factors: The Role of Culture and Relationships

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Ethical Decision Making for Business 8e Fraedrich/ Ferrell/ Ferrell C H A P T E R 7 CHAPTER 7 Organizational Factors: The Role of Culture and Relationships – PowerPoint PPT presentation

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Title: Organizational Factors: The Role of Culture and Relationships


1
Ethical Decision Making for Business 8e
Fraedrich/ Ferrell/ Ferrell
C H A P T E R 7
CHAPTER 7
  • Organizational Factors The Role of Culture and
    Relationships

2
Chapter Objectives
  • To understand the concept of corporate culture
  • To examine the influence of corporate culture on
    business ethics
  • To determine how leadership, power, and
    motivation relate to ethical decision making in
    organizations
  • To assess organizational structure and its
    relationship to business ethics
  • To explore how the work group influences ethical
    decisions
  • To discuss the relationship between individual
    and group ethical decision making

3
Chapter Outline
  • Defining Corporate Culture
  • The Role of Corporate Culture in Ethical Decision
    Making
  • Leaders Influence Corporate Culture
  • Motivating Ethical Behavior
  • Organizational Structure and Business Ethics
  • Group Dimensions of Corporate Structure and
    Culture
  • Variation in Employee Conduct
  • Can People Control Their Own Actions
  • Within a Corporate Culture?

4
Ethical Corporate Culture
  • Corporate culture includes the behavioral
    patterns, concepts, values, ceremonies, and
    rituals that take place in the organization

5
Corporate Culture
  • May be formal statements of values, beliefs, and
    customs
  • May be informal through direct or indirect
    comments conveying managements wishes
  • Two dimensions
  • Concern for people
  • Concern for performance

6
Four Organizational Culture Types
  • Apathetic
  • Caring
  • Exacting
  • Integrative
  • A cultural audit is an assessment
  • of the organizations values

7
Compliance Versus Value-Based Culture
  • Compliance-based cultures use their legal
    departments to determine ethical risk
  • Values-based cultures relies on an explicit
    mission statement that defines the firm and
    stakeholder relations

8
Differential Association
  • The idea that people learn ethical/unethical
    behavior while interacting with others

9
Whistle Blowing
  • Exposing an employers wrongdoing to outsiders
    (external to the company)
  • The SarbanesOxley Act and the FSGO has
    institutionalized whistle-blowing to encourage
    discovery of misconduct

10
Leaders Can Influence Corporate Culture
  • Five Power Bases
  • Reward power Offering something desirable to
    influence behavior
  • Coercive power Penalizing negative behavior
  • Legitimate power Titles and positions of
    authority
  • Expert power Knowledge based
  • Referent power Exists when goals or objectives
    are similar

11
Motivation
  • A force within the individual that focuses
    behavior toward achieving a goal
  • An individuals hierarchy of needs may influence
    motivation and ethical behavior
  • Needs or goals may change over time

12
Organizational Structure and Business Ethics
  • In a centralized organization, decision-making
    authority is concentrated in the hands of
    top-level managers
  • In a decentralized organization, decision-making
    authority is delegated as far down the chain of
    command as possible

13
Groups in Corporate Structure and Culture
  • Formal groups
  • Informal groups
  • Group norms

14
Can People Control Their Own Actions Within a
Corporate Culture?
  • Organizational ethical decisions often made by
    committees and formal and informal groups
  • Many decisions are beyond the influence of
    individuals
  • Individuals entering the business will need
    several years of experience to understand how to
    resolve ethical issues
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