Title: Corporate%20Culture,%20Ethics%20and%20Leadership
1Corporate Culture, Ethics and Leadership
2Corporate 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
3Corporate 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
4Corporate 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
5Corporate 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
6Corporate 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
7Ethics 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.
8Ethics 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
9Ethics 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
10Actors
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
11Ethics in Organizations
Individual Values Organizational
Values Managerial Values
12Applying 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
13Social 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
14Arguments For and Against Social Responsibility
Figure 4.4
15Approaches to Social Responsibility
Figure 4.5
16Approaches 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.
17How Business and the GovernmentInfluence Each
Other
Figure 4.6
18Managing 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.
19Managing 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.
20Leadership
- 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
21Leadership
22Leadership
- 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
23Leadership
- 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
24Leadership
- 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
25Exerting 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
26Exerting 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
27Exerting 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
28Exerting 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