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Organizational Culture and Ethical Values – Chapter 10.

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1 Organizational Culture and Ethical Values – Chapter 10

2 Culture is the set of values, norms, guiding beliefs and understandings that is shared by members of an organization and taught to new members as the correct way to think, feel and behave. It represents the unwritten, feeling part of the organization. Everyone is a culture being, but culture generally goes unnoticed.

3 Culture is like an iceberg! Observable symbols, ceremonies, stories, slogans, behaviors, dress, physical settings. Underlying values, assumptions, beliefs, attitudes, feelings

4 Culture provides people with a sense of organizational identity and generates in them a commitment to beliefs and values that are larger than themselves. They usually begin with a founder or early leader who articulates and implements particular ideas and values as a vision, philosophy, or business strategy. (376)

5 Internal Integration –members develop a collective identity and know how to work together effectively. Guides day-to-day working relationships and determines how people communicate within the organization, what behavior is acceptable or not acceptable, and how power and status are allocated. (377)

6 External Adaptation – how the organization meets goals and deals with outsiders. Culture helps guide the daily activities of workers to meet certain goals. It can help the organization respond rapidly to customer needs or the moves of a competitor. The right culture can help transform an organization’s performance from average to truly great. (377)

7 Interpreting Culture – To identify and interpret culture requires that people make inferences based upon observable artifacts. Examples include rites and ceremonies, stories, myths, heroes, legends, symbols, organizational structures, power relationships, and control systems.

8 Power Relationships Symbols Rites and Ceremonies Organizational Culture Control Systems (378) Stories and Myths Organization Structures

9 Adaptability Culture – Characterized by strategic focus on the external environment through flexibility and change to meet customer needs. Example is Google (382) Mission Culture – Concerned with serving specific customers in the external environment, but without the need for rapid change. InBev NV, the Belgian-Brazilian brewing giant is one example. (383)

10 Clan Culture – Primary focus on the involvement and participation of the organization’s members and on rapidly changing expectations from the external environment. Wegman’s (71 supermarkets) is an example. Bureaucratic Culture – has an internal focus and a consistency orientation for a stable environment. (Pacific Edge Software) (384)

11 Ethical Values and Social Responsibility Recent study: Of the 100 largest U.S. corporations, 40% have recently been involved in activities that can be considered unethical. Other countries have had similar problems. Ethics refers to the code of moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong. Ethical values set standards as to what is good or bad in conduct and decision making. (389)

12 The notion of Corporate Social Responsibility (CSR) is an extension of the idea of managerial ethics and refers to management’s obligation to make choices and take action so that the organization contributes to the welfare and interest of all organizational stakeholders, such as employees, customers, shareholders, the community and the broader society. (392)

13 There seems to be a positive relationship between ethical and socially responsible behavior and financial results. There is also evidence that people prefer to work for companies that demonstrate a high level of ethics and corporate social responsibility, so these companies can attract and retain high- quality employees. (393)

14 A survey of year-olds found that 79% say they want to work for a company that cares about how it affects or contributes to society. In a study of ethics policy and practice in successful companies such as J&J and General Mills, no point emerged more clearly than the role of top management in providing commitment, leadership and examples for ethical behavior. (393)

15 Values-based Leadership Organizational values are developed and strengthened primarily through values-based leadership, a relationship between a leader and followers that is based upon shared, strongly internalized values that are advocated and acted upon by the leader. Employees learn about values, beliefs and goals from watching managers, just as students learn which topics are important for an exam, what professors like and how to get a good grade from watching professors. Values-based leaders “walk their talk”!!!

16 Chuck Williams, Sonoma-Williams Company Nordstrom Department Stores John Tu and David Sun – Kingston Technology Company

17 Interpersonal Behaviors Treat people with care Be helpful and kind Support others Maintain positive relationships Personal Actions and Expectations Hold self to high ethical standards. Strive for honesty, humility, integrity. Accept responsibility for ethical failings. Fairness with Others Treat everyone equitably Never be condescending Accept others’ mistakes Organizational Leadership Articulate and communicate ethical vision Hold people accountable Put ethics above short-term interests Values- Based Leadership (395)

18 Who (or what) a person is (character, integrity) will ultimately determine if their brains, talents, competencies, energy, effort, alliance-building abilities, and opportunities will succeed.

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25 Results: service and sacrificeSetting aside your own wants and needs; seeking the greatest good for others

26 Code of Ethics Formal statement of the company’s values concerning ethics and social responsibility; it clarifies to employees what the company stands for and its expectations for employee conduct. (397) Social audit – measures and reports the ethical, social and environmental impact of a company’s operations. (399)

27 Whistle-blower. Tell me about it! What is it? Who does it? Why are companies trying to protect them? When safe-guards are not in place, what happens to a whistle-blower?


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