How An Organization Influences Ethical Decision-Making 2019/4/8 Topic 6 : How An Organization Influences Ethical Decision-Making 2019/4/8 Week 1

The Influences Of Corporate Culture 2019/4/8 The Influences Of Corporate Culture Values, beliefs, goals, norms and rituals that members share Explicitly documented Informally expressed Influencing employee behaviour in various ways e.g. providing meanings Indicating directions Serving as standards of behaviour 2019/4/8 Week 1

The Influences Of Corporate Culture 2019/4/8 The Influences Of Corporate Culture Four organizational cultures Apathetic – minimal concern for either people or performance Caring – high concern for people and minimal concern for performance Exacting – little concern for people and high concern for performance Integrative – high concern for people and for performance Ethics as a component of corporate culture If ethical behaviors are not valued, unethical behaviors may be rewarded 2019/4/8 Week 1

The Purposes Of A Code Of Conduct 2019/4/8 The Purposes Of A Code Of Conduct A written statement of expected behaviour Purposes : Demonstrating a company’s commitment Providing ethical guidance Encouraging more ethical practices Providing enforceable rules Function as a tool for self-regulation Serving as a public relations statement ... 2019/4/8 Week 1

The Usual Contents Of A Code of Conduct 2019/4/8 The Usual Contents Of A Code of Conduct Consisting of both principles and rules Why providing principles ? Why providing rules ? Representing the substance and form of a code 2019/4/8 Week 1

The Usual Contents Of A Code of Conduct Provide meaning and basis for judgment Flexible in applications Provide rationale and justifications Enable individuals to apply the code further to situations that are not handled well by rules …. Consisting of both principles and rules Why providing principles ? Why providing rules ? Representing the substance and form of a code 2019/4/8

Examples of principles: The Usual Contents Of A Code of Conduct Examples of principles: We offer only those services we can deliver and strive to deliver no less than our commitments We meet our contractual obligations and report and charge honestly for our services Consisting of both principles and rules Why providing principles ? Why providing rules ? Representing the substance and form of a code 2019/4/8

The Usual Contents Of A Code of Conduct Provide clear instructions in resolving ethical dilemma Allow more consistent actions and behaviors from employees Easy to interpret, understand and apply ……… The Usual Contents Of A Code of Conduct Consisting of both principles and rules Why providing principles ? Why providing rules ? Representing the substance and form of a code 2019/4/8

The Usual Contents Of A Code of Conduct Consisting of both principles and rules Why providing principles ? Why providing rules ? Representing the substance and form of a code 2019/4/8

The Usual Contents Of A Code of Conduct Principles: Broad moral principles and values that govern ethical actions Consisting of both principles and rules Why providing principles ? Why providing rules ? Representing the substance and form of a code 2019/4/8

The Usual Contents Of A Code of Conduct Rules: Specific standards of behaviour that employees can apply Consisting of both principles and rules Why providing principles ? Why providing rules ? Representing the substance and form of a code 2019/4/8

The Usual Contents Of A Code of Conduct Examples of Rules (Texas Instruments) “No company funds may be used for making political contributions of any kind to any political candidate or holder of any office of any government..” Consisting of both principles and rules Why providing principles ? Why providing rules ? Representing the substance and form of a code 2019/4/8

The Influences Of Formal Groups 2019/4/8 The Influences Of Formal Groups Formal groups Existing within an organizational structure e.g. committees, work groups and teams Week 1

Formal groups The Influences Of Formal Groups Examples of influences: Provide acceptable values e.g. punctuality, following rules Provide directions for accepted behaviour e.g., what should be done and what should not be done. Provide standards for behaviour e.g., how well should one perform. Improve team spirit e.g., audit group in a CPA firm.      ……        The Influences Of Formal Groups Formal groups Existing within an organizational structure e.g. committees, work groups and teams 2019/4/8

Formal groups The Influences Of Formal Groups Sub-divide duties within specific functions Homogeneous Less conflicts Formal groups Existing within an organizational structure e.g. committees, work groups and teams 2019/4/8

Formal groups The Influences Of Formal Groups Several functional areas on a single project Heterogeneous More conflicts Provide more options Formal groups Existing within an organizational structure e.g. committees, work groups and teams 2019/4/8

The Influences Of Informal Groups 2019/4/8 The Influences Of Informal Groups Informal groups Consisting of members who have similar interests, backgrounds, and viewpoints and who band together for companionship Help to develop informal channels of communication Week 1

The Influences Of Informal Groups Examples of influences: Make corporate culture come alive Providing direction for employee’s daily activities Providing norms and expectations Providing mutual supports Enhancing morale and job satisfaction Imposing peer pressures …….. The Influences Of Informal Groups Informal groups Consisting of members who have similar interests, backgrounds, and viewpoints and who band together for companionship Help to develop informal channels of communication 2019/4/8

Group Norms Standards of behavior that groups expect of their members 2019/4/8 Group Norms Standards of behavior that groups expect of their members Define acceptable and unacceptable behavior Define the limit on deviation from group expectations Sometimes conflict with the values and rules prescribed by the corporate culture Week 1

The Meaning Of Corporate Social Responsibility 2019/4/8 The Meaning Of Corporate Social Responsibility Beyond the production of goods and services for a profit Obligation to maximize positive impact on society and to minimize negative impact Trading-off conflicting responsibilities Affect employees in resolving ethical dilemma Week 1

The Meaning Of Corporate Social Responsibility PHILANTHROPIC RESPONSIBILITIES Be a good corporate citizen. Contribute resources to the community; improve quality of life ETHICAL RESPONSIBILITIES Be ethical. Obligation to do what is right, just, and fair. Avoid harm LEGAL RESPONSIBILITIES Obey the law. Law is society’s codification of right and wrong. Play by the rules of the game. ECONOMIC RESPONSIBILITIES Be profitable. The foundation upon which all others rest. The Meaning Of Corporate Social Responsibility Beyond the production of goods and services for a profit Obligation to maximize positive impact on society and to minimize negative impact Bearing a pyramid of responsibilities to different stakeholders Trading-off conflicting responsibilities Affect employees in resolving ethical dilemma 2019/4/8

The Meaning Of Corporate Social Responsibility Promotion of employee welfare Enhancement of consumer interests e.g. in providing after-sales services Environmental protection Donations to non-profit–making organizations Sponsoring cultural activities … The Meaning Of Corporate Social Responsibility Beyond the production of goods and services for a profit Obligation to maximize positive impact on society and to minimize negative impact Bearing a pyramid of responsibilities to different stakeholders Trading-off conflicting responsibilities Affect employees in resolving ethical dilemma 2019/4/8

Arguments For Corporate Social Responsibility 2019/4/8 Arguments For Corporate Social Responsibility Balancing power with responsibility Avoiding government regulations Improving company image Promoting long-run interest Recognizing business’s moral obligations Responding to rising public expectations ... 2019/4/8 Week 1

Arguments Against Corporate Social Responsibility 2019/4/8 Arguments Against Corporate Social Responsibility Unfair to place CSR on corporations Imposing hidden costs onto society Lacking social accountability Lowering economic efficiency and profits Friedman : Business is business … 2019/4/8 Week 1