1. How An Organization Influences Ethical Decision-Making
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Topic 6 :
How An Organization Influences Ethical Decision-Making
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Week 1

2. The Influences Of Corporate Culture
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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
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3. The Influences Of Corporate Culture
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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
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4. The Purposes Of A Code Of Conduct
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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 ...
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5. The Usual Contents Of A Code of Conduct
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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
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6. 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
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7. 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
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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
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9. 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
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10. 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
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11. 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
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12. 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
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13. The Influences Of Formal Groups
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The Influences Of Formal Groups
Formal groups
Existing within an organizational structure
e.g. committees, work groups and teams
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14. 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
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15. 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
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16. 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
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17. The Influences Of Informal Groups
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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
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18. 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
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19. Group Norms Standards of behavior that groups expect of their members
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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
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20. The Meaning Of Corporate Social Responsibility
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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
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21. 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
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22. 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
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23. Arguments For Corporate Social Responsibility
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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 ...
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24. Arguments Against Corporate Social Responsibility
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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 …
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