Chapter Ten

Organizational Culture and Ethical Values

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Organizational Culture

Def: the set of values, beliefs, understandings and ways of thinking that are shared by org members & taught to new members as correct Thomson Learning Surface level 2004

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Levels of Corporate Culture

Observable

Underlying Values, Assumptions, Beliefs, Attitudes, Feelings

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Interpreting Culture

Rites & Ceremonies expressive events Stories - history & folklore Symbols - deeper values Language Thomson Learning
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A Typology of Organizational Rites and Their Social Consequences

Type of Rite Passage Example Induction and basic training; US Army Annual awards night Social Consequences Facilitate transition of person into new social roles and statuses Enhance social identities and increase status of members Refurbish social structures and improve organization functioning Encourage and revive common feelings that bind members together and commit them to the organization

Enhancement

Renewal

Organizational development activities Office holiday party

Integration

Source: Adapted from Harrison M. Trice and Janice M. Beyer, Studying Organizational Cultures through Rites and Ceremonials, Academy of Management Review 9 (1984), 653-659. Used with permission.

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Relationship of Environment and Strategy to Corporate Culture

Needs of the Environment
Flexibility External Stability

Strategic Focus

Adaptability Culture

Mission Culture

Internal

Clan Culture

Bureaucratic Culture

Sources: Based on Daniel R. Denison and Aneil K. Mishra, Toward a Theory of Organizational Culture and Effectiveness, Organization Science 6, no. 2 (March-April 1995): 204-23; R. Hooijberg and F. Petrock, On Culture Change: Using the Company Values Framework to Help Leaders Execute a Transformational Study, Human Resource Management 32 (1993): 29-50; and R. E. Quinn, Beyond Rational Management: Mastering the Paradoxes And Competing Demands of High Performance (San Francisco: Jossey-Bass, 1988).

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Forces That Shape Managerial Ethics

Personal Ethics
Beliefs and Values Moral Development Ethical Framework

Organizational Culture
Rituals, Ceremonies Stories, Heroes Language, Slogans Symbols Founder, History

Organizational Systems
Structure Policies, Rules Code of Ethics Reward System Selection, Training

Is Decision or Behavior Ethical and Socially Responsible?

External Stakeholders
Government Regulations Customers Special Interest Groups Global Market Forces

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Ethical Issues in Business

Ethics: the study of morals and principles of conduct Right vs. Wrong Human consequences associated with decisions and actions Higher standards than prescribed by the law
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Ethical Frameworks

The Ethical / Legal Framework: When are actions legal but unethical, or illegal but still ethical? The Moral Philosophy Framework: What are underlying assumptions?
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The Ethical / Legal Framework

Legal+Ethical? Do it! Illegal+Unethical? Dont do it! But legal, but unethical? Or illegal, but ethical? Ethical dilemmas

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The Moral Philosophy Framework

1) Utilitarian: Consequential theories cost/benefit analysis maximize good and minimize harm Limitations: Measurement issues Whose utility curve?
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The Moral Philosophy Framework

2) Categorical Imperative: Rule-based theories Absolute or universal law Bible, Koran Limitations: Whose interpretation? Just following orders...
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The Moral Philosophy Framework

3) Cultural Relativism: Cultural theories Situational ethics When in Romedo as the Romans do. Limitation: Which Romans?
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Formal Structure and Systems of the Organization

Ethics committee Chief Ethics Officer Whistle-blowing Code of ethics Training programs

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Workbook Activity

Shop Til You Drop

Culture Item
1. Mission of store: 2. Individual initiative: 3. Reward system: 4. Teamwork: 5. Company loyalty: 6. Dress: 7. Diversity of employees: 8. Service orientation: 9. Human resource development:
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Discount Store

Department Store