Chapter 7 Biz Ethics

Corporate Culture

The shared beliefs top managers have about how they should manage themselves and other employees and how they should conduct their business(s).

How is Corporate Culture exhibited?

Through behavior patterns, concepts, and documents that emerge in conception.

Are unwritten rules part of corporate culture?

Yes

Where were the characteristics of an ethical corporate culture codfied?

Sarbanes Oxley 404 Section

What are the three common things shared between the varying definitions of culture?

Shared among Individuals, formed over along time, and relatively stable

What is the "tone at the top"?

a determining factor in the creation of high intergrity organizations

Most common trait that CEo's look for in a person to train?

Integrity

What are the two dimensions an organizational's culture?

1)Concern for People, 2) Concern for perfomance

Four Organizational's cultures are:

Apathetic, caring, exacting, and integrative

Apathetic Culture

Shows minimal concern for people or performance. People tend to focus on their own self-interests.

Caring Culture

High concern for people but minimal concern for performance issues.

Exacting Culture

High concern for performance but minial concern for people. Focuses on interests of the organization.

Integrative Culture

High concern for both people and performance.

Cultural Audit

An assessment of an organizations values

Compliance Based Culture

Uses a legalistic approach to ethics. Good for short-term use. Although does not have a future-istic thought and doesn't teach employees to navigate ethical gray areas.

Traditional Ethics

Focused on Compliance. Forces companies to revolve around risk management.

Value-Based Ethics Culture

Approach to Ethical Corporate Culture that relies upon an explicit mission statement that defines the core values of the firm and how customers and employees should be treated. Compliance element required with this type.

The focus of the Value-Based Ethical Culture is..

on values such as trust, transparency, and respect.

Differential Association

idea that people learn ethical or unethical behavior while interacting with others who are part of their role-sets or belong to other intimate personal groups.

Whistle-blowing

Exposing an employers wrongdoing to outsiders such as media or government regulatory agencies.

Qui Tam Relator

When an employee provides information to the government about a company's wrongdoing under the Federal False Claims Act, the whistle-blower is known as this.

Reward Power

Person's ability to influence the behavior of others by offering them something desirable. "Carrot-dangling".

Coercive Power

Opposite of reward power. When one is penalized for actions or behaviors. Found more effective in short term than long term.

Legitimate Power

Stems from belief that a certain person has the right to influence and certain others have an obligation to accept it.

Expert Power

Derived from a person's knowldge. Stems from a superior's credibility with subordinates.

Referent Power

Exists when one person percieves that his own goals/objectives are similar to another's.

Motivation

A force within the individual that focuses his or her behavior toward acheving a goal.

Job performance

Considered to be a function of ability and motivation and represented by equation(job performance= ability x motiavtion).

Compliance Based Culture Revolves around what?

Risk Management, not ethics

Value based cultures rely on what?

Mission statements that define the firm and stakeholder relations. Focus on values, not laws.

Centralized Organizational Structure

Decision making authority is concentrated in the hands of the top level managers.

When is centralized Org structures best?

Companies that make high-risk decisions, whose lower managers are not skilled, when processes are routine. May have a harder time responding to ethical issues.

Decentralized Org Structure

Decision making authority is delegated as far down the chain of command as possible.

Characteristics of Decentralized Structure.

Flexible and quicker, slow to recognize organizational policy, ethical conduct may result.

Examples of Decentralized Companies

Nike, Southwest, Microsoft

Examples of Centralized

Proctor&Gamble, GM

Formal Groups

Committees, work groups, teams

Informal Groups

The Grapevine

Group norms

Standards of behavior that groups expect of members that are defined as acceptable within the group.