*A set of values, norms, and artifacts, including ways of solving problems shared by organizational members
*The shared beliefs top mangers have about how they should manage themselves and other employees and how they should conduct their business
*Gives
Corporate Culture
*Includes assessment of effectiveness of controls by management and external auditors
*Forces firms to adopt a set of values that make up part of the culture
*Compliance with 404 requires cultural change, not only accounting changes
Sarbanes-Oxley 404
May be formal through statements of values, beliefs, and customs
-Comes from upper management
-Memos, codes, manuals, forms, ceremonies
May be informal through direct or indirect comments conveying management's wishes
-Dress codes, promotions, extracurric
Corporate culture
being a role model for ethical behavior
Promoting our culture of integrity
fostering open communication
recognizing behavior that exemplifies our ethical principles and values
responding to misconduct and reporting violations
U.S bank's principles for integrity
Concern for people
The organization's efforts to care for its employees' well-being
Concern for performance
The organization's efforts to focus on output and employee productivity
two dimensions of organizational culture
The organization's efforts to care for its employees' well-being
Concern for people
The organization's efforts to focus on output and employee productivity
Concern for performance
Apathetic: Minimal concern for people or performance
Caring: High concern for people; minimal concern for performance
Exacting: Minimal concern for people; high concern for performance
Integrative: High concern for people and performance
Four organizational Culture types
Minimal concern for people or performance
Apathetic:
High concern for people; minimal concern for performance
Caring:
Minimal concern for people; high concern for performance
Exacting:
High concern for people and performance
Integrative:
_____ is an assessment of the organization's values
Usually conducted by outside consultants; can be handled internally
cultural audit
If a firm's culture encourages/rewards/does not monitor unethical behavior, employees may act unethically
Management's sense of an organizational culture may differ from that guiding employees
Ethical corporate culture is a significant factor in ethical decision making
_____ use a legalistic approach to ethics
Revolve around risk management, not ethics
Lack of long-term focus and integrity
Compliance-based cultures
_____ rely on mission statements that define the firm and stakeholder relations
Focus on values, not laws
Top-down integrity is critical
Value-based cultures
The idea that people learn ethical/unethical behavior while interacting with others
Studies support that differential association
supports ethical decision making
Superiors have a strong influence on subordinates
Employees may go along with superiors' mor
Differential Association
Exposing an employer's wrongdoing to company outsiders
Some legal protections exit
The Sarbanes-Oxley Act, the FSGO, and the Dodd-Frank Act have institutionalized whistle-blowing protections to encourage discovery of misconduct
Whistle-Blowing
An effective leader is one who does well for the stakeholders of the corporation
Effective leaders are good at getting followers to common goals effectively and efficiently
Power refers to the
influence that leaders and managers have over the behavior and
Leaders Influence Corporate Culture
Offering something desirable to influence behavior
Reward power
Penalizing negative behavior
Coercive power
The consensus that a person has the right to exert influence over others
Legitimate power
Derives from knowledge and credibility with subordinates
Expert power
Exists when goals or objectives are similar
Referent power
A force within the individual that focuses behavior toward achieving a goal
Motivation
A function of ability and motivation
Job performance
An individual's hierarchy of needs may influence motivation and ethical behavior
Relatedness needs
Growth Needs
Satisfied by social and interpersonal relationships
Relatedness needs
Satisfied by creative or productive activities
Growth needs
Decision making authority is delegated as far down the chain of command as possible
Flexible and quicker to recognize external change
Can be slow to recognize organizational policy changes
Units may diverge and develop different value systems
Decentralized Organizational Structure
Formal groups
Informal groups
Group norms
Groups in Corporate Structure and Culture
Committees, work groups, and teams
Formal groups
The grapevine
Informal groups
Standards of behavior that groups expect of members
Define
acceptable/unacceptable behavior within the group
Group norms
Expert power usually stems from
a. a superior's credibility with his or her subordinates.
b. the belief that a certain person has the right to exert influence and that certain others have an obligation to accept it.
c. a person's ability to influence the
a. a superior's credibility with his or her subordinates.
Which of the following statements about power is true?
a. The five bases of power are mutually exclusive.
b. People generally use only one base of power to effect change in others.
c. Expert power exists when one person takes actions that will lead that p
d. Power can be used to motivate individuals ethically or unethically.
An organization that delegates decision-making authority as far down the chain of command as possible and has relatively few formal rules is
a. centralized.
b. decentralized.
c. flat.
d. tall.
e. ethical.
b. decentralized.
Which of the following is not a characteristic of an ethical corporate culture?
a. Management and the board demonstrate their commitment to strong controls through their communications and actions.
b. Every employee is encouraged and required to have hand
c. Management conducts itself in a way that is not consistent with the code of conduct.
Although both structures can create opportunities for unethical conduct, which organizational structure tends to be more ethical?
a. Tall
b. Flat
c. Centralized
d. Decentralized
e. All organizational structures are equally ethical.
c. Centralized
The ability to influence the behavior of others by offering them something desirable is best described as
a. coercive power.
b. reward power.
c. expert power.
d. legitimate power.
e. referent power.
b. reward power.
An advantage of the decentralized organization is that
a. the focus is on formal rules, policies, and procedures backed up with elaborate control systems.
b. there is a high level of bureaucracy.
c. each worker knows his or her job and what is specificall
d. it is adaptable and can quickly respond to external change.
When developing an ethical culture, there has to be a(n)____element because every organization has employees that will try to take advantage if there is an opportunity for misconduct.
a. rules-based
b. statement of mission
c. ethical
d. compliance
e. puni
d. compliance
The apathetic organizational culture exhibits
a. high concern for people but minimal concern for performance.
b. little concern for people but a high concern for performance.
c. minimal concern for people and performance.
d. high concern for people and pe
c. minimal concern for people and performance.
The exacting organizational culture is interested in
a. performance but has little concern for employees.
b. investors' impressions of profitability.
c. maintaining a strong corporate culture.
d. employees and performance.
e. employees' impressions.
a. performance but has little concern for employees.
Associating with others who are unethical and who have the opportunity to act unethically can lead to a learning process known as
a. compliance.
b. misconduct.
c. opportunity.
d. differential equations.
e. differential association.
e. differential association.
Which of the following statements about corporate culture is false?
a. Corporate culture refers to the patterns and rules that govern the behavior of an organization and its employees, particularly the shared values, beliefs, and customs.
b. The values an
The values and ethical beliefs that actually guide the firm's employees tend not to be the same ones that management states as defining the firm's culture.
No formal dress codes, working late, participation in extracurricular activities, gestures, and legends
represent
a. a complacent workplace.
b. codes of ethics.
c. a firm's organizational chart.
d. formal expressions of an organization's culture.
e. infor
e. informal expressions of an organization's culture.
A cultural audit may be used to identify
a. how cultured a firm's employees are. b. unethical employees.
c. unethical organizations.
d. an organization's culture.
e. organizational structure.
d. an organization's culture.
The 2010 passage of the Dodd-Frank Act proposed additional monetary incentives for whistle-blowers. A primary concern about these new incentives is
a. they will encourage too many employees to attempt to blow the whistle on firms, even those that have don
whistle-blowers might be tempted to report to the SEC with their reports and not report the misconduct to the
company's internal compliance program.
Marcus is the top-performing development director his non-profit organization has ever had. He possesses countless tricks and tips to continue to bring in donations, positive publicity, and supporters. Marcus would likely have
over new development departm
d. expert power
bring together the functional expertise of employees from several different areas of the organization on a single project.
a. Quality circles
b. Informal groups
c. Teams
d. Work groups
e. Committees
c. Teams
Individuals, often from the same department, who band together for purposes that may or may not be relevant to the organization are called
a. quality circles.
b. informal groups.
c. teams.
d. work groups.
e. committees.
b. informal groups.
In order for whistle-blowing to be effective,
a. financial compensation must be very high.
b. employees must wish ill on the organization for which they work.
c. lawmakers must make an effort to force employees to discuss details about the misconduct.
d.
d. it requires that the individual have adequate knowledge of wrongdoing that could damage society.
Which of the following statements about group norms is false?
a. Group norms define the limit on deviation from group expectations.
b. Group norms have the power to force a strong degree of conformity among group members.
c. Management must carefully moni
e. Group norms never conflict with the overall organization's culture.
Management's sense of the organization's culture
a. is always the same as employees' perceptions.
b. is usually easily adopted by employees.
c. is always readily evident to employees.
d. may be quite different from employees' perceptions.
e. is always dif
d. may be quite different from employees' perceptions.
Motivation is defined as
a. a person's incentive or drive to work.
b. a force within the individual that focuses his or her behavior on achieving a goal. c. personal ambition without regard to the impact on others.
d. a desire to be finished with a projec
b. a force within the individual that focuses his or her behavior on achieving a goal.
When a foreman orders an assembly-line employee to carry out a task, which the employee perceives as unethical yet the employee feels compelled to complete, the foreman is exercising
a. legitimate power.
b. expert power.
c. reward power.
d. contingent pun
a. legitimate power.
To motivate employees, an organization offers ___ to ___ employees to work toward organizational objectives.
a. punishment; force
b. peer pressure; guilt
c. incentives; encourage
d. rewards; bribe
e. threats; frighten
c. incentives; encourage
Which of the following cultures combines high levels of concern for people and performance?
a. Apathetic culture
b. Caring culture
c. Integrative culture
d. Exacting culture
e. Cooperative culture
c. Integrative culture
Ethical concerns in centralized structures can occur because of very little
a. mobility.
b. upward communication.
c. scapegoating.
d. downward communication.
e. communication rigidity.
b. upward communication
A high concern for people but minimal concern for performance can best describe the ____ culture.
a. caring
b. apathetic
c. exacting
d. shareholder
e. employee
a. caring
The establishment of an ethics committee within an organization
a. is usually highly informal.
b. is usually organized around general business topics.
c. might raise ethical concerns or resolve ethical dilemmas.
d. usually always succeeds.
e. usually incr
c. might raise ethical concerns or resolve ethical dilemmas.
Which of the following is not a form of retaliation commonly experienced by whistle-blowers?
a. Relocation or reassignment
b. No promotion or raises
c. The cold shoulder by coworkers
d. Exclusion from work activities
e. Praise by supervisors for their hon
e. Praise by supervisors for their honesty
___ are used to subdivide duties within functional areas of a company.
a. Work groups
b. Individuals
c. Experts
d. Consultants
e. Committees
a. Work groups
The ___ leader demands instantaneous obedience and focuses on punishing wrong behavior, achievement,
initiative, and self-control.
a. democratic
b. coaching
c. affiliative
d. coercive
e. pacesetting
d. coercive
Melinda is a very popular executive. She inspires her employees to follow a common vision, facilitates change, and creates a strongly positive climate, all while stressing performance. Melinda has helped to create a(n) ___ culture.
a. authoritative
b. car
c. integrative
The __ rule explains variation in employee conduct through generalizing on the percentage of employees in any
given organization who will seek to do right versus how many will be indifferent.
a. 10-30-40-20
b. 20-30-30-20
c. 40-10-10-40
d. 10-40-40-10
e.
d. 10-40-40-10
. The Sarbanes-Oxley Act
a. only applies to firms with over 50 employees.
b. has institutionalized internal whistle-blowing.
c. has placed more power under the Securities and Exchange Commission. d. requires all organizations to make their financial infor
b. has institutionalized internal whistle-blowing.
Decentralized organizations tend to put the blame for unethical behavior on lower-lever personnel?
False
Centralized organizations tend to put the blame for unethical behavior on lower-level personnel?
True
Decentralized organizations give employees extensive decisions-making autonomy
known as empowerment
true
Corporate culture provides rules that govern behavior within the organization
( values, belies, customs, and ceremonies represent what is acceptable and unacceptable in the organization)
true
An integrative culture shows high concern for performance and little concern for people
false
an Exacting culture shows high concern for performance and little concern for people
True
an integrative culture combines a high concern for people with high concern for people with high concern for production
true
Coercive power works in the same manner as reward power
false
coercive power is the opposite of reward power. once offers reward and the other responds with punishment to encourage appropriate behavior
true