Business Ethics Chapter 7: Organizational Factors: The Role of Ethical Culture and Relationships

Sarbanes-Oxley 404

Compliance section codified into law that leaders are responsible for the actions of subordinates, and corporation should have ethical corporate cultures

The _____ of any ethical culture is top down integrity which shared values, norms that provide guidance for behavior, and visible artifacts such as code of ethics that provide a standard of conduct

Crux

Values, beliefs, customs, rolls, and Sarah Moni's that are excepted, shared, and circulated through the organization represent it's

Culture 2

Centralized organization

Decision making authority is concentrated in the hands of top level managers, and little authority is delegated to lower levels

Decentralized organization

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

A) concern for people B)concerned for performance

What are the two basic dimensions to describe an organization's culture

Centralized an decentralized

What are the two broad structures for organizations

Formal group Informal group

What are the two main categories the group affected ethical behavior in business

Because they typically have a little upward communication

Why will some ethical concerns arise in centralized organization's

Organizational culture includes

values, norms, and artifacts (that influence and determine behavior)

exacting

Shows a little concern for people but a high concern for performance

About ______ of the employees take advantage of situations to further their own interests, about _____ go along with the work group on most manners, about _____ always try to follow company policies and rules (but are not likely to speak out against those who choose to go with the work group), and about ___ try to maintain formal ethical standards they believe are right in superior to the values of others and even to the company's value system

10, 40, 40, 10

Related needs and growth needs

After basic needs such as food, working conditions, and survival are satisfied, ________ become important

To create motivation

And organization offers incentives from purging place to work towards organizational objectives

Value-based culture

Approach to ethical corporate cultures relies upon an explicit mission statement that defines the firm as well as how customers and employees should be treated

Growth needs

Are satisfied by creative for productive activities

Work groups

Are used to subdivide duties within specific functional areas of the company

Centralized organizations

Because of the strict formalization and inflammation of ethics policies and procedures these tend to be more ethical and their practices then Decentralized organization's

Teams

Bring together the functional expertise of employees from several different areas of the organization for example - finance marketing and production - on a single project such as developing a new product

integrative

Combines high concern for people and for performance. An organization becomes this when superiors recognize that employees or more than interchangeable parts

Centralized organizations 2

Dress formal rules, Policies, and procedures backed up with elaborate control systems

Interpersonal conflict

Ensues when employees think they know the right course of action in a situation, get their work group for company promotes or requires a different, unethical decision

Committees in formal and informal groups, not by individuals

Ethical decisions within organizations are often made by

Caring

Exhibits high concern for people but minimal concern for performance issues

Firms have different ways of measuring an ethical corporate culture, but the problem with these measurements standards is they

Focus more on RISK, compliance, and reporting

Section 404

Forces firms to adopt a set of values that must make up a portion of the company's culture

Committees, work groups, and teams

Formal group can be divided into

Decentralized organization (4)

Give employees extensive decision making a Autonomy because management empowers employees. This could create ambigity that may be confusing for new managers however ______ may avoid ethical dilemmas through the use of affective codes of conduct and ethics

Culture

God term that can have many different meanings (attitude of a student towards learning)

Individual ethics and organizational ethics

Have an impact on employees ethical intention. If there is an ethical congruence between individuals ethics and the organizational as a culture, there is an increase in the potential for making ethical choices and organizational decision making

Sarbane's Oxley act and the federal sentencing guidelines for organizations

Have institutionalized internal whistleblowing to encourage discovery of misconduct

decentralized organization 2

Have relatively few formals, and coordination and control are usually in formal in and personal. They focus instead on increasing the flow of communication

Norms

Have the power to enforce a strong degree of conformity among group members. At the same time, they define the different rules for various positions within the organization

InFormal group (2)

Help develop and formal channels of communication, sometimes called the grapevine, that are important in every organization

Related needs

I'd buy social and interpersonal relationships

Qui tam realtor

If an employer provides information to the government about the companies wrongdoing, under the federal false claims act, the whistleblower is known as

Committee

Is a formal group of individuals assigned to a specific task

Cultural audit

Is an assessment of the organizations values it is usually conducted by outside consultants but may be performed internally as well

Grapevine

Is an important source of information for individuals to assess ethical behavior within their organization

Job Performance

Is considered to be a function of ability and motivation the job performance equals ability x motivation, meaning that employees can be motivated, but resources and know-how are also needed to get the job done

Formal group

Is defined as an assembly of individuals that has an organized structure excepted explicitly by the group

Informal group

Is defined as two or more individuals with a common interest but without an explicit organizational structure

Expert power

Is derived from a person's knowledge (or the perception that the person possess knowledge)

Coercive power

Is essentially the opposite of reward power. Instead of rewarding a person for doing something, ________ powered penalizes actions or behavior. _______ power breaks down relationships in the long term

motivation

It's a force within the individual that focuses his or her behavior towards achieving a goal

Tone at the top

It's often cited as determining factor in creating a high integrity organization

Retaliation

It's still a concern for whistleblowers and they often have a difficult time winning their cases

Centralized organizations (4)

May also exert more influence in their employees because they have a central core of policies and code of ethical conduct

Referent Power

May exist when one person perceives that his or her goals or objectives are similar to another's. The second person may attempt to influence the first to take actions that will lead both to achieve their objectives. For this power relationship to be affective, some sort of empathy must exist between the individuals

Individuals hierarchy of needs

May influence his or her motivational and ethical behavior

Whistle blowing

Means exposing and employers wrong doing to outsiders (external to the company) such as the media or government regulatory agencies

What are formal expression of an organization's culture

Memos, written codes of conduct, handbooks, manuals, forms, and ceremonies

InTernal whistleblowing

Most public companies are creating computer systems that encourage reporting misconduct internally, also called

Compliance culture

Organized around risk. Type of culture uses a legalistic approach to ethics

Group norms

Our standards of behavior that group expect of their members. They help define acceptable and unacceptable behavior within a group

2010 passage of the Dodd Frank act

Proposed additional incentives for whistleblowers

Reward power

Refers to a persons ability to influence the behavior of others by offering them something desirable

Differential association

Refers to the idea that people learn ethical or unethical behavior while interacting with others who are part of their rule sets or other intimate personal groups

Power

Refers to the influence that leaders and managers have over the behavior and decisions of subordinates. An individual has __________ over others when his or her presence causes them to behave differently.

What are the five power bases from which one person may influence another

Reward power Coercive power Legitimate power Expert power Referent power

Compliance with ________ requires culture change, not merely accounting changes

Sarbanes-Oxley 404 (3)

Sarbanes-Oxley 404

Section includes a requirement that management assess the effectiveness of The organizations internal controls in commission an audit of these controls buy an external auditor in conjunction with the audit of its financial statements

Apathetic

Shows minimal concern for either people or performance

Group norms (2)

Sometimes __________ Conflict with the values in rolls prescribed by the organizations culture. For this reason, management must carefully monitor not only the corporate culture but also the dorms of all the various groups within the organization

Apathetic, caring, exacting, integrative

What are the four organizational cultures that can be classified

Legitimate power

Stems from the belief that a certain person has the right to exert influence in that certain others have the obligation to except it. The titles and positions of authority that organizations but still on individuals appeal to this traditional view of power

_________ have a strong influence on the ethics of their subordinates. __________ managers especially 10 to go along with their superiors moral judgments to demonstrate loyalty

Superiors ; young

Rewards and punishments

The _______________ imposed by an organization must reflect the culture those at the top which to create

Upper management

The culture of an organization may be explicitly articulated or left unspoken. Explicit statement of values, beliefs, and customs usually come from _________

Immediate supervisors

The majority of employees report misconduct to their

How is corporate culture often expressed in formally

Through comments, both direct and indirect, that communicate the wishes of management

Organizational leaders

Use their power and influence to shave corporate culture. _______ should be both effective and ethical

All organizations, not just corporations, have a

culture

Culture

gives the members of the organization meaning as well as the internal rules of behavior