7. The Role of Ethical Culture and Relationships

Integrative

high concern for people and performance

Legitimate Power

titles and positions of authority (formal power) stems from the belief that a certain person has the right to exert influence and certain others have an obligation to accept it.

Job Performance

considered to be a function of ability and motivation and can be represented by the equation (=ability x motivation)

Work Groups

used to subdivide duties within specific functional areas of a company.

Cultural Audit

an assessment of an organization's values

Formal Groups

Commitees, work groups and teams an assembly of individuals with an organized structure that is explicitly accepted by the group

Control of Own Actions

Ethical decisions within organizations are often made by committees and formal and informal groups, not by individuals. Many decisions are beyond the influence of individuals alone. Individuals entering the business will usually need several years of experience within a specific industry to understand how to resolve ethical close calls

Qui Tam Relator

If an employee provides information to the government about a company's wrongdoing under the Federal False Claims Act

Kurt Lewin's Change Model

If you have a large cube of ice, but realize that what you want is a cone of ice, what do you do? First you must melt the ice to make it amenable to change (unfreeze). Then you must mold the iced water into the shape you want (change). Finally, you must solidify the new shape (refreeze).

Physiological safety social esteem self actualization

Maslow's Hierarchy of Needs

Corporate Culture (organizational culture)

Set of values, beliefs, goals, norms, and ways of solving problems shared by members (employees) of an organization 1. May be explicit statements of values, beliefs, and customs 2. May be expressed informally through direct and indirect comments that convey management's wishes the shared beliefs top managers in a company have about how they should manage themselves and other employees, and how they should conduct their businesses.

Group Norms

Standards of behavior acceptable in the group, define acceptable behavior within the group and how they treat outsiders, foster conformity, may conflict with the organizational culture Sanctions may be necessary to bring a nonconforming group into line with organizational expectations Standards of behavior that groups expect of their members Have the power to enforce a strong degree of conformity among group members Sometimes conflict with the values and rules prescribed by the organization's culture

Relatedness needs

are satisfied by social and interpersonal relationships

Teams

bring together the expertise of employees from several different ares of the orgnization

Growth Needs

creative or productive activities

Centralized Organizations

decision-making authority is concentrated in the hands of top level managers and little authority is delegated to lower levels Advantages 1.Uniformity of command 2.Efficiencies created through economies of scale 3.Creates a predictable internal environment 4. Effective in static or highly regulated environments Disadvantages 1.Unresponsive to dynamic external environment 2. Ineffective at utilizing the creativity of lower level employees, thereby reducing morale 3. Favors a "command and control" style of leadership

Decentralized organizations

decision-making authority is delegated as far down the chain of command as possible. Advantages • Highly responsive to dynamic external environments • Increases individual autonomy, thereby increasing morale • Able to meet client needs in a more customized fashion • Self-contained and controlled locations • High geographic visibility Disadvantages • Costlier than centralized operations • More difficult to control • Creates problems of coordination • Locations often in competition • Resources often duplicated • Lack of learning across locations • Lose critical mass, specialization by discipline or function

Caring

exhibits high concern for people, but minimal concern for performance

Referent Power

exists when goals or objectives are similar. Basically you want to be like them. Some sort of empathy must exist between the individuals. (informal power)

Committee

formal group of individuals assigned to a specific task

Culture

gives members of an organization meaning and provides them with rules for behaving within the organization.

Informal Groups

grapevine two or more individuals with a common interest but without an explicit organizational structure.

Sarbanes-Oxley 404

includes a requirement that management assess the effectiveness of the organization's internal controls and commission an audit of these controls by an external auditor in conjunction with the audit of its financial statements. Requires firms to adopt a set of values that forms a portion of the company's culture.

Motivation

is a force within the individual that focuses his or her behavior toward achieving a goal. Can be affected by an individual's hierarchy of needs

Leadership

is the ability or authority to guide and direct others toward achievement of a goal CEO's Boards of Directors

Expert Power

knowledge based (informal power) or a perception that a person possesses knowledge.

Whistle Blowing

means exposing an employer's wrongdoing to outsiders such as the media or government regulatory agencies.

Reward Power

offering something desirable to influence behavior (formal power) Refers to a person's ability to influence the behavior of others by offering them something desirable.

Compliance Culture

organized around risk. Uses laws and regulatory rules to creat codes and requirements. Codes of Conduct are established with compliance as their focus, with rules and policies enforced by management. Good in the short term, but not effective in the long term.

Coercive Power

penalizing negative behavior (formal power)

Differential Association

refers to the idea that people learn ethical or unethical behavior while interacting with others who are part of their role sets or other intimate personal groups Example: Criminal behavior is learned behavior and learned via social interaction with others

Power

refers to the influence that leaders and managers have over the behavior and decisions of subordinates. Individuals have this when their presence cause others to behave differently

Values Based Ethics culture

relies upon an explicit mission statement that defines the core values of the firm and how customers and employees should be treated. The focus of this type of corporate culture is on values such as trust, transparency, and respect to help employees identify and deal with ethical issues.

Exacting

shows little concern for people, but high concern for performance

Apathetic

shows minimal concern for people or performance