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Organiza(onal Culture and Ethical Values

Organiza(on Theory and Design Twel%h Edi+on Richard L. Da%

What is Culture?

•  Values, norms, guiding beliefs, and understandings that are shared by members of an organiza+on – Taught to new members as the correct way to think, feel, and behave

•  Organiza+onal culture exists at two levels – Observable symbols – Underlying values

Levels of Corporate Culture

Emergence and Purpose of Culture Provides sense of organiza/onal iden/ty

Two cri+cal func+ons in organiza+ons:

• To integrate members so they know how to relate to one another

• To help organiza+on adapt to external environment

Internal Integra/on – collec+ve iden+ty and know how to work together

External Adap/on – how the organiza+on meets goals and deals with outsiders ©2017 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Observable Aspects of Organiza+onal Culture

Organiza+onal Chart for Nordstrom

Organiza+onal Design and Culture

Managers want a corporate culture that reinforces the

strategy and structural design the organiza(on needs to be

effec(ve within environment.

Culture Strength and Organiza+onal Subcultures

•  Culture strength is the degree of agreement among members of an organiza+on about specific values

•  Subcultures reflect the common problems, goals, and experiences of a team or department

•  Different departments may have their own norms

Organiza+onal Culture, Learning, and Performance

•  Culture is important to learning and innova+on during challenging +mes

•  Strong cultures include construc/ve adapta+on with the following values:

- Concern for employees and customers

- Flexible behavior

- Encouragement of risk taking, change, and improvement

Construc+ve Versus Non-Construc+ve Cultures

Ethical Values and Social Responsibility Ethics

– the code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong

Managerial Ethics

– Ethical decisions go beyond behaviors governed by law

– Managerial ethics guide the decisions and behaviors of managers

Ethical Dilemma

─ a situa+on concerning right and wrong in which values are in conflict

Corporate Social Responsibility

•  Corporate Social Responsibility management’s obliga+on to make choices and take ac+on so that the organiza+on contributes to the welfare and interest of all organiza+onal stakeholders- employees, customers, shareholders, the community, the broader society •  Sustainability environmental efforts woven into all decisions

Rela+onship between the Rule of Law and Ethical Standards

Corporate Social Responsibility (CSR)

•  Does it pay to be good? •  Extension of the idea of managerial ethics •  Increase in social responsibility •  Customers and public are paying closer aden+on to what organiza+ons do

•  Social responsibility can enhance a firm’s reputa+on

•  Companies measure nonfinancial factors that create value

How Managers Shape Culture and Ethics

•  Value-Based Leadership •  Formal Structure and Systems

– Structure – Disclosure Mechanisms – Code of Ethics – Training Programs

•  Managers play key role in providing leadership and examples of ethical behavior

Manager Rankings of Ethical Values by Genera+on

Characteris+cs of Values-Based Leaders

Corporate Culture and Ethics in a Global Environment

•  The global environment presents tough ethical challenges

•  A global supply chain is an area of growing ethical concern

•  Countries have varied ahtudes and beliefs •  Components that characterize a global culture:

– Mul+cultural rather than na+onal values – Basing status on merit rather than na+onality

•  Some companies work closely with overseas factories to improve working condi+ons

Design Essen+als

v Cultural and ethical values help determine the organiza+on’s social capital and can contribute to success v Managers can use rites and ceremonies, stories, symbols, structures, control systems, and power rela+onships to influence culture

v Subcultures may emerge even in strong cultures

Design Essen+als

v Strong cultures can be construc+ve or non- construc+ve vManagerial ethics and corporate responsibility are important aspects of organiza+onal values v Managers can shape culture and ethics through formal systems

v Global companies face challenges in establishing strong cultural and ethical values.