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Chapter 17 Organizational Culture and Ethical Behavior

Chapter 17 Organizational Culture and Ethical Behavior. Chapter Objectives. Distinguish between values and norms and discuss how they are the building blocks of organizational culture

norman-melton
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Chapter 17 Organizational Culture and Ethical Behavior

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  1. Chapter 17Organizational Culture and Ethical Behavior

  2. Chapter Objectives • Distinguish between values and norms and discuss how they are the building blocks of organizational culture • Appreciate how a company’s culture is transmitted to employees through its formal solicitation practices and through informal “on the job” learning

  3. Chapter Objectives • Discuss five main factors that shape organizational culture and explain why different organizations have different cultures • Appreciate how differences in national culture affect the culture of organizations within a particular society • Understand the importance of building and maintaining an ethical organizational culture

  4. Opening Case: How 3M Built a Culture for Innovation • How does 3M’s culture affect creativity? • Cultural values and norms • Empowerment • Recognition • 15% of time for personal projects

  5. What is Organizational Culture? • Set of shared values, beliefs, norms that influence the way employees think, feel, and behave towards each other and towards people outside the organization • Pattern of shared basic assumptions

  6. Building Blocks of Organizational Culture • Characteristics of people within the organization • Organizational ethics • Employment relationship • Organizational structure • National culture

  7. What are Organizational Values? • Guiding principles people use to determine which types of behaviors, events, situations, and outcomes are desirable or undesirable • Terminal • Instrumental

  8. Terminal Quality Responsibility Innovativeness Excellence Economy Morality Profitability Instrumental Working hard Respecting traditions Respecting authority Being conservative Being frugal Being creative Being honest Terminal and Instrumental Values

  9. Figure 17.1 Terminal and Instrumental Values Organizational Values Terminal Values Instrumental Values Specific norms, rules, and SOPs

  10. Figure 17.2 Ways of Transmitting Organizational Culture Formal socialization practices Ceremonial Rites and Ceremonies The organizational language Employees learn through: Signs, symbols, stories

  11. Ceremonial Rites • Rites of passage • Rites of integration • Rites of enhancement

  12. Figure 17.3 Where an Organization’s Culture Comes From Characteristics of People Within Organization Organizational Ethics Nature of Employment Relationship Organizational Culture Design of Organizational Structure

  13. Figure 17.4 Sources of Organizational Ethics Organizational Ethics Societal Ethics Professional Ethics Individual Ethics

  14. Adaptive Cultures Values and norms help organization build momentum, grow, and change to achieve goals Investment in employees Merit rewards Inert Cultures Values and norms fail to motivate or inspire employees Stagnation Minimal investment in employees Little incentive for improvement Adaptive versus Inert Cultures

  15. Hofstede’s Model of National Culture • Individualism vs Collectivism • Power Distance • Achievement vs Nurturing Orientation • Uncertainty Avoidance • Long-term vs Short-term Orientation

  16. Individualism Individual achievement Freedom Competition Example United States Collectivism Group harmony Cohesiveness Consensus Cooperation Example Japan Individualism vs Collectivism

  17. High Inequalities exist Gap between rich and poor Example Guatemala Malaysia Low Social welfare programs reduce gaps Example France Germany Power Distance

  18. Achievement Assertiveness Performance Success Competition Results-oriented Example Japan United States Nurturing Quality of life warm personal relationships Service Caring Example Denmark Sweden Achievement vs Nurturing Orientation

  19. Low Easygoing Value diversity Tolerant of differences Example United States Hong Kong High Rigid Intolerant Conformity Structure Example Japan France Uncertainty Avoidance

  20. Long-term Thrift Persistence High savings rate Patience Example Japan Hong Kong Short-term Personal stability Happiness Living in the present Example United States France Long-Term vs Short-Term Orientation

  21. Table 17.1 Culture Dimensions

  22. Creating an Ethical Culture • Establish rules and norms that outline organization’s ethical position • Demonstrate commitment to following rules • Reduce incentives for unethical behavior • Develop fair and equitable HR procedures • Provide access to upper-level managers • Encourage employees to voice concerns • Create a strong board of directors

  23. Why Does Unethical Behavior Occur? • Lapses in Individual Ethics • Ruthless Pursuit of Self-Interest • Outside Pressure

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