Chapter 17: Organizational Culture and Ethical Behavior Understanding And Managing Organizational Behavior 4th Edition Chapter 17: Organizational Culture and Ethical Behavior JENNIFER GEORGE & GARETH JONES

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

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

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

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

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

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

Terminal and Instrumental Values Terminal Values Desired end states of outcomes Instrumental Values Desired modes of behavior

Figure 17.2 Where an Organization’s Culture Comes From Characteristics of people within organization Nature of employment relationship Organizational ethics Design of organizational structure

Figure 17.3 Ways of Transmitting Organizational Culture Formal socialization practices Ceremonial rites and ceremonies Organizational language Signs, symbols, stories

Ceremonial Rites Rites of passage Rites of integration Rites of enhancement

Figure 17.4 Sources of Organizational Ethics Social Ethics Professional Ethics Individual Ethics

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

Table 17.2 Culture Dimensions

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

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