New Business Characteristics 20th Century 21st Century Structure Pyramid: Top-Down Web: Bottom-Up Strengths Stability Control Adaptability Learning Focus Internal Efficiency Market Value Resources Physical Intellectual Employees Human Resource - Cost Human Capital - Asset Constraints Legal Social Responsibility

Managers and Leaders Management Leadership Custodial Managers Change Agents Action Agenda Rational Process Planning, Controlling Top Down Emergent Process Motivating, Empowering Bottom Up Outcomes Stability, Efficiency, Incremental Change Transformation, Growth, Radical Change Concern Doing things right Doing the right things Relationships Authoritative Facilitating Perspective Short-term Goals Long-term Objectives

Leadership Strategy is about distinction and change Leaders are ‘change agents’ Leader’s success is measured by how effectively they create strategic change

Leadership Functions To create change leaders must: Determine a Direction Unfreeze the organization Articulate the vision, mission, and values Define what the organization is going to become Design the Organization Create processes to challenge the status quo and overcome organizational inertia Motivate and empower employees Establish Controls Nurture a Culture of Learning, Excellence, and Ethical Behavior

Power Leaders use power to overcome organizational inertia : Systemic barriers to change Behavioral resistance to change Political barriers to change Sources of power Organizational Personal

Learning Organizations Successful learning organizations: create a proactive, creative approach to the unknown, actively solicit the involvement of employees at all levels enable all employees to use their intelligence and apply their imagination inspire and motivate with a compelling purpose

Ethical Behavior Individual Beliefs Organizational Expectations Cultural Norms Situational Factors

The Ethics Debate Few Trends could so thoroughly undermine the very foundations of our free society as the acceptance of a [corporate] social responsibility other than to make as much money for the stockholders as possible (within the limits of the law). Milton Friedman The purpose of business is not to make a profit; it is to make a profit so that the business can do something more or better (for society). Charles Handy

Approaches to Business Ethics Organizational/Legal View Businesses are legal entities and have no social or moral purpose Purpose of business is to maximize owner's wealth within the limits of the law Compliance-based ethics encourages meeting legal obligations.

Approaches to Business Ethics Responsibility (CSR) View Businesses are social entities and have social and ethical impact on society Purpose of business is to satisfy the needs of multiple stakeholders including the financial interests of stockholders Integrity-based ethics encourages morally responsible behavior

How do Businesses Become Ethical? Codes of Conduct Role Models Policies and Procedures Reward Systems Organizational Culture Selection and Training