New Business Characteristics Characteristic20 th Century21 st Century StructurePyramid: Top-Down Web: Bottom-Up StrengthsStability Control Adaptability Learning FocusInternal EfficiencyMarket Value ResourcesPhysicalIntellectual EmployeesHuman Resource - Cost Human Capital - Asset ConstraintsLegalSocial Responsibility

Managers and Leaders Management Custodial Managers Leadership Change Agents Action AgendaRational Process Planning, Controlling Top Down Emergent Process Motivating, Empowering Bottom Up OutcomesStability, Efficiency, Incremental Change Transformation, Growth, Radical Change ConcernDoing things rightDoing the right things RelationshipsAuthoritativeFacilitating PerspectiveShort-term GoalsLong-term Objectives

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

FOUR Interdependent Activities of Leadership Prepare the Organization Set a Direction Design the Organization Nurture a Culture

Prepare the Organization Unfreeze the organization Overcome organizational inertia Vested interests Systemic barriers to change Behavioral resistance to change Political barriers to change

Power The ability to get things done the way the leader wants them to be done To persuade people to do things they otherwise would not do Sources of power Organizational Personal

Set a Direction Scan the environment to develop knowledge of stakeholders and environmental trends Define what the organization is going to become Articulate the vision, mission, and values

Design the Organization Create processes to challenge the status quo and overcome organizational inertia Motivate and empower employees Establish systems, processes and controls to implement visions

Nurture a Culture Facilitate learning, excellence, and high ethical standards Create processes to challenge the status quo and overcome organizational inertia

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 A group of people get together and exist as an institution that we call a company so that they are able to accomplish something collectively that they could not accomplish separately – they make a contribution to society. David Packard

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