1. Thomson Learning © 200410-1 Chapter Ten Organizational Culture and Ethical Values

2. Thomson Learning © 2004 10-2 Organizational Culture Def: the set of values, beliefs, understandings and ways of thinking that are shared by org members & taught to new members as correct Surface level Underlying level

3. Thomson Learning © 2004 10-3 Levels of Corporate Culture Observable Underlying Values, Assumptions, Beliefs, Attitudes, Feelings

4. Thomson Learning © 2004 10-4 Interpreting Culture Rites & Ceremonies - expressive events Stories - history & folklore Symbols - deeper values Language - ingroup vocabulary

5. Thomson Learning © 2004 10-5 Disney & McDonald’s Culture ItemDisneyMcDonald’s 1. Rites & Ceremonies: 2. History & Folklore: 3. Symbols & Slogans: 4. Language:

6. Thomson Learning © 2004 10-6 Relationship of Environment and Strategy to Corporate Culture Needs of the Environment Strategic Focus Adaptability Culture Clan Culture Bureaucratic Culture Mission Culture Flexibility External Internal Stability Sources: Based on Daniel R. Denison and Aneil K. Mishra, “Toward a Theory of Organizational Culture and Effectiveness,” Organization Science 6, no. 2 (March-April 1995): 204-23; R. Hooijberg and F. Petrock, “On Culture Change: Using the Company Values Framework to Help Leaders Execute a Transformational Study,” Human Resource Management 32 (1993): 29-50; and R. E. Quinn, Beyond Rational Management: Mastering the Paradoxes And Competing Demands of High Performance (San Francisco: Jossey-Bass, 1988).

7. Thomson Learning © 2004 10-7 Forces That Shape Managerial Ethics Is Decision or Behavior Ethical and Socially Responsible? Beliefs and Values Moral Development Ethical Framework Rituals, Ceremonies Stories, Heroes Language, Slogans Symbols Founder, History Government Regulations Customers Special Interest Groups Global Market Forces Structure Policies, Rules Code of Ethics Reward System Selection, Training External StakeholdersOrganizational Systems Personal EthicsOrganizational Culture

8. Thomson Learning © 2004 10-8 Ethical Issues in Business Ethics: the study of morals and principles of conduct Right vs. Wrong Human consequences associated with decisions and actions Higher standards than prescribed by the law

9. Thomson Learning © 2004 10-9 Ethical Frameworks The Ethical / Legal Framework: When are actions legal but unethical, or illegal but still ethical? The Moral Philosophy Framework: What are underlying assumptions?

10. Thomson Learning © 2004 10-10 The Ethical / Legal Framework Legal+Ethical? Do it! Illegal+Unethical? Don’t do it! But… legal, but unethical? Or… illegal, but ethical? Ethical dilemmas

11. Thomson Learning © 2004 10-11 The Moral Philosophy Framework 1) Utilitarian: Consequential theories cost/benefit analysis maximize ‘good’ and minimize ‘harm’ Limitations: Measurement issues Whose utility curve?

12. Thomson Learning © 2004 10-12 The Moral Philosophy Framework 2) Categorical Imperative: Rule-based theories Absolute or universal law… Bible, Koran Limitations: Whose interpretation? Just following orders...

13. Thomson Learning © 2004 10-13 The Moral Philosophy Framework 3) Cultural Relativism: Cultural theories Situational ethics “When in Rome…do as the Romans do.” Limitation: Which Romans?

14. Thomson Learning © 2004 10-14 Formal Structure and Systems of the Organization Ethics committee Chief Ethics Officer Whistle-blowing Code of ethics Training programs