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WEEK 4

(BUS 1)
Prof. Restie Torres

Chapter

10

Corporate Culture: Impact
and Implication

What is Corporate Culture??
• Beliefs and behaviors that
determine how a company’s
employees and management
interact and handle outside
business transactions.
• The culture shapes the people who
are members of the organization.

• A firm’s culture can be its
sustaining value
• which offers it direction and
stability during challenging
times.
• Can be a constraint also

• Culture is implied, develops
organically over time from the
cumulative traits of the people the
company hires.
• It is reflected in its dress code,
business hours, office setup,
employee benefits, hiring decision,
treatment of clients, client
satisfaction and every other aspect

How corporate culture impacts ethical decision making .

Corporate Culture • A shaped of pattern of beliefs. . expectations and meanings that influence and guides the thinking and behaviors of the members of that organization.

How it influence ethical decision making ? .

values and structure of the organization on which they work. decision by the expectations. limited and shaped and in some cases virtually determined by the corporate culture of the firm. . Individuals can be hindered or helped in making the right or the wrong .• Decision making in the firm is influenced.

and to allow ethically responsible decisions. Ethical businesses must find ways to encourage.• In situation where the law where the law is an incomplete guide for ethical decision making . . the business culture is likely to be the determining factor in the decision. to shape.

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& e r u t Cul Chapter 10 s c i Eth .

norms. guiding beliefs. and understandings that are shared by members of an organization • Organizational culture exists at two levels – Observable symbols – Underlying values 13 ©2013 Cengage Learning.What is Culture? • Values. . in whole or in part. copied or duplicated. May not be scanned. or posted to a publicly accessible website. All Rights Reserved.

or posted to a publicly accessible website. All Rights Reserved. May not be scanned. copied or duplicated. .Levels of Corporate Culture ©2013 Cengage Learning. in whole or in part.

copied or duplicated. in whole or in part. May not be scanned. or posted to a publicly accessible website.Strong adaptive cultures often incorporate the following values: 1. The culture encourages risk taking. All Rights Reserved. The whole is more important than the parts 2. . change. and improvement 15 ©2013 Cengage Learning. Equality and trust are primary values 3.

Constructive Versus Non-Constructive Cultures 16 ©2013 Cengage Learning. in whole or in part. copied or duplicated. or posted to a publicly accessible website. May not be scanned. . All Rights Reserved.

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Ethics – Ethics refer to the code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong 18 ©2013 Cengage Learning. All Rights Reserved. in whole or in part. or posted to a publicly accessible website. May not be scanned. copied or duplicated. .

Sources of Individual Ethical Principles and Actions 19 .

Common Workplace Ethics 20 .

Responsibili ty Punctuality .

Integrity & Loyalty 22 .

Teamwork 23 .

24 .

Professionalism .

Performance feedback sessions should be corrective in nature. 26 .

27 .Good Behavior should be acknowledged.

28 .Role model • Seniors behaving in a morally upright manner will set an example for employees to follow.

The Effects of Negative Corporate Culture on Ethical Behavior .

. employees will emulate the bad behavior.1. Lack of Moral Leadership • When managers are unethical.

employees might overstep ethical boundaries to get ahead. .2. Hypercompetitiveness • If a company’s culture rewards employees who pursue personal advantage rather than focus on contributing to the performance of the entire team.

3. Poor Discipline • A lax corporate culture makes it easy for unethical behavior to prosper. .

4. Lack of Discussion • Corporate cultures that discourage honest discussion allow unethical behavior to spread unimpeded. .

Compliance Based Culture .

based Culture or valuesbased .Culture of an organization can generally be characterized as either Compliance-based Culture or Rulesbased Ethical.

Rule based rule itself is the ultimate basis of decisions invites legalistic orientation where obedience to the letter of the law is the objective there is a minimalist attitude .

fairness and responsibility . respect.Values based dominated by core ethical beliefs and convictions which underlie each rule or policy rules and policies are interpreted and applied in relation to traditional ethical values such as honesty.

Value- quite enough that employees know and follow the rules employees are expected to know and follow rules and policies if it’s legal it’s ethical they are expected to make good faith effort to honor the spirit of the rules lawful but awful values about what is right and good .• Rules Based based vs.

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Characteristics associated with compliance-based programs: • Development and communication of clear policies and guidelines to ensure compliance • Education to ensure awareness of rules • Management direction and supervision • Monitoring of employee behavior • Sanctions for non-compliance .

Values-based programs are generally associated with: • Development of higher standards of behavior through shared values • Encouragement of dialogue to interpret shared values • Enabling responsible conduct by providing support for employees' ethical aspirations • Managerial responsibility for implementation .

Both compliance and values-based programs are associated with the following outcomes: • Reduced unethical behavior • Ethical advice seeking • Awareness of ethical issues • Perceptions of better decisionmaking .

• Good ethics is not simply a risk-management strategy (though it is an effective one). high performance values-based culture requires sincere commitment based on the conviction that it is worthwhile.Which culture do you think is most likely to win the loyalty and trust of employees and customers? Which culture do you think is less likely to suffer a reputationdamaging resource-draining scandal? • Establishing a sustainable.   • An organization that truly wants to be good will be excellent. . not because it will produce better results and higher morale (which it will) but because it is simply the better way to be. it is the only foundation that can sustain a good life or a great company.

VALUES-BASED CULTURE .

business ethical values are a set of guiding principles that encourage individuals in an organization to make decisions based on the company’s stated beliefs and attitudes toward business practices within its industry . and are defined largely by the behaviors and values that govern a business environment.Definition of Business Ethical Values • Business ethical values vary by company. In general.

beliefs and preferred approaches to handling common and uncommon business situations.Corporate Culture Companies that define key elements of a corporate culture communicate their core values. . Employees with a firm grasp on a company’s values will make the most appropriate choices when facing a business dilemma.

An example is demonstrating the link between respectful workplace relationships and low turnover.Conveying Company Culture Managers define ethical business behavior in their workplaces by explaining to employees how behavior and action affects the business’ overall mission. This approach helps employees understand the link between ethical business behavior and corporate success. . or lenient return policies and increased customer satisfaction surveys.

This can be achieved by role-playing scenarios such as customer interactions. companies can define ethical business values by outlining clear examples of right and wrong behavior as it applies to them. . employee disputes or negotiations with vendors and contractors.Creating an Ethical Workplace While there are many shades of gray in business dealings.

Fair Treatment A business can define ethical behavior by outlining what it considers fair and just treatment of employees and customers. a willingness to give back to the community and the self-control to avoid situations where unethical behavior could occur. This includes goodwill among coworkers and toward customers. they become more likely to comply with corporate policies and management decisions. . When employees understand how a company defines business ethical values.

Acting with Integrity A company that defines business ethical values as a core element of a corporate culture encourages employees to perform their job responsibilities accordingly. without regard to personal outcomes or ulterior motives. . This often involves doing what’s right for the business.

Dealing with Unethical Business Values Many poor personal and professional decisions are based on a rationalization of the ethics involved. but he justifies it by saying he was under-paid. a person who embezzles from his company may fully understand the behavior was unethical. For example. so the company got what it deserved. Truly defining business ethical values in a workplace environment involves following examples of ethical behavior and fair treatment. starting from management and trickling down. .

The Evolution of Compliance Programs Into Values-Based Programs .

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Thank You! .