Ethics, Culture, and CSR PDF

Organization Culture & Ethical Values Content Organizational Culture Organization Design and Culture Organizational Culture, Learning, and Performance Ethical Values and Social Responsibility How Leaders Shape Culture and Ethics Corporate Culture and Ethics in a Global Environment...

Organization Culture & Ethical Values Content Organizational Culture Organization Design and Culture Organizational Culture, Learning, and Performance Ethical Values and Social Responsibility How Leaders Shape Culture and Ethics Corporate Culture and Ethics in a Global Environment Nada Morsi. AAST  The set of values, norms, guiding beliefs, and understandings that is shared by members of an What Is organization and taught to new members as the Culture? correct way to think, feel, and behave. Nada Morsi. AAST  Everyone participates in culture, but culture generally goes unnoticed. It is only when What Is managers try to implement new strategies or programs that go against basic cultural norms Culture? and values that they come face to face with the power of culture. Nada Morsi. AAST  On the surface are visible artifacts and observable behaviors— the ways people dress and act, the type of control systems and power structures used by the company, and the symbols, stories, and ceremonies organization members share. Nada Morsi. AAST  The underlying elements of culture, however, reflect deeper values in the minds of organization members. These underlying values, assumptions, beliefs, and thought processes operate unconsciously to define the true culture. The underlying values are an emphasis on openness, collaboration, teamwork, innovation, and constant change Nada Morsi. AAST  CULTURE ORIGINALLY COMES FROM A LEADER Organization’s culture generally begins with a founder or early leader who articulates and implements particular ideas, and values as a vision, philosophy, or business strategy Nada Morsi. AAST When these ideas and values lead to success, they become institutionalized  Each organization has certain mechanisms for communication and coordination. Through these mechanisms, information and knowledge is transported. Disney is considered a huge oragnization. It doesnt only comprise of the theme park but it also includes resorts, Disney business solution, Disney shop, Marvel movies Nada Morsi. AAST  Internal Integration Why is culture important? External adaptation Nada Morsi. AAST Internal integration means that members develop a collective identity and know how to work together effectively. It is culture that guides day-to-day working relationships and determines how people communicate within the organization, what behavior is acceptable or not acceptable, and how power and status are allocated. External adaptation refers to how the organization meets goals and deals with outsiders. Nada Morsi. AAST The right culture can help transform an organization’s performance from average to truly great. Also, guides employee decision making in the absence of written rules or policies. Nada Morsi. AAST Culture is ……. Nada Morsi. AAST  1. Rites & ceremonies: planned activities that make up a special event rite of passage, A ceremony or event marking an important stage in someone's life, moving from one group to another or changing Culture is ……. status. rite of integration, which creates common bonds and good feelings among employees and increases commitment to the organization. Nada Morsi. AAST HAPPY BIRTHDAY DEAR SPECIAL EMPLOYEE !! Nada Morsi. AAST Nada Morsi. AAST  Give me an W! …. Give me an A!... What’s that spell? Wal-Mart! What’s that spell? Wal-Mart! Who’s No. 1? THE CUSTOMER!” Nada Morsi. AAST Nada Morsi. AAST  2. Stories and Myths. Stories are narratives based on true events about company heroes who serve as models or ideals. Some stories are considered legends because the events are historic and may have been Culture is ……. embellished with fictional details. Other stories are myths, which are consistent with the values and beliefs of the organization but are not supported by facts. Nada Morsi. AAST J.W. MARRIOTT 700 Letters by hand a year to staff members Nada Morsi. AAST Culture is ……. Nada Morsi. AAST  3. symbol. A symbol is something that represents another thing. In one sense, ceremonies, stories, and rites are all symbols because they symbolize deeper values. Physical symbols are powerful because they focus attention on a specific item. Culture is ……. Nada Morsi. AAST  4. Organization Structures. The way in which people and departments are arranged into a whole, and the degree of flexibility and autonomy people have, tells a lot about which cultural values are emphasized in the organization. Culture is ……. Managers are to support the employees who give the service rather than exercise tight control over them Nada Morsi. AAST  5. Power Relationships. In some companies, finance people are quite powerful, whereas in other engineers and designers have the most power. Another aspect is considering whether power relationships are formal or informal. hierarchy or based on other factors, such as their Culture is ……. expertise or admirable character. Nada Morsi. AAST  6. Control System. of how the organization controls people and operations like , quality control systems, methods of financial control, reward systems, Culture is ……. Nada Morsi. AAST Nada Morsi. AAST “Fully-formed adult” culture Nada Morsi. AAST Tell me your thoughts Top managers typically should focus their energy more on strategy and structure than on corporate culture. Nada Morsi. AAST 4 categories of culture Nada Morsi. AAST  The adaptability culture is characterized by strategic focus on the external environment through flexibility and change to meet customer needs. The culture detect, interpret, and 4 categories of translate signals from the environment into new behavior responses. It actively creates change. Innovation, creativity, culture and risk taking are valued and rewarded. Ex: Google where they encourage experimentation, risk-taking, and entrepreneurship. They must move quickly to satisfy customers. Nada Morsi. AAST  The mission culture is concerned with serving specific customers in the external environment, but without the need for rapid change. Because the environment is stable, they can translate the vision into measurable goals and evaluate employee performance for meeting them. Professionalism, 4 categories of ambition, and aggressiveness are key values. Focused on achieving high culture sales and profit levels. Bonuses and promotions are based on performance. Ex: Insurance Nada Morsi. AAST  The clan culture focus on the involvement and participation of the organization’s members and on rapidly changing expectations from the external environment. This culture focuses on meeting the needs of employees as the route to high performance. Involvement and 4 categories of participation create a sense of responsibility and ownership and, hence, greater commitment to the organization. Companies in the fashion and culture retail industries often adopt this culture because it releases the creativity of employees to respond to rapidly changing tastes. Employees are empowered to use their own initiative and creativity in serving customers. The company pays good wages, sends employees on learning trips, and offers college scholarships Nada Morsi. AAST  The bureaucratic culture has an internal focus and a consistency orientation for a stable environment. Personal involvement is somewhat lower here. high level of consistency, conformity, and 4 categories of collaboration among members. succeeds by being highly integrated and efficient. Today, most managers are shifting away from bureaucratic culture cultures because of a need for greater flexibility. its projects stayed on time and on budget. Though sometimes being careful means being slow. EX: big clothing manufacturing Nada Morsi. AAST Culture strength Refers to the degree of agreement among members of an organization about the importance of specific values. Nada Morsi. AAST Subculture Reflect the common problems, goals, and experiences that members of a team, department, or other unit share. Nada Morsi. AAST Subculture Subcultures typically include the basic values of the dominant organizational culture plus additional values unique to members of the subculture Nada Morsi. AAST  When subcultural values become too strong and outweigh the corporate cultural values, conflicts may emerge and hurt organizational performance. Nada Morsi. AAST Many organizations become victims of their own success, clinging to outmoded and even destructive values and behaviors. Thus, the impact of a strong culture is not always positive. Nada Morsi. AAST ETHICS The code of moral principles and values that governs the behaviors of a person or group with respect to what is right or wrong Nada Morsi. AAST Dr. Nada Morsi W H AT I S U N E T H I CA L TO Y O U ? Can ethics be taught? Dr. Nada Morsi  Behavior conforming to generally accepted social norms concerning beneficial and harmful actions Ethical behavior An individual’s values and morals, plus the social context in which his or her behavior occurs, determine whether behavior is regarded as ethical or unethical. Dr. Nada Morsi  Behavior that does not conform to generally accepted social unEthical norms concerning beneficial and behavior harmful actions Dr. Nada Morsi Dr. Nada Morsi Individual ethics Ethical and unethical behaviors are determined partly by the individual and partly by the culture Ethics are based on both individual beliefs and social concepts, they vary from person to person, from situation to situation, and from culture to culture. Dr. Nada Morsi Nada Morsi. AAST Rule of LAW The rule of law arises from a set of codified principles and regulations that describe how people are required to act, that are generally accepted in society, and that are enforceable in the courts. Nada Morsi. AAST  Business ETHICS Ethical or unethical behaviors by employees in the context of their jobs Dr. Nada Morsi What’s ethical in business? Dr. Nada Morsi M ANAG E R IAL E T H IC S Standards of Behavior towards employees behavior that guide individual Behavior towards organization managers in their work Behavior towards other economic agents Dr. Nada Morsi 1. Behavior This category of managerial ethics relates to towards such matters as hiring and firing, wages and employees working conditions, and privacy and respect. Dr. Nada Morsi A manager who discriminates against African Americans or women in hiring exhibits both unethical and illegal behavior. Dr. Nada Morsi A manager may pay a worker less than he deserves, for example, because the manager knows that the employee can’t afford to quit or risk his job by complaining. Dr. Nada Morsi Nada Morsi. AAST  Ethical issues can also arise from employee behavior toward employers, especially in such 2. Behavior areas as conflict of interest, confidentiality, and towards honesty. Ex: stealing supplies, calling in sick just ORGANIZATION to stay home and relax, and using a business phone to make personal phone calls Dr. Nada Morsi Policies that forbid buyers from accepting gifts from suppliers, for instance, because such gifts might be construed as a bribe or an attempt to induce favoritism. Dr. Nada Morsi Selling company secrets to competitors Dr. Nada Morsi  Ethics also comes into play in the relationship of 3. Behavior a business and its employees with stakeholders, towards other mainly customers, competitors, stockholders, suppliers, dealers, and unions. There is room for Economic ethical ambiguity in just about every activity as agents advertising, financial disclosure, ordering and purchasing, bargaining and negotiation. Dr. Nada Morsi ethical dilemma It arises in a situation concerning right and wrong in which values are in conflict. Nada Morsi. AAST Case Study: The Prescription Predicament Dr. Ahmed is a family physician at a local hospital. One day, a patient named Adham visits Dr. Ahmed complaining of persistent pain. After a thorough examination, Dr. Ahmed believes that Adham’s condition could benefit from a specific medication, but he is aware that this medication is relatively expensive and not covered by Adham's insurance. Case Study: The Prescription Predicament Dr. Ahmed faces a dilemma: prescribe the more expensive medication that he believes would be most effective for Adham or prescribe a less expensive alternative that is covered by insurance but may not be as effective. Dr. Ahmed knows that Adham is on a tight budget and may struggle to afford the expensive medication. Case Study: The Prescription Predicament 1. How should Dr. Ahmed approach the decision of prescribing medication, considering both the effectiveness of the treatment and the financial burden on the patient? 2. Are there alternatives or compromises that could address both the patient's health needs and financial constraints? 3. How might communication with the patient about the cost and effectiveness of the prescribed medication impact the doctor-patient relationship? Ethics committee A cross-functional group of executives who oversee company ethics. The committee provides rulings on questionable ethical issues and assumes responsibility for disciplining wrongdoers. Nada Morsi. AAST Ethics committee Top executives can assign responsibility for ethical values to a specific position. This not only allocates organization time and energy to the problem but symbolizes to everyone the importance of ethics. many organizations are setting up ethics departments that manage and coordinate all corporate ethics activities. These departments are headed by a chief ethics officer Nada Morsi. AAST chief ethics officer Nada Morsi. AAST  chief ethics officer They always oversee all aspects of ethics, setting up ethics training programs, supervising the investigation of ethical problems, and advising managers on the ethical aspects of corporate decisions. Most ethics offices have confidential ethics hotlines that employees can use to seek guidance as well as report questionable behavior. Nada Morsi. AAST Assessing ethical behavior GAME Changer Dr. Nada Morsi  1. Gather the relevant factual information. Assessing 2. Analyze the facts to determine the most appropriate moral values. ethical 3. Make an ethical judgment based on the rightness behavior or wrongness of the proposed activity or policy. 4. Enjoy being ethical Dr. Nada Morsi  1. Utility. Does a particular act optimize the benefits to those who are affected by it? Ethical norms 2. Rights. Does it respect the rights of all individuals involved? 3. Justice. Is it consistent with what’s fair? 4. Caring. Is it consistent with people’s responsibilities to each other? Dr. Nada Morsi Scenario: Ethical Assessment of Employee Overtime Policy The policy would require employees to regularly work overtime hours without additional compensation. Let's apply the four norms to determine if this policy is ethical. Dr. Nada Morsi Utility Regularly working overtime without extra pay could lead to burnout and reduced job satisfaction. Employees might become less productive and motivated. Decision: The policy doesn't optimize benefits s it could harm employee well-being and overall productivity. Dr. Nada Morsi rights Requiring overtime without additional pay may violate employee’s right. Decision: The policy could potentially violate employees' rights to fair compensation for their work. Dr. Nada Morsi Justice Fairness would involve ensuring that both the company and employees share the benefits and burdens equitably. Decision: The policy might not be consistent with the principle of fairness. Dr. Nada Morsi Care The policy doesn't appear to consider employees' well-being and work-life balance, which could lead to strained relationships between employees and the company. Decision: The policy doesn't seem consistent with a caring approach toward employees. Dr. Nada Morsi Conclusion After applying the four norms, it's evident that the proposed overtime policy is ethically questionable. It doesn't optimize benefits for both employees and the company, it may violate employees' rights to fair compensation, it might not be fair, and it doesn't align with a caring approach toward employees. As a result, the policy raises ethical concerns and may need to be reconsidered or revised to ensure a more ethical approach to employee management. Dr. Nada Morsi  Dr. Nada Morsi 2 common approaches to formalizing top management commitment to ethical business practices: ADOPTING WRITTEN CODES INSTITUTING ETHICS PROGRAMS.  Code of ethics A formal statement of the company’s values concerning ethics and social responsibility; it clarifies to employees what the company stands for and its expectations for employee conduct. Nada Morsi. AAST  Code of ethics Many companies are looking for ways to protect whistle-blowers. When there are no protective measures, whistle-blowers suffer, and the company may continue its unethical or illegal practices. Many whistle-blowers suffer financial and personal loss to maintain their personal ethical standards. Nada Morsi. AAST  Whistle-blowing is employee disclosure of illegal, immoral, or illegitimate practices on the part of the organization Nada Morsi. AAST Whistle-blower An employee who discovers and tries to put an end to a company’s unethical, illegal, or socially irresponsible actions by publicizing them. Dr. Nada Morsi Online ethics training program is mandatory Nada Morsi. AAST Corporatel Social responsibility Management’s obligation to make choices where organization contributes to the welfare and interest of all organizational stakeholders. Nada Morsi. AAST  Now businesses are becoming more responsible Recycling. Environmentally friendly. Renewable energy. Dr. Nada Morsi Dr. Nada Morsi  Dr. Nada Morsi Areas of social responsibility Environment Customers Employees Investors 1. Responsibility Toward the Environment Air pollution Water pollution Land pollution Dr. Nada Morsi Dr. Nada Morsi Dr. Nada Morsi Dr. Nada Morsi 2. Responsibility Toward the CUSTOMERS Federal Trade Commission “FTC” Food and Drug Administration “FDA” Dr. Nada Morsi Dr. Nada Morsi Dr. Nada Morsi 3. Responsibility Toward the Employees Legal and social commitment Healthy environment Dr. Nada Morsi 4. Responsibility Toward the investors Insider trading Misrepresentation of Finances Dr. Nada Morsi Approaches to social responsibility Dr. Nada Morsi OBSTRUCTIONIST STANCE Do as little as possible to solve social or environmental problems, have little regard for ethical conduct, and will go to great lengths to deny or cover up wrongdoing. Dr. Nada Morsi Defensive stance Do everything that is legally required, including admitting to mistakes and taking corrective actions, but nothing more Dr. Nada Morsi Dr. Nada Morsi Accommodative stance Approach to social responsibility by which a company, if specifically asked to do so, exceeds legal minimums in its commitments to groups and individuals in its social environment Dr. Nada Morsi Dr. Nada Morsi PROACTIVE stance A company actively seeks opportunities to contribute to the well-being of groups and individuals in its social environment Dr. Nada Morsi  Proactive in promoting road safety in Egypt Raise awareness about safe driving practices Driver training programs. Dr. Nada Morsi WHY DO BIG COROPORATIONS OUTWEIGHTS ENTREPRENEURS WHEN IT COMES TO CSR? Dr. Nada Morsi Nada Morsi. AAST Nada Morsi. AAST What is it for me? Customers and the public are paying closer attention than ever before to what organizations do Enhance their firm’s reputation and even its profitability People prefer to work for companies that demonstrate a high level of ethics and CSR Nada Morsi. AAST SEE YOU NEXT WEEK Dr. Nada Morsi