Principles and Practices for Tomorrows Leaders Gary Dessler

Principles and Practices for Tomorrow’s Leaders Gary Dessler CHAPTER 2 Managing in a Cultural and Ethical Environment The Environment of Managing Power. Point Presentation by Charlie Cook

Chapter Objectives After studying this chapter and the case exercises at the end, you should be able to: 1. Correctly identify both ethical and unethical decisions. 2. Rate your own ethics level. 3. Assess and quantify the ethical culture of an organization. 4. Design a specific plan for improving ethical behavior in a company. 5. Specify the steps a manager should take to change a company’s ethical culture. 6. Design a specific diversity management plan. Copyright © 2004 Prentice Hall. All rights reserved. 2

The Wall Street Journal Workplace-Ethics Quiz Source: Wall Street Journal, 21 October 1999, pp. 81– 84. Ethics Officer Association, Belmont, Mass. ; Ethics Leadership Group, Wilmette, Ill. ; surveys sampled a cross-section of workers at large companies and nationwide. Copyright © 2004 Prentice Hall. All rights reserved. FIGURE 2– 1 3

The Meaning of Ethics • Ethics Ø The study of standards of conduct and moral judgment; also, the standards of right conduct. • Normative Judgment Ø A comparative evaluation stating or implying that something is good or bad, right or wrong, or better or worse. • Morality Ø A society’s accepted norms of behavior. Copyright © 2004 Prentice Hall. All rights reserved. 4

Good and Evil • Teleologist Ø A person who evaluates good or evil and right or wrong based on the consequences or results of the proposed actions. • Deontologist Ø A person who evaluates whether actions are good or bad, right or wrong, based on their conformity to certain principles that he or she feels must be adhered to regardless of the consequences or results of the proposed actions. Copyright © 2004 Prentice Hall. All rights reserved. 5

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Ethics and the Law • Important Points: Ø Something may be legal but not right (ethical) Ø Something may be right (ethical) but not legal. Copyright © 2004 Prentice Hall. All rights reserved. 7

The Ethical Continuum Low Source: Michael Boylan, Business Ethics (Upper Saddle River, NJ: Prentice Hall, 2001), p. 119. Copyright © 2004 Prentice Hall. All rights reserved. High FIGURE 2– 2 8

What Influences Ethical Behavior At Work? Individual Factors Organizational Factors Ethical Work Behaviors Top Management Ethics Policies and Codes Copyright © 2004 Prentice Hall. All rights reserved. 9

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Checklist 2. 1 How to Foster Ethics at Work þ Emphasize top management’s commitment. þ Publish an ethics code. þ Establish compliance mechanisms. Involve personnel at all levels. þ Train employees. þ Measure results. Copyright © 2004 Prentice Hall. All rights reserved. 12

Raytheon Company’s Quick Ethics Test • Is the action legal? • Is it right? • Who will be affected? • Does it fit company values? • How will it “feel” afterwards? • How will it look in the newspaper? • Will it reflect poorly on the company? Copyright © 2004 Prentice Hall. All rights reserved. 13

Company ethics officials say they convey ethics codes and programs to employees using these training programs: The Role of Training in Ethics Company ethics officials use these actual training tools to convey ethics training to employees: FIGURE 2– 4 Source: Susan Wells, “Turn Employees into Saints, ” HRMagazine, December 1999, p. 52. Copyright © 2004 Prentice Hall. All rights reserved. 14

What Is Organizational Culture? • Organizational Culture Ø The characteristic set of values and ways of behaving that employees in an organization share. • Patterns of Behavior Ø Ceremonial events, written and spoken comments, and actual behaviors of an organization’s members that create the organizational culture. • Values and Beliefs Ø Guiding standards of an organization that affirm what should be practiced, as distinct from what is practiced. Copyright © 2004 Prentice Hall. All rights reserved. 15

Ethics and Corporate Culture Management Ethics Corporate Culture Copyright © 2004 Prentice Hall. All rights reserved. 16

Checklist 2. 2 How to Create the Corporate Culture þ þ þ Clarify expectations. Use signs and symbols. Provide physical support. Use stories. Organize rites and ceremonies. Copyright © 2004 Prentice Hall. All rights reserved. 17

Components of Corporate Culture • Signs and Symbols Ø Practices and actions that create and sustain a company’s culture. • Stories Ø The repeated tales and anecdotes that contribute to a company’s culture by illustrating and reinforcing important company values. • Rites and Ceremonies Ø Traditional culture-building events or activities that symbolize the firm’s values and help convert employees to these values. Copyright © 2004 Prentice Hall. All rights reserved. 18

Managers And Social Responsibility • Social Responsibility Ø The extent to which companies should and do channel resources toward improving the quality of life of one or more segments of society other than the firm’s own stockholders. • Managerial Capitalism Ø The classic view is that a corporation’s main purpose is to maximize profits for stockholders. • Stakeholder Theory Ø Business has a social responsibility to serve all the corporate stakeholders affected by its decisions. Copyright © 2004 Prentice Hall. All rights reserved. 19

A Corporation’s Major Stakeholders FIGURE 2– 5 Copyright © 2004 Prentice Hall. All rights reserved. 20

Managers And Social Responsibility (cont’d) • Moral Minimum Ø The idea that corporations should be free to strive for profits so long as they commit no harm. • Stockholders versus Stakeholders? Copyright © 2004 Prentice Hall. All rights reserved. 21

Top-Rated Companies for Social Responsibility 1. 2. 3. 4. 5. 6. 7. 8. Johnson & Johnson Coca-Cola Wal-Mart Anheuser-Busch Hewlett-Packard Walt Disney Microsoft IBM Source: Ronald Alsop, “Perils of Corporate Philanthropy, ” Wall Street Journal, 16 January 2002, pp. B 1. 2001 Harris Interactive/ Reputation Institute Survey. Copyright © 2004 Prentice Hall. All rights reserved. 9. 10. 11. 12. 13. 14. 15. Mc. Donald’s 3 M UPS Fed. Ex Target Home Depot General Electric FIGURE 2– 6 22

How to Improve the Company’s Social Responsiveness • Corporate Social Audit Ø A rating system used to evaluate a corporation’s performance in meeting its social obligations. • Whistle-blowing Ø The activities of employees who try to report organizational wrongdoing. • Social Responsibility Networks Ø Organizations that promote socially responsible business practices and help managers to establish socially responsible programs. Copyright © 2004 Prentice Hall. All rights reserved. 23

Managing Diversity • Managing Diversity Ø Planning and implementing organizational systems and practices to manage people in a way that maximizes the potential advantages of diversity while minimizing its potential disadvantages. Ø Cultural diversity contributes to improved productivity, return on equity, and market performance. • Diverse Ø Describes a workforce comprised of two or more groups, each of which can be identified by demographic or other characteristics. Copyright © 2004 Prentice Hall. All rights reserved. 24

Bases for Diversity • Racial and Ethnic • Gender • Older workers • People with disabilities • Sexual/affectional orientation • Religion Copyright © 2004 Prentice Hall. All rights reserved. 25

Barriers in Dealing with Diversity • Stereotyping Ø Attributing specific behavioral traits to individuals on the basis of their apparent membership in a group. • Prejudice Ø A bias that results from prejudging someone on the basis of the latter’s particular trait or traits. • Ethnocentrism Ø A tendency to view members of one’s own group as the center of the universe and to view other social groups less favorably than one’s own. Copyright © 2004 Prentice Hall. All rights reserved. 26

Barriers in Dealing with Diversity (cont’d) • Discrimination Ø A behavioral bias toward or against a person based on the group to which the person belongs. • Tokenism Ø Appointing a small number of minority-group members to high-profile positions instead of more aggressively achieving full group representation. • Gender-Role Stereotyping Ø Usually, the association of women with certain behaviors and possibly (often lower-level) jobs. Copyright © 2004 Prentice Hall. All rights reserved. 27

Checklist 2. 3 How to Manage Diversity þ þ Provide strong leadership. Assess your situation regularly. Provide diversity training and education. Change the culture and management systems. þ Evaluate the diversity program. Copyright © 2004 Prentice Hall. All rights reserved. 28

Activities Required to Better Manage Diversity FIGURE 2– 7 Copyright © 2004 Prentice Hall. All rights reserved. 29