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Managing Business EthicsChapter 5
Treviño & Nelson – 5th Edition
++Chapter 5 Overview
Organizational Ethics as Culture
Ethical Culture: A Multisystem Framework
Ethical Leadership
Other Formal Cultural Systems
Informal Cultural Systems
Organizational Climates: Fairness, Benevolence, Self-Interest, Principles
Developing and Changing Ethical Culture
A Cultural Approach to Changing Organizational Ethics
The Ethics of Managing Organizational Ethics
++Influence of Culture on Individuals
Ethical Ethical AwarenessAwareness
Ethical JudgmentEthical Judgment Ethical ActionEthical Action
Ethical CultureEthical Culture
Individual DifferencesIndividual Differences
++Organizational Culture
Expresses shared assumptions, values and beliefs and is the social glue that holds the organization together. It’s “how we do things around here.” Strong - assumptions, values, beliefs widely shared Weak - subgroup norms more influential
++Culture
A body of learned beliefs, traditions, and guides for behavior shared among members of a society or a group
++Ethical Culture: A Multisystem Approach
Formal Systems
Informal Systems
Executive Leadership
Selection System
Policies/Codes
Orientation/Training
Performance Management
Authority Structure
Decision Processes
Role Models/Heroes
Norms
Rituals
Myths/Stories
Language
Ethical/ Unethical Behavior
Alignment?Alignment?
++Alignment and Misalignment
With alignment, all systems are “pushing” employees in the same direction – either ethical or unethical
With misalignment, employees get mixed messages about expectations
++Leadership
Executive Leaders Create Culture
Leaders Maintain or Change Organizational Culture
Ethical Leadership and Ethical Culture Unethical Leadership Hypocritical Leadership Ethically Neutral or “Silent” Leadership
++Executive Ethical Leadership Rests on Two Pillars
Moral Person
Tells followers how leader behaves
Traits Honesty Integrity, Trust
Behaviors Openness Concern for people Personal morality
Decision-making Values based Fair
Moral Manager
Tells followers how they should behave and holds them
accountable
Role modeling Takes visible ethical
action Rewards/Discipline
Hold people accountable for ethical conduct
Communicating Sends an “ethics and
values” message
++ Executive Ethical Leadership Reputation Matrix
Hypocritical leader Ethical leader
Unethical leader
Strong
Weak
Moral Manager
Weak StrongMoral Person
Ethically neutral Ethically neutral leaderleader
++Other Formal Cultural Systems
Selection Systems
Values and Mission Statements
Policies and Codes
Orientation and Training Programs
Performance Management Systems
Organizational Authority Structure
Decision-making Processes
++Informal Cultural Systems
Role Models and Heroes
Norms: “The Way We Do Things Around Here”
Rituals
Myths and Stories
Language
++Ethical Climates
Fairness
Benevolence
Self-Interest
Principles
++Ethical Culture Change
From ethical to unethical
From unethical to ethical
++Ethical Culture Change
Long-term view
Systems view
Diagnose/Audit
Intervene
Evaluate