Chapter Ten
Organizational Culture
and Ethical Values
Thomson Learning
© 2004
10-1
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 Thomson Learning
© 2004
10-2
Levels of Corporate Culture
Observable
Underlying
Values,
Assumptions,
Beliefs, Attitudes,
Feelings
Thomson Learning
© 2004
10-3
Interpreting Culture




Rites & Ceremonies
- expressive events
Stories
- history & folklore
Symbols
- deeper values
Language
- ingroup vocabulary
Thomson Learning
© 2004
10-4
Disney & McDonald’s
Culture Item
Disney
McDonald’s
1. Rites & Ceremonies:
2. History & Folklore:
3. Symbols & Slogans:
4. Language:
Thomson Learning
© 2004
10-5
Relationship of Environment and Strategy
to Corporate Culture
Needs of the Environment
Flexibility
Strategic Focus
External
Internal
Stability
Adaptability
Culture
Clan
Culture
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).
Mission
Culture
Bureaucratic
Culture
Thomson Learning
© 2004
10-6
Forces That Shape Managerial
Ethics
Personal Ethics
Beliefs and Values
Moral Development
Ethical Framework
Organizational Culture
Is
Decision
or Behavior
Ethical and
Socially
Responsible?
Rituals, Ceremonies
Stories, Heroes
Language, Slogans
Symbols
Founder, History
Organizational Systems
External Stakeholders
Structure
Policies, Rules
Code of Ethics
Reward System
Selection, Training
Government Regulations
Customers
Special Interest Groups
Global Market Forces
Thomson Learning
© 2004
10-7
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
Thomson Learning
© 2004
10-8
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?
Thomson Learning
© 2004
10-9
The Ethical / Legal Framework





Legal+Ethical? Do it!
Illegal+Unethical?
Don’t do it!
But… legal, but
unethical?
Or… illegal, but
ethical?
Ethical dilemmas
Thomson Learning
© 2004
10-10
The Moral Philosophy Framework







1) Utilitarian:
Consequential theories
cost/benefit analysis
maximize ‘good’ and
minimize ‘harm’
Limitations:
Measurement issues
Whose utility curve?
Thomson Learning
© 2004
10-11
The Moral Philosophy Framework






2) Categorical
Imperative:
Rule-based theories
Absolute or universal
law… Bible, Koran
Limitations:
Whose interpretation?
Just following orders...
Thomson Learning
© 2004
10-12
The Moral Philosophy Framework






3) Cultural
Relativism:
Cultural theories
Situational ethics
“When in Rome…do as
the Romans do.”
Limitation:
Which Romans?
Thomson Learning
© 2004
10-13
Formal Structure and Systems of the
Organization





Ethics committee
Chief Ethics Officer
Whistle-blowing
Code of ethics
Training programs
Thomson Learning
© 2004
10-14