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