Comprehensive Guide to Business Ethics, Culture, and Leadership Models

Barriers of entry

Factors that prevent or hinder new competitors from easily entering an industry or area of business.

Economies of scale

Buying in bulk comes out cheaper than buying it in small amounts.

Brand loyalty

The tendency of consumers to remain loyal to a brand, such as Apple vs Samsung.

Government regulations

Rules established by government entities, including tariffs, quotas, subsidies, taxes, licensing, and patents.

Hofstede's model of national culture

A framework for understanding cultural differences across countries.

Individualism

A cultural orientation where each individual takes care of themselves and works to benefit themselves; represented by 'I'.

Collectivism

A cultural orientation where people identify with and take care of families and communities, working for everyone's benefit; represented by 'we'.

Power distance

The extent to which less powerful members of organizations defer to more powerful members.

High Power Distance Scenario

In cultures like India, people believe the boss knows best and it's not their place to question authority.

Low Power Distance Scenario

In cultures like Sweden, people feel comfortable speaking up and everyone's opinion matters, regardless of position.

Uncertainty avoidance

The degree to which people in a culture feel uncomfortable with uncertainty and ambiguity.

Achievement vs nurturing

Achievement focuses on ambition and competition (e.g., USA), while nurturing emphasizes care and quality of life (e.g., Sweden).

Long term vs short term orientation

Long term orientation values perseverance and saving (e.g., Hong Kong), while short term orientation values quick results and spending (e.g., USA).

Breaking the glass ceiling

Achieving success in a career where inequality has previously held people back.

Diversity in workplace

The inclusion of various physical appearances, ages, races, religions, genders, socioeconomic statuses, experiences, ethnicities, capabilities, and education.

Inaccurate Perceptions

How we select, organize, and interpret what we see and taste to give meaning and order to the world.

Schemas

Abstract knowledge structures stored in memory that influence our interpretation of people, events, or situations.

Stereotypes

Widely held generalizations about a group of people, often inaccurate.

Accommodation

A process where both sides adjust while maintaining their original identity and allowing flexible cultural practices.

Assimilation

A process where an individual changes to fit the dominant culture, losing their original identity.

Salience effect

The phenomenon where we pay more attention to what's different, obvious, or attention-grabbing, even if it's not the most important.

Fostering belonging

Creating an environment where individuals feel included and valued, leading to increased workplace satisfaction and retention.

Ethics & Corporate Social Responsibility

The responsibility and obligations of leaders and companies toward the people and society affected by their actions.

Ethical dilemmas

Situations where one must choose between two conflicting moral options, with no choice feeling completely right or wrong.

Utilitarian rule

Decision that produces that great good for the greatest number of people.

Ethical dilemma

How do you know what's best for people and what most important.

Moral rights

Decision best maintains & protects the fundamental rights & privileges of all stakeholders.

Justice rule

Decision that distributes benefits and harms among people and stakeholders in a fair, equitable or impartial manner.

Practical rule

Manager has no problem declining because the average person would find the decision acceptable.

Results of unethical behavior

Shareholders sell their stock, poor reputation can get canceled, severed business deals & supplier relationships, turnover & resignations, customers switching to competitors.

Societal ethics

Values and standards that come from the society or culture a company operates in. Example: Respecting laws, fairness, human rights.

Occupational ethics

Standards that come from a professional group or job field. Example: Doctors follow medical ethics; accountants follow honesty in reporting.

Individual ethics

Personal values and morals that each manager or employee holds. Example: Integrity, honesty, personal sense of right and wrong.

Organizational ethics

Guiding principles and beliefs of the company itself — often shown in its culture, policies, and code of conduct. Example: A company promoting sustainability or refusing bribery.

Obstructionist

Does as little as possible, may even hide unethical behavior.

Defensive

Does only what's legally required, no extra effort.

Accommodative

Does what's expected and responds when asked to help.

Proactive

Takes initiative to act ethically and make a positive difference in society and the environment.

Leadership

See the future, strategize, empower, encourage risk taking, flexible lines of responsibility/authority, build intrinsic motivation, build on values, integrated focus: people & results.

Management

Planning, organizing, leading, controlling, of human and other resources to achieve original goals efficiently and effectively.

Legitimate Power

Comes from a formal position or authority in an organization. A manager gives instructions because of their title.

Expert Power

Based on a person's knowledge, skills, or expertise. A tech specialist is respected for knowing how to fix problems.

Referent Power

Comes from personal traits, charisma, or respect others have for the person. Employees follow a leader they admire.

Coercive Power

Based on the ability to punish or discipline others. A boss threatens demotion for poor performance.

Reward Power

Comes from the ability to give rewards or benefits. A manager offers bonuses or promotions for good work.

Empowerment

Expanding employee knowledge and decision-making boosts efficiency, focus, motivation, retention, and professional growth.

Fiedler's Contingency Model

Leadership success depends on matching the leader's style (task- or relationship-oriented) to the situation.

Path-Goal Theory

Leaders guide and support employees by clearing obstacles and adapting their style to fit employee needs and the environment.

Leader Substitutes Model

Certain factors (like strong teams or clear tasks) can make leadership less necessary or irrelevant.