chapter 8,9

Organizational Factors in Business Ethics

• Learning Objectives:

  • Understand corporate culture and its influence on business ethics.

  • Link leadership and motivation to ethical decision making.

  • Explore group dynamics in ethical decision making.

• Corporate Culture:

  • Comprises values, norms, artifacts shaping employee behavior.

  • Influences perceived internal rules and organizational meaning.

• Measuring Ethical Culture:

  • Commitment to integrity by management essential.

  • Involvement of employees in compliance and reporting.

  • Ethical leadership promotes a strong ethical culture.

• Case Study: Wells Fargo:

  • Investigation into top management's inaction on fraudulent sales practices.

  • Understanding employee complicity in sales fraud.

• Ethical Decision Making:

  • Corporate culture can be explicit (formal policies) or implicit (management’s tone).

  • Leadership tone significantly impacts organizational integrity.

• Ethical Frameworks:

  • Dimensions of culture: concern for people vs. concern for performance.

  • Four cultural types: Apathetic, Caring, Exacting, Integrative.

• Compliance versus Values-Based Cultures:

  • Compliance-based focuses on rules and legal obligations.

  • Values-based promotes core values and ethical decision-making context.

• Whistle-Blowing:

  • Defined as reporting wrongdoing internally or externally.

  • Legal protections in North America and incentives via the Dodd-Frank Act.

• Leaders' Roles:

  • Leaders shape culture through influence and ethical behavior.

  • Positive leader traits enhance organizational integrity; beware of destructive side.

• Dark Side of Charisma:

  • Charismatic leaders can exhibit varying ethical standards.

  • Importance of balancing positive traits with responsibilities to avoid negative outcomes.