1200 words total . 3 APA CITED reference and reference list. NO PLAGIARISM PLEASE!!!1.In a narrative format, discuss the key facts and critical issues presented in the case.2.There is obvious conflict at Astrotech Fuel Systems between Jim McGee and George Phalen. What could each person have done differently to alleviate some or all of this conflict?3.Compare and contrast the roles played by politics and power in this case. Discuss how these play out in relation to Jim McGee, George Phalen, Ben short, and Dick Faraday. What power styles did each exhibit in the case?4. Considering the department sources of power discussed in the textbook, which one was Phalen trying to establish for the Fuel System operation and how was he going about it?FOR QUESTION #5 2 APA CITED reference and reference list. NO PLAGIARISM PLEASE!!!5. What is your view of Social Responsibility? Explain your reasoning.


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Organizational Culture
& Ethics
Chapter Outline:
Organizational Culture
Managerial Ethics
Social Responsibility
Review Questions
Key Terms
cultural strength
ethical relativism
integrative social contracts view of
justice view of ethics
managerial ethics
religious view of ethics
rights view of ethics
self-interest view of ethics
social obligation
social responsibility
social responsiveness
utilitarian view of ethics
values-based management
There is a “way things are done” in every organization. Long-term members
understand it well and newcomers tend to learn it quickly. Organizational theorists
refer to this phenomenon as organizational or corporate culture. Culture refers
to the commonly held values and beliefs of a particular group of people,1 and the
concept of organizational culture reflects the application of the culture concept to
members of an organization.
the commonly held values
and beliefs of a particular
group of people
The concept of organizational culture is based on the observation from
anthropology that unique norms of behavior develop for groups of individuals who
spend a considerable amount of time together. Originally the term was used to
describe behaviors within geographical boundaries, such as the British, French, or
Vconcept to the study of
Chinese cultures. Organizational theorists have applied the
I culture) refers to the
organizations. Organizational culture (also called corporate
shared values and patterns of belief and behavior that areCaccepted and practiced
by the members of a particular organization.2 As we shall
Ksee, the organizational
culture can greatly influence the success or failure of the organization.
R are often intertwined
Standards and expectations for ethics and social responsibility
with an organization’s culture. Managers and employeesSare expected to act in
“appropriate” ways or consider certain criteria when making
, decisions. As such,
the notions of ethics and responsibility are inseparable from that of organizational
culture. The second part of this chapter discusses ethics and responsibility in
greater detail.
7-1 Organizational Culture
Although it can be traced to the 1940s, the concept of organizational
culture became
popular in the 1980s when scholars and executives began searching for reasons to
explain recent Japanese business success. They coined terms such as “Theory
Z” to describe the type of cultures that are common to Japanese organizations.4
Hence, an organizational culture is influenced by the prevailing
national culture,
although the two concepts should be distinguished.
An organization’s culture exists at two levels. At the surface level, one can observe
specific behavior of the culture, such as accepted forms1of dress and rituals or
T level that includes
ceremonies. These artifacts reflect a deeper, underlying
shared values, belief patterns, and thought processes common
S to members of the
organization. The underlying level is the most critical to understand. Because it
cannot be seen, it is often inferred by studying the surface level.
Because each organization develops its own unique culture, even organizations
within the same industry and city will exhibit distinctly different ways of functioning.
The organizational culture enables a firm to adapt to environmental changes and
to coordinate and integrate its internal operations.6 Ideally, the values that define
Organizational Theory
a culture should be clear, easy to understand
by all employees, embodied at the top of the
organization, and reinforced over time. “Adaptive
cultures” are innovative and encourage initiative,
whereas “inert cultures” are conservative and
encourage maintenance of existing resources.
An organizational culture provides members
with a sense of belonging and identity within the
organization. By definition, all organizations have
cultures, although some are more pervasive than
others. When a culture is well understood and V
managed, conflicts are handled more efficiently, knowledge
is transferred more effectively, turnover is reduced,
and teamwork is enhanced. Because culture unifies C
members of an organization around a set of beliefs and
behaviors, it can be a powerful help or hindrance in efforts
K to facilitate change.
The first and most important influence on an organization’s
culture is its founder or founders. The founder’s
core values and business beliefs serve as the foundation for the organization’s activities.7 For instance, the
primary influence on McDonald’s culture was the fast-food
S company’s founder, Ray Kroc. Although he passed
away in 1984, his philosophy of fast service, assembly
, line food preparation, wholesome image, cleanliness,
and devotion to quality are still central facets of the organization’s culture.8 Likewise, Sam Walton’s influence
on the Wal-Mart culture can still be seen today even though he passed away a number of years ago.
Whether allowed to evolve on its own or skillfully managed,
the organization’s culture serves as the basis for
many day-to-day decisions in an organization. For example,
members of an organization whose culture values
innovation are more likely to invest the time necessary
creative solutions to complex problems than
their counterparts in organizations whose culture values short-term cost containment.
Deal and Kennedy identified four key dimensions of culture.
R 9 Values constitute the beliefs central to the culture.
Heroes are individuals within the organization whoAembody the values. Rites and rituals (or ceremonies)
are symbolic events that occur within organizations that influence the culture. The culture network includes
the informal hierarchy and communication systems that develop in any organization. Identifying these four
dimensions for any organization can help determine why decisions are made.
4 Key Dimensions
of Culture
Rites & Rituals
Culture Network
Views and assumptions
about an organization’s distinctive competence
comprise one of the1most important elements of culture when an organization
is formed and begins to develop. For example, historically innovative firms
are likely to respond to a sales decline with new product introductions,
whereas companiesSwhose success is based on low prices may respond with
attempts to lower costs even further.10 However, it is possible to modify the
culture over time as the environment changes, rendering some of the culture
obsolete and even dysfunctional.
Sometimes there is considerable agreement among an organization’s members
concerning its values, norms, and behavior. At other times, however, this
Organizational Theory
is not the case. Cultural strength refers to the extent to which organizational
members agree about the importance of certain values.11 Strong cultures—such as
3M’s strong emphasis on innovation and Southwest Airlines’ strong emphasis on
delivering value in a friendly manner—can lead to success, but a culture strong in
all respects may not be appropriate for all organizations. Colleges and universities,
for example, value diversity of thought and expression among faculty and students.
As such, a culture strong in the sense that all members place a high value on
freedom of expression and differences of opinion may be appropriate. However, a
culture strong in the sense that all members agree on various perspectives may not
be appropriate.
cutural strength
the extent to which
organizational members
agree about the
importance of certain
It is essential that an organization’s culture be alignedV with its strategy. For
example, an organization whose environment is rapidlyI changing may craft a
new strategy that makes sense from financial, product, and
C marketing points of
view. Implementing the strategy may be problematic, however,
K because it requires
significant changes in assumptions, values, and ways of
E working. All things
considered, changing an organization’s strategy is often easier than changing its
culture, and both are often required for organizations to be successful.13
Organizations with “strategically appropriate cultures”—such
as PepsiCo, Wal,
Mart, and Shell—tend to outperform those whose cultures do not fit as well with
their strategies. Successful firms tend to develop cultures that emphasize three
key groups of stakeholders: customers, stockholders, and employees. Note that the
E that the culture must
point is not that these corporations have strong cultures, but
A that can help the firm
be appropriate to that firm’s strategy and must contain values
adapt to environmental change.14
Because culture reflects the past, changes in the environment can necessitate
changes in an organization’s culture.15 Conservative organizations
do not become
Aformulated new goals
aggressive and entrepreneurial simply because they have
and plans, but because they embark on a substantial effort to modify the culture,
the “way things are done.”16
It should be noted that cultural considerations do not end at1the organizational level.
Subcultures can develop in any organization and tend to 9
be more prevalent when
the organization is relatively large and its culture is relatively
1 weak. Shared values
and beliefs in a subculture can be based on commonalities
T within departments or
divisions such as functional expertise, geography, or differences
S in national culture.
7-1a Categorizing Culture
Each organization has a different culture. It is difficult to categorize cultures along
similarities lest the uniqueness be lost in the discussion. Nonetheless, it is useful
to identify broad characterizations of cultures as a means of better understanding
how they influence organizational effectiveness. One way to do so is to consider
Organizational Theory
four broad categorizations on the basis of the organization’s primary internal and external characteristics. From
an internal perspective, the key issue for the organization is the extent to which its strategic focus is internal or
external. From an external perspective, the key issue for the organization is whether the environment necessitates
flexibility or stability. In broad terms, these key issues suggest four categories of culture, as depicted in figure 7-1.
Figure 7-1
Source: Adapted from D.R.
Denison and A. K. Mishra,
“Organizational Culture &
Effectiveness,” (2001)
The adaptation culture emphasizes an external strategic
K focus through change and flexibility. Innovation and
creativity are highly valued and encouraged. The organization
remains flexible so that its members can adapt to
changes in the environment as they occur. Organizations with an adaptation culture seek not only to adapt to the
needs of the external environment, but also to influence it.
The mission culture emphasizes an external strategic
, focus through stability. Leaders in such organizations
place a great value on developing a shared understanding of the mission and vision. The mission culture is often
best suited for organizations pursuing a focus strategy, as stability is achieved through concentration on only
one specific segment of the market.
The involvement culture emphasizes an internal strategic
A focus through change and flexibility. Organizations
with involvement cultures view performance as emanating
from satisfied employees, well-equipped with
ample resources to do their jobs. Employees are encouraged to become involved as instigators of change in the
The bureaucratic culture emphasizes an internal strategic
A focus through stability. Consistency and predictability
are valued by the organization’s members. Business is conducted in a methodical manner following established
rules and procedures in order to sustain a stable environment. The bureaucratic culture is often seen as less
effective than other cultures because it does not allow members of the organization to tailor solutions to the
individual needs of customers.
Should managers attempt to promote an organizational
1 culture consistent with only one category or should
they draw from multiple categories? The answer is not always clear. On the one hand, it can be argued that an
organization’s strategy should have both an internal and an external focus, and that a balance of stability and
S in which organizations operate. Following this logic,
flexibility might be appropriate for most environments
one might reject the notion of a clearly defined culture and attempt to create a culture that reflects each of the
competing internal and external perspectives.
On the other hand, however, effective organizational leadership requires choices and accepts the fact that
some paths will be taken and others will be avoided. It is rarely possible to produce products or services in
all recognized categories for all segments of the market equally well. When an organization’s mission and
Organizational Theory
Best Practices
The Individual – Organization Fit
Do you like to dress casually, set your own hours, and make a lot of the decisions that affect your
professional life? Or do you prefer a highly defined structure with clear sets of responsibilities and
hierarchical decision-making? Characteristics such as these describe an organization’s culture. Studies
suggest that many individuals leave one job for another because of differences in the organizational
Business analytics software leader SAS is known for a highly unusual corporate culture, one
that reflects a people-centeredness and promotes high loyalty and low turnover. Developing and
promoting a culture can be costly, however. SAS’ Cary, North Carolina headquarters includes two
on-site childcare centers, an employee health V
care center, wellness programs, and even a 77,000
square foot recreation and fitness facility.
SAS has been included in the list of Best Companies for Working Mothers thirteen times and is
frequently listed on Fortune’s “100 Best Companies to Work for in America.” SAS’ ability to recruit
E professionals can be attributed to its ability to
and retain highly marketable, talented and creative
develop a company “too good to leave.”
strategies are clearly defined, it is logical that a culture whose values reflect the mission and strategies
will be most appropriate. Hence, the key issue T
is the fit between the organization’s culture and other
characteristics of the organization.
It is difficult to change an organization’s culture. It often evolves on its own and is affected by a
number of factors outside of the control of organizational leaders. The culture can be managed,
however, so that it begins to reflect a desired set of values over a period of time.
7-1b Managing Culture
According to researcher Edgar Schein, leaders can manage and shape the organization’s culture in
at least five ways.17 The first way is to systematically pay attention to areas of the business believed
to be of key importance to the strategy’s success. Employees notice where leaders invest time and
resources and are likely to incorporate the values and practices they observe into their own behavior.
9 formally by measuring and controlling the activities
The leader may take steps to accomplish this goal
1 comments or questions at meetings. These specific
of those areas, or less formally by making specific
areas should be ones identified as critical to theTfirm’s long-term performance and survival, and may
include such areas as customer service, new product
S development, or quality control.
The second means involves the leader’s reactions to critical incidents and organizational crises. The
way a CEO deals with a crisis or important occurrence in an organization, such as declining sales or
technological obsolescence, can emphasize norms, values, and working procedures, or even create
new ones. When Saturn’s chief executive chose to destroy a group of vehicles produced with faulty
coolant instead of simply draining the radiators, a strong pro-quality message was sent to its workers.
Organizational Theory
The third means is to serve as a deliberate role model, teacher, or coach. Employees
take notice of what a CEO does, both on and off the job. When a CEO models certain
behavior, others in the organization are likely to adopt it as well. For example,
chief executives who give up their reserved parking place and park among the line
workers send a message about the importance of status in the organization.
The fourth means is the process through which top management allocates rewards
and status. Leaders communicate their priorities by consistently linking pay
raises and promotions, or the lack thereof, to particular behaviors. Rewarded
behavior tends to continue and become ingrained in the fabric of the organization.
Policies that reward seniority, for example, support a culture in which loyalty, not
necessarily high performance or innovation, is highly valued.
The fifth means of shaping the culture is to modify C
the procedures through
which an organization recruits, selects, promotes, and terminates employees. An
organization’s culture can be perpetuated by hiring and promoting individuals
E beliefs and behaviors
whose values are similar to those of the firm and whose
R The easiest way to
more closely fit the organization’s changing value system.
affect culture over the long term is to hire individuals who
S possess the desired
cultural attributes.
In sum, an organization’s culture can be changed, but modification is generally a
difficult, time-consuming process. Leaders should seek toTmodify the culture in a
positive direction (i.e., one that is appropriate for the organization).
However, they
should also recognize their limitations in institutionalizing
Asteep cultural changes
over a short period of time.
7-2 Managerial Ethics
Inherent in an organization’s culture is a set of expectations concerning ethical
behavior and decision-making. Managerial ethics refers
1 to an individual’s
responsibility to make business decisions that are legal, 1honest, moral, and fair.
Unethical behavior in organizations can result in costly government fines and
penalties when it involves a violation of the law. However, the greater costs
1 indirect, such as the
incurred by organizations engaging in such practices are
loss of reputation, the departure of top employees, lostTcustomers, and greater
government regulation.18 Most managers and scholars agree
S that organizational
decisions should be made in an ethical manner. Difficulties arise when the
concept of managerial ethics is examined in greater detail, however, as competing
definitions and perspectives can have a great bearing on what would be considered
as ethical or unethical.
managerial ethics
an individual’s
responsibility to make
business decisions that are
legal, honest, moral, and
Organizational Theory
7-2a Ethical Relativism
Two contextual issues should be considered at the beginning of this discussion.
The first is the frequently debated notion of ethical relativism, the idea that ethics
is based on accepted norms in a culture. Most ethical relativists would argue, for
example, that bribery is unethical in the United States and most western nations
where the practice is generally viewed as inappropriate. In contrast, bribery is
ethical in other parts of the world where the practice is a generally accepted means
of getting things done. Hence, according to the ethical relativist, the culture defines
the ethics.
ethical relativism
the idea that ethics is
based on accepted norms
in a culture
V ethical or unethical
Strict opponents of ethical relativism argue that actions ar …
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