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TOPIC 2: DEFINING THE MANAGERS TERRAIN

PART 1 ORGANIZATIONAL CULTURE AND ENVIRONMENT


LEARNING OUTCOMES: Contrast the actions of managers according to the omnipotent and symbolic views. Discuss the characteristics and importance of organizational culture. Describe current issues in organizational culture. Identify the features of the specific and general environments. INTRODUCTION Managers must realize that organizational culture and organizational environment have important implications for the way an organization is managed. Both organizational culture and external forces that can shape an organization are explored in order to gain a better understanding of the complexities presented by internal and external environments. THE MANAGER: OMNIPOTENT OR SYMBOLIC? Two perspectives concerning the role that managers play in an organization s success or failure have been proposed. The Omn !"#en# V e$ This maintains that managers are directly responsible for the success or failure of an organization. This view of managers as being omnipotent is consistent with the stereotypical picture of the !ta"e#charge$ executive who can overcome any obstacle in carrying out the organization s ob%ectives. &hen organizations perform poorly' someone must be held accountable. (ccording to the omnipotent view' that !someone$ is the manager. The S%m&"' ( V e$ This view of management upholds the view that much of an organization s success or failure is due to external forces outside managers control. The influence that managers do have is seen mainly as a symbolic outcome. )rganizational results are influenced by factors outside of the control of managers' including the economy' customers' governmental policies' competitors actions' the state of the particular industry' the control of proprietary technology' and decisions made by previous managers in the organization. The manager s role is to create meaning out of randomness' confusion' and ambiguity. (ccording to the symbolic view' the actual part that management plays in the success or failure of an organization is minimal.

Re)' #% *+,,e*#* ) *%n#he* * Managers are neither helpless nor all powerful. Instead' the more logical approach is to see the manager as operating within constraints imposed by the organization s culture and environment. THE ORGANIZATIONS CULTURE *ust as individuals have a personality' so' too' do organizations. &e refer to an organization s personality as its culture. -h)# * O.,)n /)# "n)' C+'#+.e? )rganizational culture is the shared values' principles' traditions' and ways of doing things that influence the way organizational members act. This definition implies+ Individuals perceive organizational culture based on what they see' hear' or experience within the organization. )rganizational culture is shared by individuals within the organization. )rganizational culture is a descriptive term. It describes' rather than evaluates. ,even dimensions of an organization s culture have been proposed+ o Innovation and ris" ta"ing -the degree to which employees are encouraged to be innovative and ta"e ris"s. o (ttention to detail -the degree to which employees are expected to exhibit precision' analysis' and attention to detail. o )utcome orientation -the degree to which managers focus on results or outcomes rather than on the techni/ues and processes used to achieve those outcomes. o 0eople orientation -the degree to which management decisions ta"e into consideration the effect on people within the organization. o Team orientation -the degree to which wor" activities are organized around teams rather than individuals. o (ggressiveness -the degree to which employees are aggressive and competitive rather than cooperative. o ,tability -the degree to which organizational activities emphasize maintaining the status /uo in contrast to growth. S#."n, C+'#+.e* ,trong cultures are found in organizations where "ey values are intensely held and widely shared. &hether an company s culture is strong' wea"' or somewhere in between depends on organizational factors such as size' age' employee turnover rate' and intensity of original culture. ( culture has increasing impact on what managers do as the culture becomes stronger. Most organizations have moderate#to#strong cultures. In these organizations' high agreement exists about what is important and what defines !good$ employee behavior' for example.

,tudies of organizational culture have yielded various results. )ne study found that employees in firms with strong cultures were more committed to their firm than were employees in firms with wea" cultures. )rganizations with strong cultures also used their recruitment efforts and socialization practices to build employee commitment. (n increasing body of research suggests that strong cultures are associated with high organizational performance.

-he.e C+'#+.e ("me* 0."m )n1 h"$ # ("n# n+e*2 The original source of an organization s culture is usually a reflection of the vision or mission of the organization s founders. The culture is a result of the interaction between the founders biases and assumptions and what the first employees subse/uently learned from their own experiences. (n organization s culture continues when+ o &hen a culture is in place' practices help to maintain it. o 1iring practices reflect the culture in terms of !fit.$ o (ctions of top executives help to maintain the culture. o 2ew employees learn the organization s way of doing things through socialization3the process that helps employees adapt to the organization s culture. H"$ Em!'"%ee* Le).n C+'#+.e Culture is transmitted principally through stories' rituals' material symbols' and language. )rganizational stories are one way that employees learn the culture. These stories typically involve a narrative of significant events or people. 4ituals are repetitive se/uences of activities that express and reinforce the "ey values of the organization' which goals are most important' and which people are important or expendable. The use of material symbols is another way in which employees learn the culture' learn the degree of e/uality desired by top management' discover which employees are most important' and learn the "inds of behavior that are expected and appropriate. 5anguage is often used to identify members of a culture. 5earning this language indicates members willingness to accept and preserve the culture. This special lingo acts as a common denominator to unite members of a particular culture. H"$ C+'#+.e A00e(#* M)n),e.*2 (n organization s culture is important because it establishes constraints on what managers can do. The lin" between corporate values and managerial behavior is fairly straightforward. The culture conveys to managers what is appropriate behavior. (n organization s culture' particularly a strong one' constrains a manager s decision# ma"ing options in all managerial functions.

CURRENT ORGANIZATIONAL CULTURE ISSUES 6our current cultural issues managers should consider+ C.e)# n, )n E#h ()' C+'#+.e The content and strength of an organization s culture influence its ethical climate and ethical behavior of its members. ( strong organizational culture exerts more influence on employees than does a wea" one. The organizational culture most li"ely to shape high ethical standards is one that is high in ris" tolerance and low to moderate in aggressiveness' while focusing on means as well as outcomes. C.e)# n, )n Inn"3)# 3e C+'#+.e &hat does an innovative culture loo" li"e7 provides these characteristics+ o Challenge and involvement o 6reedom o Trust and openness o Idea time o 0layfulness:humor o Conflict resolution o Debates o 4is" ta"ing

,wedish researcher 8oran 9"vall

C.e)# n, ) C+*#"me.4Re*!"n* 3e C+'#+.e &hat does a customer#responsive culture loo" li"e7 4esearch shows the following six characteristics routinely present in a customer#responsive culture. o Type of employee o 6ew rigid rules' procedures' and regulations o &idespread use of empowerment o 8ood listening s"ills o 4ole clarity o 9mployees who are conscientious in desire to please customers C.e)# n, ) C+'#+.e #h)# S+!!".#* D 3e.* #% Today s organizations are characterized by many types of diversity including+ gender' race' age' and personality characteristics. 6or managers' it is important to recognize the impact that homogeneous vs. a heterogeneous wor"force impacts the culture of the organization. &hich culture is best for improving creative solutions and morale7

THE ENVIRONMENT The impact of the external environment on a manager s actions and behaviors cannot be overemphasized. 6orces in the external environment play a ma%or role in shaping managers endeavors. De0 n n, #he E5#e.n)' En3 ."nmen# The external environment consists of those factors and forces outside the organization that affect the organization s performance. The specific environment includes those external forces that have a direct impact on managers decisions and actions and are directly relevant to the achievement of the organization s goals. o The specific environment is uni/ue and changes with conditions. o The specific environment varies' depending on the mar"et niche served by the organization. (n organization s main constituencies include customers' suppliers' competitors' and pressure groups. Customers are the reason for an organization s existence' since customers absorb the organization s outputs. Customers represent potential uncertainty' particularly if their tastes and desires change. ,uppliers include firms that provide materials and e/uipment as well as firms with financial and labor inputs. Managers see" to ensure a steady flow of the needed materials' e/uipment' financial' and labor inputs' at the lowest possible price. Competitors cannot be ignored. Companies must monitor and respond to their competitors. (ll organizations have one or more competitors. 0ressure groups cannot be ignored by managers. Changes in social and political attitudes influence the power exerted by pressure groups.

The general environment includes these broad external conditions that may affect the organization+ economic' political:legal' sociocultural' demographic' technological' and global conditions. o 9conomic conditions include interest rates' inflation rates' changes in disposable income' stoc" mar"et fluctuations' and the general business cycle. o 0olitical:legal conditions include the general political stability of countries in which an organization does business and the specific attitudes that elected officials have toward business. 6ederal' state' and local governments can influence what organizations can and cannot do. o ,ociocultural conditions include the changing expectations of society. ,ocietal values' customs' and tastes can change' and managers must be aware of these changes. o Demographic conditions' including physical characteristics of a population -e.g.' gender' age' level of education' geographic location' income'

composition of family. can change' and managers must adapt to these changes. o Technological conditions' which have changed more rapidly than any other element of the general environment. o 8lobal factors include global competitors and global consumer mar"ets. H"$ #he En3 ."nmen# A00e(#* M)n),e.* 9nvironments differ in their amount of environmental uncertainty' which relates to -;. the degree of change in an organization s environment and -<. the degree of complexity in that environment. o Degree of change is characterized as being dynamic or stable. o In a dynamic environment' components of the environment change fre/uently. If change is minimal' the environment is called a stable environment. o The degree of environmental complexity is the number of components in an organization s environment and the extent of an organization s "nowledge about those components. o If the number of components and the need for sophisticated "nowledge is minimal' the environment is classified as simple. If a number of dissimilar components and a high need for sophisticated "nowledge exist' the environment is complex. o Because uncertainty is a threat to organizational effectiveness' managers try to minimize environmental uncertainty. The more obvious and secure an organization s relationships are with external sta"eholders' the more influence managers have over organizational controls. o ,ta"eholders are any constituencies in the organization s external environment that are affected by the organization s decisions and actions. o ,ta"eholder relationship management is important for two reasons+ It can lead to improved predictability of environmental changes' more successful innovation' greater degrees of trust among sta"eholders' and greater organizational flexibility to reduce the impact of change. It is the !right$ thing to do' because organizations are dependent on external sta"eholders as sources of inputs and outlets for outputs and the interest of these sta"eholders should be considered when ma"ing and implementing decisions.

PART 2 MANAGING IN A GLOBAL ENVIRONMENT


LEARNING OUTCOMES: Contrast ethnocentric' polycentric' and geocentric attitudes toward global business. Discuss the importance of regional trading alliances and the &orld Trade )rganization. Describe the structures and techni/ues organizations use as they go international. 9xplain the relevance of the political:legal' economic' and cultural environments to global business.

-HO O-NS -HAT? ,tudents may be astonished to discover the country of ownership origin for many products they use. In ta"ing this /uiz and discussing their scores' students may also be surprised to learn that a significant number of well#"nown companies derive more than half of their revenues from global operations. -HATS YOUR GLOBAL PERSPECTIVE? Most =.,. children study only 9nglish in school. It is not unusual for 8ermans' Italians' and Indonesians to spea" three or four languages. (mericans tend to thin" of 9nglish as the only international business language and see little need to study other languages. 0arochialism is viewing the world solely through your own perspectives' leading to an inability to recognize differences between people. 0arochialism is an obstacle for many =.,. managers and stems from monolingualism. Managers might have one of three perspectives or attitudes toward international business+ o (n ethnocentric attitude is the parochialistic belief that the best wor" approaches and practices are those of the home country -the country in which the company s head/uarters are located.. o ( polycentric attitude is the view that the managers in the host country -the foreign country where the organization is doing business. "now the best wor" approaches and practices for running their business. o ( geocentric attitude is a world#oriented view that focuses on using the best approaches and people from around the globe. o To be a successful global manager' an individual needs to be sensitive to differences in national customs and practices. UNDERSTANDING THE GLOBAL ENVIRONMENT ,everal significant forces are reshaping today s global environment. Important features of the global environment include regional trading alliances and different types of global organizations.

Re, "n)' T.)1 n, A'' )n(e* 4egional trading alliances are reshaping global competition. Competition is no longer limited to country versus country' but region versus region. The 9uropean =nion -9=. is a union of <> 9uropean nations created as a unified economic and trade entity. o The primary motivation for the creation of the 9= in 6ebruary ;??< was to allow member nations to reassert their position against the industrial strength of the =nited ,tates and *apan. Currently its membership covers a base of nearly have a billion people and @;A of the world s economic output. o 6ifteen of the <B member states of the 9= have agreed to adopt the common currency of the 9=' the euro. Denmar"' the =nited Cingdom and ,weden have opted out of using the euro. o The 5isbon Treaty' signed in December <DDB' provides the 9= with a common legal framewor" to meet current challenges facing 9uropean economies' such as climate change' security and energy needs. The 2orth (merican 6ree Trade (greement -2(6T(. is an agreement among the Mexican' Canadian' and =.,. governments in which barriers to trade have been eliminated. o 2(6T( went into effect on *anuary ;' ;??E and today is the world s largest trading bloc" in terms of 8D0. Canada is currently the =, s top trading partner with Mexico being number three -China is number two.. o 9liminating barriers to free trade -tariffs' import licensing re/uirements' customs user fees. has resulted in a strengthening of the economic power of all three countries. o Colombia' Mexico' and Fenezuela signed an economic pact eliminating import duties and tariffs in ;??E. o The Central (merican 6ree Trade (greement -C(6T(. is currently being negotiated with five Central (merican countries+ Costa 4ica' 9l ,alvador' 8uatemala' 1onduras' and 2icaragua. o Thirty#four countries in the &estern 1emisphere continue to negotiate a 6ree Trade (rea of the (mericas -6T((. agreement. 6T(( was to have been in effect no later than <DD>' but has not yet become operationalG its future is still undetermined. The (ssociation of ,outheast (sian 2ations -(,9(2. is a trading alliance of ,outheast ;D (sian nations. o In the future' the ,outheast (sian region promises to be one of the fastest# growing and increasingly influential economic regions of the world. o The future economic impact of the ,outheast (sian region could rival that of both 2(6T( and the 9=. )ther Trade (lliances. The >@#nation (frican =nion -(=. came into existence in *uly <DD<. Members plan to achieve greater economic development and unity among (frica s nations. The ,outh (sian (ssociation for 4egional Cooperation -,((4C. composed of eight (sian member states began eliminating tariffs in <DDH.

The -".'1 T.)1e O.,)n /)# "n 6-TO7 6ormed in ;??> and evolving from 8(TT' the &T) is the only global organization dealing with the rules of trade among nations. Membership consists of ;>@ countries and @D observer governments as of <DDI. The &T) appears to play an important role even though critics are vocal and highly visible. DOING BUSINESS GLOBALLY D 00e.en# T%!e* "0 In#e.n)# "n)' O.,)n /)# "n* Business has been conducted internationally for many years -e.g.' Du0ont conducted business in China in ;IH@' 1. *. 1einz manufacturing their brands since ;?D>' and 6ord established its first overseas sales branch in 6rance in ;?DI.. Multinational corporations did not become popular until the mid#;?HDs. 8lobal organizations can be classified in the following categories+ The term multinational corporation -M2C. is a broad term that refers to any and all types of international companies that maintain operations in multiple countries. ( transnational corporation -T2C.' sometimes called a borderless organization' is a type of international company in which artificial geographical barriers are eliminated. Jou should "eep in mind that neither the national origin of a company nor the national origin of its employees is any longer a good measure of where that company conducts business. H"$ O.,)n /)# "n* G" In#e.n)# "n)' (n organization that goes international typically progresses through three stages+ Companies that go international may begin by using global sourcing -also called global outsourcing.. In this stage of going international' companies purchase materials or labor from around the world' wherever the materials or labor are least expensive. Beyond the stage of global sourcing' each successive stage to become more international involves more investment and ris". In the next stage' companies may go international by exporting -ma"ing products domestically and selling them abroad. or importing -ac/uiring products made abroad and selling the products domestically.. Both exporting and importing re/uire minimal investment and ris". In the early stages of going international' managers may also use licensing -giving another organization the right to ma"e or sell its products using its technology or product specifications. or franchising -giving another organization the right to use its name and operating methods.. (fter an organization has done international business for a period of time' managers may decide to ma"e more of a direct investment in international mar"ets by forming a strategic alliance' which is a partnership between an organization and a foreign

company partner-s.. In a strategic alliance' partners share resources and "nowledge in developing new products or building production facilities. ( %oint venture -a specific type of strategic alliance. may be underta"en to allow partners to form a separate' independent organization for some business purpose. Managers may decide to ma"e a direct investment in a foreign country by establishing a foreign subsidiary' in which a company sets up a separate and independent production facility or office. 9stablishing a foreign subsidiary involves the greatest commitment of resources and the greatest ris" of all of the stages in going international.

MANAGING IN A GLOBAL ENVIRONMENT Managing in a global environment entails challenges. The Le,)'4P"' # ()' En3 ."nmen# The legal#political environment does not have to be unstable or revolutionary to be a challenge to managers. The fact that a country s political system differs from that of the =nited ,tates is important to recognize. The E("n"m ( En3 ."nmen# The economic environment also presents many challenges to foreign#based managers' including fluctuations in currency exchange rates rates' inflation' and diverse tax policies. In a free mar"et economy' resources are primarily owned by the private sector. In a planned economy' all economic decisions are planned by a central government. The C+'#+.)' En3 ."nmen# Countries have different cultures' %ust as organizations do. 2ational culture is the values and attitudes shared by individuals from a specific country that shape their behavior and their beliefs about what is important. (n approach developed by 8eert 1ofstede serves as a valuable framewor" for understanding differences between national cultures. 1ofstede studied individualism versus collectivism. Individualism is the degree to which people in a country prefer to act as individuals rather than as members of groups. Collectivism is characterized by a social framewor" in which people prefer to act as members of groups and expect others in groups of which they are a part -such as a family or an organization. to loo" after them and to protect them. (nother cultural dimension is power distance' which measures the extent to which a society accepts the fact that power in institutions and organizations is distributed une/ually. =ncertainty avoidance describes the degree to which people tolerate ris" and prefer structure over unstructured situations. 1ofstede identified the dimension of achievement versus nurturing. (chievement is the degree to which values such as assertiveness' the ac/uisition of money and material goods' and competition prevail. 2urturing emphasizes sensitivity in relationships and concern for the welfare of others.

5ong#term and short#term orientation. 0eople in countries having long#term orientation cultures loo" to the future and value thrift and persistence. ,hort#term orientation values the past and present and emphasizes a respect for tradition and fulfilling social obligations. Countries have different ran"ings on 1ofstede s cultural dimensions' and managers should be aware of the cultural differences present in countries in which they do business. The 8lobal 5eadership and )rganizational Behavior 9ffectiveness -85)B9. research program is an assessment that updates 1ofstede s studies. o 85)B9 began in ;??@ and identified nine dimensions on which national cultures differ+ (ssertiveness' future orientation' gender differentiation' uncertainty avoidance' power distance' individualism:collectivism' in#group collectivism' performance orientation' and humane orientation.

GLOBAL MANAGEMENT IN TODAYS -ORLD (s companies such as I4C=T' 2issan and 5ego have found' the openness that is necessary to conduct business successfully in a global environment poses great challenges. The increased threat of terrorism' economic interdependence of trading countries' and significant cultural create a complicated environment in which to manage. ,uccessful global managers need to have great sensitivity and understanding. Managers must ad%ust leadership styles and management approaches to accommodate culturally diverse views.

PART 8 SOCIAL RESPONSIBILITY AND MANAGERIAL ETHICS


LEARNING OUTCOMES: Discuss what it means to be socially responsible and what factors influence that decision. 9xplain green management and how organizations can go green. Discuss the factors that lead to ethical and unethical behavior. Describe management s role in encouraging ethical behavior. Discuss current social responsibility and ethics issues. INTRODUCTION This chapter discusses issues involving social responsibility and managerial ethics and their effect on managerial decision ma"ing. Both social responsibility and ethics are responses to a changing environment and are influenced by organizational culture. -HAT IS SOCIAL RESPONSIBILITY? Managers regularly face decisions that have dimensions of social responsibility. 9xamples include employee relations' philanthropy' pricing' resource conservation' product /uality and safety' and doing business in countries that violate human rights. There are two opposing views of social responsibility. The classical view is the view that management s only social responsibility is to maximize profits. 9conomist and 2obel laureate Milton 6riedman is the most outspo"en advocate of this view. 6riedman argues that managers primary responsibility is to operate the business in the best interests of the stoc"holders3the true owners of the organization. The socioeconomic view is the view that management s social responsibility goes beyond the ma"ing of profits to include protecting and improving society s welfare. This view purports that corporations are not independent entities responsible only to stoc"holders. 6rom )bligations to 4esponsiveness to 4esponsibility. ,ocial obligation occurs when a firm engages in social actions because of its obligation to meet certain economic and legal responsibilities. ,ocial responsiveness is seen when a firm engages in social actions in response to some popular social need. ,ocial responsibility is a business s intention' beyond its legal and economic obligations' to do the right things and act in ways that are good for society. ,hould )rganizations be ,ocially Involved7 1ow do socially responsible activities affect a company s economic performance7 ( ma%ority of studies have found a positive relationship between social involvement and economic performance' but some caution in this regard is necessary because of methodological /uestions associated with the measurement of social responsibility and economic performance. (nother way to address this issue is to evaluate socially responsible investment -,4I. funds. These mutual funds provide a way for individual investors to support socially responsible companies. These funds typically use social screening3applying social criteria -screens. to investment decisions. The conclusion is that there is little

evidence to say that a company s socially responsible actions will hurt an organization s long#term economic performance. GREEN MANAGEMENT ( number of highly visible ecological problems and environmental disasters -e.g.' 9xxon Faldez oil spill' mercury poisoning in *apan' Three Mile Island and Chernobyl nuclear power plant accidents. brought about a new spirit of environmentalism. &hile these disasters grab attention' we often ignore more common examples of (merican consumerism such as plastic shopping bags. )ur !bag habit$ cost billions of gallons of oil each year and fill our landfills. 1ow )rganizations 8o 8reen. (pproaches include the legal -or light green. approach' the mar"et approach' the sta"eholder approach' and the activist approach. 9valuating the 8reening of Management. (s organizations become !greener'$ they are reporting their commitment to being green in several ways' including fulfilling of guidelines issued by the 8lobal 4eporting Initiative -84I.G meeting I,) ;EDD; standardsG and appearing on the list of the ;DD Most ,ustainable Corporations in the &orld.

MANAGERS AND ETHICAL BEHAVIOR The term ethics refers to principles' values' and beliefs that define what is right and wrong behavior. This section examines the ethical dimensions of managerial decision ma"ing. F)(#".* Th)# A00e(# Em!'"%ee E#h (* There are complex interactions that influence whether a person acts ethically or unethically when faced with an ethical dilemma. ,tages of Moral Development. 4esearch confirms three levels of moral development. 9ach level has two stages. o The first level is called preconventional. (t this level' the individual s choice between right or wrong is based on personal conse/uences involved. o (t the second stage' which is labeled conventional' moral values reside in maintaining expected standards and living up to the expectations of others. o (t the third level3the principled level3the individual ma"es a clear effort to define moral principles apart from the authority of the groups to which the person belongs. o 4esearch on the stages of moral development indicates that people proceed se/uentially through the six stages of these three levels' with no guarantee of continued development at any stage. The ma%ority of adults are at ,tage E. The higher the stage an employee reaches' the more li"ely that he or she will behave ethically. Individual Characteristics. ( person %oins an organization with a relatively entrenched set of values.

o Falues are basic convictions about what is right and wrong. Falues are broad and cover a wide variety of issues. o 9go strength is a personality measure of the strength of a person s convictions. Individuals who score high on ego strength are li"ely to resist impulses to act unethically and will li"ely do what they themselves thin" are right. o 5ocus of control is a personality attribute that measures the degree to which people believe they control their own fate. Individuals with an internal locus of control thin" that they control their destiny' while persons with an external locus of control are less li"ely to ta"e personal responsibility for the conse/uences of their behavior and are more li"ely to rely on external forces. 9xternals believe that what happens to them is due to luc" or chance. ( third factor influencing managerial ethics is structural variables. The existence of structural variables such as formal rules and regulations' %ob descriptions' written codes of ethics' performance appraisal systems' and reward systems can strongly influence ethical behavior. The content and strength of an organization s culture influences ethical behavior. o (n organizational culture most li"ely to encourage high ethical standards is one that is high in ris" tolerance' control' and conflict tolerance. o ( strong culture exerts more influence on managers than does a wea" one. o 1owever' in organizations with wea" cultures' wor" groups and departmental standards strongly influence ethical behavior.

E#h (* n )n In#e.n)# "n)' C"n#e5# (re ethical standards universal7 1ardlyK ,ocial and cultural differences between countries are environmental factors that play an influential role in determining ethical and unethical behavior. (t the ;??? &orld 9conomic 6orum' the =nited 2ations ,ecretary# 8eneral challenged world business leaders to !embrace and enact$ this particular document that gives guidelines for doing business globally in the areas of human rights' labor' and anti#corruption. ENCOURAGING ETHICAL BEHAVIOR )rganizations can ta"e a number of actions to cultivate ethical behavior among members. In this section of the text' eight suggestions are explored+ The selection process for bringing new employees into organizations should be viewed as an opportunity to learn about an individual s level of moral development' personal values' ego strength' and locus of control. ( code of ethics is a formal statement of an organization s primary values and the ethical rules it expects employees to follow. In addition' decision rules can be developed to guide managers in handling ethical dilemmas in decision ma"ing. Top management s leadership and commitment to ethical behavior is extremely important since the cultural tone for an organization is established by its top managers.

9mployees %ob goals should be tangible and realistic' because clear and realistic goals reduce ambiguity and motivate rather than punish. *ob goals are usually a "ey issue in the performance appraisal process. If an organization wants employees to uphold high ethical standards' this dimension must be included in the appraisal process. 0erformance appraisals should include this dimension' rather than focusing solely on economic outcomes. 9thics training should be used to help teach ethical problem solving and to present simulations of ethical situations that could arise. (t the least' ethics training should increase awareness of ethical issues. Independent social audits evaluate decisions and management practices in terms of the organization s code of ethics and can be used to deter unethical behavior. )rganizations can provide formal protective mechanisms so that employees with ethical dilemmas can do what is right without fear of reprisal.

SOCIAL RESPONSIBILITY AND ETHICS ISSUES IN TODAYS -ORLD M)n), n, e#h ()' ')!*e* )n1 *"( )' .e*!"n* & ' # e* 9thical lapses are not %ust confined to the C9) s of large companies' li"e 9nron. 9mployees at all levels of the organization have admitted to lapses such as falling asleep at wor" or spreading rumors about a co#wor"er. (nd such behavior is not limited to wor"' studies also show that business schools have their share of bad behavior' including cheating. )ne survey showed that only ;? percent of students would report a classmate who cheated. 9thical 5eadership. (bove all' managers must set an ethical example by modeling appropriate behavior and rewarding employees who act ethically. 0rotecting 9mployees &ho 4aise 9thical Issues. Managers must assure employees who raise ethical concerns that they will not encounter personal or career ris"s. These individuals are called whistleblowers.

S"( )' En#.e!.ene+.*h ! ( social entrepreneur is an individual or organization who see"s out opportunities to improve society by using practical' innovative' and sustainable approaches. B+* ne**e* !."m"# n, !"* # 3e (h)n,e Managers are increasingly expected to act responsibly in the way they conduct business. Managers using a social impact management approach examine the social impacts of their decisions and actions. Corporate 0hilanthropy. 8iving to charitable foundations and causes is not limited to individuals. )rganizations' through their ability to coordinate large pro%ects and their access to capital' have made great strides in improving community and social efforts. 9mployee Folunteering 9fforts. 9mployees in many organizations are encouraged to volunteer their time to promote social change. ,ome organizations even allow employees to spend part of their wor"day toward volunteer efforts.

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