CHAPTER 2:THE ENVIRONMENT: CULTURE, ETHICS,

SOCIAL RESPONSIBILITY AND SUSTAINABILITY

CH 2© 2015 SAGE Publications

Five Internal Environmental Factors• Mission

• The organization’s reason for being• Management & Culture

• Values, beliefs and assumptions the members of an organization share

• Resources• Human, Financial, Physical and Informational

• Structure• The way an organization groups its resources to accomplish its

mission• Systems Process

• How an organization structures resources to transforms inputs into outputs

Systems Process Components• Inputs

• Organizations resources: human, financial, physical, and informational

• Transformation• Turning inputs into outputs

• Outputs• The products or services offered to customers

• Feedback• Means of control to ensure that the inputs and

transformation process are producing the desired results

Total Quality Management• Stressing quality within an organization

• Focus on the customer to continually improve product value

• Continually improving the system and its processes

Organizational Culture• Core values and principles of leaders• Behaviors, practices and attitudes of employees

• Culture can be learned but it must be understood first

Learning the Organizational Culture• Organizational Culture can be learned through

observing people and events in the organization• Artifacts are physically observable elements of

culture• Heroes• Stories• Slogan• Symbols• Ceremonies

Three Levels of Culture• Behavior

• What people do and say• Values and Beliefs

• Guide decision making and shape behavior• Assumptions

• Values and beliefs that are so deeply ingrained that they are considered unquestionably true and taken for granted

Strong & Weak Cultures• Strong Cultures

• Employees subconsciously know the shared assumptions as well as the values and beliefs

• Behave as expected• Results in easier communication and cooperation

• Weak Cultures• Employees do not behave as expected

The External Environment• The factors outside an organization’s boundaries that

affect its performance

The Nine Major External Factors• Customers• Competition• Suppliers• Labor force/unions• Shareholders• Society• Technology• The economy• Government

Task Factors

General Factors

Ethics• Standards of right and wrong that influence behavior

• Ethical: Right behaviors• Unethical: Wrong behaviors

• Ethical standards are closely tide to cultural values

Moral Development• Developing ability to distinguish right from wrong and

choosing the right thing• Three Levels of Moral Development

• Pre-conventional• Conventional• Post-conventional

Three Levels of Moral Development• Pre-conventional Level:

• Choose behavior based on self interest and the likely consequences of the behavior (reward or punishment)

• Conventional Level:• Seek to maintain expected standards and live up to

the expectations of others• Post-conventional Level:

• Make an effort to define moral principles for themselves regardless of leaders or the groups ethics

Pre-conventional and Conventional Moral Justifications• Displacement of Responsibility: blaming ones unethical

behavior on others• Diffusion of Responsibility: behaving unethically and no

one person is held responsible• Advantageous Comparison: comparing oneself to others

who are worse

Pre-conventional and Conventional Moral Justifications• Disregard or Distortion of Consequences: minimizing the

harm caused by the unethical behavior• Attribution of blame: claiming the unethical behavior

was caused by someone else's behavior• Euphemistic Labeling: using “cosmetic” words to make

the behavior sound acceptable

Enforcing Ethical Behavior• Whistle blowing: encouraging employees to expose

unethical or illegal behaviors within the organization.

Corporate Social Responsibility• Corporate Social Responsibility (CSR): exploring the

responsibilities of business and its role in society• Environment• Society• Customers• Suppliers• Employees

Sustainability• Meeting the needs of the present world without

compromising the ability of the future generations to meet their own needs