chapter 4-class ppt

7/17/2019 Chapter 4-Class Ppt

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The Corporate Culture

Impact and Implications

Chapter4


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Chapter Objectives

After exploring this chapter !ou "ill be able to#1$ %efine corporate culture

2$ &xplain ho" corporate culture impacts ethical decision-ma'ing

($ %iscuss the differences bet"een a compliance culture and a values-

based culture

)$ %iscuss the role of corporate leadership in establishing the culture

*$ &xplain the difference bet"een effective leaders and ethical leaders

+$ %iscuss the role of mission statements and codes in creating an ethicalcorporate culture

,$ &xplain ho" various reporting mechanisms such as ethics hotlines andombudsman can help integrate ethics "ithin a firm

$ %iscuss the role of assessment monitoring and auditing of the cultureand ethics program

.$

&xplain ho" culture can be enforced via governmental regulation


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/hat is Corporate Culture0

A shared pattern of beliefs expectations and meanings that

influence and guide the thin'ing and behaviors of the

members of that organiation$

This culture shapes the people "ho are members of the

organiation$


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Compliance vs$

alues-3ased Cultures

In the 1..45s there "as a distinction in t!pes of corporate

cultures#

Compliance-based cultures6the traditional approach78 A compliance-based culture emphasies obedience to the rules as the

primar! responsibilit! of ethics$ A compliance-based culture "ill

empo"er legal and audits offices to mandate and monitor

compliance "ith the la" and "ith internal codes$

Values-based or integrity-based cultures

8 A values-based culture is one that reinforces a particular set of values

rather than a particular set of rules$


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%ifferences in 9oals

The goals of a traditional compliance-oriented program ma!include meeting legal and regulator! re:uirements; minimiingris's of litigation and indictment; and improving accountabilit!

mechanisms$ The goals of a more evolved and inclusive ethics program ma!

entail a broader and more expansive application to the firmincluding# maintaining brand and reputation;

recruiting and retaining desirable emplo!ees;

helping to unif! a firm5s global operations;

creating a better "or'ing environment for emplo!ees; and

doing the right thing in addition to doing things right$


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The tone at the top$?

3e!ond personal behavior leadership sets the tone through othermechanisms such as the dedication of resources$ &thical business leaders not onl! tal' about ethics and act ethicall! on a personal

level but the! also allocate corporate resources to support and promote ethicalbehavior$

There is a long-standing credo of management# >budgeting is all about values$?

@ore common versions are# >put !our mone! "here !our mouth is? and >"al'the tal'$?


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Effective=eaders vs$

Ethical =eaders

3eing perceived as a leader pla!s an important role in a

leader5s abilit! to create and transform an ethical corporate

culture$

e! executives have the capabilit! of transforming a business

culture for better or "orse$

/hat do "e mean b! an >ethical? leader0 A good leader is

simpl! an!one "ho does "ell "hat leaders do$ 9ood leadersare effective at getting follo"ers to their common destination$


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Effective=eaders vs$

Ethical =eaders

Certainl! ethicall! appropriate methods of leadership are central to

becoming an ethical leader$

Creating a corporate culture in "hich emplo!ees are empo"ered and

expected to ma'e ethicall! responsible decisions is a necessar! part ofbeing an ethical business leader$

3ut "hile some means ma! be ethicall! better than others 6e$g$

persuasion rather than coercion7 it is not the method alone that

establishes a leader as ethical$ /hile perhaps necessar! an ethical means of leading others is not

sufficient for establishing ethical leadership$

The other element of ethical leadership involves the end or goal

to"ards "hich the leader leads$


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3uilding a alues-3ased

Corporate Culture

One of the 'e! manifestations of ethical leadership is the

articulation of values for the organiation$

It is the leader5s responsibilit! to ensure that the firm isguided b! some set of organiing principles that can guide

emplo!ees in their decision-ma'ing processes$


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The


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%eveloping The Culture through

a Code

The second step in the development of guiding principles for the firm is

the articulation of a clear visionregarding the firm5s direction$

The third step in this process is to identif! clear steps as to ho" this

cultural shift "ill occur$ ou need to have processes and procedures inplace that support and then sustain that vision$

Dinall! to have an effective code that "ill successfull! impact culture

there must be a belief throughout the organiation that this culture is

actuall! possible achievable$ If conflicts remain that "ill prevent certain components from being

realied or if 'e! leadership is not on board no one "ill have faith in

the changes articulated$


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Whistleblowing? involves the disclosure of unethical or illegal

activities to someone "ho is in the position to ta'e action to prevent or

punish the "rongdoing$

/histleblo"ing can expose and end unethical activities but it can alsoseem dislo!al it can harm the business and it can extract significant

costs on the "histleblo"er$

/histleblo"ing can occur internall! as "hen Bherron /at'ins reported

her concerns to en =a!$

It can occur externall! as "hen Eeffer! /eigand 6as portra!ed in the

movie The Insider7 reported to +4 @inutes about 3ro"n and /illams5

activities in not onl! concealing and 'no"ingl! mislead the public about

the harmful effects of cigarettes but also using additives that increased

the potential for harm$


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Chapter Dour ocabular! Terms

After examining this Chapter !ou should have a clear understanding of the

follo"ing e! Terms and !ou "ill find them defined in the 9lossar!#

Code of Conduct

Compliance &nvironment Culture

&thics Officers

Dederal Bentencing 9uidelines

@ission Btatement

Fnited Btates Bentencing Commission

alues-based Organiation

/histleblo"ing

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