Chapter 7 Flashcards
Define Corporate Culture
Corporate culture has many definitions
- A set of values, norms, and artifacts, including ways of solving problems shared by organizational members
- The shared beliefs top mangers have about how they should manage themselves and other employees and how they should conduct their business
- Gives organizational members meaning and sets the internal rules of behavior. All organizations have culture
Difference between Formal and Informal corporate culture
Formal: statements of values, beliefs, and customs. Comes from upper management in form of memos, codes, manuals, forms, and ceremonies.
Informal: through direct or indirect comments conveying management’s wishes. Such as dress codes, promotions, and extracurricular activities.
True or False: Culture is codified by the Sarbanes-Oxley 404 compliance section
True.
- Includes assessment of effectiveness of controls by management and external auditors
- Forces firms to adopt a set of values that make up part of the culture
- Compliance with 404 requires cultural change, not only accounting changes
Name one of the US Bank’s Principles for Integrity
See slide 5
The “tone at the top” is not necessary in creating ethical corporate culture
False: The “tone at the top” is critical in creating ethical corporate culture
A cultural audit is an assessment of the organization’s financial statements. True or False?
False. A cultural audit is an assessment of the organization’s values. Usually conducted by outside consultants; can be handled internally
The two dimensions of Organizational Culture are:
- Concern for people: The organization’s efforts to care for its employees’ well-being
- Concern for performance: The organization’s efforts to focus on output and employee productivity
Management’s sense of an organizational culture may differ from that guiding employees. True or false?
True
True or False: Integrity is a valuable trait to look for in Future Leaders
True. See Slide 7
See picture for examples of organizational cultures
Slide 10
Define differential Association
The idea that people learn ethical/unethical behavior while interacting with others. Supports ethical decision-making.
Compliance-based cultures use an opportunistic approach to ethics
False. Compliance-based cultures use a legalistic approach to ethics. Revolve around risk management, not ethics. Lack of long-term focus and integrity
What is a Question to Ask before Engaging in External Whistle-Blowing?
See picture slide 15
Exposing an employer’s wrongdoing to company outsiders is known as
Whistle-Blowing. The Sarbanes-Oxley Act, the FSGO, and the Dodd-Frank Act have institutionalized whistle-blowing protections to encourage discovery of misconduct, thus some legal protections exist.
Value-based cultures rely on mission statements that define the firm and stakeholder relations. True or False?
True. Focus on values, not laws. Top-down integrity is critical
Most observed misconduct is by someone outside the company. True or false?
False - Most observed by higher management or the supervisor (more the supervisor).
Percentage of Employees Who Experience Retaliation after Reporting Misconduct is about 22 percent as of 2011. True or false?
True. See slide 16
Integrity refers to the influence that leaders and managers have over the behavior and decisions of subordinates. True or False?
False. Power refers to the influence that leaders and managers have over the behavior and decisions of subordinates. A individual has power when his/her presence causes people to behave differently. Power and influence shape corporate culture
Name one out the four organizational culture types:
- Apathetic: Minimal concern for people or performance
- Caring: High concern for people; minimal concern for performance
- Exacting: Minimal concern for people; high concern for performance
- Integrative: High concern for people and performance
A function of ability and motivation is job performance. True or false?
True
An effective leader is one who does well for the stakeholders of the corporation. True or false?
True. Effective leaders are good at getting followers to common goals effectively and efficiently
An individual’s hierarchy of needs have no influence on motivation and ethical behavior. True or False?
False. An individual’s hierarchy of needs may influence motivation and ethical behavior. Relatedness needs and Growth needs may influence behavior.
The five power bases are:
- Reward power: Offering something desirable to influence behavior
- Coercive power: Penalizing negative behavior
- Legitimate power: The consensus that a person has the right to exert influence over others
- Expert power: Derives from knowledge and credibility with subordinates
- Referent power: Exists when goals or objectives are similar
Define motivation
A force within the individual that focuses behavior toward achieving a goal.
Decision making authority is concentrated in the hands of office managers under a Centralized Organizational Structure. True or false?
False. Decision making authority is concentrated in the hands of top-level managers. Little authority delegated to lower levels. Best for organizations… -That make high-risk decisions -Whose lower-level managers are not skilled in decision-making -Where processes are routine
What is the difference between relatedness and growth?
-Relatedness needs: Satisfied by social and interpersonal relationships -Growth needs: Satisfied by creative or productive activities
Decision making authority is delegated as far down the chain of command as possible is considered a Centralized Organizational Structure.
False. This is the Decentralized Organizational Structure. -Flexible and quicker to recognize external change -Can be slow to recognize organizational policy changes -Units may diverge and develop different value systems
Define group norms
Standards of behavior that groups expect of members. Define acceptable/unacceptable behavior within the group
See chart for Variation in Employee Conduct
see slide 27
Difference between formal and informal groups in corporate structure and culture.
Formal groups: Committees, work groups, and teams Informal groups: The grapevine
See chart for Examples of Centralized and Decentralized Corporate Cultures
Slide 25
Congruence between individual and organizational ethics—increases potential for making ethical decisions. True or false?
True
See chart for difference in organizational types.
Slide 23
True or False? Management’s sense of an organizational culture may differ from that guiding employees
True, and if a firm’s culture encourages/rewards/does not monitor unethical behavior, employees may act unethically
Questions to ask for Whistle-Blowing, which is protected under Sarbanes Oxley
A centralized organizational structure is best for which type of organizations?
- That make high-risk decisions
- Whose lower-level managers are not skilled in decision-making
- Where processes are routine
A decrntralized organization is one in which Decision making authority is delegated as far down the chain of command as possible. What are the benefits and disadvantages of this?
A: Flexible and quicker to recognize external change
D:
Units may diverge and develop different value systems, causing ethical misconduct
The Grapevine is an example of a formal group - True or False?
False, it is an informal group. Formal groups are committees, work groups, and teams
What kind of power stems from a belief that a certain person has the right to exert power over others?
Legitimate Power
A characteristic of a centralized organization has low and informal rules. True or false?
False - Have many formal rules
_____ power is essentially the opposite of reward power in that it penalizes actions or behavior instead of rewards it.
coercive
Which of the following utilizes a legalistic approach to ethics and uses laws and regulations to create its codes and requirements?
compliance
