Chapter 7

Question 1

Define Corporate Culture

Answer 1

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

Question 2

Difference between Formal and Informal corporate culture

Answer 2

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.

Question 3

True or False: Culture is codified by the Sarbanes-Oxley 404 compliance section

Answer 3

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

Question 4

Name one of the US Bank’s Principles for Integrity

Answer 4

See slide 5

Question 5

The “tone at the top” is not necessary in creating ethical corporate culture

Answer 5

False: The “tone at the top” is critical in creating ethical corporate culture

Question 6

A cultural audit is an assessment of the organization’s financial statements. True or False?

Answer 6

False. A cultural audit is an assessment of the organization’s values. Usually conducted by outside consultants; can be handled internally

Question 7

The two dimensions of Organizational Culture are:

Answer 7

• 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

Question 8

Management’s sense of an organizational culture may differ from that guiding employees. True or false?

Answer 8

True

Question 9

True or False: Integrity is a valuable trait to look for in Future Leaders

Answer 9

True. See Slide 7

Question 10

See picture for examples of organizational cultures

Answer 10

Slide 10

Question 11

Define differential Association

Answer 11

The idea that people learn ethical/unethical behavior while interacting with others. Supports ethical decision-making.

Question 12

Compliance-based cultures use an opportunistic approach to ethics

Answer 12

False. Compliance-based cultures use a legalistic approach to ethics. Revolve around risk management, not ethics. Lack of long-term focus and integrity

Question 13

What is a Question to Ask before Engaging in External Whistle-Blowing?

Answer 13

See picture slide 15

Question 14

Exposing an employer’s wrongdoing to company outsiders is known as

Answer 14

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.

Question 15

Value-based cultures rely on mission statements that define the firm and stakeholder relations. True or False?

Answer 15

True. Focus on values, not laws. Top-down integrity is critical

Question 16

Most observed misconduct is by someone outside the company. True or false?

Answer 16

False - Most observed by higher management or the supervisor (more the supervisor).

Question 17

Percentage of Employees Who Experience Retaliation after Reporting Misconduct is about 22 percent as of 2011. True or false?

Answer 17

True. See slide 16

Question 18

Integrity refers to the influence that leaders and managers have over the behavior and decisions of subordinates. True or False?

Answer 18

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

Question 19

Name one out the four organizational culture types:

Answer 19

• 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

Question 20

A function of ability and motivation is job performance. True or false?

Answer 20

True

Question 21

An effective leader is one who does well for the stakeholders of the corporation. True or false?

Answer 21

True. Effective leaders are good at getting followers to common goals effectively and efficiently

Question 22

An individual’s hierarchy of needs have no influence on motivation and ethical behavior. True or False?

Answer 22

False. An individual’s hierarchy of needs may influence motivation and ethical behavior. Relatedness needs and Growth needs may influence behavior.

Question 23

The five power bases are:

Answer 23

• 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

Question 24

Define motivation

Answer 24

A force within the individual that focuses behavior toward achieving a goal.

Question 25

Decision making authority is concentrated in the hands of office managers under a Centralized Organizational Structure. True or false?

Answer 25

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

Question 26

What is the difference between relatedness and growth?

Answer 26

-Relatedness needs: Satisfied by social and interpersonal relationships -Growth needs: Satisfied by creative or productive activities

Question 27

Decision making authority is delegated as far down the chain of command as possible is considered a Centralized Organizational Structure.

Answer 27

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

Question 28

Define group norms

Answer 28

Standards of behavior that groups expect of members. Define acceptable/unacceptable behavior within the group

Question 29

See chart for Variation in Employee Conduct

Answer 29

see slide 27

Question 30

Difference between formal and informal groups in corporate structure and culture.

Answer 30

Formal groups: Committees, work groups, and teams Informal groups: The grapevine

Question 31

See chart for Examples of Centralized and Decentralized Corporate Cultures

Answer 31

Slide 25

Question 32

Congruence between individual and organizational ethics—increases potential for making ethical decisions. True or false?

Answer 32

True

Question 33

See chart for difference in organizational types.

Answer 33

Slide 23

Question 34

True or False? Management’s sense of an organizational culture may differ from that guiding employees

Answer 34

True, and if a firm’s culture encourages/rewards/does not monitor unethical behavior, employees may act unethically

Question 35

Questions to ask for Whistle-Blowing, which is protected under Sarbanes Oxley

Answer 35

Question 36

A centralized organizational structure is best for which type of organizations?

Answer 36

• That make high-risk decisions
• Whose lower-level managers are not skilled in decision-making
• Where processes are routine

Question 37

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?

Answer 37

A: Flexible and quicker to recognize external change

D:
Units may diverge and develop different value systems, causing ethical misconduct

Question 38

The Grapevine is an example of a formal group - True or False?

Answer 38

False, it is an informal group. Formal groups are committees, work groups, and teams

Question 39

What kind of power stems from a belief that a certain person has the right to exert power over others?

Answer 39

Legitimate Power

Question 40

A characteristic of a centralized organization has low and informal rules. True or false?

Answer 40

False - Have many formal rules

Question 41

_____ power is essentially the opposite of reward power in that it penalizes actions or behavior instead of rewards it.

Answer 41

coercive

Question 42

Which of the following utilizes a legalistic approach to ethics and uses laws and regulations to create its codes and requirements?

Answer 42

compliance