155971624
Corporate Ethical Culture: Review of Literature and Introducing PP Model☆
Abstract Companies can be identified as ethical or unethical companies based on their ethical culture. The corporate culture suggests that organizations have identifiable cultures such as ethical culture. Corporate ethical culture is the shared beliefs about ethics of an organization's members. Although corporate ethical culture is an important concept in organizational-individuals based studies in business, management and accounting, it does not have even an accepted and unified definition. The purpose of this paper is to find out how corporate culture and especially corporate ethical culture has been studied by reviewing how authors defined and studied corporate ethical culture. Two questions are guided this article: 1) How is corporate ethical culture defined by prior researchers? 2) What are the purposes for studying corporate ethical culture? This paper also presents different models of corporate ethical culture developed by prior researchers to find out what is the current position of corporate ethical culture in the literature.
152637466
Effective Reward and Incentive Scheme for Effective Organizations
Effective reward and incentive scheme has become a tool for organizational effectiveness in the 21 st century.  Effective reward and incentive scheme can benefit many organizations if managed properly. In this era of globalization there is need for effective reward and incentive scheme in order to enable organizations respond quickly to changes in the environment. The paper reviews literature on the effect of effective reward and incentive scheme on organizational performance. The paper concludes that the success of organizations to a very large extent depends on how effective their reward and incentive schemes are. The paper recommends that managers should put in place an effective reward and incentive scheme that sufficiently motivates employees as this could enhance their productivity, responsiveness and commitment to the achievement of the organizational goals.. Keywords: Effective reward scheme, Effective incentive scheme Organizational performance, Employee involvement.
153423721
Enron Ethics (Or: Culture Matters More than Codes)
This paper describes and discusses the Enron Corporation debacle. The paper presents the business ethics background and leadership mechanisms affecting Enron's collapse and eventual bankruptcy. Through a systematic analysis of the organizational culture at Enron (following Schein's frame of reference) the paper demonstrates how the company's culture had profound effects on the ethics of its employees.
143584528
Understanding organizational culture
The Concept of Organizational Culture Organizational Culture as Metaphor and Metaphors for Culture Organizational Culture and Identity Organizational Culture and Performance Organizational Culture, Strategy and Marketing Organizational Culture and Leadership Work and Multiple Levels of Culture Ambiguity of Culture Culture as Constraint: An Emancipatory Approach Cultural Change Conclusions
146691572
Classics of Organization Theory
1. CLASSICAL ORGANIZATION THEORY. Socrates Discovers Generic Management, Xenophon (1869). Of the Division of Labour, Adam Smith (1776). Superintendent's Report, Daniel C. McCallum (1856). The Engineer as Economist, Henry R. Towne (1886). General Principles of Management, Henri Fayol (1916). The Principles of Scientic Management, Frederick Winslow Taylor (1916). Bureaucracy, Max Weber (1922). Notes on the Theory of Organization, Luther Gulick (1937). 2. NEOCLASSICAL ORGANIZATION THEORY. The Economy of Incentives, Chester I. Barnard (1938). Bureaucratic Structure and Personality, Robert K. Merton (1957). The Proverbs of Administration, Herbert A. Simon (1946). Foundations of the Theory of Organization, Philip Selznick (1948). A Behavioral Theory of Organizational Objectives, Richard M. Cyert and James G. March (1959). 3. HUMAN RESOURCE THEORY, OR THE ORGANIZATIONAL BEHAVIOR PERSPECTIVE. The Giving of Orders, Mary Parker Follett (1926). The Hawthorne Experiments, Fritz J. Roethlisberger (1941). A Theory of Human Motivation, Abraham H. Maslow (1943). The Human Side of Enterprise, Douglas Murray McGregor (1957). Groupthink: The Desperate Drive for Consensus at Any Cost, Irving L. Janis (1971). 4. "MODERN" STRUCTURAL ORGANIZATION THEORY. Mechanistic and Organic Systems, Tom Burns and G. M. Stalker (1961). The Concept of Formal Organization, Peter M. Blau and W. Richard Scott (1962). Organizational Choice: Product versus Function, Arthur H. Walker and Jay W. Lorsch (1968). The Five Basic Parts of the Organization, Henry Mintzberg (1979). In Praise of Hierarchy, Elliott Jaques (1990). Technology as a Contingency Factor, Richard M. Burton and Borge Obel (1998). 5. ORGANIZATIONAL ECONOMICS THEORY. Markets and Hierarchies, Oliver E. Williamson (1975). Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure, Michael C. Jensen and William H. Meckling (1976). Learning from Organizational Economics, Jay B. Barney and William G. Ouchi (1986). Managing Business Transactions, Paul H. Rubin (1990). 6. POWER AND POLITICS ORGANIZATION THEORY. Understanding the Role of Power in Decision Making, Jeffrey Pfeffer (1981). Democracy and the Iron Law of Oligarchy, Robert Michels (1915/1962). The Bases of Social Power, John R. P. French Jr. and Bertram Raven (1959). The Power of Power, James G. March (1966). Power Failure in Management Circuits, Rosabeth Moss Kanter (1979). The Power Game and the Players, Henry Mintzberg (1983). 7. ORGANIZATIONAL CULTURE THEORY. Defining Organizational Culture, Edgar H. Schein (1993). Culture and Organizational Learning, Scott D. N. Cook and Dvora Yanow (1993). Changing Organizational Cultures, Harrison M. Trice and Janice M. Beyer (1993). Organizational Culture: Pieces of the Puzzle, Joanne Martin (2002). 8. REFORM THROUGH CHANGES IN ORGANIZATIONAL CULTURE. The Z Organization, William G. Ouchi (1981). In Search of Excellence: Simultaneous Loose-Tight Properties, Thomas J. Peters and Robert H. Waterman Jr. (1982). The Fifth Discipline: A Shift of Mind, Peter M. Senge (1990). Gendering Organizational Theory, Joan Acker (1992). Creating a Government that Works Better and Costs Less: Report of the National Performance Review, Vice President Al Gore (1993). Creating the Multicultural Organization: The Challenge of Managing Diversity, Taylor Cox Jr. (2001). 9. THEORIES OF ORGANIZATIONS AND ENVIRONMENTS. Organizations and the System Concept, Daniel Katz and Robert L. Kahn (1966). Organizations in Action, James D. Thompson (1967). Institutionalized Organizations: Formal Structure as Myth and Ceremony, John W. Meyer and Brian Rowan (1977). External Control of Organizations: A Resource Dependence Perspective, Jeffery Pfeffer and Gerald Salancik (1978). Demography of Corporations and Industries, Glenn R. Carroll and Michael T. Hannan (2000).
167476764
Theory Z: How American Business can Meet the Japanese Challenge
The article reviews the book “Theory Z: How American Business Can Meet the Japanese Challenge,” by William Ouchi.
147565245
Corporate Cultures: The Rites and Rituals of Corporate Life.
For junior and senior managers alike, Deal and Kennedy offer explicit guidelines for diagnosing the state of one's own corporate culture and for using the power of culture to wield significant influence on how business gets done.. Business experts everywhere have been finding that corporations run not only on numbers, but on culture. In this revised and updated 2000 edition of Corporate Cultures , organization consultants Terrence Deal and Allan Kennedy probe the conference rooms and corridors of corporate America to discover the key to business excellence. They find that the health of the bottom line is not ultimately guaranteed by attention to the rational aspects of managing-financial planning, personnel policies, cost controls, and the like. What's more important to long-term prosperity is the company's culture-the inner values, rites, rituals, and heroes-that strongly influence its success, from top management to the secretarial pool. For junior and senior managers alike, Deal and Kennedy offer explicit guidelines for diagnosing the state of one's own corporate culture and for using the power of culture to wield significant influence on how business gets done.
32671211
Corporate Ethical Values and Organizational Commitment in Marketing
The authors explore corporate ethical values and organizational commitment in marketing. They (1) discuss corporate ethical values as a component of corporate culture, (2) review the literature on organizational commitment, (3) hypothesize a positive relationship between corporate ethical values and organizational commitment, and (4) empirically test the relationship with data from more than 1200 professional marketers, representing subsamples of marketing managers, marketing researchers, and advertising agency managers. The study results provide strong evidence of a positive association between corporate ethical values and organizational commitment. Given previous research demonstrating a strong link between commitment and specific organizational benefits, corporate ethics may be not only an important societal issue, but a key organizational issue as well.
141971676
The Effect of Organizational Culture and Ethical Orientation on Accountants' Ethical Judgments
This paper examines the relationship between organizational ethical culture in two large international CPA firms, auditors' personal values and the ethical orientation that those values dictate, and judgments in ethical dilemmas typical of those that accountants face. Using an experimental task consisting of multiple judgments designed to vary in "moral intensity" (Jones, 1991), and unique as well as tried-and-true approaches to variable measurements, this study examined the judgments of more than three hundred participants in our study. ANCOVA and path analysis results indicate that: (1) Ethical judgments in situations of high moral intensity are affected by personal values and by environmental variables, such as the professional code of conduct (direct and indirect effects) and previous ethics instruction (direct effect only). (2) Corporate ethical culture, and a relatively strong firm rules-orientation, affect auditors' idealism but not relativism, and therefore indirectly affect ethical judgments. Jones' (1991) moral intensity argument is supported: differences in the characteristics of specific judgment tasks apparently result in different decision processes.
51990960
Organizational Ethical Culture: Real or Imagined?
Can companies be identified by how ethical they are? The concept of organizational culture suggests that organizations have identifiable cultures of which ethics are a part. By definition culture is the shared beliefs of an organization's members, hence the ethical culture of an organization would be reflected in the beliefs about the ethics of an organization which are shared by its members. Thus, it is logical to conceptualize the ethics of different organizations as existing on a continuum bounded at one end by unethical companies and at the other, highly ethical companies. This research assesses the efficacy of the existing measure of organizational ethical culture for identifying the ethical status of organizations on a this continuum. Results suggest that the Ethical Culture Questionnaire designed by Trevino, Butterfield and McCabe (1995) measures individual perceptions regarding organizational ethics but does not identify shared beliefs about an organizationÕs ethical culture.
154268487
An institutional perspective of the Sarbanes‐Oxley Act
Purpose – In the light of recent financial scandals, such as Enron, Global Crossing and WorldCom, the purpose of this paper is to use an institutional theory perspective to examine the interactions between the accounting profession, the SEC and the Congress.Design/methodology/approach – The paper takes an institutional perspective of the Sarbanes‐Oxley Act and reviews how historical events have led to various institutional developments, which, in turn, have resulted in accountancy changes.Findings – The end result is posited to be an outcome that enhances the legitimacy of the SEC to regulate the accounting profession. At the same time, the accounting profession will emerge from the events able to proclaim that it is improved. Finally, politicians will garner favor from the voters since they have acted to protect the public from financial frauds.Originality/value – Describes how the relationship among the three parties is in reality a highly predictable set of behaviors that will allow all of the particip...
19012268
Developing and sustaining an ethical corporate culture: The core elements
Of all the issues boards of directors, executives, and managers face, one could argue that unethical corporate activity is one of the most significant in terms of its potential negative impact and also one of the most difficult to properly address. This article argues that three key elements must exist if illegal or unethical activity within and on behalf of organizations is to be minimized through developing and sustaining an ethical corporate culture. The three elements include (1) the existence of a set of core ethical values infused throughout the organization in its policies, processes, and practices; (2) the establishment of a formal ethics program, including a code of ethics, ethics training, an ethics hotline, and an ethics officer; and (3) the continuous presence of ethical leadership—that is, an appropriate ‘tone at the top’ as reflected by the board of directors, senior executives, and managers. While each of these three elements is distinct, they also overlap, relate to, and reinforce each other. This article discusses each of the three key elements necessary to develop and maintain an ethical corporate culture.
154454769
Characteristics of Ethical Business Cultures
The purpose of this study was to identify general characteristics attributed to ethical business cultures by executives from a variety of industries. Our research identified five clusters of characteristics: Mission- and Values-Driven, Stakeholder Balance, Leadership Effectiveness, Process Integrity, and Long-term Perspective. We propose that these characteristics be used as a foundation of a comprehensive model that can be engaged to influence operational practices in creating and sustaining an ethical business culture.
151135022
Facing Ethical Dilemmas in the Workplace: A Qualitative Study of HR Managers' Perceptions of the Influences on Their Behavior and the Implications for Building an Ethical Culture in Organizations.
This study examined the perceptions of human resource managers who had faced ethical dilemmas in the workplace, to gain an understanding of how they felt their life experiences shaped their values in making ethical decisions. In order to understand their perspectives, in-depth interviews were conducted that helped frame the issue. The experiences of ten human resource managers who believed they chose a right course of action when faced with a real world situation were examined within the context of their life experiences. Each professional shared a personal story through the process of interviews that told of an ethical dilemma, and the development of the value perspectives that made up his or her ethical framework.
54067277
Ethics Programs and Ethical Culture: 
A Next Step in Unraveling Their 
Multi-Faceted Relationship
One of the main objectives of an ethics program is to improve the ethical culture of an organization. To date, empirical research treats at least one of these concepts as a one-dimensional construct. This paper demonstrates that by conceptualizing both constructs as multi-dimensional, a more in-depth understanding of the relationship between the two concepts can be achieved. Through the employment of the Corporate Ethical Virtues Model, eight dimensions of ethical culture are distinguished. Nine components of an ethics program are identified. To assess the relationship between ethics programs and ethical culture, a survey was conducted of 4,056 members of the U.S. working population. The results show that the relationships between the components of an ethics program and the dimensions of ethical culture differ in strength, nature, and significance. Implications for research and practice are discussed.
167921552
Does A Tone At The Top That Fosters Ethical Decisions Impact Financial Reporting Decisions: An Experimental Analysis
The accounting profession believes the reliability of financial reporting is affected by an organizations internal control, the foundation of which relates to the tone at the top of an organization. Despite attempts by organizations to create ethical environments, financial accountants are sometimes confronted with ethical dilemmas that may affect financial reporting decisions. An experiment that consisted of six different financial reporting scenarios was used to examine the influence of the tone at the top on financial reporting decisions. Subjects were assigned to three different organizational categories in terms of tone at the top a tone that fosters ethical behavior, a tone that does not foster ethical behavior, and a neutral tone. The results support the position that tone at the top does relate to financial reporting decisions.
167169132
The Effect of Punishment on Ethical Behavior When Personal Gain Is Involved
ABSTRACT With the recent onslaught of accounting frauds, the nature of unethical decision making in organizations has shifted from the lack of sensitivity for the ethical aspects of decisions to one where executives have used their positional power for personal gain. Congress reacted with stiffer laws and punishments, raising the question of the role of punishment in deterring corporate crime. This study investigates the effect of four variables, valence of the outcome, probability of getting caught, severity of punishment, and moral values, on ethical decision making. A survey with six ethical scenarios was administered in three different classes resulting in 115 completed surveys. Students were asked to select the scenario option they would actually do in the situation and to rate how significant the four variables were in their decision. The responses for the six scenarios were combined and analyzed using linear regression. Three of the four variables were significant in explaining the variance in selection of the ethical option. Moral values explained the most variance with severity of punishment being second and valence of the outcome third. This study contributes to the ethics literature by demonstrating the importance of punishment in supporting a person's choice of the ethical option. INTRODUCTION The corporate problems with unethical decision making have changed in nature over the years from issues related to product safety, environmental impact, and misleading marketing to more obvious uses of corporate power for personal gain. In the last six months we have seen two CEOs prosecuted and sentenced to jail terms for misuse of corporate funds, misleading investors, and misrepresenting financial results. Prior to these prosecutions, examples of unethical decision making at Enron, Tyco, WorldCom, and others have been attributed to a climate where executives have come to believe they are above the law (Bianco, Symonds, & Byrnes, 2002). In response to the continuing corporate scandals, Congress passed the Sarbanes-Oxley Act, which was signed by President Bush in the summer of 1992. This act, along with the US Sentencing Guideline Amendments and the Department of Justice Principles of Federal Prosecution of Business Organizations, was passed to foster greater financial accuracy and curb corporate malfeasance. These actions demonstrate the first attempt to govern corporate conduct by imposing criminal liability directly on executives for investor fraud. These steps by the government are based on the belief that greater apprehension, prosecution, and punishment will deter these acts of unethical behavior (Imperato, 2005). Much of the previous research on ethical behavior has taken the perspective of increasing cognitive moral development, raising sensitivity to ethical issues, and improving moral judgment; but much less attention has been paid to the impact that punishment and prosecution has on moral motivation. LITERATURE REVIEW The majority of the early research on ethics was based on Kohlberg' s (1969) model of Cognitive Moral Development, which described three levels of moral development: pre-conventional, conventional, and principled. These levels correspond to the basis people use to distinguish right from wrong. The Defining Issues Test (DIT) is the instrument most commonly used to measure the level of moral development of research subjects (Abdolmohammadi & Sultan, 2002). Rest (1986, 1994), in his extensive review of the literature on ethical development, realized that researchers were looking at different aspects of the decision-making process. He proposed a four-component model that includes moral sensitivity, moral judgment, moral motivation, and moral character. Moral sensitivity is the awareness of how one' s actions affect other people and the realization that the cause-consequence chain of events that one's actions initiate has moral implications. …
153533795
The Relationship Between Demographic Variables and Ethical Decision Making of Trainee Accountants
This study examines the impact of a range of demographic variables (gender, firm size, degree type, level of education, length of experience, age and work area) on ethical intentions, ethical judgement, perceived ethical intensity and perceived ethical culture. Cases containing information on four types of time pressure-induced auditor dysfunctional behaviours were distributed to trainee accountants attending a professional education programme of the Institute of Chartered Accountants in Ireland. The findings suggest that gender, firm size and degree type had a significant association with ethical decision making. These variables also had a significant association with perceived ethical intensity as did work area. Gender, firm size, level of education and length of experience showed evidence of a significant association with perceived ethical culture. Implications of the findings and areas for further research are discussed.