MANTISSAASSIGNMENT COVERStudent NameAISHA OSENI

Student ID

Programme BBA PGSM

Module Subject:Managing Cultural Diversity within Company

Module code:MG 422

Name of Lecturer:Ewan Lee

Assignment title:Creating Ethical Culture in Organisation

Assignment Submission dateName of Group MembersExtension date agreed (Written approval from Mantissa office)Actual Late submission date

08 - 07 - 2014

Explanation for Late submission (if applicable)

Interim mark awarded

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Table of ContentTopicsPagesIntroduction3Question 1The emphasis on creating an ethical culture has become more prominentas CEOs are accused of questionable practices. What can management do to create a more ethical culture?4-6Question 2Explain how a strong culture may actually serve as a liability to an organizationDiscussion of how a strong culture could lead to breaches in ethics. Use the Enron case to guide your essay7-9Conclusion10References11

INTRODUCTIONEthics refers to a prescribed or accepted code of conduct. Ethical issues are a set of moral values that need to be addressed while carrying out business. Businesses operate in a society that is structured around moral values. Therefore, when conducting its operations, a business has certain responsibilities which are to relate the moral standing of the organisation to the society. In order to survive, a business needs to maintain its moral standard.

Question 1 The emphasis on creating an ethical culture has become more prominent as large corporations and their CEOs are accused of questionable practices. What can management do to create a more ethical culture?Questionable business practice are unethical or unacceptable behaviour in the internal or external environment of the business organisation. They are basically behaviour outside the company's code of conduct.Ethical organisations can said to be organisation comprises of leaders with role model integrity, open and honest communication, an environment where employees verbalize wrong doing and a pride in high ethical standards. Despite the evidence that it is culture that counts leaders usually try to build ethical cultures by putting the emphasis on compliance, procedures, rules and regulations.(Robbins, 2009). The question is what can management do to create an ethical organisational culture? Here are the essentials: Ethical Leader: An organisation can never be ethical unless its bosses role model ethical behaviour and set the standards. They have to be clear about their values and demonstrate them in actions as well as words. Employees look to the behaviour of top management as a model of whats acceptable behaviour in the workplace. When senior management is observed by subordinates to take the ethical high road, it send a positive message for all employees (Robbins, 2009).Concentrating on The Right Thing: For an ethical culture to prevail, employees also need to feel responsible and accountable for their actions. In the Ethics in the Workplace survey , 70% of respondents believed that it is important that employees feel responsible for and committed to ethical practice. However only just over 40% believed that employees in their organisations actually did feel responsible. Without a sense of personal accountability people can blame their boss, the organisation or someone else. Creating an environment where people are expected to stand up for what they believe is right and take responsibility is crucial. Without it there can be no ethical culture as small and large daily wrongdoings will go unchecked. It is the regular employees who know what is going on. Bad things are hidden from management so organisations need to create a strong culture of speaking up and standing up for what is right (Robbins, 2009). Ethical Training Courses: It can be difficult to spot an ethical situation in the first place, let alone knowing the best way to tackle it. All employees need to have the knowledge and skills to identify and tackle ethical situations as well as the permission to raise concerns when they have them. Running mandatory ethics training for everyone in the company signals that ethics is a high priority. By setting up seminars, workshops, and similar ethical training programs. Use these training sessions to reinforce the organizations standards of conduct, to clarify what practices are and are not permissible, and to address possible ethical dilemmas (Clark, 2003).Honour Ethical Acts: Compensating employees for doing the right thing and challenge them when they do the wrong thing. It can take a lot of courage to raise concerns about the actions of colleagues. Employees need to be encouraged to do so by being rewarded in the form of appreciation from management including a positive mark in their performance appraisal. Colleagues often do not challenge wrongdoing for fear of exclusion from colleagues and management. They need to be actively encouraged to do so (Peters, 1985). Overlook Errors: Blunders can be tolerated but not when they are made repeatedly. If people are raid to make mistakes they will either always play it safe which is not always good for the business or cover any errors up for fear of punishment. One company gives an annual award for the best mistake made last year. It is the mistake from which the corporation learned most. It comes back to people feeling like they can speak up without fear of punishment. Notice that having a code of conduct is not on the list. It is not a bad thing to have one. But having one does not guarantee an ethical culture. The problems with codes of conduct are two-fold: they cannot possibly cover all situations and eventualities and usually ethical issues are not as simple as saying this is the right answer. Certainly you can cover basic rules and standards in a code of conduct but there is no substitute for running training courses to help people to understand how to identify an ethical issue and how to go about making decisions to what to do. The conversations that take place in such workshops will take you much further towards developing an ethical culture than the best code of conduct in the world will. (Peters, 1985). Provide Protective System: The organization needs to provide formal mechanisms so that employees can discuss ethical dilemmas and report unethical behaviour without fear of chastise. This might include creation of ethical counsellors, ombudsmen, or ethical officers. It can also be seen as a way of encouraging whistle blowers in the organisation, the more the protective measure, more report on unethical behaviours will be publicised (Peters, 1985).

QUESTION 2Organisational culture explain the way things are done in an organisation, in terms of the values, behaviours and assumptions which dictate the way people approach their work. Organisational culture is deeply rooted and is different from one environment to another. Strong Culture affects performance, profit and even survival. The culture tells people how they should behave and interact, what they should strive for, how they should communicate, how decisions are made and how much independence they can enjoy within the company. Culture is a double-edged sword, though. When its negative, culture saps a small business and its people. Here are some other situations where a strong culture may be a barrier to action (Albert, 2006).Barriers to change:Culture is a liability when the shared values are not in concurrence with those that will promote the organizations efficiency. This is mostly likely to occur when an organizations is dynamic. When an environment is undergoing rapid change, an organizations entrenched culture may no longer be appropriate. So stability of behaviour is an asset to an organization when it faces a stable environment (Albert, 2006).Barriers to diversity:Hiring new employee who, because of race, age, generation, disability, or other differences, are not like the majority of the organizations members create a paradox. Management wants new employee to accept the organizations core culture values. Otherwise , these employee are unlikely to fit in or be accepted. But at same time, management wants to openly acknowledge and demonstrate support for the differences that these employee bring support to the workplace (Albert, 2006).

Barriers to acquisitions and Mergers:Cultural compatibility has become the primary concern. While favourable financial statement or product line may be the initial attraction of an acquisition candidate, whether the acquisition actually works seem to have more to do with how well the two organizations culture match up.

How a Strong Culture Lead to Breach in Ethics at EnronAn organisation that lack culture emphasize the importance of integrity, honesty, and trust, compulsory ethics training programs are often destined to fail. Therefore, creating such a culture is essential to keep away from the collapse of organizations such as Enron (Sim, 2003). Some of the factors affecting ethical culture creation, leadership may be the most influential. Leaders, by representing high levels of sincerity and integrity in their actions, can model the behaviours that are demanded in an organization. If their actions contradict their words, establishing a culture of ethics will be extremely difficult. As an example, Kenneth Lay, which was one of the key leaders and organizers of the criminal activity and massive fraud that lead to Enrons bankruptcy, Lay maintains his innocence and lack of knowledge of what was happening. He blames virtually all of the criminal activities on Fastow. However, Sherron Watkins, the key Enron whistleblower, maintains that she can provide examples of Lays questionable decisions and actions. Leaders also have a role in creating a culture of ethics, because they establish the reward systems being used in a company. There is a relationship between setting very difficult goals for employees and unethical behaviour. When leaders create an extremely performance oriented culture where only results matter and there is no tolerance for missing ones targets, the culture may start rewarding unethical behaviours. Enron is a brilliant example of this act where the leaders do not care about how the target is met, they only care about the result which will indirectly encourage questionable payments or unethical behaviours because employees want to keep their job. Integrity was not a trait frequently exhibited by many of the executive leaders within the culture at Enron. Jeffrey Skilling, for example, was a supremely confident, intelligent, and determined leader. His ability to provide a vision for the company was, by many accounts, amazing and inspiring. Skillings leadership style was one that exemplified and encouraged creativity and risk-taking, especially as it related to the maximization of profit and Enrons share value (Fowler, 2003).

In the case of Skillings leadership style, however, the maximization of profit was aggressively taken to such an extreme that the leadership trait of integrity became a non-factor within the culture at Enron. This lack of integrity was a serious flaw within the organizational structure and culture of the company (Fowler, 2003).

COCNLUSIONTo curb unethical behaviour in organisational environment, management need to build or put all crucial mechanism in place which will propel transparency and accountability in employees dealing either internal or external jurisdiction of the organisation.

REFERENCESAlbert, Terry, and Ingulli., (2006). Elaine, Law & Ethics in the Business Environment, 5th edition, Mason, OH: Thomson Learning.

Clark, Margaret M.,JD.,SPHR, "Corporate Ethics Programs Make a Difference, but not the only difference", HR Magazine, July 1, 2003, page 36.Driscoll, Dawn M., Hoffman W.,(2000). Ethics Matters: How to Implement Values-Driven Management. Waltham, MA: Bently College Center for Business Ethics.

Fowler T., (2002). The pride and the fall of Enron. Houston Chronicle,http://www.chron.com/cs/CDA/story.hts/special/enron/1624822, (Accessed June 25, 2014).

Robbins P., and Judge, T., (2009). Organizational behaviour (13th ed.). Upper Saddle River, NJ: Pearson Education, Inc.

Sim R., and Brinkmann, J., (2003). Enron ethics (or: Culture matters more than codes).Journal of Business Ethics, 45(3), 243-256.

Peters J., and Austin N. ,(1985), Passion for Excellence: The Leadership difference. New York: Ballantine.

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