Prepared by Shohag

THM (6 Batch)

Chapter 3
Organizational calture, Environment, social Responsibility
and Managerial Ethics

Organizational Culture
Organizational culture is the shared values, beliefs, and behaviors that shape
how people work together in a company. It defines the “personality” of an
organization and influences how employees interact, make decisions, and
approach their work.
><
Management book Strong versus Weak Culture

1. Strong Culture:

Employees clearly understand and embrace organizational values.

High alignment between individual goals and organizational goals.

Examples: Apple, Google, and Amazon, where employees are aligned with
innovation and excellence.

Advantages: Improved loyalty, consistency, and teamwork.

Disadvantages: Resistance to change if the culture becomes rigid.

2. Weak Culture:

Lack of shared values or goals.

Employees feel disconnected and unmotivated.

Miscommunication and conflicts are common.

Example: Organizations with high employee turnover or poor leadership.

1
 Prepared by Shohag
THM (6 Batch)
><

Source of Culture
Edgar H. Schein's "Organizational Culture and Leadership" is a popular
management book that explains the concept of culture in organizations. Schein
identifies three sources of culture in an organization:

Organizational culture originates from multiple sources, including:

Founders: Founders' vision and values often shape the initial culture.

Leadership: Leaders reinforce culture through actions and decisions.

History and Traditions: Past successes and rituals contribute to the culture.

Industry Norms: External factors like industry standards influence culture.

Recruitment and Selection: Hiring people whose values align with the
organization strengthens the culture.

><

Continuity of Culture
Culture persists over time through mechanisms like:

Socialization: New employees are introduced to the organization's norms.

Rituals and Ceremonies: Regular events reinforce cultural values.

Symbols and Language: Use of logos, slogans, and stories to sustain culture.

Leadership Role: Leaders act as role models in preserving core values.

Policies and Procedures: Formal rules ensure cultural continuity.

><

2
 Prepared by Shohag
THM (6 Batch)

How Employees Learn Culture

Employees learn organizational culture through various methods:

Stories: Narratives about the organization’s past successes or failures.

Rituals and Routines: Regular practices that reflect organizational values.

Symbols: Logos, office design, or uniforms that represent cultural identity.

Language: Specific terminology or phrases unique to the organization.

Observation: Watching how leaders and peers behave in different situations.

><

Effect of Culture on Manager

Organizational culture directly influences how managers perform their roles:

Decision-Making: Managers align their choices with cultural values.

Leadership Style: Culture shapes whether managers adopt an authoritative,

democratic, or laissez-faire style.

Communication: A transparent culture fosters open communication, while a

hierarchical culture may restrict it.

Performance Management: Managers use culture-driven metrics to evaluate

employees.

Adaptability: In dynamic environments, managers must balance cultural

preservation with necessary changes.

><

3
 Prepared by Shohag
THM (6 Batch)

Ethical Culture
An ethical culture promotes moral principles and accountability across the
organization.

Characteristics of Ethical Culture:

Clear ethical policies and codes of conduct.

Leadership that models ethical behavior.

Open communication to report unethical practices.

Rewards for ethical behavior and penalties for violations.

Benefits:
Builds trust with employees, customers, and stakeholders.

Reduces the risk of legal and reputational damage.

Enhances employee morale and organizational integrity.

><

External and Internal Environment and Their Effect

Organizations operate within two types of environments that influence their
decisions and operations:

a. Internal Environment

The internal environment includes factors within the organization that affect its
performance, such as:

1. Organizational Structure: Determines roles, responsibilities, and decision-

making processes.

2. Employees: Skills, motivation, and productivity of employees shape the

organization’s success.

4
 Prepared by Shohag
THM (6 Batch)

3. Resources: Financial, physical, and technological resources impact the

organization’s capabilities.

4. Corporate Culture: Shared values, beliefs, and norms influence behavior and
decision-making.

Effects:

Positive internal factors like a strong culture and skilled employees enhance
efficiency.

Weaknesses, such as poor leadership or inadequate resources, can hinder

growth.

b. External Environment

The external environment consists of factors outside the organization,

categorized as macro and micro:

1. Microenvironment: Includes customers, competitors, suppliers, and

distributors.

2. Macroenvironment: Includes broader forces like political, economic, social,

technological, environmental, and legal (PESTEL).

Effects:

Changes in external factors like government regulations or market demand

create opportunities or threats.

For example, technological advancements may require adaptation, while

economic downturns can reduce consumer spending.
><

5
 Prepared by Shohag
THM (6 Batch)

Social Responsibility, View of social Responsibility Arguments For

and against social Responsibility

Social responsibility refers to the ethical obligation of businesses to contribute

positively to society and minimize harm.

a. Views of Social Responsibility

1. Classical View: Businesses should focus solely on maximizing profits for

shareholders, as suggested by economist Milton Friedman.

2. Socioeconomic View: Businesses have broader responsibilities, including

improving the well-being of society.

b. Arguments For Social Responsibility

1. Improves Public Image: Companies that contribute to societal well-being

build goodwill.

2. Sustainability: Ensures long-term survival by addressing environmental

concerns.

3. Attracts Talent and Investors: Ethical companies draw employees and

investors who value social impact.

4. Prevents Government Intervention: Proactively addressing social issues

reduces the need for regulation.

c. Arguments Against Social Responsibility

1. Diverts Focus from Profits: Spending on social causes may reduce

profitability.

2. Lack of Expertise: Businesses are not equipped to solve societal problems

effectively.

3. Accountability to Shareholders: Management’s primary duty is to maximize

shareholder value.

6
 Prepared by Shohag
THM (6 Batch)
4. Increased Costs: Social initiatives often involve significant costs that might
burden smaller firms.
><
3. Managerial Ethics

Managerial ethics refers to the moral principles and standards that guide
managers in their decision-making and behavior.

a. Types of Managerial Ethics

1. Individual Ethics: Personal values and beliefs of managers.

2. Organizational Ethics: Ethical policies, codes of conduct, and the

organization's culture.

3. Societal Ethics: Expectations of the broader community regarding ethical

behavior.

b. Importance of Managerial Ethics

1. Maintains Trust: Ethical behavior builds trust with stakeholders.

2. Enhances Reputation: Upholding ethics ensures a positive image.

3. Promotes Fairness: Prevents exploitation and discrimination.

4. Compliance with Laws: Reduces legal risks by adhering to regulations.

c. Ethical Decision-Making Process

1. Identify the ethical issue.

2. Gather relevant facts.

3. Consider stakeholders and potential outcomes.

4. Evaluate alternatives using ethical principles.

7
 Prepared by Shohag
THM (6 Batch)

Importance Previews Year Question

1.what is organizational culture ( most important)

= ( 1 page)

2.How Employees can more learn culture

= ( 3 page)
><

3.Identify the seven dimensions of Organizational culture (imp)

Organizational culture is typically described using the following seven

dimensions:

1. Innovation and Risk-Taking

Refers to the extent to which employees are encouraged to be innovative,
experiment, and take risks. Organizations with a strong focus on this dimension
are usually open to change and new ideas.

2. Attention to Detail
The degree to which precision, analysis, and attention to detail are expected
from employees. Some organizations emphasize meticulous work and
thoroughness.

3. Outcome Orientation
This dimension focuses on results rather than the processes used to achieve
them. Organizations with a high outcome orientation stress accomplishments
and end goals.

4. People Orientation
The extent to which management decisions consider the effects on employees.
A people-oriented culture emphasizes fairness, respect, and valuing employee
contributions.

8
 Prepared by Shohag
THM (6 Batch)
5. Team Orientation
Highlights the degree to which collaboration and teamwork are encouraged.
Organizations fostering this dimension value collective efforts over individual
achievements.

6. Aggressiveness
Refers to the competitiveness of the organization. High aggressiveness means
the organization prioritizes outperforming competitors, while a low-
aggressiveness culture values harmony and stability.

7. Stability
The extent to which the organization emphasizes maintaining the status quo
rather than encouraging growth or change. Stability-oriented organizations
value predictability and long-term planning.

><

4.How culture affects managers (imp)

= ( 3 page)

5.Difference Between strong culture and weak culture

= ( 1 page)

><

6.Describe how organizations can go green

Organizations can adopt sustainable and eco-friendly practices through various

strategies, including:

1. Adopting Renewable Energy

Transitioning to solar, wind, or other renewable energy sources for operations
reduces carbon footprints and dependence on non-renewable resources.

2. Implementing Waste Management Programs

Encouraging recycling, composting, and reducing waste generated during
operations ensures better resource utilization.

9
 Prepared by Shohag
THM (6 Batch)
3. Promoting Green Products and Services
Developing environmentally friendly products or services and encouraging
customers to choose sustainable options.

4. Energy Efficiency Initiatives

Using energy-efficient lighting, equipment, and appliances; optimizing heating,
cooling, and manufacturing processes to reduce energy consumption.

5. Encouraging Remote Work

Allowing employees to work from home reduces commuting, lowers energy
usage at office facilities, and minimizes environmental impact.

6. Sustainable Supply Chain Management

Partnering with suppliers who use sustainable practices and ensuring eco-
friendly materials in production can make the supply chain greener.

7. Raising Environmental Awareness

Educating employees and stakeholders about the importance of sustainability
through workshops, training, and internal policies fosters a green culture.

8. Green Building Initiatives

Designing or renovating office spaces to be energy-efficient and
environmentally friendly, such as through LEED-certified designs or using
sustainable materials.

9. Setting Clear Sustainability Goals

Establishing measurable green objectives, such as reducing greenhouse gas
emissions by a certain percentage, ensures accountability.

10. Investing in Technology

Leveraging innovations like AI, IoT, or energy management systems to optimize
energy use and resource allocation.

10