09

E K
WE

BUS304:
Leadership and Change
Management
Leadership Ethics and Social Responsibility
Lecturer: Dr. Fazle Rabbi;
Email: Fazle.Rabbi@cihe.edu.au
Unit Coordinator: Dr. Mahfuz Ashraf
Email: mahfuz.ashraf@cihe.edu.au

1
Learning Outcomes

1) Explain the power of culture to an organization’s effectiveness, both

internally and externally.
2) Describe the characteristics of low- and high-performing cultures.
3) Distinguish between symbolic and substantive leadership actions for
shaping organizational culture.
4) Identify and briefly describe the four types of culture commonly found in
organizations.
5) Describe Hofstede’s theory of National Culture Identities.
6) Identify organizational practices that do foster an ethical work
environment.
7) Explain how authentic leadership has its roots in moral and ethical
theory of leadership.
8) Explain the benefits of embracing diversity.
9) What leadership actions can support and sustain a pro-diversity culture?
What Is Organizational Culture?

• An organization’s culture is manifested in several

ways.
• Organizational culture gives identity to an
organization.
• Culture is the aggregate of beliefs, norms, attitudes,
values, assumptions, and ways of doing things that is
shared by members of an organization and taught to
new members.
Video: What is Organizational Culture?
Culture Creation and Sustainability

• Culture is created by design or by default.

• By design:
• A new leader can impose a new culture.
• By default:
• Culture happens as a slowly evolving process.
• A culture is sustained with each successive generation of leaders
and followers.
• Through stories, artifacts, rituals, slogans, symbols, and special
ceremonies.
The Power of Culture

Culture serves two important functions:

(1) it creates internal unity, and (2) it helps the
organization adapt to changes in its environment.
Internal unity External adaptation
• Culture defines a normative order • Culture determines how the
that provides consistent organization responds to
behavior. changes.
• The right culture can make • The right culture ensures an
employees feel like valued organization responds quickly.
participants. • For optimum performance, there
• They become self-motivated. has to be a strategy-culture fit.
• Resulting in a unified workforce.
• Full of creativity and innovation.
Strong versus Weak Cultures

• Organizational culture may influence performance outcomes.

• A unique corporate culture can be a competitive advantage.
• The strength of any culture depends on the degree to which
norms and practices are widely shared and strongly held
throughout the organization.
Strong versus Weak Culture

Strong Symbolizes a complete

agreement or shared

Culture mind-set on key values

and norms, with leaders
playing a key role.

Weak Symbolizes a lack of

agreement or

Culture shared mind-set on

key values and
norms.
Characteristics of Weak (Low) Performing Cultures

Weak cultures are generally associated with

low performance.

There is a low degree of fit between strategy

and an organization’s culture.
Characteristics of Strong (High) Performing Cultures

Strong cultures are generally associated with

high performance.

There is a higher degree of fit between

strategy and an organization’s culture.
The Leader’s Role in
Influencing Culture

• Leaders use different tools for changing, modifying, or

sustaining culture.
• Substantive actions are explicit and highly visible and indicative of
management’s commitment to a new way of doing things.
• Symbolic actions are valuable for the signals they send about the kinds
of behavior and expectations leaders wish to encourage.
Leadership Actions for Shaping Culture
Types of Culture

• There is no one best organizational culture.

• The focus here is on four culture types:
• cooperative, adaptive, competitive and bureaucratic.
• They are not mutually exclusive.
• An organization’s culture may reveal characteristics of
one or more of these types.
• However, high-performing organizations with
strong cohesive cultures tend to lean more toward
one particular culture type.
 Types of Culture
Cooperative Culture
• Represents a leadership belief in strong, mutually reinforcing exchanges
and linkages between employees and departments.

Adaptive Culture
• Represents a leadership belief in active monitoring of the external
environment for emerging opportunities and threats and adapting to them.

Competitive Culture
• Represents a leadership mind-set that encourages and values a highly
competitive work environment.

Bureaucratic Culture
• Represents a leadership mind-set that values order, stability, status, and
efficiency.
 Discussion Question

• Describe some of the practices, policies, and norms that you would
expect to find in an organization that prides itself on building a
culture of respect and trust.
National Culture Identities – Hofstede’s Value Dimensions

• On a national level, there are unique cultural identities

associated with different countries.
• Geert Hofstede developed five value dimensions that distinguish
a nation’s culture from other nations.
• Each dimension contains two opposing values on opposite ends
of a continuum.
Hofstede’s Value Dimensions for Understanding National
Cultural Differences
Video: Hofstede - Cultural Dimensions
Individualistic or Collectivistic Cultures

• Individualism is a psychological state

in which people see themselves first
as individuals and believe their own
interest and values are primary.
• Collectivism is the state of mind
wherein the values and goals of the
group – whether extended family,
ethnic group, company, or community
– are primary.
High- or Low-Uncertainty-Avoidance Cultures

• High-uncertainty-avoidance culture
has a majority of people who do not
tolerate risk, avoid the unknown, and
are comfortable when the future is
relatively predictable and certain.
• Low-uncertainty-avoidance culture
has a majority of people who are
comfortable with and accepting of the
unknown, and tolerate risk and
unpredictability.
High- or Low-Power-Distance Culture

• In a high-power-distance culture,
leaders and followers rarely interact
as equals.
• In a low-power-distance culture,
leaders and their followers interact on
several levels as equals.
Long- or Short-Term Orientation

• People with a long-term orientation

have a future-oriented view of life
and thus are thrifty (saving for the
future) and persistent in achieving
goals.
• A short-term orientation derives from
values that express a concern for
maintaining personal happiness and
for living for the present.
Masculinity or Femininity Cultures

• Masculinity describes a culture that

emphasizes assertiveness and a
competitive drive for money and
material objects.
• Femininity describes a culture that
emphasizes developing and nurturing
personal relationships and a high
quality of life.
Implications for Leadership

• In the academic community:

• There is greater recognition that future leaders need diversity
competencies to leverage a diverse workforce.
• At the organizational level:
• More and more organizations are relying on leaders with international
experience to lead a multicultural workforce and compete in a global
marketplace.
Organizational Ethics

• Ethics are the standards of right and wrong that influence

behavior.
• Here, the focus is on the role of leadership in creating an ethical
work environment.
• Whose absence can lead to severe consequences for the for
organization.
Fostering an Ethical Work Environment

• Some of the tools available include:

• Code of Ethics.
• Must be supported by the corporate culture.
• Ethics Committees.
• An ethics ombudsperson is a single person entrusted with the responsibility of acting
as the organization’s conscience.
• Training and Education.
• Aligns member behaviors with the organization’s values.
• Disclosure Mechanisms.
• Whistle blowing is employee disclosure of illegal or unethical practices on the part of
the organization.
Authentic Leadership

Personality profile of the authentic leader How authentic leaders influence follower
• Holds themselves to a higher standard. behavior and attitudes

• Has an introspective quality. • Emphasize transparency.

• Driven by a strong value system. • Increase follower organizational citizenship.

• Character provides a moral compass. • Increase job satisfaction and retention.

• Followers know what is expected.
• Courage allows them to speak out to right
wrongs, admit and own up to mistakes. • There are high levels of identification with
the leader.
Diversity Leadership

• Diversity is the inclusion of all groups at all levels in an

organization.
• The changing work place.
• Demographic changes account for the most significant increase in
workforce diversity.
• Passage of the ADA broadens that diversity.
• Another demographic trend is the age and gender mix.
 Discussion Question

• Describe the different generations that make up what some people

are now referring to as “generational diversity” and identify their
unique characteristics.
• What are the implications of generational diversity on effective leadership?
Benefits of Embracing Diversity

• Some of the economic benefits of diversity:

• Can offer a company a marketing advantage.
• Embracing diversity allows companies to:
• Recruit from a larger pool,
• Train and retain superior performers, and
• Maximize the benefits of a diverse workforce.
• Diversity may lower costs.
• Creates a broader base for creative problem solving.
• Diverse teams often outperform non-diverse teams.
 Discussion Question

• Despite the benefits of diversity, some have described it as a

“double-edged sword”.
• Explain why.
Creating a Pro-Diversity Organizational Culture

• The best companies look beyond diversity compliance to

diversity institutionalization.
• Saying you have a pro-diversity culture and being a diversified
organization are two different things.
• Diversity proponents emphasize the importance of executive
leadership and organization-wide participation.
 Discussion Question

• What is the difference between diversity compliance and diversity

institutionalization?
Factors That Support and Sustain a
Pro-Diversity Culture

Ethnocentrism is the belief that one’s own group or subculture is

naturally superior to other groups and cultures.

The glass ceiling is defined as an invisible barrier that separates

women and minorities from top leadership positions.
Video: Ethnocentric Orientation in Business
Video: Glass Ceiling in Business
The Effects of Globalization on Diversity Leadership

• Corporations are becoming more global and hence more

ethnically diverse.
• Global companies must learn to deal with diverse, cross-cultural
stakeholders.
• Learning to deal effectively with partners from different cultures
will be critical.
• Multinational companies are recruiting leaders with multicultural
experiences.
 Discussion Question

• In your opinion, what would be some strategies for developing a

diversity sensitive orientation (DSO)?
 NEXT WEEK:
Leading Teams