Business ethics – an organizational ”must-have”

Nowadays, the economic responsibility of business stands for a consistent challenge and pressure due to global competitiveness. Still, when fulfilling their economic responsibilities, businesses should consider simultaneously ethical responsibilities. These responsibilities consist of practices, behaviors, activities, policies that are not codified into laws, but are expected (in a positive sense) or prohibited (in a negative sense) by societal members. Also, ethical responsibilities cover a series of standards or expectations of behavior that reveal a constructive interest for what clients, employees, shareholders, the community, and other stakeholders perceive as right or fair.

At this level, consultant John Dalla Costa (cited in Carroll, 2000, p. 36) underlined in his work The Ethical Imperative that ethics is becoming step by step the central business issue of our time, afflicting corporate profits and credibility, as well as personal security and the sustainability of a global economy. A business manager has responsibilities for their workers, their customers, their shareholders, their competitors, laws, society and environment. In order to perform these duties, business people must make decisions within a moral framework and consequently the core of business ethics is to establish what one ought to be doing, when one is doing business.

An interesting consideration in this respect is brought to light by Solomon (1993, p. 36) who states that ethics in business practice does not necessarily come from the business schools that managers attend, but from some character traits – “virtues” that are acquired through socialization, but also due to the environment and culture organization in which the individual is formed as manager. The author mocks economics school graduates that become Wall Street financial officers whose activity is defined as “making money”. Once employed, young people will practice all the tricks learned in school and they will work to impress a manager, taking behavioral patterns valued in the company and then climb the ladder of the organization upon receipt of increasing salaries or bonuses. The author calls this phenomenon “abstract greed”. It is centered on money, around the desire to simply get rich, not to get anything related to it or to prove that you possess expertise, but just for the sake of being rich. It is the most important good feeling, more important than personal dignity or happiness.

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Common bond versus common identity within the group matrix

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A salient theory about the formation of social groups assumes that individuals join groups driven by either strong personal connections with other members or by the interest in the group as an entity. Thus, depending on the main motivation of people, spontaneously created groups can be classified as either social or topical. This theoretical categorization is known as common identity and common bond and affirms that the two types of groups have different and well-defined features that characterize them in terms of group dynamics, patterns of interaction, subgroup structure, motivation policies, managerial intervention or moderation, individual commitment etc.

A myriad of studies reveal that groups created on common bonds and common identities may both generate strong commitments, but in different ways. For example, common bond groups may elicit higher levels of interest in the individual group members and in within-group communications while common identity groups may treat individual group members as relatively interchangeable.

At this point, the preservation of homogeneity stands for an imperative in order to maintain unity in these groups (Farzan et al., 2011). Despite the existence of many similarities, social psychological research frequently deems that these two types of groups cannot be combined with each other. It is assumed that overestimating the presence of individuals may afflict the common identity and overestimating the presence of the group as a whole may afflict common bonds (Turner, 1991; Postmes, Spears & Lea, 1998; Sassenberg, 2002).

Analyzing varied prerequisites for the influence in groups based on interpersonal bonds, most researchers have demonstrated that common-bond and common-identity groups had very different dynamics: in the former type of group, influence arises from diversity of views and disagreement, whereas in the latter type of group, influence arises from coherence and consensus (Sassenberg & Postmes, 2002).

Future research is expected to identify many other contingencies that determine whether group membership is compatible or incompatible with expressions of individuality. These aspects comprise the norms and dynamics of the group, the comparative context, the relative size of the group, and the component of individuality that is salient.

Challenges for the future leadership

Nowadays, the increase of international organizations is liable to alter the interpretative perspectives on intercultural human interaction. By creating the organizational framework of communication between different nationalities, traditions and histories, rituals and values, norms and actions etc, the international actor will foster a symbolic domain where different cultures interact and interfere on a daily basis. Although it has been proven in time that similarity has a positive impact on social interaction and cooperation (Berscheid and Walster, 1978; Byrne, 1971, 1992; Byrne and Lamberth, 1971; Clore and Byrne, 1974; Morry, 2007), the future opens its gates to diversity at all levels.

As an international employee, one may face diversity continuously in her/his current collaborations – her/his co-worker, subordinate or manager may be of a different nationality, culture, religion, way of thinking and of expressing feelings and so on. Subsequently, the transformative action of individuals (nationally and culturally speaking) brings about the emergence of a specific reaction toward “the others”, a cultural disposition of overprotecting our own identity. The fear of being absorbed by another cultural model acts as a restraining factor against the others. We are proud of who we are, of our ways to think and act in the work context and meeting other styles may pose a huge pressure on our job efficiency. It is most likely that the cultural collision produces not only local disruptions, but overall consequences, at the company level.

In this respect, from Schein’s standpoint, cultural diversity within an organization cannot be approached otherwise, but through leadership-driven intervention and negotiation (Schein, 2009). This is why intercultural negotiation firmly requires an active leader who does not wait for positive outcomes to come naturally, but instead he totally assumes the corporate intercultural environment and he focuses his efforts on harmonizing the varied organizational cultures.

In other words, these efforts must become a key point on every leader’s agenda, starting from the moment when corporations make acquisitions, mergers or joint-ventures. All these facts involve different people who must integrate as well as possible in the new organizational social system as a condition for achieving their goals and the organization’s goals simultaneously. Moreover, the future leader will set himself up as a milestone and driving force of mobilizing the inner organizational cleavages toward an effective framework for negotiation.

A snapshot of ELT

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Experiential Learning Theory (ELT) has a long history and provides a pertinent model of the learning process and a multilinear model of adult development, both of which are consistent with what we know about how people learn, grow, and develop. The spiral of learning from experience described in experiential learning theory (Kolb, 1984) can help learners (e.g. employees) “learn how to learn”. By consciously following a recursive cycle of experiencing, reflecting, thinking, and acting, they can increase their learning power.

Following “the learning way” begins with embracing the idea that “I am a learner” and continues with the development of sophisticated strategies for intentional learning based on their unique talents and the different learning challenges they face (Kolb and Kolb, 2009, p. 297).

The theory is called “Experiential Learning” to emphasize the central role that experience plays in the learning process, an emphasis that distinguishes ELT from other learning theories. The term “experiential” is used therefore to differentiate ELT both from cognitive learning theories, which tend to emphasize cognition over affect, and behavioral learning theories that deny any role for subjective experience in the learning process. Experiential learning theory defines learning as „the process whereby knowledge is created through the transformation of experience. Knowledge results from the combination of grasping and transforming experience” (Kolb 1984, p. 41).

The ELT model portrays two dialectically related modes of grasping experience – Concrete Experience (CE) and Abstract Conceptualization (AC) and two dialectically related modes of transforming experience – Reflective Observation (RO) and Active Experimentation (AE) (Mainemelis, Boyatzis and Kolb, 2002, p. 5).

In grasping experience, some of us perceive new information through experiencing the concrete, tangible, felt qualities of the world, relying on our senses and immersing ourselves in concrete reality. Others tend to perceive, grasp, or take hold of new information through symbolic representation or abstract conceptualization – thinking about, analyzing, or systematically planning, rather than using sensation as a guide. Similarly, in transforming or processing experience some of us tend to carefully watch others who are involved in the experience and reflect on what happens, while others choose to jump right in and start doing things. The watchers favor reflective observation, while the doers favor active experimentation.