Ethical crises are bad for organization reputation, but they rarely have any financial consequences

Chapter 10 and 12 midterm exam in bmkt330 course (sociological management )

• Leaders who fail to institute proper systems and controls that facilitate ethical conduct share responsibility with those who conceive, execute, and knowingly benefit from corporate misdeeds
• Internal benchmarking is discouraged in most organizations because it creates competition and internal rivalries that are counterproductive
• Inspiring and motivating people with a mission or purpose is a necessary and sufficient condition for developing a learning organization
• A key function of the leaders in a learning organization is to generate an organization-wide commitment to the status quo
• People with strong self-awareness are overly critical and unrealistically optimistic and are well suited to run organizations because they will make good judgment calls
• Empathy, one of the components of emotional intelligence (EI), refers to personal proficiency in managing relationships and building networks
• Emotional intelligence (EI) is one of the components of a high intelligence quotient (IQ)
• Leaders must draw on a range of personal skills as well as organizational mechanisms to move their organizations forward in the face of barriers to change
• Behavioral barriers to change occur because of conflicts between departments, conflicts arising from power relationships, and refusal to share information
• The tendency of many individuals to invest further in decisions providing positive performance feedback is referred to as escalation
• Setting a direction is the leadership activity that involves developing a strategic vision of what the organization could become
• Three key interdependent strategic leadership activities are: designing the organization, determining its direction, and nurturing a culture dedicated to excellence and ethical behavior
• One of the factors that explained the effectiveness of ambidextrous organizational designs in the O\'Reilly and Tushman study was that the reward systems emphasized traditional unit goals
• The O'Reilly and Tushman study on ambidextrous organizational designs found that there was little support for the argument that organizational structure, management practices employed and performance of both the breakthrough initiative and the traditional business are related
• Firms that place too strong a priority on either adaptability or alignment can expect short term gains only
• One of the challenges of an ambidexterity in a firm is that it must ensure that it remains proactive in expanding or modifying its product-market scope to anticipate and satisfy market conditions
• Ambidextrous organizational designs are useful for firms that wish to create modest, incremental innovations at the same time as dramatic, breakthrough innovation. This is done by maintaining adaptability and alignment of values and coordination across organizational activities
• Managers trained in rigid hierarchies do not find it difficult to transition to participative style required for effective teamwork
• According to author Jeffrey Pfeffer, the advantages of teams are that employees control themselves, develop more creative solutions to problems, and permit the absorption of administrative tasks previously performed by specialists
• In a barrier-free organization, differences in skills, authority, and talent disappear
• Jack Welch, former CEO of GE, believes that all internal and external organizational boundaries should vanish completely
• Logitech International is an example of a company that began as a global start-up, with headquarters in both California and Switzerland and operations in both countries
• Three major contingencies that influence the chosen structure of a company are: the type of strategy that drives its foreign operations, its product diversity, and the extent to which the company is dependent on foreign sales
• Global start-ups occur after a corporation has exhausted all other possibilities for domestic growth
• A worldwide product division structure is used when global strategies require that each division be responsible for overall efficiency and performance
• Operational decision making in a large business places excessive demands on top management of the firm
• To enhance integration and control of related product market activities, the functional structure minimizes centralization
• As firms grow, owner managers often need to hire functional specialists to handle the increased information-processing burden
• In a simple structure where the owner manager makes most of the important decisions, extensive rules and regulations are used to maintain order
• The most appropriate type of organizational structure to select is dependent upon the product or service the company provides
• When a firm has international operations, choosing the most appropriate structure depends upon the extent of international expansion, the type of strategy, and the degree of market density
• A strategy of related diversification requires a need to reorganize only around product lines. This leads to a divisional structure
• The strategy and structure of a firm change as the firm increases in size, diversifies into new product markets, and limits its geographic scope
• Ethical crises are bad for organization reputation, but they rarely have any financial consequences
• Research supports that there are many potential benefits of an ethical organization, including that there is a strong and consistent relationship between ethical performance and measures of financial performance
• A compliance-based approach to ethics management combines a concern for law with an emphasis on managerial responsibility for ethical behavior
• There can be a high-integrity organization without high-integrity individuals
• In integrity-based ethics programs, organizational ethics is seen as the responsibility of the employees
• If leaders do not believe in the ethical standards that they are trying to inspire, they will not be effective as good role models
• Codes of conduct help employees from diverse backgrounds to work more effectively across cultural backgrounds
• Inappropriate reward systems may cause individuals to commit unethical acts
• The Kraft Heinz Company makes MiO Drops. This is an example of a high-tech source of innovation
• Process innovations are often associated with a low-cost leadership strategy
• Product innovations are commonly associated with a differentiation strategy
• Radical innovations are evolutionary applications of novel ideas within existing paradigms
• Proctor and Gamble has centralized 20 to 30 percent of its research efforts in a new corporate-level business creation and innovation unit. They believe that this will assist them only with developing incremental innovations that will help the overall bottom line
• Research indicates that leaders of innovative firms spend 50 percent more time on discovery activities than the leaders of less innovative firms
• The term strategic envelope refers to the scope of innovation efforts of a firm
• For innovation team members to work enthusiastically on innovation projects, it is important to separate the performance of individual team members from the performance of the innovation itself
• Focused corporate venturing permeates all parts of the organization and involves every member of the organization
• Business incubators are designed to support fledgling entrepreneurial ventures until they can operate as stand-alone businesses
• Only about 50 percent of corporate venturing efforts reach profitability within six years of their launch

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