Question

When Jim began working in the human resources department at KR Electronics, he was impressed with the number of advancement opportunities the job offered. His first task was to monitor reports that came in from employees through the company’s ethics hotline. It was a simple job, but one Jim felt would lead him to a higher position in the HR department. He spent two days learning about the company’s ethical policies and values, such as the importance of integrity and confidentiality. Jim felt reassured he chose a great company in which to start a career. KR Electronics was a competitive company, and every six months employees were evaluated for performance. While the highest performers received substantial bonuses, the lowest 15 percent were consistently fired within the year. This didn’t bother Jim too much. He knew many other well-known companies had a similar system in place. What bothered Jim was the way the supervisors treated employees who did not perform highly. Several employees approached Jim and told him of an abusive manager who often yelled at employees in front of other coworkers. Jim heard reports that the supervisor would make comments such as “I can’t wait till the year is up and I can tell you to get lost. It’ll be nice to actually get someone in this job with half a brain.” When Jim approached David, the human resources manager of his department, about what he heard, David shrugged off Jim’s concerns. “You’ve got to understand, Jim,” David explained. “We operate in a highly competitive field. Employees have to work quickly and efficiently in order to maintain our business. This often requires supervisors to get tough. Besides, this supervisor’s unit is one of our highest performers. Apparently, whatever he’s doing is working.” This remark made Jim feel uncomfortable, but he did not want to argue with his boss about it. One day Jim got a call from a woman in the company’s sales department. She informed him that many of the firm’s salespeople made exaggerated claims about the quality of their electronics. He also learned salespeople were making guarantees about products that were not true, such as how long the product would last. “The salespeople are given substantial bonuses for exceeding their quotas, so many promise whatever it takes to increase their sales,” the woman explained. Although it was not required to provide a name when reporting, the person talking to Jim gave her name as Sarah Jones. She asked Jim to make sure her sales manager Rick Martin did not find out she called the hotline. Jim gave the report to his supervisor for further investigation. Two weeks later Jim heard that Sarah Jones had been fired for poor performance. He approached David to ask him about the situation and was horrified to find out the sales manager of Sarah’s division had been told about her report. “But David, this is a violation of our confidentiality code! I promised Sarah we would keep her name anonymous when investigating this matter. What if Rick fired her out of retaliation?” Jim asked. David looked at Jim in exasperation. “Jim, you are making too big of a deal out of this. Nobody forced Sarah to give her name to us over the hotline. And trust me, Rick’s a good man. He wouldn’t fire someone simply to get back at them for reporting. It seems to me that these reports don’t have credibility, anyway. It’s likely that Sarah made up these allegations to hide her poor performance.” Jim left David’s office upset. Even if Sarah was a poor performer, he did not feel that it was right that her sales manager was told about her report when she expressly requested otherwise. As he went back to his desk, he remembered hearing that the sales manager and David were good friends and often went out together for lunch. Case 1 questions: 1

. Using concern-for-people and concern-for-performance matrix, discuss the four types of corporate culture? What type of corporate culture does KR Electronics have? Explain your answer?  

List and explain THREE ethical issues in the case? And explain how the corporate culture of KR Electronics contributed to these ethical issues?

Answer 1

There are four forms of corporate culture, as per Robert E. Quinn and Kim S. Cameron at Ann Arbor, University of Michigan: tribe, adhocracy, business, and hierarchy.

• Philosophy of the clan is people-focused in the way that the business feels like one huge happy party. It is an area of intensely collaborative work where each person is respected and coordination is a primary concern. Clan culture is also combined with a hierarchical framework that helps break down walls between the C-suite and staff and fosters incentives for mentorship. Such businesses are performance-focused and welcome transformation, a testament to the extremely versatile existence of these organizations.
• Innovative societies are rooted in an adhocracy. They are the firms who are at the cutting edge of their field — they are trying to build the next new trend before others have even started to raise the same questions. They need to take chances to do so. Cultures of adhocracy respect creativity in the way that workers are allowed to think creatively and come up with their ideas. Since this form of corporate culture falls under the context of external emphasis and competitiveness, innovative innovations need to be tied to business development and performance in the sector.
• Company culture places productivity first. All is done with the end result in mind; each job has a mission that is associated with the broader objective of the organization, and there are also multiple degrees of separation between staff and leadership positions. There are organizations that are results-oriented and rely on objective performance rather than internal fulfillment. A business ethos emphasizes the value of thresholds being exceeded, goals accomplished and outcomes obtained.
• The conventional organizational framework is adhered to by organizations of hierarchic structures. They are internal organization-focused organizations with a consistent chain of command with several management layers dividing staff with leadership. Beyond a formal system, the staff also have a dress code to obey. Cultures of the Hierarchy have a fixed way to do things, keeping them predictable and risk-averse.

KR electronics have Market-oriented culture. They are very much focused on end results. Performing is the only way to survive. There is no respect for individual value and freedom but, performance is given uttermost priority.

Ethical issues:

• Open abuse: Giving warning about the not performing is okay but scolding someone open is not a good idea. The company needs to implement better HR policies in place to avoid such problems.
• Firing due to non-performance: Firing should be the end process when there is no fit for any other role of the person in the organization.
• No protection for Whistleblowers: The company fires whistleblowers which is against the law as well as ethical practices. Firing Sarah was one such example.

The corporate culture of a typical small business where few people only dictate the policies and even goes beyond the policies to take personal revenge is what contributing to these ethical issues.