The Art of War - Workplace Culture

Week Six Learning Team Assignment

Krystle Harmon

Lagaytria Harrell

Glynis Malveaux

Linda Porter

MGT 521

Rebecca Merek

Week Six Learning Team Assignment

What was the culture at Lehman Brothers like?

Excessive risk taking by employees was openly applauded and rewarded; employees who made questionable deals were treated and conquering heroes. If anyone objected to the unaccepted and unethical behavior, the objecting person was either ignored or overruled. Serious errors in accounting and reports contained grossly negligent items. The executives made the culture problems worse by their behavior; Lehman filed misleading reports and used $50 billion of undesirable assets off the organization's balance sheets.

Unethical issues associated with work behavior are based on violation of values established within the organization. These behaviors include falsified data, verbal abuse, deception, and harassment thus not conforming to approved standards of the organizational culture or professional.

When normal work behavior goes outside what is normal for the organization, the results have negative impact on the organization. Deviant behavior is conduct outside the norm for any group, culture, or organization. Deviant behavior is a growing concern in many organizations, can be open or subconscious, and has negative consequences for the organization (Applebaum, 2006). When manager plan, organize, lead, and control, they must consider and respond to ethical dimensions (Robbins, 2012)

The Lehman Brothers organization had issues with "greed" and was led by "crooks" and these issues failure. The beginning of the firm's failure was leadership. If the leadership had made better decision, it is a huge possibility that this firm would still be in existence today (Robins, 2013). Lehman repeatedly exceeded its own internal risk limits and controls because of due to a wide range of bad calls by its management; this led to the bank's collapse (Robins, 2012).

What role did Lehman's executives play in the company's collapse?

Lehman's executives played an important role in the company's collapse. According to a report released by bankruptcy court, Lehman's executives' auditors took actions that led to the firm's collapse (Robbins, 2012). The firm's auditor, Ernst and Young, was a reputable organization but violated legal, policy, and ethical guidelines required for managing the Lehman's accounts. Because Lehman continued to exceed its own internal risk limits and controls, a high percentage of corrupt decisions by its' management the organization failed. According to a report submitted by Valukas, the firm's top leaders should have done a better job as decision makers for the organization (Robbins, 2012). Workplace deviance and unethical behavior is most often destructive (Applebaum, 2006) and each has a variety of consequences. There is no such thing as an 'innocent by-stander"' and before the behavior can be corrected or eliminated, it must be reported.

The three most important causes of unethical behavior are bias, conflict of interest, and personal profit. Bias takes place when personal values, codes of conduct, and acceptance of misconduct take priority over what is considered right and wrong. Personal characteristics form values that enter the work environment with every individual hired to perform organizational tasks and assignments. The observed behavior results include the impact to moral behavior, motivation, self-control, and ego (Latham, 2007). Conflict of interest can occur because of affiliations, personal priorities, or personal gain. The first option to avoid unethical behavior is to acknowledge the potential violation, recusal from situations that may intentionally lead to a violation, and regulation of questionable business relationships.

The first mistake was high level of dependence on market complacency that pushes many financial institutions gamble without any idea of losing everything. Zingales (2008) stated that the market complacency was raised by the real estate boom. Somehow banks decreased interest rate for mortgages and people with low repayment rating could afford to purchase a house. Lehman Brothers' risk-oriented culture encouraged unethical decision for financial gain; therefore the risk-taking ideal they overlooked questionable financial behaviors. Professional ethics was put behind profit with employees making questionable deals hailed and treated as conquering heroes (Robbins & Coulter, 2011). The Lehman Brother's case highlights some of the negative ethical practices that affected the current financial crises in the United States.

Trust is important and essential in every business and organization. Management's ethics is the key for trust, trustworthiness, commitment, and integrity (Colquitt, Scott & LePine, 2007). Ethics in an organizations' leadership safeguards professionals from unfounded external control, prevents internal conflict, and provides protection in the event of litigation (Pot & Koningsveld, 2009). Ethical refers to matters that influence decisions on moral issues in matters reflecting what is right or wrong. These ethical matters are not limited to the value system of the decision makers but what is generally acceptable in the organization's culture. Although ethical standards are not laws, there are penalties that can result from ethical violations (McIntire & Miller, 2007).