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1. How can foreign institutional investors invest in China A-share market?

Andrew Fastow, the former chief financial officer (CFO) of Enron who was convicted of wire and securities fraud, explains that the culture of an organization starts with the behavior of the top executives. Employees do not follow empty rhetoric though: Employees imitate the behavior and decision-making processes of top management (Useem, 2016). Based on what you have learned in this unit, do you believe this is an accurate statement? How big of an effect can empty rhetoric have on organizational behavior? 

reading material:

Effective communication is a key component to a successful business. The ability of each employee to

communicate on an individual basis and on an organizational level is vital. The ability of an organization to

communicate its message to both its employees and its customers can often determine the success or failure

of a business venture.

The term organizational behavior focuses on how individuals and groups act within organizations.

Communication is simply the act of transferring information from one person (the sender) to another (the

receiver). Beyond this simple definition, however, lies a world of possibilities that make the process complex.

How is the information encoded? How is it transmitted (the channel)? Does the communication occur on a

face-to-face basis, over the telephone, or via a mass media platform where both verbal and nonverbal

communication can occur? Is it written communication meant for an individual, a specific group, or a general

audience? Is it focused on words, or are other visualizations (photographs, graphs, charts, and maps)

included?

The following model of the communication process dramatically simplifies a complex human activity. It

presents the process that occurs when one person (e.g., a manager) communicates an idea to another

person (an employee).

UNIT I STUDY GUIDE

How Communication Processes

Guide Organizational Behavior

BBA 2026, Organizational Communication 2

UNIT x STUDY GUIDE

Title

Desired Outcome

The desired outcome of any communication process is to have the receiver (or receivers) understand the

message. This concept can almost seem counterintuitive to students who start looking at specific purposes

for messages rather than the general idea of communication. One approach is to say, “I am writing an

argumentative paper. Is it not my goal to get my readers to agree with me?” An employee may say, “I am

writing a memo regarding XYZ products. Is it not my goal to get the customers to purchase the product?” The

answer to both of these questions lies in the answer to another: Can a writer accomplish either of these goals

if the receiver does not understand the message? First and foremost, the message has to be successfully

transmitted from the sender to the receiver (or receivers): If understanding occurs, the message is successful.

Avoiding Misunderstandings

Misunderstandings can occur at any stage of the communication process. There are many barriers to

effective communication that can interfere with the transmission of the message, including language and

emotional barriers, lack of attention or interest, expectations, false assumptions, and cultural differences. A

sender must be aware of these barriers and try to reduce their impact.

Within a business, there can be additional obstacles to communication. There are different types of channels.

A manager might speak directly to an employee, for example, or his or her message might go through a

series of other people before reaching all of the employees. Different types of technologies allow for multiple

types of channels, as well, and technologies vary in speed, accuracy, cost, and efficiency.

In “What Was Volkswagen Thinking?,” Useem (2016) begins by discussing the behavior of James Burke, the

CEO of Johnson & Johnson during the 1980s when the company faced a product-tampering crisis. Three

years prior to the crisis, Burke held a meeting with his top executives where he suggested eliminating the

company credo. Burke was concerned that the managers were not reflecting upon the company credo for

everyday decisions. He called for a debate among his top managers about the document and the role of

moral duties in daily business. Instead of voting to remove it, the managers chose to revitalize the message of

the credo within the company (Useem, 2016).

Burke took this step within his organization because it seemed that there was a misunderstanding in the

communication process. The managers were not treating the company credo as a “living document” with a

salient message. In order to address this breakdown in communication, Burke used his position to force a

debate among the top manager, and his actions paid off three years later during the Tylenol capsulepoisoning

crisis that occurred in Chicago-area stores.

When the emergency first broke, Burke was on a plane and could not be reached. Useem (2016) explains

that employees, on their own initiative, ordered Tylenol to be removed from store shelves and publically

Model of the communication process

BBA 2026, Organizational Communication 3

UNIT x STUDY GUIDE

Title

warned consumers not to use the product. This resulted in a $100 million loss for the company but is also

considered the gold standard of organizational crisis response. The message Burke sent during the meeting

reinforcing the ideas of the company credo was heard loud and clear by the Johnson & Johnson managers.

Their actions aligned with the company credo and helped to save lives.

Active analysis of the company credo helped to firmly establish the message in the minds of the Johnson &

Johnson managers. This technique can be quite effective in guiding the behavior of an organization because

the response to potential problems has been worked out in advance. Useem (2016) explains that executives

receive a tremendous amount of information throughout the workday. It is difficult to process this much

information on a constant basis, so executives will utilize unwritten scripts to provide responses. These scripts

are unique to each organization and are created through corporate culture. The scripts benefit efficiency, but

when they are not actively examined, such scripts can have an adverse impact on organizational behavior.

The most efficient response is not always the best.

Useem (2016) presents sociologist Diane Vaughan’s concept of the normalization of deviance as an example

of how scripted communication can negatively influence organizational behavior. Vaughan studied NASA

after the Challenger space-shuttle disaster and discovered that the individuals who worked for NASA did not

make a mistake in regard to the safety procedures of the shuttle launch; instead, the mistakes were socially

organized and systematically produced by the behavior of the organization. The managers were conforming

to NASA’s need to meet schedules and set up rules that allowed them to accept more and more risk.

Because the organization was urging them along, the managers accepted a social normalization of the

deviance in the basic engineering principles, and it no longer seemed deviant to them, despite the fact that

they far exceed their own rules for elementary safety. People outside of the situation see the deviance,

Vaughan determined, but those inside do not.

Case Study: Volkswagen Emissions Scandal

In “4 Ways ‘Connection Culture’ Improves Risk Management,” Michael Lee Stallard (2016) explains that

experts have identified organizational culture as one of the reasons for the failure of management at

organizations, such as General Motors, NASA, Nokia, and Volkswagen. Looking at the Volkswagen situation

in detail illustrates Stallard’s point.

Background

Scientists from the University of West Virginia tested Volkswagen diesel vehicles and found that the company

was able to cheat on emission tests with software that indicated the vehicles’ emissions were far lower than

they actually were. Over 11 million vehicles were equipped with the “defeat devices” (Varandani, 2015).

The use of the “defeat device” to fool U.S. regulators has resulted in a federal lawsuit against the company.

As reported by the National Public Radio (NPR) in “U.S. Files Lawsuit Against Volkswagen Over Emissions

Trickery,” the vehicles are actually putting up to 40 times more pollution into the air than U.S. standards allow

(Chappell, 2016). Michael Horn, CEO of Volkswagen’s U.S. business concerns, testified on Capitol Hill that

over 600,000 vehicles produced by Volkswagen violate the U.S. Clean Air Act. When asked if the software

that disconnected the vehicles’ emissions controls outside of an official emissions testing area was installed

specifically to beat the tests, Horn replied in the affirmative. He said that, to his knowledge, the software was

designed to trick the system and fool U.S. regulators (Chappell, 2016).

The scandal resulted in the resignation of many top-level Volkswagen employees and a drop in the

company’s stock price. Volkswagen faces billions of dollars in potential fines and also the cost of retrofitting its

vehicles with systems to limit emissions. Yet, Volkswagen CEO Matthias Mueller publicly insists that the

company did not lie to consumers.

In an interview with Sonari Glinton (2016) for NPR, Mueller tried to downplay the issue by calling it a technical

problem. He claimed that Volkswagen had not interpreted American law correctly. He also explained that

Volkswagen’s technical engineers reached their target goals with software solutions that were illegal in

America.

Useem (2016) argues that this organizational culture was deliberately established by Mueller and the other

executives to tinker with the unconscious criteria by which decisions at Volkswagen are made. This relates

directly to Vaughan’s concept of the normalization of deviance. It is not a case of miscommunication: The 

BBA 2026, Organizational Communication 4

UNIT x STUDY GUIDE

Title

executives clearly communicated their requirements, and the engineers found solutions to reach the targets. It

did not matter if those solutions were illegal. When faced with the certainty of a superior’s wrath or the distant

possibility of an issue with an agency of a foreign government, Useem (2016) argues that most employees

will choose to placate their boss. It is possible, as Mueller indicates in his interview with NPR, that the

engineers did not even see the deviance. They were too caught up in the corporate culture and wrapped up in

unconscious criteria established in the communication of their company.

References

Chappell, B. (2016, January 4). U.S. files lawsuit against Volkswagen over emissions trickery. Retrieved from

http://www.npr.org/sections/thetwo-way/2016/01/04/461927119/u-s-files-lawsuit-against-volkswagenover-emissions-trickery

Glinton, S. (2016, January 11). We didn’t lie, Volkswagen CEO says of emissions scandal. Retrieved

http://www.npr.org/sections/thetwo-way/2016/01/11/462682378/we-didnt-lie-volkswagen-ceo-says-ofemissions-scandal

Stallard, M. L. (2016, February 20). Michael Lee Stallard: 4 ways “connection culture” improves risk

management. Newstex.

Useem, J. (2016). What was Volkswagen thinking? The Atlantic Monthly, 317(1), 26-28.

Varandani, S. (2015, December 17). Volkswagen emissions scandal: European parliament backs inquiry into

German automaker, probe could last a year. International Business Times. Retrieved from

http://www.ibtimes.com/volkswagen-emissions-scandal-european-parliament-backs-inquiry-germanautomaker-probe-2230060

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