Paradigm Toys: A Case Study

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A. Effective Powers
I strongly believe that the legitimate power is the most effective one in establishing an ethical climate at Paradigm Toys. To establish a company-wide ethical climate, the company has to have formal power to do so. Expert and referent power are not formal power, so they are not the choice here. Among three formal bases of power – coercive, reward, and legitimate – only legitimate power requires unnecessary surveillance while all of them require all employees to comply with the code of ethics. In other words, coercive and reward power require there is constant surveillance by the influencing agents – i.e. the company’s managers. On the other hand, legitimate power induces the obligation (Raven, 2008). The employees’ recognition

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