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Chapter 3 The Manager's Changing Work Environment & Ethical Responsibilities

STUDY
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Who should the company be responsible to?
1. Internal stakeholders
2. External stakeholder
Internal stakeholders
Employees, owners, board of directors etc these people have a direct effect on the overall success in the businessss
External stakeholders
1. The general environment
2. The task environment
stakeholder
The people who interests are affected by an organization's activities.
Task environment
Consists of 1.customers 2. Competitors 3. Suppliers 4.distributors 5. Strategic allies 6. Employee organizations 7.local communities 8. Financial institutions 9. Government regulators 10. Special-interest groups 11. Mass media
Customers
Those who pay to use an organization's goods and services. A lot of times they value
Competitors
People or organizations that compete for customers and resources
Suppliers
A person or an organization that provides suppliers- that is raw materials , services, equipment, labor, or energy to other organizations.
Distributors
A person or an organization that helps another organization sell its goods and services to customers; the internet has helped some manufacturers sell directly to the public.
Strategic Allies
Describes the relationship of two organizations that join forces ( include competition) to achieve advantages neither can perform as well.
Employee Organizations: Unions & Associations
Unions: that represent hourly workers (Auto workers); steadily declined in recent years.

Professional organizations: Represent salaried workers (Newspaper guild)
Local Communities
Important stakeholders especially their reaction to the company moving in (or out); local governments use this a tax base, families & merchants for their businesses.
clawbacks
When a local government rescinds ( takes back) the tax break when firms don't deliver promised jobs.
Financial Instutuions
Banks, savings & loans, and credit unions fund businesses with loans, but with the economic times even people with good credit couldn't secure a loan ( to tide them over when revenues or down or to fund new projects).
Government Regulators
Regulatory agencies that establish ground rules under which organizations may operate.

ex local & state regulators, WTO, foreign governments, FAA
Special- Interest groups
Groups whose members try to influence specific issues.

ex MAD, NOM, NRA etc.
Mass Media
Print, Radio, Tv & the internet influences; many companies have a special department to deal with this force.

ex Johnson & Johnson Tylenol fiasco
The General Environment (Macro environment)
1. Economic
2. Technological
3. Sociocultural
4. Demographic
5. Political-legal
6. International

Helps steer managers towards long-term goals.
Economic forces
Consist of the general economic traditions and trends (that the organization has no control over) that may affect an organization's performance.
a) Unemployment: more applicants, but less potential for growth
b) Inflation: Less discretionary income for all
c) Interest Rates :Borrowing gets more expensive
d) Economic Growth : More opportunities

ex The Great Recession of 2007-2009; economy becoming more polarized
Technological Forces
New developments in methods for transforming resources into goods or services; making things obsolete quickly; creates a high-tech society

ex the Internet & biotechnology
Sociocultural Factors
Influences and trends originating in a country's, a society's, or a culture's human relationships and values that may affect an organization.

ex less cigarettes, whiskey , red meat & eggs.
Increase in athletic shoes, spandex,diets.
Demographics Forces
The influences on an organization arising from changes in the characteristics of a population, such as age, gender, or ethnic origin.
ex marriage rate down, intermixing of races, etc.
Political- Legal Factors
Changes in the way politics shape laws and laws shape the opportunities for and threats to an organization.
ex whatever party is in power will effect how a law is brought about.
Also suing your competition
International Forces
Changes in the economic, political, legal, and technological global system that may affect an organization.

ie a flatter, smaller, interconnected world
Ethical dilemma
A situation in which you have to decide whether to pursue a course of action that may benefit you or your organization but that is unethical or even illegal.
Ethics
The standards of right and wrong that influence behavior; very subjective, varies between countries & cultures.
Value System
The patterns of values within an organization
Values
The relatively permanent and deeply held underlying beliefs and attitudes that help determine a person's behavior.

Sometimes the values of an individual and the organization differ, leading to conflict.
Utilitarian Approach
The Greatest good for the greatest number of people.

ex efficiency, profit, firing lots of employees to improve bottom line and the stakeholders.
Individual Approach
Achieving the individual's best long-term interests, which are ultimately in everyone's self-interest. This is not always the case however

ex Short term ethics leads to long-term success, pollution from farm affects fishing industry.
Moral-Rights Approach
Guided by respect for the fundamental rights of human beings

ex U.S.'s bill of rights.
Justice Approach
Guided by respect for impartial standards of fairness and equity.

ex laws are carried out fairly. Ceo pay hot button issue.
Insider Trading
The illegal tradition of a company's stock by people using confidential company information.
Ponzi Scheme
Using cash from newer investors to pay off older ones.
Sarbanes- Oxley Act of 2002 (SarbOx or SOX)
Established requirements for proper financial record keeping for public companies and penalties of as much as 25 years in prison for noncompliance.

Ie makes the CEO personally certify the company's financial statments
Laurence Kohlberg's 3 levels of moral development
Level 1 Preconventional- follows rules
Level 2 conventional- follows expectations of others
Level 3 Post-conventional- guided by internal value
Promoting Ethics
1. Creating a strong ethical climate
2. Screening ethics codes & training programs
3. Instituting Ethics codes & training programs
4. Rewarding Ethical Behavior (Protecting Whistle Blowers) ; a lot of companies now haze a chief ethics officer.
Ethical Climate
Represents employer's perceptions about the extent to which work environments support ethical behavior. ( policies, procedures, and practices)
Code of ethics
Consists of a formal written set of ethical standards guiding an organization's actions. Ie how to treat stakeholders
Whistle blower
Am employee who reports organizational misconduct to the public. (health, safety, corruption etc); may sometimes receive an award
Social responsibility
Being a good 'corporate citizen' ; it is also the manager's duty to take actions that will benefit the interests of society as well as the organization
Corporate social responsibility
The notion that corporations are expected to go above and beyond following the law and making a profit. Ex going green, sustainability etc.

1. Classical view
2. socio-economic View
Philanthropy
Making charitable donations to benefit humankind

ex Zuckerberg's 100 mil to NJ school system
Bill Gates stepping down as CEO to work on his foundation
Classical View
Maximize profits are the only responsibility of the corporation
Socio-economic
Goals that go beyond profits and needs to focus, protect, and improve society.

a) Sustainability
b) philanthrophy
Sustainability
Meeting the needs of the present without sacrificing the needs of the future.
Archie B carroll's corporate social responsibility pyramid
1. Philanthropic Responsibility
2. Ethical Responsibility
3. Legal Responsibility
4. Economic Responsibility
The effect(s) on ethical behavior
1. Customers more apt to purchase from them
2. Workers are more efficient, loyal & creative
3. Effects the quality & retention of best employees
4. Improves overall sales growth
5. Affects company efficiency
6. Can lead to legal fines
7. Affects stock price
8. Effect on profits
Corporate Governance
The system of governing a company so that the interests of corporate owners and other stakeholders are protected.
Diversification
This represents how people are similar & different
1. Personality
2. Internal Dimensions
3. External Dimensions
4. Organizational Dimensions
Personality
Stable & mental characteristics responsible for your identity
Internal Dimensions
Things you carry with you that are part of you
ex gender, race, physical abilities, age, ethnicity, sexual orientation
External Dimensions
Things that you acquire in your life experience
ex education, marriage, geographic location, economics, stereotypes
Organizational Dimensions
Where you are in the career ladder
ex seniority, division
Trends in Diversity
1. Age
2. Gender
3. Race
4. Sexual Orientation
5. Physical & Mental Disabilities
6. Education Levels
Age
As a whole America is getting older, people are living longer, and a crappy economy (which makes people work longer)
Gender
The majority of women in big cities actually make $6000 more than their male counterparts. Due to the information age, jobs nowadays are based on brain power not physical attributes like strength.
Race
By 2020, there will be no majorities in the United States
Sexual Orientation
6.4% of the population; follow the money, fight for rights at the tipping point
Physical & Mental Disabilities
No longer stigmatized & considered normal
Education levels
College today is the equivalent to a high school degree
To move up the corporate ladder, graduate school is almost a requirement.
ex underemployment 26.7%; 1 in 4 Americans are underemployed
Alvon Tofler's "waves"
1. Agricultural Wave
2. Industrialization
3. Information Wave
Agricultural Wave
200 years ago, every society in the world was in this age.
Industrialization
1820's in Europe 1870's in America (Because of the civil war)
Information Wave
1970's- now
The age of the employee, the best people can not be replaced
ie Knowledge is power