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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


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


Those who pay to use an organization's goods and services. A lot of times they value


People or organizations that compete for customers and resources


A person or an organization that provides suppliers- that is raw materials , services, equipment, labor, or energy to other organizations.


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.


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.


The standards of right and wrong that influence behavior; very subjective, varies between countries & cultures.

Value System

The patterns of values within an organization


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


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


Goals that go beyond profits and needs to focus, protect, and improve society.

a) Sustainability
b) philanthrophy


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.


This represents how people are similar & different
1. Personality
2. Internal Dimensions
3. External Dimensions
4. Organizational Dimensions


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


As a whole America is getting older, people are living longer, and a crappy economy (which makes people work longer)


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.


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.


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

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