Bus 682 Midterm Chapters 1, 2, 3, 4, 5, 6
Describe the fiduciary responsibilities of members of a board of directors. (pages 78-79)
-Avoid ethical misconduct, provide leadership in decisions to prevent ethical misconduct. Also "duty of diligence," making informed decisions too. -They are also fiduciaries for the shareholders. -A fiduciary is when there is trust placed in someone to act on their best interests.
What is reputation management? Describe the four components of the reputation management process, and explain how these components work together. (pages 54-57)
-Building and sustaining a company's good name. Also generating positive feedback from stakeholders -Organizational identity, image, performance, and reputation. -They find the standards and responsibilities that will allow them to achieve their goals. (Also work with stakeholders effectively and adjusting effectiveness)
Explain what a stakeholder orientation is and why it is required for an organization to be socially responsible? (page 14-15)
-Companies are focused on stakeholders' concerns. -Implying that business is connected to other parts of society.
Describe two moral philosophies and how each would impact an employee's decision in a business situation. (pages 167-169)
-Consequentialism impacts by figuring out if the decision is right or acceptable. -Ethical formalism impacts by focusing on the rights of individuals and on the intentions associated with a particular behavior
Why did Congress enact the Sarbanes-Oxley Act? What are the major provisions and benefits of the Act? (pages 141-143)
-Enacted to provide a new standard of ethical behavior for U.S. businesses thanks to Enron -It protects investors by improving the accuracy and reliability of corporate disclosures
What are the performance benefits of social responsibility? (pages 22-28)
-Increased efficiency in daily operations -Greater employee commitment -Higher product quality -Improved decision making -Increased customer loyalty -Improved financial experience.
Describe the four types of communication and why they are important to ethical leadership. (pages 214-217)
-Interpersonal occurs when there are two or more people communicating -Small group is communication that occurs in small groups -Nonverbal communication is expressed through body language or expressions -Listening is actively listening to the other person's verbal or nonverbal behavior They are important because without it, you cannot be an ethical leader
Outline the benefits of social responsibility to investors, customers, and employees. (pages 22-28)
-Investors: Helps concerned investors purchase stock in responsible companies. -Customers: A business can continually strengthen its customers' trust in the company and confidence. -Employees: Corporate social responsibility initiatives help retain employees.
How can a strong compliance program act as a buffer to keep employees from committing crimes and protect the company's reputation? What are the key elements of the program? (pages 137-138)
-It can avoid or reduce organizational penalties if an employee commits a crime. 1) Establish codes of conduct (identify key risk areas) 2) Appoint or hire high-level compliance manager (ethics officer) 3) Take care in delegating authority (background checks on employees) 4) Institute a training program and communication system (ethics training) 5) Monitor and audit for misconduct (reporting mechanisms) 6) Enforce and discipline (management implementation of policy) 7) Revise program as needed (feedback and action)
Define ethical misconduct disaster (EMD). Provide two examples of ethical misconduct disasters that have occurred in business over the past several years. (pages 57-61)
-It can be an unexpected crisis that can be fraud or unethical decision making that threatens/disrupts company operations -FIFA officials in engaged in bribery, racketeering, and fraud. -Target ignored potential hacking activity which led to a millions of customers' personal information.
Name the three attributes of stakeholders, and explain how these attributes may affect the development of a relationship between a stakeholder and a company. (pages 50-53)
-Power: There's coercive power which uses fear or punishment to impose one's views, which can make the relationship hostile -Legitimacy: Belief that a stakeholder's actions are proper. Linked to values and regulations. A stakeholder can tarnish a company's legitimacy. -Urgency: Ex. Hundreds of protesters took the streets in Bangladesh for when the factor killed over a 100 workers. Their urgency of the prosecutors resulted in the arrest of factory managers and investigations
What are the major provisions of the Dodd-Frank Act? (page 143-145)
-Prevents financial crisis by increased financial regulation -Additional oversight of the industry -Preventative measures to reduce types of risk-taking
Describe the differences between primary and secondary stakeholders. (page 46)
-Primary stakeholders are needed for the firm to survive Includes: Employees, customers, suppliers, and shareholders, along with governments and communities. -Secondary stakeholders do not engage in direct transactions with the company. Includes: Media, trade associations, and special-interest groups.
Describe the five types of leadership power. Why are they important? (pages 204-206)
-Reward power is a person's ability to influence the behavior of others by offering them something desirable (money, status, promotion) -Coercive power is essentially the opposite of reward power, which penalizes actions or behavior It relies on fear to change behavior -Legitimate Power is when a certain person has the right to apply influence -Expert power is derived from a person's knowledge (or the perception that the person possess knowledge) -Referent Power exists when one person perceives that his or her goals or objectives are similar to another's
What are the social reasons for regulation? What are the economic reasons for regulation? (pages 115-119)
-The social reason is equality in the workplace and to protect people from business -The economic reason is to regulate fair competition without it becoming destructive.
What is crisis management? Describe the four stages of the crisis management process and possible conditions, strategies, and tactics that an organization may experience or consider at each stage. (pages 57-61)
-When an organization deals with a sudden emergency Crisis management is the process of handling a high-impact event characterized by ambiguity and the need for swift action. Four stages: -Prodromal stage- The issue is discovered (Pre-crisis) -Acute stage- Crisis occurs -Chronic Stage- Crisis requires explanation and decision making -Resolution- When things start becoming more normal again
List and describe the six steps involved in implementing a stakeholder perspective into a company's social responsibility strategy. (pages 63-66)
1) Assessing the corporate culture- Identify the organizational mission, values, and norms (Likely to have implications for social responsibility). 2) Identifying stakeholder groups- Recognize stakeholder needs, wants, and desires. 3) Identifying stakeholder issues- Understanding the concerns to these stakeholders 4) Assessing the organization's commitment to social responsibility- Matches the organization's interest 5) Identifying resources and determining urgency- Prioritization of stakeholders and issues along with the assessment of past performance provides for allocating resources 6) Gaining stakeholder feedback- Using focus groups, observation, and surveys.
What are the four types of responsibility that businesses should accept and abide by? Provide a brief explanation of each stage, including an example of how a business may fulfill each responsibility. (pages 10-12)
1) Financially viability (Economics): Provides a return on investment for their owners, creates jobs for the community, and contribute goods and services to the economy 2) Legal: Companies maintain compliance with legal and regulatory requirements specifying the nature of responsible business conduct 3) Ethics: Companies must decide what they consider to be just, fair, and right. Includes principles and values 4) Philanthropic activities: Promotes the welfare of others. Ex. Donating money to good causes
What additional legal issues must a company contend with when it engages in commerce beyond its own borders? (pages 127-128)
A company must contend with the laws of its own nation, international laws, and the laws of the nation in which it will be trading
Why is emotional intelligence important? (pages 210-211)
Because emotionally intelligent leaders exhibit self-control and self-awareness, they are better in solving stressful situations
Describe why social responsibility needs a strategic focus. What steps do companies need to take to create a strategic focus? (pages 8-10)
Because it helps companies find the area which they want to concentrate on. (For social responsibility focus) 1) Needs a plan 2) Then written, implemented, and revised 3) Approved by upper management 4) Monitor it
Define business ethics and discuss its relationship with laws, regulations, and legal issues. (pages 154-158)
Business ethics are the principles and standards that guide behaviors in the world of business. The relationship between them all is that they are all kind of like a set of rules
Describe some ways that organizational leaders can develop an ethical culture. (pages 176-180)
By communicating values and norms to employees, developing ethical programs, and appoint an ethics officer to enforce it.
What are the arguments for and against high levels of executive compensation? (pages 98-100)
For? Executives take lots of risks and therefore rewarded. Against? They pay more attention to compensation than they do ensuring the integrity of the company's financing systems.
Describe the three factors that influence ethical decisions in business, and provide an explanation of how they affect employees in the workplace. (pages 166-176)
Individual factors affect employees with their ethical choices. Organizational relationships affects by settling ethical issues with their associates Opportunity affects employees with limited barriers and with provided rewards
Define social responsibility and what it involves. (pages 4-7)
It fulfills economic, legal, ethical, and philanthropic responsibilities expected by its stakeholders Involves ethical responsibilities such as equal rights or gender roles.
Define corporate governance and explain how it is related to social responsibility? (pages 76-77)
It is the official system of oversight, accountability, and control for organizational decisions and resources. -Related because there have to be systems in place to ensure the economic, legal, ethical and philanthropic responsibilities are met
What are some of the characteristics of the best boards of directors? (pages 94)
Knowing the process, having the skills and knowledge to do so, and being responsible.
For companies that operate in a number of locations, describe the relationship between social responsibility expectations in the home market and social responsibility expectations in host markets. (page 18-22)
Many corporations treat the host market poorly. Usually, resources are being exploited. An example of this is Global CSR (Corporate Social Responsibility) since it is both internal and external. -Programs for employees to get promoted -Important in international markets -Also important in external social programs
Describe the social responsibility continuum, including the two endpoints of the continuum and the types of responsibilities and stakeholders considered at the endpoints. (pages 13)
Minimal endpoint: Focuses on shareholders Strategic endpoint: Focuses on financial, legal, ethical, and philanthropic ideas targeted at selected stakeholders
According to results from the National Business Ethics Survey, what are the types of misconduct commonly found in the workplace? (page 160)
Observed misconduct (abusive behavior, lying to stakeholders, conflict of interest), pressure to compromise standards, report observed misconduct, experience retaliation for reporting
What are some of the requirements of ethical leadership? (pages 207-208)
Place the organization's interest above your own, understand employees, and passionate about the organization along with its success.
What is corporate culture, and how is it conveyed in an organizational setting? (pages 170-172)
Set of values, beliefs, and artifacts shared by members or employees of an organization
Discuss the Sherman Antitrust Act, Clayton Antitrust Act, and Federal Trade Commission Act and explain how the three acts are interconnected. (page 121-123)
Sherman - Prohibits monopolies Clayton - Prohibits price discrimination, exclusive dealing, and other efforts to restrict competition Federal trade - Prohibits discrimination between retailers and wholesales They all have prohibitions to give everyone businesses or people a fair chance
Describe how the return on corporate governance goes beyond enhanced organizational performance to include the competitiveness of nations. (103)
The company chooses to govern itself, including management and employees. If it is organized well, the company usually will profit from that organization
Compare and contrast the shareholder model of corporate governance with the stakeholder model of corporate governance. Which model would you recommend for an organization that wants to be socially responsible and profitable? Defend your answer. (pages 84-86)
The shareholder model focuses on maximization of wealth for investors and owners -The stakeholder model focuses on stakeholder concerns I would personally choose the stakeholder because this model focuses on the success of the organization or project while the shareholder focuses on return on investment. Eventually if you do work within the organization your profits will come later.
What are investor expectations when they are determining whether to invest in the firm? (pages 93)
They expect a solid return for their investment and that their money is being placed in the care of capable and trustworthy organizations
Using examples, what power do stakeholders have over businesses? (page 44-45)
They have the ability to withdraw - or threatening to withdraw - these needed resources give them power over businesses
What are the differences between transactional leadership and transformational leadership? In what type of situation would each be useful? (pages 211-212)
Transactional creates employee satisfaction through trust and motivation Transformational promotes activities and behavior through a shared vision of common learning experiences. Transactional is good for ensuring that procedures are implemented. Transformational leadership is more involved in corporate social responsibility
What is an ethical issue? Describe seven categories of ethical issues and provide examples of specific situations that may occur within each category. (pages 159-165)
When an individual's actions are evaluated as right or wrong -Abusive -Misuse of resources -Conflict of interest -Bribery -Discrimination/sexual -Harassment -Fraud -Privacy
Name five stakeholder issues and how these could be measured to assess corporate impact and success. (page 45)
Working conditions, consumer rights, diversity, product safety/quality, and public health/safety. Assess it by looking at its efforts and communication on the issues.
