Principles of Management (Chapter 2)

Internal Environment

This environment consists of owners, board of directors, employees, and the physical work environment

Task Environment

This type of environment includes competitors, customers, suppliers, and regulators.

Informal Organizational Dimension

Leadership, an organization's culture, and how organization's handle whistleblowing are examples of....

Board of Directors

Part of the internal environment and is the governing body that is elected by the stockholders and charged with overseeing a firm's general management to ensure it is run to the best of the stockholders' interest.

Physical Work Environment

Part of the internal work environment and includes the work that the people of the organization does and how the company is structured.

Suppliers

Part of the task environment and Organizations that provide resources for other organizations.

Customers

Part of the task environment and Whoever is paying money to acquire an organization's products/services.

Regulators

Part of the task environment and are elements that have the potential to control, legislate, or influence an organization's practices.

Competitors

Part of the task environment and are other organizations that compete with it for resources.

Owners

People who have legal property rights to that business.

Political-Legal Dimension

part of the general environment that consists of government regulations of business and the relationship of business and government. (Ex. McDonald's is subject to a variety of forces such as food preparation standards.)

Technological Dimension

part of the general environment, and is made up of the methods available for converting resources into products or services. (Ex. Computer-assisted manufacturing and design techniques allow organizations to produce more efficiently)

Economic Dimension

part of the general environment, and is the overall health and vitality of the economic system in which the organization operates (important factors include inflation, interest rates, and unemployment)

Strategic Partners

A part of the task environment and are two or more companies that work together in joint ventures or other partnerships.

Philanthropic giving

A way to manage social responsibility, which is the awarding of funds or gifts to charities or other worthy causes. (formal organizational dimension)

Legal compliance

A way to manage social responsibility, which is the extent to which an organization conforms to local, state, federal, and international laws (formal organizational dimension)

Ethical compliance

A way to manage social responsibility, which is the extent to which the organization's members follow basic ethical and legal standards of behavior (Ex. groups are established to evaluate hiring strategies) (formal organizational dimension)

Regulatory agencies

Agencies created by the government to protect the public from certain business practices (Ex. EPA, FDA)

Licensing

An arrangement whereby a firm allows another company to use its brand name, trademark, technology, patent, copyright, or other assets, and then in return is paid a royalty, usually based on sales.

There should be a written code of ethics, top management must be involved, and employees must be trained.

The 3 ways organizations can manage ethical behavior

Stakeholders, The natural environment, and the general social welfare

The three areas that businesses can be socially responsible for

How the firm treats the employee, How the employee treats the firm, How the firm treats other economic agencies, and How the firm handles its financial reporting

What are Managerial Ethics?

General Environment

a set of broad dimensions and forces in an organization's surrounding that can influence the organization

Whistleblowing

an employee's disclosure of illegal or unethical conduct by others within the organization

Ethics

an individual's personal beliefs about what is right or wrong, good or bad

Unethical behavior

behavior that does not conform to generally accepted social norms

Ethical behavior

behavior that is acceptable in the eye of the beholder

Importing

bringing a good, service, or capital into the home country from abroad.

exporting

making a product in a firm's domestic marketplace and selling it in another country

Joint venture

special type of strategic alliance in which the partners actually share ownership of a new enterprise

Social responsibility

the set of obligations an organization has to protect and enhance the societal context of which it functions

organizational culture

the set of values, beliefs, behaviors, customs, and attitudes that helps the organization's members understand what it stands for, how it does things, and what it considers important.

Strategic alliances

two or more firms jointly cooperate for mutual gain

Direct investment

when a firm headquartered in one country builds or purchases operating facilities or subsidiaries in a foreign country. (ex. Disney theme park in Hong Kong, and Dell's computer factory in China)