SM131 Final

Governance SDGs

Gender equality; decent work and economic growth; industry, innovation, and infrastructure; sustainable cities and communities; responsible consumption and production; climate action; peace, justice, and strong institutions; partnerships for the goals

Community Stakeholders

General public, environmental groups, civic groups

Prevention Costs

Getting ahead of problem and preventing it from happening; quality planning, design, education and training, process control, information, reporting, QIP, QIT, supplier involvement

Diffused Preferences

Give customization option so everyone can design their own product

Goal of Accounting

Give investors information to efficiently allocate capital; promote appropriate resource allocation by firms and capital markets

Behaving Like a Professional

Good first impression, focus on good grooming, be on time, practice considerate behavior, good email and phone etiquette, be prepared

Limiting Business Liability

Good for society to protect the personal assets of business investors; supports entrepreneurship, risk-taking, and innovation, fuels growth and wealth for society; central tenant of capitalistic economic model

Value

Good quality at a fair price; when consumers calculate, they look at the benefits and then subtract the cost to see if the benefits exceed the costs; determined by different factors

Shareholder Expectations

Good return on their investment

Operating Income

Gross Profit - Operating Expenses; how much money company actually made

Reference Group

Group an individual uses as a reference point in forming beliefs, attitudes, values, or behavior

Shared

Group phenomenon; shared behaviors, values, and assumptions; experienced through norms and expectations of a group; unwritten rules

Bundling

Grouping two or more products together and pricing them as a unit

Determining Stakes

Groups in the same generic category frequently have different specific interests, concerns, perceptions of rights, and expectations; identify nature, legitimacy, power, urgency, and saliency of a group's stakes and their potential to affect the organization

Infomercials

Growing in importance because they show products in use and present testimonials to help sell goods and services

SDG Compass

Guide companies on how they can align their strategies as well as measure and manage their contribution to the SDGs; organized into five sections: Understanding the SDGs, defining priorities, setting goals, integrating, and reporting and communicating

Distributed Product Development

Handing off various parts of your innovation process - often to companies in other countries; increase in outsourcing and alliance building; difficult to coordinate multi-firm processes

Different From Your Peers

Harder to communicate at first; less satisfied; more potential conflict; more creative; drawing from a broader knowledge base; slower fitting in process

Implicit

Hardwired to recognize and respond instinctively; silent language; themes should be expected to recur across many models, definitions, and studies in the field

Primary Stakeholders

Have a direct stake in the organization and its success

Primary Social Stakeholders

Have a direct stake in the organization and its success, and, therefore, are most influential; stakeholders and investors, employees and managers, customers, local communities, suppliers and other business partners

Secondary Stakeholders

Have a public or special interest stake in the organization that is more indirect

Corporation

Have their own legal entity separate from identity of members; ability to draw capital from many investors; minimal personal risk; ability to scale up and be more successful; 20% of total businesses; 81% of business revenue

Pull Strategy

Heavy advertising and sales promotion efforts are directed towards consumers so they'll request the products from retailers

Transactional Level

Highest and most developed; the extent to which managers actually engage in transactions (relationships) with stakeholders

Synthesis Approach

Holds that business does have moral responsibilities to stakeholders but that they should not be seen as part of a fiduciary obligation; ethical responsibility towards other stakeholders

Act and Reflect on the Outcome

How can my decision be implemented with the greatest care and attention to the concerns of all stakeholders? How did my decision turn out and what have I learned from this specific situation?

Workforce Forecasts

How do I know when to staff up or cut back?; analyze turnover, succession planning, and business opportunity data to identify potential shortages or excesses of key capabilities long before they happen

Action

How do I most effectively give voice to my values?

Power Structure

How is power or authority distributed within your group? How can you influence your group without authority? To what extent can we influence others and influence decision making? Not just determined by official position within company or group; understanding power can help understand group dynamics

Gross Profit (Gross Margin)

How much a firm earned by buying (or making and selling merchandise

Social

Human rights, supply chain standards, labor management, health and safety, human capital development

New Product Development Process

Idea generation, product screening, product analysis, development, testing, commercialization

Value Creation

Idea in business where profit is revenues earned from customers minus costs incurred

SDG Benefits

Identifying future business opportunities; enhancing value of corporate sustainability; strengthening stakeholder relations and keeping the pace with policy developments; stabilizing societies and markets; using a common language and shared purpose

"Smell" Test

If a proposed course of action stinks, don't do it

Utilitarianism Weaknesses

Ignores actions that may be inherently wrong; one may ignore the means and just focus on the ends; may come into conflict with the ideas of justice or rights; difficult to formulate satisfactory rules for decision making

Knockoff Brands

Illegal copies of national brand-name goods

Measurement System

Implement a stakeholder performance measurement system; evidence of serious intent to achieve results

Implementation

Implies execution, application, operationalization, and enactment; four indicators of successful stakeholder management: survival, avoided costs, continued acceptance and use, expanded recognition and adoptions

Perceived Quality

Important part of brand equity; product that's perceived as having better quality than its competitors can be priced accordingly; key is to identify what consumers look for in high-quality product and use information in every message the company sends out

Moral Rights

Important, justifiable claims or entitlements; do not depend on a legal system to be valid

Purpose Advantages

Improved appreciation for diversity, sustainability, and social responsibility

Enjoyment Advantages

Improved employee morale, engagement, and creativity

Results Advantages

Improved execution, external focus, capability building, and goal achievement

Learning Advantages

Improved innovation, agility, and organizational learning

Order Advantages

Improved operational efficiency, reduced conflict, and greater civic-mindedness

Safety Advantages

Improved risk management, stability, and business continuity

Sole Proprietor

In business by yourself; limited resources of one person; high personal risk; easiest way to get into business; low capital, high risk; 72% of all business in U.S.; 6% of all revenue from business in U.S.

Ethics and Compliance Officer

In charge of implementing the array of ethics and compliance initiatives in the organization

Social Stakeholders

Include people and organizations involved in your business

Return on Equity

Indirectly measures risk by telling us how much a firm earned for each dollar invested by its owners; (net income after tax/total owners' equity)

Levels of Analysis

Individual/personal level, managerial/organizational level, industry level, society level, global level

Strength

Internal factors (company), favorable factors (market)

Awareness

Is it an ethical issue?

Current Assets

Items that can or will be converted into cash within one year; cash, accounts receivable, inventory

Outcome Bias

Judging a decision based on the outcome - rather than how exactly the decision was made in the moment

Business Ingredients

Land, labor, capital, entrepreneurship, knowledge

Feigenbaum

Leader of Total Quality Movement; identified costs of control

Factors Affecting Consumer Behavior

Learning, reference group, culture, subculture, cognitive dissonance

Not To Make

Lower wages, lower fixed costs, fewer regulations, no/less investment required, IT enables global coordination, globalization expands markets

Economic Value

Make investments in long-term competitiveness

Stakeholder Identification

Management must identify not only generic stakeholder groups but also specific subgroups

Sustainability Audit

Managing sustainability issues within organizations

Customer Analysis Steps

Market segmentation, market targeting, market positioning

Haziness

May lead you to acting or reacting without a clear idea of what is going on

Leverage

Measure the degree to which a firm relies on borrowed funds in its operations

Accounting as an Information System

Measures business activities; processes data into reports and financial statements; communicates results to decision makers; turns data into information; language of business

JUST 100 (Top 10)

Microsoft, NVIDIA, Apple, Intel, Alphabet, JPMorgan Chase, Salesforce.com, AT&T, Cisco Systems, Adobe

Primary Nonsocial Stakeholders

Might include natural environment, future generations, and nonhuman species

Secondary Nonsocial Stakeholders

Might include those who represent or speak for the primary nonsocial stakeholders; environmental interest groups or animal welfare organizations; nonmarket players; can quickly become primary through media or special-interest groups when a claim's urgency takes precedence over its legitimacy

Employee Stakeholders

Minorities, women, older employees, unions, activists

Costs

Monetary, temporal, psychological, behavioral

To Make

More control, easier integration across functions, fewer transportation issues, rapid response to customer, avoid safety/environmental blindspots, fewer trade/tariff issues

Pervasive

Multiple levels; applies broadly in an organization; collective behaviors, physical environments, group rituals, visible symbols, stories, and legends; mindsets, motivations, unspoken assumptions

Management Failure

My team doesn't care enough to do this; I can't persuade my colleagues; Our voices aren't heard; We don't know what they want

Social SDGs

No poverty; zero hunger; good health and well-being; quality education; gender equality; clean water and sanitation; decent work and economic growth; industry, innovation, and infrastructure; reduced inequalities; responsible consumption and production; peace, justice and strong institutions

JUST Capital

Nonprofit research organization that ranks companies that do the right thing; most outperform their benchmarks

Pillars 4-6 of GVV

Normalization, self-knowledge & alignment, voice; acting on your values; requires a strategy; acting on your values is possible; doesn't require poking holes in others' successes; requires thought and engagement to develop; not so much about persuading others you are right as it is about accomplishing your goal of having the opposing party understand your position

Ladder of Stakeholder Engagement

Number of steps from low engagement to high engagement; lower levels of stakeholder engagement might be used for informing and explaining; middle levels of engagement focus on communicating by way of formats such as conferences, social media, mass emails, newsletters, or surveys; higher levels might be active or responsive attempts to involve stakeholders in company decision making

Media Types

Old-fashioned media - not much traceability, don't know return from investment; new media - online, ways to monitor customer journey

Indirect Blindness

One holds others less accountable for unethical behaviors when they are carried out through third parties

Net Income

Operating Income - Interest Expenses (Banks) and Taxes (government); bottom line; 5-10% of revenue

Flow Shop

Operating unit such as a refinery or chemical plant where the process is turned on at some point and runs continuously; neither individual units nor batches of units are produced; equipment is highly specialized for a relatively small group of products; work centers dominated by machines rather than people; short throughput time; vritually no setups

Value Chain Perspective

Organizations add value by harvesting raw materials, producing basic materials, fabricating parts, assembling products, distributing products, selling products to customers, providing after-sales service, reclaiming materials through recycling

Values

Our audience stands for...

Sustainable Development

Pattern of resource use that aims to meet human needs while preserving the environment so that these needs can be met not only in the present but also for future generations

Competitive Factors

Pay attention to dynamic environment; brick and mortar compete against the Internet; speed, service, price, selection

Economic Factors

Pay attention to economic environment; GDP, disposable income, competition, unemployment

Top 2020 Issues

Pays a fair, livable wage; upholds human rights standards across the supply chain; invests in workforce training; acts ethically at the leadership level; cultivates a diverse and inclusive workplace

Moral Equilibrium

Penchant for people to keep an ethical scoreboard in their heads and use this information when making future decisions

Primary Dimensions of Culture Styles

People interactions, response to change

Hostile Takeover

People think sole purpose of enterprises is to provide the largest immediate gain for shareholder; "raiders" can loot business and ruin potential for long-term gain

Framing

People's ethical judgments are affected by how a question or issue isposed

4 Ps of Operations

People, Place, Processes, Partnerships

Equitable

People, profit

Legitimacy

Perceived validity of appropriateness of a stakeholder's claim to a stake; owners, employees, and customers represent high degree

82%

Percent of employees that saw their leaders as fundamentally uninspiring

65%

Percent of employees that would forgo a pay raise if it meant seeing their leader fired

70%

Percent of leaders who rate themselves as inspiring and motivating

Two Pillars of Leadership

Perceptions of the manager both as a moral person and a moral manager

Social-Financial-Reputation Relationship

Perspective 1: Socially responsible firms are more financially profitable; Perspective 2: Firm's financial performance is a driver of its social performance; Perspective 3: Interactive relationship between and among social performance, financial performance, and corporate reputation

Surface Artifacts

Physical structures, language, rituals and ceremonies, stories and legends

Bearable

Planet, people

Viable

Planet, profit

Break-Even Point

Point where revenues from sales equal all costs

Ill-Conceived Goals

Poorly set goals that encourage negative behaviors such as sales goals emphasized too much or set too high

Competitive Strategies for Business Success

Porter; lower cost, differentiation

New Product Failure

Possibility is high; not delivering what was promised, poor positioning, too few differences from competitors, poor packaging

Dormant Stakeholder

Power (attribute)

Dominant Stakeholder

Power, legitimacy (attributes)

Definitive Stakeholder

Power, legitimacy, urgency (attributes)

Dangerous Stakeholder

Power, urgency (attributes)

Reporting and Communicating

Practice of corporate sustainability disclosure has increased dramatically in line with stakeholder demand for information; important to communicate SDGs in order to understand and meet needs of stakeholders; effective reporting creates trust; variety of channels to communicate strategy and performance; strategic tool to drive performance and engage stakeholders

Biases

Prejudice in favor of or against one thing, person, or group compared with another, usually in a way considered to be unfair

Creating Shared Value at Starbucks

Prioritizing employee wellbeing; creating community of employees; full health care and stock options; supporting local communities; often-ignored groups of workers; College Achievement Plan

Push Strategy

Producer uses advertising, personal selling, sales promotion, and all other promotional tools to convince wholesalers and retailers to stock and sell merchandise

Intangible

Producer's reputation and image created by advertising

Consumer Stakeholders

Product liabilities, social activists, average consumers

Innovation Objective

Product, social, and management innovation

Decline

Product: Cut product mix, develop new product ideas; Price: Consider price increase; Place: Consolidate distribution, drop some outlets; Promotion: Reduce advertising to only loyal customers; Sales: Falling sales; Profits: Profits may fall to become losses; Competitors: Declining number

Triple Bottom Line

Profit, people, and planet

Descriptive Value

Provides language and concepts to describe effectively the corporation or organization in stakeholder inclusive terms

Sustainability

Providing for the needs of the present generation while not compromising the ability of future generations to meet theirs; simultaneous pursuit of economic prosperity, environmental quality, and social equity

Place

Putting product in a place where people will buy it; intermediaries are middle links

Corporate Transparency

Quality, characteristic, or state in which activities, processes, practices, and decisions that take place in companies become open or visible to the outside world

Purpose

Reason for being; north star; gives life to our values and principles; what kind of legacy/impact do we want to have?

Lack of Innovation

Reason of downfall of many organizations

Lack of Management

Reason of failure of new ventures

Pillar 7 of GVV

Reasons & rationalizations; difficult conversation with people that disagree with what you want to do; acting on your values; what is at stake for the key parties, including those who disagree with you? What are the main arguments you are trying to counter? What arguments or levers can you use to influence those who disagree with you? What is your plan of action?

Stakeholder Symbiosis

Recognizes that all stakeholders depend on each other for their success and financial well-being

Managerial Responsibilities

Recruiting, training, motivating, compensating, retention

How to Create Shared Value

Redefine productivity in the value chain; recreate products and markets; enable local cluster development

Nonsocial Stakeholders

Refer to entities such as animals, the environment, and generations of people who haven't yet been born

Negative Right

Right to be left alone; right to think and act free from the coercion of others; freedom from false imprisonment, freedom from illegal search and seizure, freedom of speech

Positive Right

Right to something; right to food, health care, clean air, certain standard of living, education

Gross Profit

Sales/Revenue - Cost of Sales

Strategies to Improve

Self-awareness that we can be "strooped"; reduce information/squint (get rid of information that isn't relevant to the job or question so you aren't swayed); make your judgments free from the influence of others (focus just on what matters)

Marketing Objective

Set after concentration and market standing decisions are made

Reconceiving Products and Markets

Society's needs include health, better housing, improved nutrition, help for the aging, greater financial security, less environmental damage; demand for products and services that meet societal needs is growing; greater opportunities when serving disadvantaged communities; businesses must identify all societal needs, benefits, and harms that are or could be embodied in the firm's products

Business Forms

Sole proprietor, partnership, corporation

Non-Financial Reporting

Solid, trustworthy reporting and strong auditing; real understanding of risks associated with different companies

Starbucks Values

Source ethically and sustainably, create opportunities, lead in green retail, strengthen communities

Setting Goals

Specific, measurable, and time-bound sustainability goals; foster shared priorities and drive performance; select KPIs (key performance indicators); define baseline and select type; set level of ambition; announce commitment to SDGs

Work Order

Specifies the number of units to be produced at a time (batch size), and the sequence of steps required (the flow or routing)

Setup Time

Spending time preparing for the job and to clean up after the job is completed; independent of the number of items in the batch

Age of Philanthropy

Stage 2; emphasizes charitable CSR when companies support social causes through donations and sponsorships; support provided through company foundations or trusts;

Age of Marketing

Stage 3; promotional CSR; CSR is used primarily as a public relations approach designed to enhance the company's brand, image, or reputation

Age of Management

Stage 4; Brought about strategic CSR; CSR activities are linked to the company's core business

Ethics

Standards of behavior that tell us how human beings ought to act in the many situations in which they find themselves; unwritten rules for interactions with one another; standards of conduct generally accepted that govern society; how you behave when nobody is looking

Ethics Framework

Statement of an organization's purpose, values, and principles; must be stable, make sense, be practical, and be authentic

Who Uses Accounting Information?

Stockholders, potential stockholders, creditors, potential creditors

Principles for Ethical Leadership

Stop and think, extend trust, two-way conversations, demonstrate moral authority, shape the context, lead with purpose

Finished Goods Inventories

Storages of completed products or outputs; buffer against demand fluctuations by keeping output ready for customers when they order

External Stakeholders

Suppliers, society, government, creditors, shareholders, customers

The Challenge

Systematic cognitive barriers can blind us to our own unethical behaviors and decisions, hampering out ability to maximize the value we create in the world

Costs of Variability

Taguchi; cost to society of a product varying from the target value of a key attribute; provides motivation for employees and workers to be concerned about reducing variability in processes

Management Isn't Common Sense

Takes hard work to do well; dangerous belief; become lazy managers; too late to improve management when you see top performers leave company

Productivity Objectives

Task of business is to make resources productive

Processes

Technology and Innovation: Project, job shop, cell, flow, humans vs. machines, product innovation, process innovation; Execution: Planning and control, QC, maintenance; Improvement: Continuous improvement, six sigma, lean, reengineering

Activity Ratios

Tell us how effectively management is turning over inventory to profits

Return on Sales

Tells us whether the firm is doing as well as its competitors in generating income from sales; (net income/net sales)

Stakeholder Responsibility Matrix

Template that managers might use to systematically think through its various responsibilities to each stakeholder group

Creative Destruction

Term economists use as shorthand description of the free market's messy way of delivering progress; lost jobs, ruined companies, and vanishing industries are a part of the growth system; firm's inability to adapt to radically changing external environment

Quality

The ability of a product or service to consistently meet or exceed customer expectations

Retained Earnings

The accumulated earnings from a firm's profitable operations that were reinvested in the business and not paid out to stockholders in dividends

Ratio Analysis

The assessment of a firm's financial condition using calculations and interpretations of financial ratios developed from the firm's financial statements; compare company's performance to financial objectives and to competition; liquidity, amount of debt, profitability, and overall business activity

Manufacturers' Brands

The brand names of manufacturers that distribute products nationally; ex. Xerox, Sony, and Dell

Stakeholder Inclusiveness

The central element of stakeholder corporation; development of loyal relationships with customers, employees, shareholders, and other stakeholders

Shield

The code acts in a manner that allows employees to better challenge and resist unethical requests

Rule Book

The code acts to clarify what behavior is expected of employees

Signpost

The code can lead employees to consult other individuals or corporate policies to determine the appropriateness of behavior

Fire Alarm

The code leads employees to contact the appropriate authority and report violations

Smoke Detector

The code leads employees to try to convince others and warn them of their inappropriate behavior

Mirror

The code provides employees with a chance to confirm whether their behavior is acceptable to the company

Magnifying Glass

The code suggests a note of caution to be more careful or engage in greater reflection before acting

Business

The collection of private, commercially-oriented (profit-oriented) organizations, ranging in size from one-family proprietorships to corporate giants

Product Mix

The combination of product lines offered by a manufacturer

Cost of Quality

The cost of not creating a quality product or service; increases when there is an issue

Product Differentiation

The creation of real or perceived product differences; sometimes so small that marketers must use a creative mix of branding, pricing, advertising, and packaging to create a unique, attractive image

Ostrich Effect

The decision to ignore dangerous or negative information by "burying" one's head in the sand, like an ostrich

Urgency

The degree to which the stakeholder's claim on the business calls for the business' immediate attention or response

Green Marketing

The development and marketing of products that are presumed to be environmentally safe; efforts to produce, promote, package, and reclaim products in a manner that is sensitive or responsive to ecological concerns

Cash Flow

The difference between cash coming in and cash going out of a business

Distributive Justice

The distribution of benefits and burdens in societies and organizations

Liquidity

The ease with which an asset can be converted to cash

Income Statement

The financial statement that shows a firm's profit after costs, expenses, and taxes; summarizes all of the resources that have come into the firm (revenue), all the resources that have left the firm (expenses), and the resulting net income or net loss; shows the revenue a firm earned selling its products compared to its selling costs over a specific period of time

Marketing Mix

The ingredients that go into a marketing program: product, price, place, promotion

Auditing

The job of reviewing and evaluating the information to prepare a company's financial statements; examine financial health of organization and its operational efficiencies and effectiveness

Maximum Sustainable Goodness

The level of value creation that we can realistically achieve

Brand Association

The linking of a brand to other favorable images

Lesson 2

The more business things change, the more they stay the same

Milton Friedman

The only group that has a moral claim on the corporation is the people who own shares of the stock (shareholders); maximize profit within the law without violating social standards

Yield

The percent of good items in a batch (output quantity/input quantity)

Capacity Utilization

The percentage of capacity used; how much capacity is required; helps determine what resources you need; can be as high as you can make it while still meeting customer requirements like quality, fast and/or reliable delivery, or customization; typically 80% but varies by industry; efficiency measure that relates directly to cost and inversely to customer service

Club

The potential enforcement of the code causes employees to comply with the code's provisions

Double-Entry Bookkeeping

The practice of writing every business transaction in two places

Incrementalism

The predisposition toward the slippery slop

Bandwagon Effect

The probability of one person adopting a belief increases based on the number of people who hold that belief; powerful form of groupthink; meetings are often unproductive

Stakeholder Thinking

The process of always reasoning in stakeholder terms throughout the management process, and especially when organizations' decisions and actions have important implications for others

Market Segmentation

The process of dividing the total market into groups whose members have similar characteristics

Niche Marketing

The process of finding small but profitable market segments and designing or finding products for them

Environmental Scanning

The process of identifying the factors that can affect marketing success; include global, technological, sociocultural, competitive, and economic influences

Motivated Blindness

The process of overlooking the questionable actions of others when it is in one's own best interest

Test Marketing

The process of testing products among potential users

Journal

The record book or computer program where accounting data are first entered

Price Leadership

The strategy by which one or more dominant firms set the pricing practices that all competitors in an industry follow

Depreciation

The systematic write-off of the cost of a tangible asset over its estimated useful life

Role Morality

The tendency some people have to use different ethical standards as they more through different roles in life

Brand Equity

The value of the brand name and associated symbols; goal of marketers is to reestablish notion; company can't know value of brand until it sells it to another company

Organizational Culture

The values and assumptions shared within an organization; provides direction toward the "right way" of doing things; provides direction toward the "right way" of doing things; ideology that helps edit people's everyday experience; shared standard of relevance as to the critical aspects of the work that is being accomplished

Appraisal Costs

Things you expect to incur; incoming inspection, in-process inspection, final inspection, testing devices, destructive testing, inventory safeguarding

Process Fairness

Three factors have been identified that help to decide whether it has been achieved; Have people's (employees, customers) input been included in the decision process? Do people believe the decisions were made and implemented in an appropriate manner? People watch their managers' behavior

Capacity

Time Available/Cycle Time; number of units produced (for customers served) per unit of time

Cycle Time

Time between completion of successive units; Task Time / # of Serves; determined by bottleneck

Time Standard

Time required to accomplish a particular task, given that the work center is available for working on that operation; based on some expectation of worker and machine efficiency, and may or may not be achieved; key requirement is consistency

Customer Value

Total Benefits - Total Costs

Walmart

Trailblazers in supply chain coordination; sharing of demand data, leader in logistics and supply chain technology, point of use delivery, vendor managed inventory; the delivery dot

Moral Person

Traits: Stable personal attributes, integrity, honesty, trustworthiness; Behaviors: What you do, not what you say, doing the right thing, showing concern for people, being open, being personally ethical; Decision Making: Reflect solid set of ethical values and principles

Six Pillars of Character

Trustworthiness, respect, responsibility, fairness, caring, citizenship

Four Patterns of Ethical Dilemmas

Truth vs. Loyalty; Individual vs. Community; Short-term vs. Long-term; Justice vs. Mercy

Homogeneous Preferences

Try to target everyone

Cognitive Dissonance

Type of psychological conflict that can occur after a purchase; may have doubts about whether they got the best product at the best price; marketers must reassure consumers they made a good decisions

Stakeholder Corporation

Ultimate form or goal of the stakeholder approach

Shared Assumption

Unconscious, taken-for-granted beliefs; implicit mental models, ideal prototypes of behavior; only able to learn through experience

Guerrilla Marketing

Unconventional and creative marketing strategy intended to get maximum results from minimal resources

Walmart and Drucker

Understand customer's needs and demands; develop innovative solutions to satisfy needs

Understanding the SDGs

Understand opportunities and responsibilities they represent; advance sustainable development through investments, solutions, and business practices; encourage companies to reduce their negative impacts while enhancing their positive contribution

Interpersonal Skills

Understanding how employees think and make sense of insights; engage effectively and inspire

Test of Common Sense

"Does the action I am getting ready to take really make sense?"; consider practical consequences and limitations

Materiality

"The impact of this action is not material. It doesn't really hurt anyone."; depend on the method of measurement being employed so it is ambiguous

Locus of Responsbility

"This is not my responsibility; I'm just following orders here."; argument is often used when we know we are uncomfortable with a decision or action but are afraid of the consequences of voicing and acting upon that judgment

Ethical Tests

Used to help clarify what is the most prudent course of action to take; culled from the real-world experiences of many

Minds Fool Us

2D-3D world; context; perspective; expectations; haziness/complexity

Brand

A name, symbol, or design (or combination thereof) that identifies the goods and services of one seller or group of sellers and distinguishes them from the goods and services of competitors

Market Concept

A three part business philosophy: (1) a customer orientation, (2) a service orientation, (3) a profit orientation

Annual Report

A yearly statement of the financial condition, progress, and expectations of an organization

Ethics Quick Test

Using a brief set of questions to make ethical decisions

Power

Ability or capacity of the stakeholder(s) to produce an effect - to get something done that otherwise may not be done

DELTA

Access to high quality DATA, ENTERPRISE orientation, analytical LEADERSHIP, strategic TARGETS, and ANALYSTS; mastering talent analytics

Financial Accounting

Accounting information and analyses prepared for people outside the organization; information to creditors and lenders, employee unions, customers, suppliers, government agencies, and the public

Government and Not-for-Profit Accounting

Accounting system for organizations whose purpose is not generating a profit but serving ratepayers, taxpayers, and others according to a duty approved budget; helps taxpayers, special interest groups, legislative bodies; Governmental Accounting Standards Board (GASB) sets accounting standards

Managerial Accounting

Accounting used to provide information and analyses to managers inside the organization to assist them in decision-making; measuring and reporting costs of production, marketing, and other functions; preparing budgets (planning); checking whether or not units are staying within their budgets (controlling); designing strategies to minimize taxes

Results

Achievement and winning; work environments are outcome-oriented and merit-based places where people aspire to achieve top performance; employees united by drive for capability and success; leaders emphasize goal accomplishment; 89% ranked 1st or 2nd

Economic Environment

Addresses the nature and direction of the economy in which business operates, variables include gross national product, inflation, interest rates, etc.

General Expenses

Administrative expenses of the firm such as office salaries, depreciation, insurance, and rent

Promotion Mix

Advertising, personal selling, public relations, and sales promotion; product can also be a tool

Dodd-Frank Wall Street Reform and Consumer Protection Act

After 2008; increased financial regulation affecting accounting by increasing the power of PCAOB to oversee auditors of brokers and dealers in securities markets

The Marketing Concept Era

After end of World War II, boom in consumer spending; needed to be responsive to consumers if they wanted business; marketing concept emerged; 1960s-1980s; led to a focus on customer relationship management (CRM) that has become important today

Fairness (Justice) Approach

All equals should be treated equally; ethical actions treat all human beings ethically; Rawls; Stakeholders: Family, friends, company, community, society Relevant Factors: What factors determine stakeholder's similarities and differences (wages, social status, etc.)?; Will effects be fair to all?: Are all stakeholders being affected fairly vis-a-vis the relevant factors?

Total Fixed Costs

All the expenses that remain the same no matter how many products are made or sold; rent, business insurance

Tax Accounting

An accountant trained in tax law and responsible for preparing tax returns or developing tax strategies

Certified Internal Auditor (CIA)

An accountant who has a bachelor's degree and two years of experience in internal auditing, and who has passed an exam administered by the Institute of Internal Auditors

Stakeholder Enagement

An approach by which companies successfully implement the transactional level of strategic management capability

Stakeholder

An individual or a group that has one or more of the various kinds of stakes in the organization; more cooperative when they feel they have shared utility; affected by and affect actions, decisions, policies, and practices of firms

Stake

An interest or a share in an undertaking; demand for something due or believed to be due; range from ownership in a business to certain rights the business owes you; value they expect to receive from firms

Blind Spots

Areas in which one fails to exercise judgment or discrimination

Ethic of Reciprocity

Argues that if you want to be treated fairly, treat others fairly; if you want your privacy protected; respect the privacy of others

Aretaic Theories

Aristotle saw the individual as essentially a member of a social unit and moral virtue as a behavior habit, a character trait that is both socially and morally valued; virtue theory; principle of varing

Four Levers for Evolving a Culture

Articulate and aspiration; select and develop leaders who align with the target culture; use organizational conversations about culture to underscore the importance of change; reinforce the desired change through organizational design

AI and Optimization

Artificial intelligence is pushing companies toward Theory X; algorithms take decision making away from employees; no longer feel accountable; employees don't like being monitored and rarely works because people find ways around it

Fundamental Accounting Equation

Assets = Liabilities + Owners' Equity; basis for balance sheet; equation must always be balanced

Fixed Assets

Assets that are relatively permanent, such as land, buildings, and equipment

Packaging Functions

Attract the buyer's attention; protect the goods inside stand up under handling and storage, be tamperproof and deter theft; easy and open to use; describe and give information about the contents; explain the benefits for the good inside; provide information on warranties, warnings, and other consumer matters; give indication of price, value, and uses

Internal Audit

Audit performed by private accountants to guarantee that the organization is carrying out proper accounting procedures and financial reporting

Data

Augment HR data with new metrics; must be sufficient enough to understand trends that matter

Key Financial Statements

Balance sheet, income statement, statement of cash flows

Principles Approach to Ethics

Based on the idea that employees and managers desire to anchor their decisions and actions on a more solid foundation than that provided with the conventional approach

Barriers to an Ethical Organization

Bazerman and Tenbrunsel; ill-conceived goals, motivated blindness, indirect blindness, slippery slope, overcoming values

Rational Benefits

Because our product can...

Factors Affecting Moral Climate

Behavior of superiors was ranked as the primary influence on unethical behavior; behavior of one's peers was ranked high in two of three studies; industry or professional ethical practices ranked in upper half of all three studies

Value

Benefits relative to costs, not just benefits alone

Owner Stakeholders

Board members, institutional groups, private citizens

Debt

Borrow money from bank

Actual Product

Brand, quality, style, packaging, design

Lesson 1

Business is too important to be left to businesspeople

Pipeline

Business that employs a step-by-step arrangement for creating and transferring value, with producers at one end and consumers at the other; losing to platforms

Philanthropic Responsibilities

Business' voluntary, discretionary responsibilities; reflect current expectations of business by pubic; implied social contract; be a good corporate citizen

Expenses

Businesses spend money on people, marketing, and resources

Communication Principles

Candor, fidelity, confidentiality

Etsy

Changed their approach from a marketplace for craftspeople to a typical e-commerce site in the gig economy; big manufacturers altered buyer-seller relationships and community identity

Test of the Big Four

Characteristics of decision making that may lead you astray or toward the unethical course of action; greed, speed, laziness, haziness

Data from Communication Platform

Chat, email, text messaging, Slack

Pillar 7 Levers

Check your own motivations and biases; understand motivations of others; What is your most powerful lever?; understand the best way to make your case

Indian Beverage Association

Coke and Pepsi formed this coalition; address issues related to the government and charges that they are polluting the groundwater in the state and other taxation issues

Racial Equity in Workplace

Commit to paying all employees a living wage that covers the local cost of food, housing, and medical care; increase business with Black owned suppliers and organizations; fund local education and create apprenticeship and scholarship programs to support more diverse hiring

Data from Company Surveys

Commitment, job satisfaction, psychological safety, team effectiveness; annual employee survey that offers self-reported measures

Macroenvironment

Comprehensive societal context in which organizations reside; social, economic, political, and technological environments

Technology in Accounting

Computerized accounting programs can post information from journals instantaneously from remote locations to encrypted laptops or cell phones; helps small business so they don't have to hire personnel

Quality Costs

Conceptual framework, not always totally quantifiable, useful for attention getting, requires consistency of measurement, useful as a mechanism for keeping score

Flow

Connect separate components

Shared Values

Conscious beliefs, evaluate what is good or bad, right or wrong; not every explicit or visible; give guidance about where to spend your time

Principle of Utilitarianism

Consequential principle, or a teleological principle; correctness or fairness of an action can be determined best by looking at its overall results or consequences; greatest good for the greatest number; Jeremy Bentham

Make a Decision and Test It

Considering all these approaches, which option best addresses the situation? If I told someone I respect - or told a television audience - which option I have chosen, what would they say?

Market

Consists of people with unsatisfied wants and needs who have both the resources and the willingness to buy

Ethics Screen

Consists of several select standards against which the proposed course of action is to be compared

Improving an Organization's Ethics

Continuous presence of ethical leadership reflected by the board of directors, senior executives and managers; existence of a set of core ethical values infused throughout the organization by way of policies, processes, and practices; formal ethics program that includes a code of ethics, ethics training, and ethics officer and ethics training

Brand Loyalty

Core of brand equity; the degree to which customers are satisfied, like the brand, and are committed to further purchases; loyal group of customers represents substantial value to a firm; coupons and discounts can erode

Governance

Corporate governance, corruption and instability, executive pay, board diversity, business ethics

Operating Expenses

Costs involved in operating a business, such as rent, utilities, and salaries

Total Quality Cost

Costs of Control + Costs of Failure of Control; prevention and appraisal costs can be balanced against internal and external failure costs

Variable Costs

Costs that change according to the level of production; expenses for materials, direct costs of labor used

Stakeholder Responsibility

Could state what different stakeholder groups might logically expect from companies

Recognize an Ethical Issue

Could this decision or situation be damaging to someone or to some group? Does this decision involve a choice between a good and bad alternative, or perhaps between two "goods" or two "bads"? Is this issue about more than what is legal or what is most efficient? If so, how?

Motivating

Create a culture where employees feel energized and inspired; What incentives motivate high-level performance in our work teams?

Purpose of Business (Drucker)

Create a customer

Values Statement

Create a stakeholder-inclusive "vales statement"

Sarbanes-Oxley Act

Created new government reporting standards for publicly traded companies; prohibits accounting firms from providing certain non-auditing work to companies they audit; strengthens the protection for whistle-blowers who report wrongful actions of company officers; requires company CEOs and CFOs to certify the accuracy of financial reports and imparts strict penalties for any violation of securities reporting; prohibits corporate loans to directors and executives of the company; establishes the five-member Public Company Accounting Oversight Board (PCAOB) under the Securities and Exchange Commission (SEC) to oversee the accounting industry; stipulates that altering or destroying key audit documents will result in felony charges and significant criminal penalties

Ethics of Care (Principle of Caring)

Critical of many traditional views; Carol Gilligan; maintains that traditional ethics focus too much on individuals self and on cognitive thought processes

Starbucks' Values

Culture of warmth and belonging; acting with courage; challenging status quo; connecting with transparency, dignity, and respect

Accounts Payable

Current liabilities or bills the company owes to others for merchandise or services purchased on credit but not yet paid for

Buggy Moral Code

Dan Ariely; peole cheat just by a little bit; when reminded of their morality, people cheat less; cheating more when removed from actual money; more cheating when someone in in-group cheats

Primary Data

Data that you gather yourself (not from secondary sources such as books and magazines)

People Analytics

Data-driven approach to employee-related decisions and practices; collecting employee and organization data, analyzing data, and making decisions; increasingly important in business

Current Liabilities

Debts due in one year or less

Long-Term Liabilities

Debts not due for one year or more

Targets

Decide whether to concentrate on hiring, assignments, or retention; types of employees; type of talent analytics

Recruiting

Deciding who joins organization; hiring practices; How can we recruit diverse top talent?

Competing Rights

Decision between two apparent rights and it is harder to choose; eliminate the conflict by reframing it or decide what is "more right"

Unethical Decisions

Decisions that are dishonest, unfair and unjust and costly for you, your community, and your business

Marketing Research Process

Define the question and determining present situation, collect research data, analyze research data, choose best solution and implement it

Cultural Norms

Define what is encouraged, discouraged, accepted, or rejected within a group; Schein, Schwartz, Hofstede

Financial Accounting Standards Board (FASB)

Defines generally accepted accounting principles (GAAP) that accountants must follow

Culture From a Managerial Perspective

Degree of social control over how employees work and interact; social glue that connects employees together; helps employees make sense of organizational events

System 2

Deliberate and proactive decision-making; allocates attention to the effortful mental activities that demand it, including complex computations

Stakeholder Management Capability (SMC)

Describes an organization's integration of stakeholder thinking into its processes and it may reside at one of three levels of increasing sophistication: rational, process, transactional

System 1 Examples

Detect that one object is more distant than another; orient to the source of a sudden sound; complete the phrase "bread and..."; make a "disgust face" when shown a horrible picture; detect hostility in a voice; answer to 2 + 2 = ?; read words on large billboards; drive a car on an empty road; understand simple sentences

Market Targeting

Develop measures of attractiveness; selecting the group(s) of customers to go after (best potential return)

Market Positioning

Develop positioning for each segment; develop marketing mix for each segment; trying to convey meaning of product to marketplace; how a consumer thinks of a brand; how the company tries to impact how the consumer thinks of a brand; be the best at something that resonates with customers

Clustered Preferences

Different products/brands for different segments

Pluralism

Diffusion of power among society's many groups and organizations

Causes of Judgment Failures

Dilution of responsibility; pressure to perform; culture didn't support pulling the plug; time pressure; big decisions should be examined in advance; too many emotions, not enough reasoning

Enduring

Direct thoughts and actions of group members over the long-term; develops through critical events in collective life and learning of a group; attraction-selection-attrition model by Benjamin Schneider; self-reinforcing social pattern that grows resistant to change and outside influences

Geographic Segmentation

Dividing a market by cities, counties, states, or regions

Demographic Segmentation

Dividing the market by age, income, and education level; most widely used but not necessarily the best

Benefit Segmentation

Dividing the market by determining which benefits of the product to talk about

Financially Strapped

Do independent work to supplement their income but would prefer not to have to do side jobs to make ends meet; 16%

Golden Rule

Do unto others as you would have them do unto you; merits consideration because of its history and popularity as a basic and strong principle of ethical living and decision making; accepted by most people, easy to understand, win-win philosophy, acts as a compass when you need direction

Test of Purified Idea

Don' think that others in authority such as an accountant, lawyer, or a boss can "purify" your proposed action by saying they think it is okay. It still may be wrong. You will still be held responsible

Greed

Drive to acquire more and more in your own self-interest

Kant's Categorial Imperative

Duty-based principle of ethics, deontological principle; action that is morally obligatory; sense of duty arises from reason or rational nature

Assets

Economic resources (things of value) owned by a firm; productive, tangible items such as equipment, buildings, land, furniture, and motor vehicles that help generate income; intangible items with value such as patents, trademarks, copyrights, and goodwill; listed in order of liquidity

Profit (Triple Bottom Line)

Economic variables dealing with the bottom line and cash flow

Statement on the Purpose of a Corporation

Economy that allows each person to succeed through hard work and creativity; businesses that create jobs, foster innovation, and provide essential goods and services; deliver value to customers; invest in employees, deal fairly and ethically with suppliers; support communities; generate long-term value for shareholders; Business Roundtable; represents move away from shareholder primacy; shareholder interests on same level as those of customers, employees, suppliers, and communities

Cheap

Efficiency; the extent to which products are produced using the fewest resources necessary; not a lower quality or inexpensive item

Promotion

Effort by marketers to inform and remind people in the target market about products and to persuade them to participate in an exchange

Issues Management

Elementary: Defensive; Engaged: Reactive, policies; Innovative: Responsive, programs; Integrated: Proactive, systems; Transforming: Defining

Transparency

Elementary: Flank protection; Engaged: Public relations; Innovative: Public reporting; Integrated: Assurance; Transforming: Full disclosure

Citizenship Concept

Elementary: Jobs, profits, and taxes; Engaged: Philanthropy, environmental protection; Innovative: Stakeholder management; Integrated: Sustainability or triple bottom line; Transforming: Change the game

Strategic Intent

Elementary: Legal compliance; Engaged: License to operate; Innovative: Business case; Integrated: Champion, in front of it; Transforming: Market creation or social change

Leadership

Elementary: Lip service, out of touch; Engaged: Supporter, in the loop; Innovative: Steward, on top of it; Integrated: Champion, in front of it; Transforming: Visionary, ahead of the pack

ESGs

Embedded environmental, social and governance factors in capital markets makes good business sense and leads to more sustainable markets and better outcomes for societies

Stakeholder Culture

Embraces the beliefs, values, and practices that organizations have developed for addressing stakeholder issues and relationships

On-Demand Marketing Era (Mobile)

Emerging; consumers are demanding relevant information when they want it; consumers can share and rate experiences; improve handling of social media, big data, and customer experiences

Corporate Social Responsiveness

Emphasizes action, activity

Corporate Social Performance

Emphasizes outcomes, results

Generating Ideas

Employee suggestions; research and development; listen to suppliers; present customers

Ethical Due Process

Employees, customers, owners, and all stakeholders want to be treated fairly

Internal Stakeholders

Employees, manager, owners

Arguments for CSR

Enlightened self-interest; warding off government regulations; resources available; proaction better than reaction; public support

Processing

Entries are made into journals (recording); effects of journal entries are transferred or posted into ledgers (classifying); all accounts are summarized

MSCI ESG Ratings

Environmental social governance; help investors understand risks and opportunities; see how companies manage risks; used for analysis, risk management, leadership, benchmarking, etc.; help with socially responsible investments

Planet

Environmental variables relating to natural resources, water, and air quality, energy conservation, and land use

Rights Approach

Ethical action is the one that best protects and respects the moral rights of those affected; humans have a right to be treated as ends and not merely as means to other ends; may imply duty to respect rights of others; Locke; Freedom of: Speech, religion, assembly, etc. Obligation: Is my action respecting everyone's moral, legal, and contractual rights? Are they fully informed?; Goal: Take the action that does not infringe on other's rights

Procedural Justice

Ethical due process; refers to fair decision-making procedures, practices, or agreements

Confidentiality

Ethical manager must exercise care in deciding what information they disclose to others

The Production Era

European settlers to early 1900s; produce as much as you can for limitless market; business owners were mostly farmers, carpenters, and trade workers; limited production capability back then with a lot of demand for products

Sadhu

Every person did their bit for the Sadhu; however, no one ensured the ultimate well-being of the sadhu; each did their bit as long as it was convenient, then passed on the "buck" to others; greed, speed, laziness, and haziness; maybe the sadhu was in a personal last journey and wanted to go in peace

Total Product Offer

Everything that consumers evaluate when deciding whether to buy something; also called a value package

Purpose

Exemplified by idealism and altruism; work environments are tolerant, compassionate places where people try to do good for the long-term future of the world; employees united by focus on sustainability and global communities; leaders emphasize shared ideals and contributing to a greater cause; 9% ranked 1st or 2nd

Rationalizations

Expected or standard practice; materiality; locus of responsibility; locus of loyalty

Stereotyping

Expecting a group or person to have certain qualities without having real information about the person; allows us to quickly identify strangers as friends or enemies, but people tend to overuse and abuse it; can be hurtful or lead to bad decisions; racial stereotypes ingrained in most of us

Management

Explains why we can employ large numbers of knowledgeable, skilled people in productive work

Enjoyment

Expressed through fun and excitement; work environments are light-hearted places where people tend to do what makes them happy; employees united by playfulness and stimulation; leaders emphasize spontaneity and a sense of humor; 2% ranked 1st or 2nd

Opportunities

External factors, favorable factors (market)

Threats

External factors, unfavorable factors (market)

Analytical Thinking

Extracting insights from data

Personal Selling

Face-to-face presentation and promotion of products and services; search for new prospects and follow-up service after sale

Place (Operations)

Facilities: Location, layout, network; Capacity: Growth policy, economies of scale, additions

Packaging

Factor in evaluation of goods; change product in consumers' minds; make a product more attractive; changes product by changing its visibility, usefulness or attractiveness; tracking chips

Business Essentials

Factors of production, basic business forms

Blind-Spot Bias

Failing to recognize your own cognitive biases

Internal Failures Costs

Failures within company; scrap, rework, retesting, downtime - capacity, yield losses, managing defective materials

Employee Expectations

Fair pay and good working conditions

Customer Expectations

Fair prices and safe products

People Interactions

Falls on a spectrum from highly independent to highly interdependent; autonomy, individual action, and competition vs. integration, managing relationships and coordination group effort

System 1 vs. System 2

Fast vs. Slow; Unconscious vs. Conscious; Automatic vs. Effortful; Everyday Decisions vs. Complex Decisions; Error Prone vs. Reliable

Ed Freeman

Father of stakeholder approach; three major flaws in how society sees business: money is the purpose (profit is not purpose), business and ethics contradiction, people are not simple beings of self-interest; creating value together; values must be able to be challenged; many groups have a moral claim on the corporation because the corporation has the potential to harm or benefit them (stakeholders); identify stakeholder groups, make decisions that take them into account, ethical theory

Government Stakeholders

Federal, local state

Work Management

Field of study encompassing analytics methods for studying work to find improvements, maximum efficiency, and god time estimates for various tasks

Calculating Yield

Final Yield = Yield at Step 1 x Yield at Step 2 x Yield at Step N

Balance Sheet

Financial statement that reports a firm's financial condition at a specific time and is composed of three major accounts: assets, liabilities, and owners' equity; what company owns and owes on a certain day

Statement of Cash Flows

Financial statement that reports cash receipts and disbursements related to a firm's three major activities: operations, investments, and financing; provides a summary of money coming into and going out of the firm; tracks a company's cash receipts and cash payments; highlights the difference between cash coming in and cash going out

Outputs

Financial statements; balance sheet, income statement, statement of cash flow, other reports (ex. annual reports)

Applying the Marketing Process

Find opportunities -> conduct research -> identify a target market -> design a product to meet the need based on research -> do product testing -> determine a brand name, -> design a package, and set a price -> select a distribution system -> design a promotional program -> build a relationship with customers

Customer Orientation

Find out what consumers want and provide it for them

Deontological Theories

Focus on duties

Teleological Theories

Focus on the consequences or results of the actions they produce; utilitarianism; recommends taking the action that results in the greatest good for the greatest number

Profit Orientation

Focus on those goods and services that will earn the most profit and enable the organization to survive and expand to serve more consumer wants and needs

First-Line Management

Foremen, Supervisors, Office Managers; supervise employees who are directly involved in goods and services

Netflix Culture

Freedom and responsibility; trust; self-discipline; encouraged to be risk-takers; gateway to creativity; empowerment

Public Relations (PR)

Function that evaluates public attitudes, changes policies and procedures in response to the public's requests, and executes a program of action and information to earn public understanding and acceptance

Benefits

Functional, social, personal, experimental; customers buy these

Integrating

Fundamental towards addressing SDGs; potential to transform company's core business; wok with partners to enhance impact and reach; anchor sustainability goals within business; create a shared understanding of how progress towards sustainability goals creates value for the company; integrate sustainability goals into performance reviews and remunerations schemes across the organization; embed sustainability across all functions

Generally Accepted Accounting Principles

GAAP; same rules so allows for analysis and comparison

Language

Words or slogans on the wall, feature on posters, or on marketing materials; outward signals

Bottleneck

Work center with least capacity (longest cycle time); determines overall cycle time

Theory Y

Workers contributed much more when they had the freedom to express their ideas and take initiative; on the rise the past 40 years

5 Important Stakeholders

Workers, communities, customers, shareholders, environment

People

Workforce: Selection, training, retention; Organization: Structure, rewards, performance management, culture

Ethics and Compliance Program Features

Written standards of ethical workplace conduct; ethics training on the standards; mechanisms to seek ethics advice or information; methods or means for reporting misconduct anonymously; performance evaluations of ethical conduct; systems to discipline violators; set of guiding values or principles

Lesson 3

You can make a difference

Giving Voice to Values

You don't improvise ethics in the moment. You need to rehearse and train yourself on how to react if certain situations were to happen

Theory X

View that workers had to be tightly controlled and directed

Corporate Citizenship

Views companies as citizens and all this implies

Word-of-Mouth

Wasn't one of the traditional forms of promotion because it was not considered to be manageable, but it has always been an effective way of promoting goods and services; goal is to get company's message to as many people as possible

The Solution

We have both an intuitive system for ethical decision-making (System 1) and a more deliberate one (System 2)

Zero-Risk Bias

We love certainty- even if it's counterproductive; eliminating risk entirely means there is no chance of harm being caused

Pillar 7 Main Arguments

What are the reasons and rationalizations you need to address?; objections you hear; unspoken assumptions of the organization; What about your own internalization rationalizations and other concerns you might be struggling with?

Interest

When a person or group will be affected by a decision

Liquid Workforce

While market demand fluctuates, workforces remain fixed; cut full-time staff and added contractors who didn't get benefits or need to be paid when business fell; contractors were paid by the task and vendors provided just-in-time staffing; negative effects on permanent staff; contractors have no obligation to look after the company's interests

Industrial Goods

Products used in the production of other products; sometimes called business goods or B2B goods

Profit Objective

Profit is needed to pay for attainment of objectives; plan for needed minimum profitability

Corporate Social Responsibility Pyramid

Profit, legal, ethical, philanthropic; firm should engage in decisions, actions, policies, and practices that simultaneously fulfill the components; positioning portrays fundamental nature of categories to business' existence in capitalistic economic systems

Commercialization

Promoting a product to distributors and retailers to get wide distribution, and developing strong advertising and sales campaigns to generate and maintain interest in the product among distributors and consumers

B2B Selling Process

Prospect and qualify, preapproach, approach, make presentation, answer objections, close sale, follow up

Social Program Imperatives

Protect and support communities; protect and renew the environment; sustainable practices for business and planet's future

Independent Audit

Public accountants; an evaluation and unbiased opinion about the accuracy of a company's financial statements

Results Disadvantages

Overemphasis on achieving results may lead to communication and collaboration breakdowns and higher levels of stress and anxiety

Enjoyment Disadvantages

Overemphasis on autonomy and engagement lead to a lack of discipline and create possible compliance or governance issues

Caring Disadvantages

Overemphasis on consensus building may reduce exploration of options, stifle competitiveness, and slow decision making

Learning Disadvantages

Overemphasis on exploration may lead to a lack of focus and an inability to exploit existing advantages

Order Disadvantages

Overemphasis on rules and traditions may reduce individualism, stifle creativity, and limit organization agility

Safety Disadvantages

Overemphasis on standardization and formalization may lead to bureaucracy, inflexibility, and dehumanization of the work environment

Authority Disadvantages

Overemphasis on strong authority and bold decision making may lead to politics, conflict, and a psychologically unsafe work environment

Advertising

Paid, nonpersonal (not face-to-face) communication through various media by organizations and individuals who are in some way identified in the advertising message

Unilever

Responsible business practices; creation of economic and social value; shift in leadership to think global and act local; value and purpose driven; from selling soap to saving lives

Net Income or Net Loss

Revenue left over or depleted after all costs and expenses, including taxes, are paid

Data from Company Operations

Revenue, assets, net income, operating expenses, ROA; accounting data

Legal Rights

Rights that some governing authority (Constitution, Bill of Rights, federal, state, or local government) have formalized as rights

Redefining Productivity

Value chains affect and are affected by societal issues such as natural resource and water use, health and safety, working conditions, and equal treatment in the workplace; congruence between societal progress and productivity in the value chain; energy use and logistics; resource use; procurement; distribution; employee productivity; location

Components of a Total Product Offer

Price, store surroundings, guarantee, reputation of producer, buyer's past experience, package, image created by advertising, Internet access, convenience, speed of delivery, service, brand name

Psychological Pricing

Pricing goods and services at price points that make the product appear less expensive than it is

Consumer Decision-Making Process

Problem recognition, information search, evaluation of alternatives, product choice, post purchase evaluation

Task

Process steps that takes place to move service forward

Tangible

Product itself and its package

Maturity

Product: Differentiate product to satisfy different market segments; Price: Further reduce price; Place: Take over wholesaling function and intensify distribution; Promotion: Emphasize brand name as well as product benefits and differences; Sales: Maturity; Profits: Declining profits; Competitors: Stable number, then declining

Growth

Product: Improve product, keep product mix limited; Price: Adjust price to meet competition; Place: Increase distribution; Promotion: Heavy competitive advertising; Sales: Rapidly rising sales; Profits: Very high profits; Competitors: Growing number

Introduction

Product: Offer market tested product, keep mix small; Price: Go after innovators with high introductory price (skimming strategy) or use penetration pricing; Place: Wholesalers, selective distribution; Promotion: Dealer promotion and heavy investment in primary demand advertising and sales promotion to get stores to carry the product and consumers to try it; Sales: Low sales; Profits: Losses may occur; Competitors: Few

Unsought Goods and Services

Products that consumers are unaware of, haven't necessarily thought of buying, or find that they need to solve an unexpected problem; can include emergencies; often rely on personal selling

Dealer (Private-Label) Brands

Products that don't carry the manufacturer's name but carry a distributor or retailer's name instead; ex. Kenmore and DieHard are sold by Sears

Industry or Professional Level

ex. Is this safety standard we electrical engineers have passed really adequate for protecting the consumer in this age of do-it-yourselfers?

High-Low Pricing Strategy

Setting prices that are higher than EDLP stores, but having many special sales where the prices are lower than competitor's prices; department stores and some other retailers; encourages customers to wait for sales, thus cutting into profits

SWOT Analysis

Used to understand the external and internal environments - collaborators, customers, company, competitors, context; strength, weaknesses, opportunities, threats

Instrumental Value

Useful in portraying the relationship between the practice of stakeholder management and the resulting achievement of corporate performance goals

Job Shop

Uses general purpose equipment and personnel to deal with small batches; great bandwidth for routing and product diversity; long throughput times; low machine capacity utilizations, many storage steps; high ratio setup time to run time; seemingly random bottlenecking at different work centers

Technological Factors

Using consumer databases, blogs, and social networking can help companies develop products and services that closely match consumers' needs; computers, telecommunications, bar codes, data interchange, internet changes

Strategic Insights

Using insights to align organizational structures with strategic business goals

Conflict of Interest

Usually present when the individual has to choose between his or her interests and the interst of someone else or some other group

Goodwill

Value attached to factors such as a firm's reputation, location, and superior products

Product Line

A group of products that are physically similar or are intended for a similar market; usually face similar competition

Brand Manager

A manager who has direct responsibility for one brand or one product line; called a product manager in some firms; greater control over new-product development and product promotion

Cost of Goods Sold (Cost of Goods Manufactured, COGS)

A measure of the cost of merchandise sold or cost of materials and supplies used producing items for resale; compare price of manufacturing and price received

Walmart Leadership Principles

Commit to your business, share your profits with all associates and treat them as partners, motivate partners, communication, appreciate associates, celebrate success, listen to everyone, exceed customer expectations, control expenses, swim upstrea

Characteristics of Strong Ethical Cultures

Communicated ethics as a priority, set a good example of ethical conduct, kept commitments, provided information as to what was going on, supported following organization's standards

Fidelity

Communicator should be faithful to detail, should be accurate, and should avoid deception or exaggeration

Certified Public Accountant (CPA)

An accountant who passes a series of examinations established by the American Institute of Certified Public Accountants (AICPA)

Public Accountant

An accountant who provides accounting services to individuals or business on a fee basis; design accounting system, help select software for system, analyze organization's financial performance

Private Accountant

An accountant who works for a single firm, government agency, or nonprofit organization; keep accurate financial information

Survivorship Bias

An error that comes from focusing only on surviving examples, causing us to misjudge a situation

Ethics Principle

An ethical concept, guideline, or rule that, if applied when you are faced with an ethical decision or practice, will assist you in taking the ethical course of action

Legal Responsibilities

Businesses expected to operate under laws and regulations; reflect society's view of "codified ethics"; responsibility to society to comply

Financial Transactions

Buying and selling goods and services, acquiring insurance, paying employees, using supplies

Managerial and Organizational Levels

Carry consequences for an individual's status in the organization, for the company's reputation and success in the community, kind of ethical environment or culture that will prevail on a day-to-day basis at the office

Financing

Cash raised by taking on new debt, or equity capital or cash used to pay business expenses, past debts, or company dividends

Operations

Cash transactions associated with running the business

Investments

Cash used in or provided by the firm's investment activities

Slippery Slope

Causes people to not notice others' unethical behavior when it gradually occurs in small increments

Learning (Culture)

Characterized by exploration, expansiveness, and creativity; work environments are inventive and open-minded places where people spark new ideas and explore alternatives; employees united by curiosity; leaders emphasize innovation, knowledge, and adventure; 7% ranked 1st or 2nd

Arguments Against CSR

Classical economics (Friedman); businesses not equipped; dilutes business purpose; businesses have too much power already; decline in global competitiveness

Environmental SDGs

Clean water and sanitation; affordable and clean energy; industry, innovation, and infrastructure; sustainable cities and communities; responsible consumption and production; climate action; life below water; life on land

Environmental

Climate change, natural resources, pollution and waste, biodiversity

Stakeholder Relationships

Elementary: Unilateral; Engaged: Interactive; Innovative: Mutual influence; Integrated: Partnership alliance; Transforming: Multi-organization

Decision Making

Entails a process of stating the problem, analyzing the problem, identifying possible courses of action that might be taken, evaluating these courses of action, deciding on the best alternative, implementing the chosen course of action

Conventional Approach

Entails making a comparison between a decision, action, or policy and prevailing norms of acceptability

Utilitarian Approach

Ethical action is the one that provides the most good or does the least harm; deals with consequences; tries to increase the good done and reduce the harm done; Bentham; Stakeholders: Family, friends, company, community, society; Benefits vs. Harm: How can stakeholders benefit and how can they be harmed by my action? Goal: Create the most benefit over harm for the most stakeholders

Convenience Goods and Services

Products that the consumer wants to purchase frequently and with a minimum of effort; candy, gum, milk, snacks, gas, and banking services; location, brand awareness, and image are important for marketers; best way to promote is to make them readily available and create the proper image

Structural

Elementary: Marginal, staff driven; Engaged: Functional ownership; Innovative: Cross-functional coordination; Integrated: Organizational alignment; Transforming: Mainstream, business driven

Rational Level

Entails the company identifying who their stakeholders are and what their stakes happen to be

Product Innovation

Innovation in product or service

Economic Responsibilities

Institution should have the objective to produce goods and services that society needs and wants and to sell them at fair prices; sufficient profits to ensure its survival and growth and to reward investors; attention to revenues, costs, investments, strategic decision making, focus on long-term financial performance

Governing Philosophy

Integrating stakeholder management into the firm's governing philosophy

Principles of Stakeholder Management (Clarkson Principles)

Intended to provide managers with guiding precepts regarding how stakeholders should be treated

Greenwashing

Intentionally seeking to convey the image of a socially responsible firm when in fact they are conducting business as usual; may attempt to make public believe they are "green" or "greener" than they are

Weaknesses

Internal factors (company), unfavorable factors (market)

Shared Value

Investments in long-term competitiveness that also address social and environmental objectives

Ethics Check

Is it legal? Is it balanced? How will it make me feel about myself?

Market Triumphalism

Leading up to 2008 recession, time of market faith and deregulation; era began in 1980s

Intangible Assets

Long-term assets (ex. patents, trademarks, copyrights) that have no real physical form but do have value

Bonds Payable

Long-term liabilities that represent money lent to the firm that must be paid back

Marginal Stakeholder

Low on both potential for threat and potential for cooperation; might include professional associations of employees, inactive consumer interest groups, or shareholders; strategy: monitoring; watch carefully, minimal effort, offense or defense

Principle of Rights

Maintains that persons have both moral and legal rights that should be honored and respected; a right can only be overridden by a more basic or important right

Fundamental Task of Management

Make people capable of joint performance through common goals, common values, the right structure, and the training and development they need to perform and respond to change

Service Orientation

Make sure everyone in the organization has the same objective: customer satisfaction

Product Analysis

Making cost estimates and sales forecasts to get a feeling for profitability of new-product ideas; products that don't meet criteria are withdrawn from consideration

Managerial Ethics

Making decisions which have ethical implications or consequences

Gag Test

Manager's clearest signal that a dubious decision or action is going too far is when you simply "gag" at the prospect of carrying it out

Accounting Disciplines

Managerial accounting, financial accounting, auditing, tax accounting, governmental and not-for-profit accounting

Relationship Marketing

Marketing strategy with the goal of keeping individual customers over time by offering them products that exactly meet their requirements; technology enables sellers to work with individual buyers to determine their wants and needs and to develop goods and services specifically designed for them

Business Objectives

Marketing, innovation, human resources, financial resources, physical resources, productivity, social responsibility, profit requirements; determines structure of business, key activities, and allocation of people to tasks

The Selling Era

Mass-production by 1920s; production capacity exceeded immediate market demand; business philosophy went from production to selling; emphasized selling and advertising to persuade consumers to buy existing products; didn't offer service after sale

Laziness

May lead you to take the easy course of action that requires the least amount of effort

Liquidity Ratios

Measure a company's ability to turn assets into cash to pay its short-term debts

Profitability (Performance) Ratios

Measure how effectively a firm's managers are using its various resources to achieve profits

Acid-Test (Quick Ratio)

Measure the cash, marketable securities (stocks and bonds), and receivables of a firm, compared to its liabilities; (cash + accounts receivable + Marketable securities/current liabilities); satisfactory between .5-1

Scrap Rate

Measures the losses per period (1 - yield)

Revenue

Monetary value of what a firm received for goods sold, services rendered, and other payments (such as rents received, money paid to the firm for use of its patents, interest earned, etc.)

Profit

Money left over after expenses; if company doesn't need it, can give dividends to shareholders

Resource Objectives

Resources a business needs in order to perform with supply, utilization, and productivity

Retention

Responsible for making sure firm's top performers stay with the companies; How can we prevent our best employees from leaving the company?

Income Statement Equation

Revenue - Expenses = Net Income

Deeper Elements

Shared values, shared assumptions

Bandwidth

The ability of an operating unit to tolerate wide variances in work order requirements; typically acquired by choosing general purpose equipment instead of special purpose equipment, and flexible layouts that facilitate wide variations in the pattersns of work flow

Bookkeeping

The recording of business transactions; divide firm's transactions into meaningful categories

Target Costing

Designing a product so that it satisfies customers and meets the profit margins desired by the firm

McDonald's

Effective Partnership Policies: Loyal to suppliers, progressive franchise policy; Policy Effects: High consistency, high innovation levels, industry leadership

Good

Effectiveness; the extent to which the product and its delivery satisfy the customers' wants and needs; how well you meet expectations

Successful Platform Businesses

Alibaba, AirBnB, Uber, Facebook

7 Pillars of GVV

Values, purpose, choice, normalization, self-knowledge & alignment, voice, reasons & rationalizations

Expected (Standard) Practice

"Everyone does this, so it's really standard practice. It's even expected."; if everyone was actually acting unethically, what would be the consequences for business practice and customer trust?; if its' standard practice, why are there laws, rules, and/or policies against it?

Test of Ventilation

"Expose" your proposed action to others and get their thoughts before acting; opinions of people who may not see things your way

Test of Making Something Public (Disclosure Rule)

"How would I feel if others knew I was doing this? How would I feel if I knew that my decisions or actions were going to be featured on the national evening news tonight for the entire world to see?"; whether action or decision can withstand public disclosure or scrutiny

Locus of Loyalty

"I know this isn't quite fair to the customer but I don't want to hurt my reports/team/boss/company."; can be framed in many ways

Test of One's Best Self

"Is this action or decision I'm getting ready to take compatible with my concept of myself at my best?"

Steps in the Accounting Cycle

1. Analyze source documents (sales slips, travel records, etc.) 2. Record transactions in journals 3. Transfer (post) journal entries to ledger 4. Take a trial balance 5. Prepare financial statements (balance sheet, income statement, statement of cash flows) 6. Analyze financial statements

Customer Relationship Era

1990s and early 2000s; the process of learning as much as possible about customers and doing everything you can to satisfy them- or even exceed their expectations- with goods and services; enhance customer satisfaction and stimulate long-term customer loyalty; respond to desire to be more sustainable

Trademark

A brand has exclusive legal protection for both its brand name and its design

Society

A community, nation, or a broad grouping of people with common traditions, values, institutions, and collective activities and interests

Competition-Based Pricing

A pricing strategy based on what all the other competitors are doing. The price can be set at, above, or below competitors' prices; pricing depends on customer loyalty, perceived differences, and the competitive climate

Product Screening

A process designed to reduce the number of new-product ideas being worked on at any one time; applies criteria to determine whether the product fits well with present products, has good profit potential, and is marketable

Certified Management Accountant (CMA)

A professional accountant who has met certain educational and experience requirements, passed a qualifying exam, and been certified by the Institute of Certified Management Accountants

Accounting Cycle

A six-step procedure that results in the preparation and analysis of the major financial statements; relies on work of bookkeepers and accountants

Focus Group

A small group of people who meet under the direction of a discussion leader to communicate their opinions about an organization, its products, or other given issues

Ledgers

A specialized accounting book or computer program in which information from accounting journals is accumulated into specific categories and posted so that managers can find all the information about one account in the same place

Trial Balance

A summary of all the financial data in the account ledgers that ensures the figures are correct andbalanced

Financial Statement

A summary of all the financial transactions that have occurred over a particular period; indicate firm's financial health and stability; key factor in decision-making

Product Life Cycle

A theoretical model of what happens to sales and profits for a product class over time; the four stages of the cycle are introduction, growth, maturity, and decline; can give clues to successfully promoting a product over time

Brand Name

A word, letter, or group of words or letters that differentiates one seller's goods and services from those of competitors; most people choose well-known; ensures quality, reduces search time, and adds prestige to purchases; facilitates new-product introductions, helps promotional efforts, adds to repeat purchases; differentiates products so that prices can be set higher

Public Accountant Career Path

Accountant -> CPA Manager -> CPA Partner

Private Accountant Career Path

Accountant -> VP of Finance -> CFO

Inputs

Accounting documents; sales documents, shipping documents, payroll records, bank records, travel records, entertainment records

Social Responsibility Objective

Business needs to think through its impacts and its responsibilities and set objectives for both

Pricing Objectives

Achieving a target return on investment or profit - make a profit by providing goods and services to others, reduce amount provided to customers; building traffic - advertise certain products at or below cost to attract people to store (loss leaders), make profits by following the short-run objective of building a customer base; achieving greater market share - offer low prices, lower finance rates, low lease rates, or rebates; creating an image - high price to give an image of exclusivity and status; furthering social objectives - low price so people with little money can afford

Mainstream Adopters

All other conventional businesses that have adopted, practiced, and achieved some degree of excellence or recognition for socially responsible policies and practices; gain competitive advantage reduce costs, enhance reputation, emulate other firms, fulfill corporate citizenship

Business-to-Business (B2B) Market

All the individuals and organizations that want goods and services to use in producing other goods and services or to sell, rent, or supply goods to others

Consumer Market

All the individuals or households that want goods and services for personal consumption or use

Promotion (4 Ps)

All the techniques sellers use to inform people about and motivate them to buy their products or services; advertising, personal selling, public relations, publicity, word of mouth, various sales promotions; relationship building with customers

Selective Perception

Allowing our expectations to influence how we perceive the world

Training

Allows for low-wage countries to be efficient

Accounts Receivable

Amount of money owed to the firm that it expects to receive within one year; liquid because it can be easily converted to cash

Viral Marketing

Marketing phenomenon that facilitates and encourages people to pass along a marketing message

Analysts

Analytical theory needs to be converted into practice; best analysts can persuade managers to adopt analytical decision making; early adopters to analytics created tangible value for themselves by applying right data and tools to people processes

Critical Competencies for Managing People

Analytical thinking, interpersonal skills, strategic insights

Process

Any conversion activity where inputs are transformed into outputs; in factories, output is finished products; in retail stores, output is a satisfied customer

Product

Any physical good, service, or idea that satisfies a want or need plus anything that would enhance the product in the eyes of consumers, such as the brand; designing a want-satisfying product

B2C Selling Process

Approach (asking questions), presentation (answering questions), close, follow-up

Servant Leadership

Approach to ethical leadership and decision making based on the moral principle of serving others first; listening, empathy, healing, persuasion, awareness, foresight, conceptualization, commitment to the growth of people, stewardship, building community

Managers and Management

As you move up the corporate hierarchy, success will be due to effective managerial and interpersonal skills rather than technical expertise alone; managing larger and larger number of employees

A's of Giving Voice to Values

Awareness, analysis, action

Rawl's Principle of Justice

Based on the idea that what we need first is a fair method by which we may choose the principles through which conflicts will be resolved; two principles: each person has an equal right to the most extensive basic liberties compatible with similar liberties for all others, social and economic inequalities are arranged so that they are both (a) reasonably expected to be to everyone's advantage and (b) attached to positions and offices open to all

Core Product

Basic features and benefits of product

Product Attributes

Because our product has...

Social Entrepreneurship

Began their CSR initiatives at the very beginning of their founding and strategically carried it forward; large part of initial mission was to bring abut social change; pushed capitalism toward creating shared value; Benefit Corporations (B-Corps) are an emerging area

Corporate Sustainability

Being able to sustain your business responsibly, with one eye on new external risks and the other on future consequences of decisions; allocating financial or in-kind resources of the corporation to a social or environmental initiative

System 2 Examples

Brace for the starter gun in a race; focus attention on the clowns in the circus; focus on the voice of a particular person in a crowded and noisy room; look for a woman with white hair; search memory to identify a surprising sound; maintain a faster walking speed than is normal for you; monitor the appropriateness of your behavior in a social situation; count the occurrences of the letter a in a page of text; tell someone your phone number; park in a narrow space; compare two washing machines for overall value; fill out a tax form; check the validity of a complex logical argument

Networking

Building a personal array of people you've met, spoken to, or corresponded with, who can offer you advice about and even help your career options

Corporate Social Responsibility

Business activities + social programs; social activities mainly disconnected from the core business activities; economic, legal, ethical, and philanthropic responsibilities; considering the impact of a company's actions on society; the obligation of decision makers to take actions which protect and improve the welfare of society as a whole along with their own interests

Platform

Business based on enabling value-creating interactions between external producers and consumers; facilitate exchange of goods, services, or social currency

Global Business Citizen

Business enterprise (including its managers) that responsibly exercises its rights and implements its duties to individuals, stakeholders, and societies within and across national and cultural borders

Operations Management

Business function concerned with designing, controlling, and improving the process of producing goods and services; realizing value by producing goods and services that customers can purchase; make sure quality is there and wants and needs are satisfied; the science of getting things done

Social Intrapreneurship

Companies that didn't have a specific social agenda as part of their initial formation but later developed a highly visible social agenda or program; work inside major companies to develop and promote practical solutions to social, environmental, or sustainability challenges as a part of their financial missions

Nonprice Competition

Compete on product attributes rather than price; marketers tend to stress product images and consumer benefits; small organizations promote services that accompany basic products rather than price in order to compete with bigger firms

Specialty Goods and Services

Consumer products with unique characteristics and brand identity. Because these products are perceived as having no reasonable substitute, the consumer puts forth a special effort to purchase them; fine watches, expensive wine, fur coats, jewelry, imported chocolates, and services provided by medical specialists or business consultants; marketing through special magazines; rely on reaching special market segments through advertising; when consumers reach point of brand insistence

Cost-Based Pricing

Cost as a primary basis for setting price; measure production costs (including materials, labor, and overhead), add in margin of profit, and come up with a price; in the long-run, market determines the price; include expected costs of product updates, marketing objectives, and competitor prices

Learning

Creates changes in individual's behavior resulting from previous experiences and information

Creating a Customer

Creating a market where customers and competition transact; understand customer needs and demands; develop innovative solutions to satisfy these needs

Process Analysis Activities

Creating a process flow diagram, analyzing the operating unit structure, analyzing the work flow, evaluating the overall process

Marketing Management Building Blocks

Customer acquisition and retention; segmentation and P's of marketing are about creating and delivering value; price is about capturing value; cheaper and more profitable to retain customers than to attract new ones; move from transactional frame of mind to relationship frame of mind

External Failure Costs

Customer complaint adjustment, returned materials -restocking and reshipping, warranty charges, allowances for defective materials, lost business

Coke and Pepsi Allegations

Dangerously high levels of pesticide residue in soft drinks in India; accused of over consuming scarce water supply and polluting water sources; water exploitation and controlling natural resources, and thus communities, contributing to toxic waste

Free Agents

Derive their primary income from independent work and actively choose this working style; 30%

Reluctants

Derive their primary income from independent work but would prefer traditional jobs; 14%

Pricing Paradox

Easiest, fastest, and least costly adjustment that one can make to the marketing mix (adjusted automatically by algorithms); small changes can have very large effects on the bottom line

Comparative Advantage

Determine how to allow each person or organization to use time where it can create the most value; individuals can perform a task at a lower opportunity cost than others

Schein

Developed organizational culture model

One-to-One Marketing

Developing a unique mix of goods and services for each individual customer; easy to do in B2B markets where each customer may buy in huge volume

Mass Marketing

Developing products and promotions to please large groups of people; little market segmentation; sell same products to as many people as possible; sometimes become less responsive to market

Internal Sales Promotion

Directed at salespeople and other customer-contact people to keep them enthusiastic about the company; activities include sales training, sales aids, audio-visual displays, and trade shows

Volume (Usage) Segmentation

Dividing the market by usage (volume of use); find customer base and how to develop promotions that appeal to them

Psychographic Segmentation

Dividing the market using groups' values, attitudes, and interests

Earnings Per Share (EPS)

Earnings help stimulate the firm's growth and provide for stockholders' dividends; report in basic earnings per share and diluted earnings per share

Similar to Your Peers

Easier to communicate at first; more satisfied; less potential conflict; less creative; drawing from similar knowledge base; faster fitting in process

Virtue Approach

Ethical actions should be consistent with certain ideal virtues that provide for the full development of our humanity; dispositions and habits that enable us to act according to the highest potential of our character and on behalf of values like truth and beauty; honesty, courage, compassion, generosity, tolerance, love, fidelity, integrity, fairness, self-control, prudence; Aristotle; What are my virtues?: Honesty, loyalty, fairness, courage, generosity; Who do I want to be?: Will my action enforce the kind of character I value in myself?; Am I satisfied?: Can I live with my decision and the effects it has? Does it represent me?

Key Tenets for Best Compliance Programs

Ethics and compliance are a central component to a company's business strategy; ethics and compliance risks are owned, managed and mitigated; leaders at all levels are involved in building and sustaining a culture of integrity; the organization should project its values and encourage the reporting of concerns or suspected wrongdoing; the organization will take action and hold itself accountable when wrongdoing takes place

Evaluate Alternative Actions

Evaluate the options by asking the following questions: Which option will produce the most good and do the least harm? (Utilitarian Approach); Which option best respects the rights of all who have a stake? (Rights Approach); Which option treats people equally or proportionately? (Justice Approach); Which option best serves the community as a whole, not just some members? (Common Good Approach); Which options leads me to act as the sort of person I want to be? (Virtue Approach)

Augmented Product

Extra service, delivery, installation, CSR, financing, warranties, end of life

Virtue Ethics

Focuses on becoming imbued with virtues (honesty, fairness, truthfulness, trustworthiness, benevolence, respect, nonmalfeasance)

Social Environment

Focuses on demographics, lifestyles, culture, and social values of society

Influencer Marketing

Focuses on leveraging individuals who have influence over potential buyers and orienting marketing activities around these individuals to drive a brand message to the larger market

Caring

Focuses on relationships and mutual trust; work environments are warm, collaborative, and welcoming places where people help and support one another; leaders emphasize sincerity, teamwork, and positive relationships; 63% ranked 1st or second

Political Environment

Focuses on the processes by which laws get passed and officials get elected and all other aspects of the interaction between firms, political practices, and government; of particular interest: taxation, regulatory practice, changes over time in business regulation

Why Do Businesses Exist?

Formed by entrepreneurs who seek to address an opportunity or problem in market; earn financial return; passion and drive to make an impact on the world

Stuff

Goods and services

Data from HR Information Systems

Headcount (employees working for firm), tenure, performance ratings, salary, turnover, demographics

Defining Priorities

Help focus efforts because not all SDGs are relevant; first conduct an assessment on the current, potential, positive and negative impacts that your business activities have on the SDGs; engage stakeholders to understand interests and concerns; consider magnitude, severity, and likelihood of current and potential negative impacts, importance of such impacts to key stakeholders and the opportunity to strengthen competitiveness; assess opportunity for company to grow or gain advantage from its current or potential positive impacts across SDGs

Basic Earnings Per Share (Basic EPS) Ratio

Helps determine the amount of profit a company earned for each share of outstanding common stock; (net income after taxes/number of common stock shares outstanding)

Behavioral Ethics

Helps us to understand at a deeper level many of the behavioral processes that research has shown actually are taking place in people and organizations

Mixed-Blessing Stakeholder

High on both potential for threat and potential for cooperation; employees who are in short supply, clients, or customers; could become a supportive or nonsupportive stakeholder; strategy: collaboration; take offense, partnership, pool resources, keep informed

Supportive Stakeholder

High on potential for cooperation and low on potential for threat; ideal stakeholder; strategy: involvement; board of directors, some employees; take offense, accommodate, proact, keep satisfied

Nonsupportive Stakeholder

High on potential for threat but low on potential for cooperation; competing organizations, unions, federal or other levels of government, and the media; strategy: defend; be prepared, guard against, negotiate

Reasons for Increased Cheating

Higher levels of inequality, today's widespread insecurities, failure of oversight across many sectors, America's highly individualistic culture

Company Priorities After Pandemic

Hire back laid-off or furloughed workers after operations return to normal; continue to enforce safety and sanitation policies and processes across operations; continue to provide measure to accommodate financially stressed customers, such as cutting prices or not charging late fees

Pillar 7 Plan of Action

Implementation of the plan; your decision; To whom should your plan of action be conveyed?; your levers; When and in what context?

Authority Advantages

Improved speed of decision making and responsiveness to threats or crises

Accounting Questions

How is the company doing? Strong or weak? Can it pay bills? Growing? Making money? What does it own? How much does it owe?

Brand Awareness

How quickly or easily a given band name comes to mind when a product category is mentioned; advertising helps build

Talent Supply Chain

How should my workforce needs adapt to changes in the business environment?; helps companies make decisions in real time about talent-related demands; most complex because it requires high-quality data, rigorous analysis, and the integration of broad talent management and other organization processes

Process Analysis

How to develop a process for producing goods and services; components are the same; understanding what the process does, how and why it does it, how effectively it works, and how it might be improved

Incentive Structure

How to motivate people? How to measure and reward performance? Money isn't enough - can demotivate people and make them perform worse

Caring Advantages

Improved teamwork, engagement, communication, trust, and sense of belonging

Business-to-Business Market

Includes manufacturers, intermediaries, institutions, and the government; larger than the consumer market because items are sold and resold several times before they reach final consumer; marketing strategies differ; few customers; tend to be geographically concentrated; generally more rational and less emotional; tend to be direct; based on personal selling

Ethics Culture

Includes the tone set by top management leaders, supervisor reinforcement of ethical behavior, and peer commitment

Promotion Objectives

Inform, persuade, remind; used to promote awareness, consideration, preference, action, and loyalty

Secondary Data

Information that has already been compiled by others and published in journals and books or made available online; doesn't always provide all the information managers need to make important decisions

Social Innovation

Innovation in the marketplace and consumer behavior and values

Managerial Innovation

Innovation in the various skills and activities needed to make the products and services and bring them to market

What is Marketing?

Innovation, research, analytics, product development, strategy, informing operations of the firm, knowledge of customer

Raw Materials Inventories

Inputs stored before processing; protect operating unit from supply problems

Accounting System

Inputs, processing, outputs

Effectiveness and Efficiency

Know customers' needs (customer defines value); understanding technology (is it feasible? know minimal amount of information on technological feasibility); innovation (design, technology, process); deploying and coordinating resources (companies rely on others to get things done, process design, process execution)

Common Good Approach

Interlocking relationships of society are the basis of ethical reasoning; respect and compassion for all others are requirements; calls attention to the common conditions that are important to the welfare of everyone; Rousseau; How do I benefit from society?: Public safety, just legal system, affordable healthcare, fair trade and commerce, peaceful society; Who benefits from my action?: Me, my family, my community, the ecosystem, the strong, the weak, society; Reflection: By benefiting society, did I help others progress as well as myself?

Pillar 7 Stakeholders

Internal stakeholders; external stakeholders; What is important to them? Who has a stake in the outcome of your decision? Who has an interest? What are the motivations of each stakeholder? How much power does each hold? What are the benefits and harms, rights and wrongs?

Stories and Legends

Internet, advertising, more informal; What are the narratives that organizations have about what came before you and how that influences work? ex. Story about founder; Inspiration; tells what's important to people at organization

Work-In-Progress Inventories

Inventories held at or between work centers; decouple tasks in a process, making each work center less dependent on the previous work center

Social Value

Investments that address social and environmental objectives

Company's DNA

Invisible, yet powerful template for employee behavior; organizational culture

Compensatory Justice

Involves compensating someone for a past injustice

Principle of Justice

Involves the fair treatment of each person

Toby Groves Lessons

It often starts small and becomes a slipper slope; rationalization overcomes rational thinking; there is a split of persona between the "personal" and "business" sphere; the cumulative impacts grows out of control and leads to more numerous and more brazen transgressions; loss of perspective; loss consciousness of who is being hurt

Local Community Expectations

Jobs and minimal disruption

Partnership

Joint sole proprietorship; pulled resources across two or more partners; high personal risk, but spread across partners; often found in service industries; 8% of businesses in U.S.; 13% of total business revenue

Gig Economy

Labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs; workers have formal agreements with on-demand platform companies to provide on-demand services to the company's clients; use their skills, labor, and personal possessions to earn an income

Ethics Training Goals

Learn the fundamentals of business ethics; learn to solve ethical dilemmas; learn to identify causes of unethical behavior; learn about common managerial ethical issues; learn whistle-blowing criteria and risks; learn to develop a code of ethics and execute an internal ethical audit

Discretionary Stakeholder

Legitimacy (attribute)

Stakeholder Attributes

Legitimacy, power, urgency

Dependent Stakeholder

Legitimacy, urgency (attributes)

Decision Making Limitations

Limited ability to calculate; importance of social networks; emotion overtakes logic; altruism vs. pure self-interest; desire for instant rewards; people stick to default choices

Good PR Program

Listen to the public, develop policies and procedures in their public interest, tell people you're being responsive to their needs

Common Mistakes in Talent Analytics

Making analytics an excuse to treat human beings like interchangeable widgets; keeping a metric live even when it has no clear business reason for being; relying on just a few metrics to evaluate employee performance, so smart employees can game the system; insisting on 100% accurate data before an analysis is accepted - which amounts to never making a decision; assessing employees only on simple measures such as grades and test scores, which often fail to accurately predict success; using analytics to hire lower-level people but not when assessing senior management; failing to monitor changes in organizational priorities, thus creating irrelevant- if accurate - analyses; ignoring aspects of performance that can't easily be translated into quantitative measures; analyzing HR efficiency metrics only, while failing to address the impact of talent management on business performance

Corporate Governance Structure

Many checks and balances in order to preserve interests of different parties; owners and stockholders elect Board of Directors; Board of Directors hires officers; officers set corporate objectives and select managers; managers supervise employees

Basic Functions of Business

Marketing and innovation

Target Marketing

Marketing directed toward those groups (market segments) an organization decides it can serve profitably

Lessons from Segway

Marketing is central to innovation and brining solutions to markets; innovation too important to be left to scientists and engineers; solves needs or relieves a pain point; customers must be willing to pay for benefits; figure out product that best fits need; success predicated on the right product/service design, business model, and go-to-market strategy

Diluted Earnings Per Share (Diluted EPS) Ratio

Measures the amount of profit earned for each share of outstanding common stock, but also considers stock options, warrants, preferred stock, and convertible debt securities the firm can convert into common stock

Debt to Owners' Equity Ratio

Measures the degree to which the company is financed by borrowed funds that it must repay; (total liability/owners' equity); over 100% shows firm has more debt than equity

Inventory Turnover Ratio

Measures the speed with which inventory moves through he firm and gets converted into sales; (cost of goods sold/average inventory)

Ethics Audits

Mechanisms or approaches by which a company may assess or evaluate its ethical climate or programs

Creating Shared Value

Michael Porter; social activities are embedded and integrated within the rest of the activities of the business; business and society can be brought together if business redefines the basic purpose; generating economic value in a way that also produces value for society

Equity

Money owners put into business to get it started; can get other partners but must give some up and share profits with investors

Sociocultural Factors

Monitor social trends to maintain close relationship with customers; growing population of those over 65; rise of ethnic groups like Hispanics and Asians; population shifts, values, attitudes, trends

Ethical Responsibilities

Needed to embrace activities, standards, and practices that are expected or prohibited by society even though they aren't codified in law; full scope of norms, standards, values, and expectations that reflect what society regards as fair and moral; continually evolving; avoid harm

Power of the Platform

New business model that uses technology to connect people, organizations, and resources in an interactive ecosystem in which amazing amounts of value can be created and exchanged

Generic Goods

Nonbranded products that usually sell at a sizable discount compared to national or private-label brands; feature basic packaging and are backed with little or no advertising; come close to same quality as national brand-name goods

Regulation

Not a dirty word; strong role to keep businesses in check; doesn't have to be the enemy of competition or business success; allows businesses to focus just on business

Strategy

Offers formal logic for company's goals and orients people around them; provides clarity and focus for collective action and decision making; relies on plans and sets of choices to mobilize people; enforced by concrete rewards for achieving goals and consequences for failing; incorporates adaptive elements that can scan and analyze external environment and sense when changes are required to maintain continuity and growth

Pluralistic Society

One in which there is wide decentralization and diversity of power concentration

Training

Ongoing training and development; employees have skills they need to work effectively; What training should we invest in for our employees?

Capitalism

Only 25% of Americans think it works for society today

Transparency Characteristics

Openness, ongoing communication, accountability

Stakeholder Opportunities and Challenges

Opportunities for businesses to build decent, productive working relationships with the stakeholders; challenges usually present themselves in such a way that the firm must handle the stakeholders acceptably or be hurt in some way- financially or in terms of its public image or reputation in the community

Opacity

Opposite of transparency; opaque condition in which activities and practices remain obscure or hidden from outside scrutiny and review

Process Level

Organizations go a step further than Rational Level and actually develop and implement processes - approaches, procedures, policies, and practices - by which the firm may scan the environment and further pertinent information about stakeholders, which is then used for decision-making purposes

Enterprise

Organizations need access to employee data to be successful; statistical relationship between employee satisfaction and company performance

Emotional Benefits

Our product makes people feel...

Salience

Our tendency to focus on the most easily recognizable features of a person or concept

Purpose Disadvantages

Overemphasis on a long-term purpose and ideals may get in the way of practical and immediate concerns

Stroop Test Lessons

People are bad at ignoring information in front of them; we process information even if it is irrelevant, misleading, or even wrong- it is automatic (why fake news works so well)

Anchoring Bias

People are over-reliant on the first piece of information they hear; people have trouble updating on the first piece of information they hear; not fundamentally flawed - anchor can have meaning

Conservatism Bias

People favor prior evidence over new evidence or information that has emerged; slow to accept new information

Work Centers

People or pieces of equipment performing particular kinds of transformation operations

Availability Heuristic

People overestimate the importance of information that is available to them

Keyword Marketing

Placing a marketing message in front of users based on specific keywords and phrases they are using to search; gives marketers ability to reach the right people with the right message at the right time

Safety

Planning, caution, and preparedness; work environments are predictable places where people are risk-conscious and think things through carefully; employees united by desire to feel protected and anticipate change; leaders emphasize being realistic and planning ahead; 8% ranked 1st or 2nd

Middle Management

Plant Managers, Division Managers, Department Managers; located in corporate headquarters; oversee activities in a few different stores within region

Top Management

President, CEO, Executive Vice Presidents; responsible for organization-wide goals and strategies

Reframe Pressuer

Pressure creates stress and stress impacts you and the people around you; turn stress into your superpower and perform better; don't look for external fixes; use cognitive reappraisal to change stress into something that helps you

Negotiating Pay

Price differentiation is being applied to starting salaries; employers offered lower starting salaries than what they were willing to pay and employees accepted and didn't try to negotiate; issue in paying people different salaries for similar jobs

Throughput Time

Queue Time + Task Time; time required for a job to go from start to finish

System 1

Rapid but not thoughtful decision-making; operate automatically and quickly, with little or no efforts and no sense of voluntary control; innate skills; learned associations between ideas; learned skills like reading and understanding nuances of social situations

Moral Manager

Recognizes the importance of proactively putting ethics at the forefront of their ethical agenda; engage in role modeling through visible action; communicates about ethics and values; use rewards and discipline effectively

Suppliers Expectations

Regular business and prompt payment

Selling Expenses

Related to the marketing and distribution of a firm's goods or services, such as advertising, salespeople's salaries, and supplies

Balance

Relationship between cycle times in a process

United Nation Sustainable Development Goals (SDGs)

Released in 2015; urging businesses to follow goals: no poverty; zero hunger; good health and well-being; quality education; gender equality; clean water and sanitation; affordable and clean energy; decent work and economic growth; industry, innovation, and infrastructure; reduced inequalities; sustainable cities and communities; responsible consumption and production; climate action; life on land; peace, justice, and strong institutions; partnerships for the goals; companies pursue different goals; 1. Climate action; 2. Responsible consumption and production; 3. Decent work and economic growth; 4. Gender equality; define global priorities and aspirations for 2030

Ethics is Not...

Religion: Ethics applies to everyone; doesn't address certain ethical issues facing businesses; Following the Law: Good system of law incorporates ethical standards, but law can deviate from what's ethical Following Culturally Accepted Norms: Some cultures are unethical; Science: Social and natural science can provide data for better ethical choices; doesn't tell us what we should do

External Sales Promotions

Rely on samples, coupons, cents-off deals, displays, store demonstrators, premiums, and other incentives

Technological Environment

Represents the total set of technology-based advancements taking place in society and the world

Candor

Requires that a manager be forthright, sincere, and honest in communication transactions; requires manager to be fair and free from prejudice and malice in communication

Proximity

Researchers think it should be included as an important stakeholder factor; the spatial distance between the organizations and its stakeholders

Order

Respect, structure, and shared norms; work environments are methodical places where people tend to play by the rules and want to fit in; employees united by cooperation; leaders emphasize shared procedures and time-honored customs; 15% ranked 1st or 2nd

Compensating

Salary important for employee's motivation; base salary, commission, stock options, etc.; How (and how much) should we pay people?

Stakeholder Management

See to it that while the firm's primary stakeholders achieve their objectives, the other stakeholders are dealt with ethically and also relatively satisfied; describe, analyze, understand, and manage; embraces social, legal, ethical, and economic considerations

Conscious Capitalism

Seeking a higher purpose using a stakeholder orientation, embracing conscious leadership, promoting a conscious culture that seeks to improve the social fabric of business

Bounded Rationality

Sees managers as wanting to be rational but influenced by biases and other cognitive limitations that get in the way

Subculture

Set of values, attitudes, and ways of doing things that results from belonging to a certain ethnic group, racial group, or other group with which one closely identifies

Culture

Set of values, attitudes, and ways of doing things transmitted from one generation to another in a given society; emphasizes and transmits the values of education, freedom, and diversity

Price

Setting a price for the product; determined by competition, costs of production, distributing, and promoting

Everyday Low Pricing (EDLP)

Setting prices lower than competitors then not having any special sales; Home Depot, Walmart; bring consumers to the store whenever they want a bargain rather than having them wait until there is a sale

Organizational Ethical Culture

Shared values, beliefs, behaviors, and ways of doing things in the organization

Cultural Attributes

Shared, pervasive, enduring, implicit

Notes Payable

Short-term or long-term liabilities that a business promises to repay by a certain date; like loans from banks

Market Targeting Strategies

Single-segment concentration, selective specialization, product specialization, market specialization, full market coverage

Personal Level

Situations we face in our personal lives that are generally outside the context of our employment but may have implications for our jobs

People

Social variables dealing with community, education, equity, social resources, health, wellbeing, and quality of life

Paradox of Progress

Society can't reap rewards without accepting that some may become worse off; attempts to soften creative destruction can lead to stagnation and decline

Overconfidence

Some of us are too confident about our abilities, and this causes us to take greater risks in our daily lives; many people think that they are above average

Response to Change

Stability (prioritizing consistency, predictability, and maintenance of status quo) vs. flexibility, adaptability, and receptiveness to change; those that favor stability tend to follow rules, use control structures, reinforce hierarchy, and strive for efficiency; those that favor flexibility tend to prioritize innovation, openness, diversity, and a longer-term orientation

Age of Greed

Stage 1; characterized by defensive CSR; CSR practices are undertaken only when companies' shareholder value needs to be protected

Age of Responsibility

Stage 5; Employs systemic CSR that focuses on identifying and remedying the root causes of irresponsibility and unsustainability

Secondary Social Stakeholders

Stake in the organization is more indirect or derived; maybe influential in affecting reputation and public standing; government and regulators, civic institutions, social pressure/activist groups, media and academic commentators, trade bodies, competitors

Normative Value

Stakeholders are seen as possessing value irrespective of their instrumental use of management; emphasizes how stakeholders should be treated

Code of Conduct

Standalone document that introduces the concept of ethics and compliance and provides an overview of what you mean when you talk about ethical business conduct; usually addresses employment practices, employee, client, and vendor information, public information/communications, conflicts of interest, relationships with vendors, environmental issues, ethical management practices, and political involvement

Stakeholder Strategies

Strategies and actions for addressing its shareholders; directly or indirectly; offense or defense; accommodate, negotiate, manipulate, or resist, combination or singular action; prioritize stakeholder expectations and demands before deciding; supportive, marginal, nonsupportive, mixed-blessing

Skimming Price Strategy

Strategy in which a new product is priced high to make optimum profit while there's little competition; recover research and development costs; large profits will eventually attract new customers

Penetration Strategy

Strategy in which a product is priced low to attract many customers and discourage competition; enables firm to penetrate or capture a large share of the market quickly

Authority

Strength, decisiveness, and boldness; work environments are competitive places where people strive to gain personal advantage; employees united by strong control; leaders emphasize confidence and dominance; 4% ranked 1st or 2nd

Leadership

Success of almost any initiative depends on leaders; commitment to this approach is single most important factor in whether company succeeds; leaders who believe that human-capital insights should be used to solve business problems must press for decisions and analyses based on facts and data; foster culture that allows for experimentation and mistakes

Enabling Local Cluster Development

Success of every company is affected by supporting communities and infrastructure around it; productivity and innovation; internal costs if not strong; formation of open and transparent markets; identify gaps and deficiencies in areas such as logistics, suppliers, distribution channels, training, market organization, and educational institutions; initiatives that focus on weaknesses are more effective than broad community outreach

Parternships

Supply Chain: Vertical integration, coordination

Theory of Scientific Management

Systematic training of blue collar workers on a large scale; between 1885 and 1910; broke tasks into individual unskilled operations that could be done quickly

Concept Testing

Taking a product idea to consumers to test their reactions; sample different packaging, branding, and ingredients until a product emerges that's desirable from both production and marketing perspectives

Applying Talent Analytics

Talent Supply Chain, Talent Value Model, Workforce Forecasts, Human-Capital Investment Analysis, Analytical HR, Human-Capital Facts

Ethnographic Segmentation

Talk with consumers and develop stories about the product from their perspective

Publicity

Talking part of sales promotion; information distributed by the media that's not paid for, or controlled by the seller; greatest advantage is believability

Demand-Based Pricing

Target costing; makes final price an input to the product development process; first estimate the selling price people would be willing to pay for a product then subtract desired profit margin; result is target cost of production, or what you can spend to profitably produce the item

Symptoms of Lazy Management

Tendency for managers to blame lower performance and turnover on employees rather than on oneself or on the organization; tendency for managers to look for quick fixes to complex retention problems

Overconfidence Bias

Tendency for people to be more confident of their own moral character or behavior than they have objective reason to be

Conformity Bias

Tendency that people have to take their cues for ethical behavior from their peers rather than exercising their own independent technical judgment

Bounded Ethicality

Tends to occur when managers and employees find that even when they aspire to behave ethically it is difficult due to a variety of organizational pressures and psychological tendencies that intervene; hard to be ethical

Tokens

The "few" in a group or organization, numerical minorities; ways that you're different may be dramatized; often treated as representatives of their category, as symbols rather than individuals

Overcoming Values

The act of letting questionable behaviors pass if the outcome is good

Marketing

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large; helping buyers buy

Owners' Equity

The amount of the business that belongs to the owners minus any liabilities owed by the business; for sole proprietors or partners, the value of everything owned by the business minus liabilities of the owners; for corporations, the owners' claims to funds they have invested in the firm as well as retained earnings

Marketing Research

The analysis of markets to determine opportunities and challenges, and to find the information needed to make good decisions; identify what products customers have purchased in the past, and what changes have occurred to alter what they want; business trends, ecological impact of decisions, global trends; can be collected through social media

Levers

Think in the long run as well as the short run; consider the firm's wider purpose; consider competitive advantage; position yourself as an agent of continuous improvement; provide actionable alternatives; consider an ally; consider the costs to each affected party; assume the audience is pragmatic; share good examples

Break-Even Analysis

The process used to determine profitability at various levels of sales

Self-Serving Bias

The propensity people have to process information in a way that serves to support their preexisting beliefs and their perceived self-interest

Current Ratio

The ratio of a firm's current assets to its current liabilities; (current assets/current liabilities); 2 or better is a safe risk

Accounting

The recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and other interested parties the information they need to make good decisions; report financial information to interested stakeholders

Fraud Risk Assessments

The review process designed to identify and monitor conditions and events that may have some bearing on the company's exposure to compliance/misconduct risk and to review company's methods for dealing with these concerns

Innovation

The task of endowing human and material resources with new and greater wealth-producing capacity; not necessarily an invention

Speed

The tendency to rush things and cut corners because you are under the pressure of time

Clustering Illusion

The tendency to see patterns in random events; people try to draw conclusions based on events that aren't connected

Information Bias

The tendency to seek information when it does not affect action; more information isn't always better; people can make more accurate predictions with less information

Recency

The tendency to weight the latest information more heavily than older data; we have a problem discounting the last piece of information heard; overweighted

Shopping Goods and Services

Those products that the consumer buys only after comparing value, quality, price, and style from a variety of sellers; marketers can emphasize price differences, quality differences, or some combination; combination of price, quality and service for best appeal

Task Time

Time transforming input to output; Run Time + Setup Time

Queue Time (Wait Time)

Time when nothing of value is being created by the business; input is not transformed in any material way; business tries to reduce impacts

Market Economy vs. Market Society

Tool for organizing productive activity vs. Market values seep into every aspect of human endeavor

Culture From an Employee Perspective

Understand what is expected of them and what their priorities should be; establishes a common language that all employees "speak"; experience social belonging and feel comfortable enough to thrive

Demanding Stakeholder

Urgency (attribute)

Casual Earners

Use independent work to supplement their income and do so by choice; some have traditional primary jobs, while others are students, retirees, or caregivers; 40%

Global Factors

Use internet; carry on dialogue about goods and services; puts pressure on those whose responsibility it is to deliver products to customers worldwide; trade agreements, competition, trends, opportunities

CSR vs. CSV

Value: Doing good; citizenship, philanthropy, sustainability; discretionary or in response to external pressure; separate from profit maximization; agenda is determined by external reporting and personal references; impact limited by corporate footprint and budget vs. Economic and societal benefits relative to cost; joint company and community value creation; integral to competing and profit maximization; agenda is company specific and internally generated; realigns entire company budget

Pillars 1-3 of GVV

Values, purpose, choice; awareness, analysis; What are the facts?; What are the critical issues? What should you consider? Think broadly about your objectives, get outside advice, think about them one by one; What are the alternatives? Think broadly about possible outcomes, look at them together, build scenarios and approaches; What are the consequences of each alternative? Short-term and long term; make a decision

Multifiduciary Approach

Views stakeholders as more than just individuals and groups who can wield economic or legal power; management has a fiduciary responsibility toward stakeholders just as it has this same responsibility towards shareholders

Strategic Approach

Views stakeholders primarily as factors to be taken into consideration and managed while the firm pursues profits for its shareholders

Confirmation Bias

We tend to listen only to information that confirms our preconceptions; Look for information to support your point; forget to look for information that doesn't support your point

Segway

Well-engineered product but not necessarily a good product; started at too high of a price; 10 years to achieve low estimate of Year 1 sales; eventually segmented market which led to a slight improvement; focused on engineering without an understanding of the market

Human-Capital Facts

What are the key indicators of my organization's overall health?; single version of truth regarding individual performance and enterprise-level data such as head count, contingent labor use, turnover, and recruiting; consider what facts will give them that version; transparent to end users about the process

Giving Voice to Values Questions

What are the main arguments you are trying to counter? What are the reasons and rationalizations you need to address? What's at stake for the key parties, including those who disagree with you? What's at stake for you? What levers can you use to influence those who disagree with you? What is your most powerful and persuasive response to the reasons and rationalizations you need to address? To whom should the argument be made? When and in what context?

Get the Facts

What are the relevant facts of the case? What facts are not known? Can I learn more about the situation? Do I know enough to make a decision? What individuals and groups have an important stake in the outcome? Are some concerns more important? Why? What are the options for acting? Have all the relevant persons and groups been consulted? Have I identified creative options?

Rituals and Ceremonies

What are the things that everyone would expect? ex. Baristas calling your name when the coffee is ready

Physical Structures

What are they signaling about what it means to work there based on physical building? Colors, features, wallpaper, office set-up

Marketing vs. Selling

What does customer wish to buy? vs. What do we want to sell?

Questions of Organizational Ethics

What factors contribute to ethical or unethical behavior in the organization? What actions, strategies, or best practices might the management use to improve the organization's ethical climate? What psychological and organizational processes revealed through "behavioral ethics" come into play when ethical decision making and behavior are pursued?

Question of Top Management

What is our business?

Analysis

What is right or wrong in this situation?

Liabilities

What the business owes to others (debts)

Values

What's good; the things we strive and care for, desire and seek to protect

Principles

What's right; the lines we will never cross; outlines how we may or may not achieve our values

Legal Right

When a person or group has a legal claim to be treated in a certain way or to have a particular right protected

Ownership

When a person or group has a legal title to an asset or a property; ownership

Moral Right

When a person or group thinks it has a right to be treated in a certain way or to have a particular right protected

Pro-Innovation Bias

When a proponent of an innovation tends to overvalue its usefulness and undervalue its limitations

Vertical Integration

When one firm adds value itself

Placebo Effect

When simply believing that something will have a certain effect on you causes it to have that effect

Choice-Supportive Bias

When you choose something, you tend to feel positive about it, even if that choice has flaws

Stakeholder Mindset

Where managers look at the world as if they have a stakeholder "script" to create value for a wide array of stakeholders within their value chain

Human-Capital Investment Analysis

Which actions have the greatest impact on my business?; helps organizations understand which actions have the greatest impact on business performance

Analytical HR

Which units, departments, or individuals need attention?; collects or segments HR data to gain insights into specific departments or functions; integrates individual performance data with HR process metrics and outcome metrics

Stakeholder Management Questions

Who are our organization's stakeholders? What are our stakeholder's stakes? What opportunities and challenges do our stakeholders present to the firm? What responsibilities (economic, legal, ethical, and philosophical) does the firm have to its stakeholder? What strategies or actions should the firm take to best address stakeholder challenges and opportunities?

Communication Structure

Whose voice is heard? How to handle tough conversations; How to provide/seek feedback? Based on behaviors, not personality, actionable; good company or good team can cultivate giving and seeking feedback culture

Talent Value Model

Why do employees choose to stay with- or leave- my company?; calculate what employees value most; create model that will boost retention rates; help managers design personalized performance incentives, assess whether to match a competitor's recruitment offer, or decide when to promote someone

Corporate Social Responsibility Benefits

Win new customers or increase customer retention; enhance relationships with customers, suppliers, and networks; attract and maintain satisfied workforce; save money on energy costs; differentiate from competitors; improve reputation; access to investment and funding opportunities