Capstone
The Rights view
Evaluate organizational decisions on the extent to which they protect basic individual rights.
forward integration
a firm acquiring its buyers (i.e., expanding "downstream")
External Growth
acquiring other companies
Switching costs
are the upfront costs that buyers must incur if they switch from one competitor to another.
metaphor of the ledger
arguing that they have the right to engage in certain unethical practices because of other good things they have done.
Stakeholders
individuals or groups who are affected by or can influence an organization's operations
core competencies
the firm's key capabilities and collective learning skills that are fundamental to its strategy, performance, and long-term profitability.
culture
the generally accepted values, traditions, and patterns of behavior in a society.
Comparative Advantage
the idea that certain products may be produced more cheaply or at a higher quality in particular countries due to advantages in labor costs or technology
Mission
the reason for the firm's existence
Environmental Scanning
the systematic collection and analysis of information about relevant macroenvironmental trends.
Resource-based theory
views performance primarily as a function of a firm's ability to utilize its resources and emphasize the development of a distinctive competence.
Realized Strategy
what management actually implements.
Intended Strategy
what management originally plans.
self-reference criterion
when competing abroad because they consciously refer to their own cultural values as a standard of judgment, a phenomenon known as
horizontal related diversification
when it acquires a business outside its present scope of operation, but with similar or related core competencies
CEO Duality
when the CEO also serves at the chairman of the board—represents a potential conflict of interest.
information symmetry
whereby buyers and sellers share information.
information asymmetry
whereby sellers control key information that is not available to buyers.
deny rights of the victims
rationalizing that "they deserve what they got anyway."
deny responsibility
rationalizing that they have no other choice but to participate in unethical behavior.
The Self-Interest view
Benefits of the decision-maker(s) should be the primary considerations.
Pension Security Act (2002)
Gives workers more freedom to diversify their investments and greater access to quality investment advice concerning their 401(k) plans.
clicks and bricks
Many traditional firms are integrating e-commerce into their existing business models, a combination known as clicks and bricks. These firms are attempting to build synergy between traditional and virtual storefronts.
CAN SPAM Act (2003)
Prescribes rules and penalties for e-mail "spammers," although enforcement is difficult
Food Quality Protection Act (1996)
Reduces the amount of carcinogenic pesticides allowed in foods.
Goals
desired ends toward which efforts are directed
conglomerate (unrelated) diversification.
When a corporation acquires a business in an unrelated industry to reduce cyclical fluctuations in cash flows or revenues,
backward integration
When a firm acquires its suppliers (i.e., expanding "upstream"),
Business model
is the mechanism whereby the organization seeks to earn a profit by selling its goods.
Liquidation
is the strategy of last resort, and terminates the business unit by selling its assets. In effect, liquidation represents a divestment of all the firm's business units and should be adopted only under extreme conditions
corporate-level strategy
is the strategy top management formulates for the overall corporation.
Synergy
occurs when the combination of two organizations results in higher effectiveness and efficiency than would otherwise be generated separately.
Merger
occurs when two or more firms, usually of roughly similar sizes, combine into one through an exchange of stock
Managerial Ethics
refers to an individual's responsibility to make business decisions that are legal, honest, moral, and fair.
Vertical integration
refers to merging various stages of activities in the distribution channel.
Social Responsibility
refers to the expectation that business firms should serve both society and the financial interests of the shareholders.
Industrial organization (IO),
a branch of microeconomics, emphasizes the influence of the industry environment on the firm.
Mass Customization
is the ability to individualize product and service offerings to meet specific buyer needs.
retrenchment strategy
A firm deliberately reduces its size when it employs a retrenchment strategy.
horizontal integration
A firm that acquires other companies in the same line of business is engaging in
Takeover
A purchase of a controlling quantity of shares of a firm by an individual, a group of investors, or another organization
corporate restructuring
A retrenchment strategy is often accompanied by a reorganization process known
The Justice view
All decisions will be made in accordance with pre-established rules or guidelines
Compete in related industries
Allows a firm to develop synergy among the business units.
Compete in a single industry
Allows a firm to specialize, but "all eggs are in a single basket."
The Utilitarian view
Anticipated outcomes and consequences should be the only considerations when evaluating an ethical dilemma.
The Integrative Social Contracts view
Decisions should be based on existing norms of behavior, including cultural, community, or industry factors
The Religious view
Decisions should be based on personal or religious convictions.
Leveraged Buyout (LBO)
Takeovers that rely heavily on borrowed funds.
Internet as distribution channel
The Internet acts as a distribution channel for non-tangible goods and services. Consumers can purchase items such as airline tickets, insurance, stocks, and computer software online without the necessity of physical delivery.
Stability
attempting to maintain the present size and scope of operations—may be more attractive than growth in four instances
social weighting
by making carefully controlled comparisons.
appeal to higher values
by suggesting that justification of the unethical behavior is due to a higher order value.
Outsourcing
contracting out a firm's non-core, non-revenue-producing activities to other organizations primarily to reduce costs
Internal Growth
expanding by internally increasing its size and sales.
critical success factors
factors that tend to be essential for success for most or all companies in a given industry—for the industry.
Sustainable strategic management (SSM)
is a broader notion of social responsibility refers to the strategies and related processes that promote superior performance from both market and environmental perspectives.
Acquisition
is a form of merger whereby one firm purchases another, often with a combination of cash and stock.
industry
is a group of companies that produce competing products or services.
Strategic Management
is a process that includes top management's analysis of the environment in which the organization operates prior to formulating a strategy, as well as the plan for implementation and control of the strategy.
Commoditization
is a process whereby firms are having a more difficult time distinguishing their products and services from those of their rivals
Competitive advantage
is a state whereby a firm's successful strategies cannot be easily duplicated by its competitors.
Boston Consulting Group (BCG) Matrix
is corporate portfolio framework that examines the relationships among business units held by a single firm.
Strategic alliances
often called partnerships. occur when two or more firms agree to share the costs, risks, and benefits associated with pursuing new business opportunities.
Strategy
refers to top management's plans to develop and sustain competitive advantage so that the organization's mission is fulfilled.
Offshoring
relocating some or all of a firm's manufacturing or other business processes to another country to reduce costs—is similar to outsourcing, but enables the firm to retain control of the operations abroad instead of relinquishing them to other firms.
Exit barriers
represent costs a firm must incur if it leaves an industry.
market share
represents a firm's position within an industry.
Contingency theory
represents a middle ground perspective that views organizational performance as the joint outcome of environmental forces and the firm's strategic actions.
turnaround
seeks to transform the corporation into a leaner, more effective firm, and includes such actions as eliminating unprofitable outputs, pruning assets, reducing the size of the workforce, cutting costs of distribution, and reassessing the firm's product lines and customer groups.
Divestment
selling one or more of a firm's business units—may be necessary when the industry is in decline, or when a business unit drains resources from more profitable units, is not performing well, or is not synergistic with other corporate holdings.
relative market share
share—the firm's percentage of sales in an "industry" restricted to select competitors—is a useful measure.
Objectives
specific, often quantified, versions of goals
deny injury
suggesting that the unethical behavior did not really hurt anyone.