Management Ch3

Social audit

- A systematic assessment of a company's performance in implementing socially responsible programs - Often based on predefined goals

Whistle-blower

- An employee, or even an outside consultant, who reports organizational misconduct to the public, such as health and safety matters, waste, corruption, or overcharging of customers

Internal Stakeholders

- Consist of employees, owners, and the board of directors

Justice (Deciding Ethical Dilemmas)

- Guided by respect for impartial standards of fairness and equity

Moral-rights (Deciding Ethical Dilemmas)

- Guided by respect for the fundamental rights of human beings

Utilitarian (Deciding Ethical Dilemmas)

- Guided by what will result in the greatest good for the greatest number of people

Individual (Deciding Ethical Dilemmas)

- Guided by what will result in the individual's best long term interest, which ultimately are in everyone's self-interest

Philanthropy

- Making charitable donations to benefit humankind - "Not Dying Rich"

Social Responsibility

- Manager's duty to take actions that will benefit the interests of society as well as of the organization

Legal Responsibility

- Obey the law -Do what is required by global stakeholders

External Stakeholders

- People or groups in the organization's external environment that are affected by it -Task, general environment

Values

- Relatively permanent and deeply held underlying beliefs and attitudes that help determine a person's behavior

Triple bottom line

- Representing People, Planet, and Profit (the 3 Ps) - Measures an organization's social, environmental, and financial performance

Ethical Dilemma

- Situation in which you have to decide whether to pursue a course of action that may benefit you or your organization but that is unethical or even illegal

Ethics

- Standards of right and wrong that influence behavior

Stakeholders

- The people whose interests are affected by an organization's activities - Internal, external

Economic Responsibility

-Be Profitable -Do what is required by global capitalism

Philanthropic Responsibility

-Be a good global corporate citizen -Do what is desired by global stakeholders

Ethical Responsibility

-Be ethical - Do what is expected by global stakeholders

Corporate Social Responsibility

-Notion that corporations are expected to go above and beyond following the law and making a profit

The Sarbanes-Oxley Reform Act

-Often shortened to SarbOx or SOX, established requirements for proper financial record keeping for public companies and penalties of as much as 25 years in prison for noncompliance -SOX requires a company's CEO and CFO to personally certify the organization's financial reports, prohibits them from taking personal loans and lines of credit, and makes them reimburse the organizationfor bonuses and stock options when required by restatement of corporate profits. It also requires the company to have established procedures and guidelines for audit committees

Corporate Governance

-The system of governing a company so that the interests of corporate owners and other stakeholders are protected.

The Gold Standard

-in brand crisis management is the path followed by health products company Johnson & Johnson in 1982, after several consumers died from taking tainted Tylenol pills. J&J responded in a way that has become the preferred strategy taught in business schools, according to one account: "Communicate clearly with the public about a crisis, cooperate with government officials, swiftly begin its own investigation of a problem, and, if necessary, quickly institute a product recall." A big part of the strategy is communicating honestly and frequently through the media.

How Organizations Can Promote Ethics

1. Creating of a strong ethical climate 2. Screening prospective employees 3. Instituting ethics codes and training programs 4. Rewarding ethical behavior: Protecting whistle-blowers

The Task Environment

1. Customers 2. Competitors 3. Supplier 4. Distributor 5. Strategic Allies 6. Unions 7. Lenders 8. Government 9. Special interest groups 10. Mass Media

The Organization's Environment

1. External Stakeholders - The General Environment -The Task Environment 2. Internal Stakeholders

Carroll's Global Corporate Social Responsibility Pyramid

1. Philanthropic Responsibility 2. Ethical Responsibility 3. Legal Responsibility 4. Economic Responsibility

Organizations may have two value systems that conflict

1. The value system stressing financial performance versus 2. The value system stressing cohesion and solidarity in employee relationships

Four Approaches to Deciding Ethical Dilemmas

1. Utilitarian 2. Individual 3. Moral-rights 4. Justice

The General Enviroment

External Stakeholders 1.Economic Forces 2.Technological Forces 3. Sociocultural Forces 4.Demographic Forces 5.Political-legal Forces 6.International Forces

Owners

Internal Stakeholders - Consist of all those who can claim the organization as their legal property

Board of directors

Internal Stakeholders - Members elected by the stockholders to see that the company is being run according o their interests

International Forces

The General Environment (External Stakeholders) - Changes in the economic, political, legal, and technological global system that may affect an organization

Political-Legal Forces

The General Environment (External Stakeholders) - Changes in the way politics shape laws and laws shape the opportunities for and threats to an organization

Economic forces

The General Environment (External Stakeholders) - Consist of the general economic conditions and trends - unemployment, inflation, interest rates, economic growth - that may affect an organization's performance

Sociocultural Forces

The General Environment (External Stakeholders) - Influences and trends originating in a country's, a society's, or a culture's human relationships and values that may affect an organization

Demographic Forces

The General Environment (External Stakeholders) - Influences on an organization arising from changes in the characteristics of a population, such as age, gender, or ethnic origin

Technological Forces

The General Environment (External Stakeholders) - New developments in methods for transforming resources into goods and services

Distributor

The Task Environment (External Stakeholders) - A person or organization that helps another organization sell its goods and services to customers

Supplier

The Task Environment (External Stakeholders) - A person or organization that provides raw materials, services, equipment, labor or energy to other organizations

Strategic Allies

The Task Environment (External Stakeholders) - Describes the relationship of two organizations who join forces to achieve advantages neither can perform as well alone

Special Interest Groups

The Task Environment (External Stakeholders) - Groups whose members try to influence specific issues

Competitors

The Task Environment (External Stakeholders) - People or organizations that compete for customers or services

Crowdfunding

The Task Environment (External Stakeholders) - Raising money for a project or venture by obtaining many small amounts of money from many people ("the crowd")

Government Regulators

The Task Environment (External Stakeholders) - Regulatory agencies that establish ground rules under which organizations may operate

Clawbacks

The Task Environment (External Stakeholders) - Rescinding the tax breaks when firms don't deliver promised jobs

Customers

The Task Environment (External Stakeholders) -Those who pay to use an organization's goods or services