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