Management Test #2

Suppose you are an accountant for a large publicly traded company. You have discovered an error in the financial records that makes the company look more profitable. Explain how the four ethical rules discussed in the text would be applied to this situation.

- Utilitarian - • If the mistake is not fixed and the public finds out, everyone in the company will suffer Moral Rights - • It isn't right to profit off of this false appearance of the company due to a mistake Practical - • People outside the business world would not agree with the decision to profit from this error Justice - • The benefits from the error isn't fair to the competitors in the market

Describe the four rules of ethics and discuss their managerial implications.

- Utilitarian - an ethical decision should produce the greatest good for the greatest number of people Moral Rights - an ethical decision should maintain and protect the fundamental rights and privileges of people Practical - an ethical decision should be one that a manager has no hesitation about communicating to people outside the company b/c the typical person in a society would think the decision is acceptable Justice - an ethical decision should distribute benefits and harm among people in a fair, equitable, and impartial manner

Discuss how suppliers produce opportunities and threats for a company, and give realistic examples.

Changes in nature, number, or type of supplier produces opportunities and threats that a manager must respond to so their organization prospers. A major supplier-related threat that confronts managers arises when suppliers' bargaining position is so strong that they can raise the prices of the inputs they supply

Describe the two moral principles that guide managers in their efforts to meet their ethical imperative.

Distributive Justice - moral principle calling for fair distribution of pay, promotions, and other organizational resources based on meaningful contributions that individuals have made and not over personal characteristics over which they have no control. Procedural Justice - moral principle calling for the use of fair procedures to determine outcomes to organizational members.

Define diversity. Explain the reasons why diversity is such a pressing concern and issue for managers and organizations.

Diversity is the differences among people in age, gender, race, ethnicity, religion, sexual orientation, socio-economic status and capabilities/disabilities. Equal Opportunities and be treated fairly.Diversity is an important organizational resource that can help gain a competitive advantage.

Discuss the idea that ethics may change over time. Give an example of an ethical value that may be changing in the culture in which you presently live.

Ideals and beliefs change over time, so in result, so do ethics. For example, the acceptance of gay people has largely evolved. In the past, gays were often largely discriminated against, but now they are being largely accepted and those who don't accept them are viewed as unethical people.

Discuss how distributors produce opportunities and threats for a company, and give realistic examples.

If distributors become so large and powerful that they can control customers' access to a particular organization's goods/services, they can threaten the organization by demanding that it reduce the prices of its goods/services

Describe the major provisions of Title VII of the Civil Rights Act, the Equal Pay Act, and the Americans with Disabilities Act.

Prohibits Discrimination, Men and Women are paid equally, Prohibits discrimination against disabled individuals ; requires that employers make accommodations for disabled workers

There are two basic types of sexual harassment that can occur in the workplace. Distinguish between these two types and give two specific examples of each that could occur in a business setting. Describe four initial steps that managers can take to deal with sexual harassment?

Quid Pro Sexual Harassment - harasser asks an employee for sexual favors in order to keep their job, receive a promotion, etc. Hostile Work Environment Sexual Harassment - members face an intimidating, hostile, or offensive work environment because of their sex.

Discuss the three types of bias that managers can exhibit either toward subordinates or toward other managers and give one specific business example of each of these biases.

Similar to me effect - perceive others who are similar to ourselves more positively than we perceive people who are different Social Status effect - perceive individuals with high social status more positively than those with low social status Salience effect - focus extra attention on individuals who are conspicuously different from us

What are the advantages when companies and their managers behave in a socially responsible manner?

The company will prosper, run smoothly, and stakeholders will be happy. Employees will be rewarded fairly and efficiently. Customers will be happy and receive quality product.

What is the "global environment"? Why is it important for managers to understand this concept?

The global environment is a set of forces and conditions in the world outside an organization's boundary that affect how it operates and shape its behavior. These forces change over time and presents managers with opportunities and threats. Creates opportunities to sell more and obtain more captial/resources. Or shortages of resources can devastate organization.

Discuss the importance of the managers' roles in developing ethical values and standards in other employees.

When the managers instruct other employees on how to act ethically, the company's operations will run smoothly as a whole. Disputes between employees will be less frequent, product development will be efficient, and the drive in employees will increase due to this positive environment. Once employees start getting away with behaving unethically, a trend of it will occur all around the company's work force.

What are barriers to entry? Describe in brief the three main sources from which barriers to entry result.

barriers of entry are factors that make it difficult and costly for a company to enter a particular task environment Economies of Scale are the cost advantages associated with large operations Brand Loyalty is the customers preference for the products of a certain organization Government Regulations at the national and global levels, administrative barriers are government policies that create barriers to entry and limit imports of goods by overseas companies.

Define ethical dilemma, and ethics. Provide an example of an ethical dilemma.

- Ethical Dilemma - Quandary people find themselves in when they have to decide if they should act in a way that might help another person even though doing so might go against their own self-interest - Ethics - inner-guiding moral principles and values that people use to analyze a situation and then decide what the right or appropriate way to behave is - Example: Employee notices that a coworker left a $20 bill on their desk, after everyone else has left the office. They can choose to take it for themselves or can return it to the rightful owner then next day.

In today's business world, top executives are receiving large salaries and unbelievable stock options. Is it ethical for managers to receive these amounts? Argue both sides of this question.

- For: The top executives are responsible for the company's well being. They make the crucial decisions that can make or break a company. Without them, the company would crumble. With the stresses of such a great responsibility and if the company is profiting, they deserve the salary. Against: The lower ranking workers are what keep the company in operation. They don't deserve as much as the top executives, but the gap in salaries is too much. Top executives' salaries should be lowered to help somewhat raise lower employees' wages.

Identify and describe the approaches to social responsibility, in the order of least to most ethical. Give an example of a real company to illustrate each. (Low to High ethical)

- Obstructionist Approach - • Companies choose not to behave in a social responsible way and behave unethically • EX: Arthur Anderson shredding Enron's files proving corruption Defensive Approach - • Companies and managers obey the law and legal requirements but make no attempt to exercise social responsibility • EX: WoldCom offering large stock options and bonuses with weak performance Accommodative Approach - • Companies behave legally and ethically and try to balance the interests of different stakeholders • EX: almost any typical large US company, such as Ford Proactive Approach - • Companies actively embrace socially responsible behavior, going out of their way to learn about the needs of different stakeholder groups • EX: Nucor, a US steelmaker o Not a layoff since 1977

Identify four sources of business ethics. Provide realistic examples of each source.

- Societal Ethics - • Standards that govern how members of a society should deal with one another in matters involving issues such as fairness, justice, poverty, and the rights of the individual • Originate from a society's laws, customs, practices, internalized certain values, beliefs, and norms • EX: Not being able to chew gum in Singapore and their strict no littering laws Occupational Ethics - • Standards that govern how members of a profession should conduct themselves when performing work related activities • EX: FDA demanding drug companies to provide information on all possible side effects on drugs sold to the public Organizational Ethics - • Guiding practices and beliefs through which a particular company and its managers view their responsibility toward their stakeholders • Top managers play a crucial role in determining a company's ethics • EX: corruption at Enron corp. and disregarding their stakeholders Individual Ethics - • Personal standards and values that determine how people view their responsibilities to other people and groups • Howe they should act in situations when their own self interest are at stake • EX: a manager deciding if he should cut lower employees salaries in order to increase his/her own along with the other top managers

Define six major stakeholders. Using an example of your college or university, give specific examples of stakeholders of each major type.

- Stockholders - • Have a claim on a company due to stock ownership • Concerned with company's operations b/c want max return on their investment • Concerned that managers are behaving ethically in order to not hurt company's reputation Managers - • Have a claim on a company because of the skills, expertise, and experience they bring to it • Bear responsibility of deciding which goals an organization should pursue to provide most benefit to stakeholders • Decisions are often b/c of need to uphold ethical values Employees - (professors, maintenance, kitchen staff) • Those who work in firms' various departments and functions • Receive rewards consistent with their performance • A company acts ethically when rewarding employees fairly Suppliers and Distributors - (textbook suppliers, school apparel providers) • Most companies within a network of suppliers and distributors • Work with suppliers to supply firm with the input they need to operate • Distributors are intermediaries who receive the products to distribute to the final customers, expect quality products at agreed prices Customers - (students, parents) • Most critical stakeholder group • Managers work hard to create loyal customers, attract new ones, and improve products over time for customers • Expect quality products at a fair price and good after-sales service Community, Society, and Nation - (city of Scranton and citizens) • Physical locations like towns or cities in which companies are located • A community provides a company with the physical and social infrastructure that allows it to operate • A company contributes to the economy of the town or region through salaries, wages, and taxes.