Chapter 3 Management a practical introduction

The people whose interests are affected by an organization’s activities.
Two Types of Stakeholders:
Internal and External.
Internal Stakeholders:
Consist of employees, owners, and the board of directors, if any.
Consist of all those who can claim the organization as their legal property.
Board of Directors:
Members elected by the stockholders to see that the company is being run according to their interests.
In non-profit organizations, the board of directors may be called:
The Board of Trustees or The Board of Regents.
External Stakeholders:
People of groups in the organization’s external environment that are affected by it.
An organization’s external environment consists of:
The task environment and the general environment.
Task Environment:
Consists of 11 groups that present you with daily tasks to handle: customers, competitors, suppliers, distributors, strategic allies, employee organizations, local communities, financial institutions, government regulators, special-interest groups, and mass media.
Those who pay to use an organization’s goods or services.
People or organizations that compete for customers or resources.
A person or an organization that provides supplies–that is, raw materials, services, equipment, labor, or energy–to other organizations.
A person or an organizations that helps another organization sell its goods and services to customers.
Strategic Allies:
Describes the relationship of two organizations who join forces to achieve advantages neither can perform as well alone.
Labor Unions tend to represent _____ workers.
Professional Associations tend to represent _____ workers.
Rescinding the tax breaks when firms don’t deliver promised jobs.
Government Regulators:
Regulatory Agencies that establish ground rules under which organizations may operate.
Special-Interest Groups:
Groups whose members try to influence specific issues.
General Environment (AKA Macroenvironment):
Includes 6 forces: economic, technological, sociocultural, demographic, political-legal, and international.
Economic Forces:
Consist of the general economic conditions and trends–unemployment, inflation, interest rates, economic growth–that may affect an organization’s performance.
Technological Forces:
New developments in methods for transforming resources into goods and services.
Sociocultural Forces:
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:
Influences on an organization arising from changes in the characteristics of a population, such as age, gender, or ethnic origin.
Political-Legal Forces:
Changes in the way politics shape laws and laws shape the opportunities for and threats to an organization.
International Forces:
Changes in the economic, political, legal, and technological global system that may affect an organization.
Ethical Dilemma:
A 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.
The standards of right and wrong that influence behavior.
Ethical Behavior:
Behavior that is accepted as “right” as opposed to “wrong” according to ethical standards.
Value System:
The pattern of values within an organization.
The relatively permanent and deeply held underlying beliefs and attitudes that help determine a person’s behavior.
Organizations may have two important value systems that can conflict:
(1) The value system stressing financial performance versus (2) the value system stressing cohesion and solidarity in employee relationships.
Utilitarian Approach:
Guided by what will result in the greatest good for the greatest number of people.
Individual Approach:
Guided by what will result in the individual’s best long-term interests, which ultimately are in everyone’s self-interest.
Moral-Rights Approach:
Guided by respect for the fundamental rights of human beings.
Justice Approach:
Guided by respect for impartial standards of fairness or equity.
Insider Trading:
The illegal trading of a company’s stock by people using confidential company information.
Ponzi Scheme:
Using cash from newer investors to pay off older ones.
Sarbane-Oxley Act of 2002:
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.
Laurence Kohlberg:
Proposed three levels of personal moral development.
Level 1 of Kohlberg’s Theories:
Preconventional; Following rules.
-managers are autocratic or coercive, expect employee obedience
Level 2 of Kohlberg’s Theories:
Conventional; Following expectations of others.
-conformist, not slavish
-managers lead by encouragement, cooperation, and are group/team oriented
-most managers
Level 3 of Kohlberg’s Theories:
Postconventional; Guided by internal values.
-farthest along in moral development
-independent souls who follow own values – focus on needs of employees, lead by empowering. 1/5 of american managers
One way an organization can promote ethics:
Create a Strong Ethical Climate.
One way an organization can promote ethics:
Screen Prospective Employees.
One way an organization can promote ethics:
Institute Ethics Codes & Training Programs.
One way an organization can promote ethics:
Reward Ethical Behavior; Protect Whistle-Blowers.
Ethical Climate:
Represents employees’ perceptions about the extent to which work environments support ethical behavior.
Code of Ethics:
Consists of a formal written set of ethical standards guiding an organization’s actions.
An employee who reports organizational misconduct to the public.
Social Responsibility:
A manager’s duty to take actions that will benefit the interests of society as well as of the organization.
Corporate Social Responsibility (CSR):
The notion that corporations are expected to go above and beyond following the law and making a profit.
Archie B. Carroll:
Creator of the Global Corporate Social Responsibility Pyramid.
The top (first layer) of Carroll’s Global CSR Pyramid:
Philanthropic Responsibility; Be a good global corporate citizen; Do what is desired by global stakeholders.
The second layer of Carroll’s Global CSR Pyramid:
Ethical Responsibility; Be ethical; Do what is expected by global stakeholders.
The third layer of Carroll’s Global CSR Pyramid:
Legal Responsibility; Obey the Law; Do what is required by global stakeholders.
The base (fourth layer) of Carroll’s Global CSR Pyramid:
Economic Responsibility; Be profitable; Do what is required by global capitalism.
Making charitable donations to benefit humankind.
One way that ethical behavior and high social responsibility can pay off:
Effect on Customers.
One way that ethical behavior and high social responsibility can pay off:
Effect on Employees’ Work Effort.
One way that ethical behavior and high social responsibility can pay off:
Effect on Job Applicants & Employee Retention.
One way that ethical behavior and high social responsibility can pay off:
Effect on Sales Growth.
One way that ethical behavior and high social responsibility can pay off:
Effect on Company Efficiency.
One way that ethical behavior and high social responsibility can pay off:
Effect on Company Revenue.
One way that ethical behavior and high social responsibility can pay off:
Effect on Stock Price.
One way that ethical behavior and high social responsibility can pay off:
Effect on Profits.
Represents all the ways people are unlike and alike–the differences and similarities in age, gender, race, religion, ethnicity, sexual orientation, capabilities, and socioeconomic background.
Diversity experts who developed a “diversity wheel”:
Lee Gardenswartz and Anita Rowe.
Four layers of the “Diversity Wheel”:
(1) Personality, (2), Internal Dimensions, (3) External Dimensions, and (4) Organizational Dimensions.
The stable physical and mental characteristics responsible for a person’s identity.
Internal Dimensions of Diversity:
Those human differences that exert a powerful, sustained effect throughout every stage of our lives.
Examples of Internal Dimensions of Diversity:
Gender, age, ethnicity, race, sexual orientation, and physical abilities.
External Dimensions of Diversity:
Include an element of choice; they consist of the personal characteristics that people acquire, discard, or modify throughout their lives.
Examples of External Dimensions of Diversity:
Educational Background, marital status, parental status, religion, income, geographic location, work experience, recreational habits, appearance, and personal habits.
Glass Ceiling:
The metaphor for an invisible barrier preventing women and minorities from being promoted to top executive jobs.
Americans With Disabilities Act:
Prohibits discrimination against the disabled.
Working at jobs that require less education than a person has.
The belief that one’s native country, culture, language, abilities, or behavior is superior to that of another culture.
A Barrier to Diversity:
Stereotypes & Prejudices.
A Barrier to Diversity:
Fear of Reverse Discrimination.
A Barrier to Diversity:
Resistance to Diversity Program Priorities.
A Barrier to Diversity:
Unsupportive Social Atmosphere.
A Barrier to Diversity:
Lack of Support for Family Demands.
A Barrier to Diversity:
Lack of Support for Career-Building Steps.