Chapter 3 Management a practical introduction

Stakeholders:
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.
Owners:
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.
Customers:
Those who pay to use an organization’s goods or services.
Competitors:
People or organizations that compete for customers or resources.
Supplier:
A person or an organization that provides supplies–that is, raw materials, services, equipment, labor, or energy–to other organizations.
Distributor:
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.
Hourly.
Professional Associations tend to represent _____ workers.
Salaried.
Clawbacks:
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.
Ethics:
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.
Values:
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.
Whistle-Blower:
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.
Philanthropy:
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.
Diversity:
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.
Personality:
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.
Underemployed:
Working at jobs that require less education than a person has.
Ethnocentrism:
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.