1. The Manager’s Changing Work Environment and Ethical Responsibilities Chapter 3

2. Triple Bottom Line People Planet Profit Measures an organization’s social, environmental, and financial performance.

3. Social Audit A systematic assessment of a company’s performance in implementing socially responsible programs, often based on predefined goals.

4. Stakeholders People whose interests are affected by an organization’s activities. Managers operate in two organizational environments. External Internal  Internal – employees, owners, and the board of directors

5. Owners – consist of all those who can claim it as their legal property. Board of Directors – In a corporation – elected by stockholders to make decisions on behalf of the corporation

6. External Stakeholders People or groups in the organization’s external environment that are affected by it. Task environment General Environment

7. The Task Environment Groups that present you with daily tasks to handle: Customers Competitors Suppliers Distributors Strategic allies Employee organizations (unions and organizations) Local communities Financial institutions Government regulators Special interest groups Mass media

8. Customers Those who pay to use an organization’s goods or services.

9. Competitors People or organizations that compete for customers or resources.

10. Supplier A person or an organization that provides supplies to other organizations. Raw materials Services Equipment Labor Energy

11. Distributor Person or an organization that helps another organization sell its goods and services to customers.

12. Strategic Allies Describes the relationship of two organizations who join forces to achieve advantages neither can perform as well alone.

13. Employee Organizations Unions and Associations Unions represent hourly workers as well as professional associations (salaried workers)

14. Local Communities Schools and municipal governments rely on the organization for their tax base. Clawbacks – rescinding the tax breaks when firms don’t deliver promised jobs.

15. Financial Institutions Banks, Savings and Loans, Credit Unions Crowdfunding (crowdsourcing) – raising money for a project or venture by obtaining many small amounts of money from many people (the crowd.)

16. Government Regulators Regulatory agencies that establish ground rules under which organizations may operate.

17. Special Interest Groups Groups whose members try to influence specific issues, some of which may affect your organization.

18. Mass Media Print Radio TV Internet

19. General Environment (macroenvironment) Economic forces Technological forces Sociocultural forces Demographic Political-legal International

20. Economic Forces Consist of the general economic conditions and trends: Interest rates The level of inflation and employment level Long-term prospects for the economy These are forces in your nation and region which you and your organization probably have no control over.

21. Technological Factors New developments in methods for transforming resources into goods or services.

22. Sociocultural Factors Influences and trends originating in a country’s, a society’s, or a culture’s human relationships and values that may affect an organization. Factors include: What is the dominant religion? What are attitudes to foreign products and services? Does language impact upon the diffusion of products onto markets? How much time do consumers have for leisure? What are the roles of men and women within society? How long are the population living? Do the population have a strong/weak opinion on green issues?

23. Demographic Forces Influences on an organization arising from changes in the characteristics of a population. Age Gender Ethnic origin

24. Political Factors Changes in the way politics shape laws and laws shape the opportunities for and threats to an organization. You must consider issues such as: 1.How stable is the political environment? 2.Will government policy influence laws that regulate or tax your business?. 3.What is the government's position on marketing ethics? 4. What is the government's policy on the economy? 5. Does the government have a view on culture and religion? 6. Is the government involved in trading agreements?

25. International Forces Changes in the economic, political, legal, and technological global system that may affect an organization.

26. 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 those standards.

27. 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.

28. Four approaches to deciding ethical dilemmas Utilitarian Individual Moral-Rights Justice

29. Utilitarian Approach For the Greatest Good Ethical behavior is guided by what will result in the greatest good for the greatest number of people

30. Individual Approach Guided by what will result in the individual’s best long-term interests, which ultimately are in everyone’s self-interest. Assumption – you will act ethically in the short run to avoid others harming you in the long run.

31. Moral-Rights Approach Guided by respect for the fundamental rights of human beings. Bill of Rights – Right to life, liberty, privacy, health and safety, and due process Difficulty: rights can be in conflict It is legal for an employer to listen to business phone calls and monitor all non-spoken personal communications

32. Justice Approach Guided by respect for impartial standards of fairness and equity Discrimination, sexual harassment, etc.

33. 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.

34. SarbOx (Sarbones-Oxley) Act passed in 2002 Establishes requirements for proper financial record keeping for public companies and penalties for noncompliance SEC – Securities Exchange Commission Requires a company’s chief executive officer and chief financial officer (ceo and cfo) to personally certify the organization’s financial reports, prohibits them from taking personal loans of lines of credit, and makes them reimburse the organization for bonuses and stock options when required by restatement of coporate profits.

35. Three Levels of Personal Moral Development (Laurence Kohlberg) Level 1 – Pre-conventional Follows rules Level 2 – Conventional Follows expectations of others Level 3 – Post-conventional Guided by internal values

36. How organizations can promote ethics Support by top managers of a strong ethical climate (the tone at the top is critical) Ethics codes and training programs Code of Ethics consists of a formal written set of ethical standards guiding an organization’s actions. Rewarding ethical behavior – protecting whistleblowers (health and safety matters, waste, corruption, overcharging)

37. Ethical Climate Represents employees’ perceptions about the extent to which work environments support ethical behavior.

38. Screening Prospective Employees Companies try to screen out dishonest, irresponsible employees by checking applicants’ resumes and references.

39. Code of Ethics Consists of a formal written set of ethical standards guiding an organization’s actions.

40. Whistle-Blower An employee, or even an outside consultant, who reports organizational misconduct to the public.

41. Social Responsibility The duty to take actions that will benefit the interests of society as well as of the organization. Be a good global citizen Be ethical Obey the law Be profitable  Archie B. Carroll

42. Corporate Social Responsibility (CSR) The notion that corporations are expected to go above and beyond following the law and making a profit.

43. Our economic system has brought prosperity, but it has also let to unsustainable business practices because it has assumed that natural resources are limitless. Sustainability – economic development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

44. Climate Change Refers to major changes in temperature, precipitation, wind patterns, and similar matters occurring over several decades. Global Warming – one aspect of climate change, refers to the rise in global average temperature near the Earth’s surface, caused mostly by increasing concentrations in the atmosphere of greenhouse gases.

45. Natural Capital The value of natural resources, such as topsoil, air, water, and genetic diversity, which humans depend on.

46. Philanthropy Making charitable donations to benefit humankind.

47. How does being good pay off: Effect on customers. Effect on employees’ work effort. Effect on job applicants and employee retention. Effect on sales growth. Effect on company efficiency. Effect on company revenue. Effect on stock price. Effect on profits.