Chapter 3 - Environment and Ethical Responsibilities

Triple Bottom Line

measures an organization’s performance in three areas: people, planet, and profit, reflecting its social, environmental, and financial impact

Stakeholders

individuals or groups whose interests are affected by an organization’s activities, including employees, owners, and external parties

Internal Stakeholders

include employees, owners, and the board of directors, who have a direct interest in the organization's performance and the power to influence its direction

External Stakeholders

parties outside the organization, such as customers, suppliers, and community members, who are impacted by its operations

Task Environment

refers to the immediate external factors that directly affect an organization’s operations, including competitors, customers, and suppliers

Customers

individuals or entities that purchase goods or services from an organization, influencing its revenue and market strategy

Competitors

other businesses that offer similar products or services within the same market, impacting an organization’s market share and pricing strategies

Suppliers

provide the necessary materials, goods, or services required for an organization to operate, affecting its production and cost structure

Distributors

intermediaries that facilitate the delivery of products from manufacturers to customers, playing a crucial role in the supply chain

Strategic Alliances

organizations that collaborate with another entity to achieve mutual goals, enhancing competitive advantage and market reach

Employee Organizations

represent workers' interests, including unions or professional associations, advocating for their rights and benefits

Local Communities

encompass the geographical areas where an organization operates, whose members are affected by its business practices and social responsibilities

Financial Institutions

entities that provide financial services, such as banks and investment firms, influencing an organization’s funding and investment opportunities

Government Regulators

are authorities that establish and enforce laws and regulations that organizations must comply with, impacting their operations and governance

Special Interest Groups

organizations advocating for specific issues or causes, influencing public policy and organizational practices

General Environment

encompasses broad external conditions and forces, such as economic, technological, sociocultural, demographic, political-legal, and international factors, that can influence an organization’s strategy and operations but are not directly controlled by it.

Economic Forces

encompass factors such as inflation, unemployment, and economic growth that affect consumer behavior and organizational performance

Technological Forces

refer to advancements and innovations that influence how organizations operate and compete in the marketplace

Sociocultural Forces

societal trends and cultural norms that affect consumer preferences and organizational practices

Demographic Forces

involve statistical characteristics of populations, such as age, gender, and income, impacting market dynamics

Political-Legal Forces

encompass governmental regulations and political conditions that affect business operations and ethical standards

International Forces

refer to global market trends, trade agreements, and international relations that influence organizational strategy and operations

Ethics

the moral principles that govern an individual’s or organization’s behavior, guiding decisions and actions

Values

represent core beliefs and standards that shape an organization’s culture and influence its decision-making

Four Approaches to Solving Ethical Dilemmas

• Utilitarian

• Individual

• Moral-Rights

• Justice

Utilitarian Approach

Focuses on the greatest good for the greatest number

Individual Approach

Emphasizes personal rights and the best long-term interests of individuals

Moral-Rights Approach

Centers on respecting and protecting individual rights.

Justice Approach

Advocates for fairness and equity in decision-making.

White-Collar Crime

refers to non-violent, financially motivated crimes committed by business professionals, often involving deceit or breach of trust

Sarbox

legislation aimed at improving corporate governance and accountability in financial reporting

Ethical Training

involves programs designed to educate employees about ethical standards and decision-making processes within an organization

Three Levels of Moral Development

• Preconventional

• Conventional

• Postconventional

Preconventional

Focuses on obedience and self-interest.

Conventional

Centers on societal norms and maintaining relationships.

Postconventional

Emphasizes abstract principles and personal ethics.

Climate Change

refers to long-term alterations in temperature and weather patterns, often attributed to human activity and impacting environmental sustainability

Sustainable Development

the practice of meeting current needs without compromising the ability of future generations to meet their own

Natural Capital

refers to the world's stocks of natural assets, including geology, soil, air, water, and all living things, which provide ecosystem services essential for human survival and economic activity