Mgmt 320 midterm Ruth Huwe

Ideology

Bundle of values that creates a particular view of the world

Republican Values

conservative

hard work

pro military

Raegan

pro immigration

hard work

pro military

free market

(conservative)

Mario Cuomo

less military

more social programs

victim attitude

equality of outcome

affordable education

(he's a liberal)

Liberalism

• "hands off"

• less government regulation

• free market

• ideologies = bigger gov (take care of others), social safety net, food, employment, jobs/domestic manufacturing, poverty, shelter, education, family

Dixiecrat

conservative democrat

Rockefeller Republicans

Liberal republican

Gerrymandering

Process of redrawing legislative boundaries for the purpose of benefiting the party in power.

business

An organization that produces or distributes a good or service for profit.

society

Human beings and their collective social structures

Stakeholders

All those affected by a firm's decisions, policies, or operations

Stake

an interest or claim to an organization or business

shareholder/ ownership theory

a business' sole responsibility is to maximize wealth for its shareholders while remaining within the bounds of the law

stakeholder theory

corporations serve a broad public purpose: to create value for society

• you should balance the needs of all the different stakeholders

• overtime, you win in the long run if you follow this model

Archetype

A detail, image, or character type that occurs frequently in literature and myth and is thought to appeal in a universal way to the unconscious and to evoke a response

General Systems Theory

all organisms are open to and interact with their external environments

• organisms can’t be understood in isolation but only in relationship to their surroundings

• key in business survival is to effectively adapt to changing conditions

interactive social system

Each needs the other, and each influences the other

Core arguments for Stakeholder Theory

descriptive: the way it is

instrumental: more effective (it pays)

normative: moral argument (right thing to do)

prescriptive: the way something should be

descriptive argument for stakeholder theory

stakeholder view is a more realistic description of how companies work, have to focus on all stakeholders to be successful

instrumental argument for stakeholder theory

states that stakeholder theory is more effective at managing a business and ends up being more profitable because stakeholders are happier

normative argument for stakeholder theory

• stakeholder management is the right thing to do

• with great power comes great responsibility

• moral argument

Fiduciary

person who exercises power on behalf of another

Market Stakeholders

those that engage in economic transactions with the company as it carries out its purpose of providing society with goods and services

non-market stakeholders

people and groups who - although they do not engage in direct economic exchange with the firm - are nonetheless affected by or can affect its actions

internal stakeholders

those who are employed by the firm

External Stakeholders

people or groups in the organization's external environment that are affected by it

Stakeholder analysis model

1. Identify the issue at hand

2. Identify relevant stakeholders

3. Identify stakeholder interests

4. Identify power of each stakeholder

5. Stakeholder Coalitions

Types of stakeholder power

Voting power

Political power

Informational power

Legal power

Economic power

voting power

stakeholder has a legitimate right to cast a vote

economic power

ability to control resources/affect a company's bottom line

political power

ability to influence government laws and regulations

Legal Power

exercising the use of the law

ex: bringing lawsuit against somebody

informational power

having access to valuable data/ being able to bring information to attention of the public or key decision makers

Corporate Social Responsibility (CSR)

act in a way that enhances society and be held accountable for its actions

Drivers of CSR

Market

Gov. actions

Social investment

Reports

NGOs can use norms, principles, or laws to pressure

Morals

Codes of Conduct

CSR Eras

Stewardship - 1950s

Responsiveness - 1960

Ethics - 1980s

Citizenship - 1990s

B corporations

• vetted by B-labs (NGO)

• have to meet all requirements of the triple bottom line (people, planet, profit)

Corporate Citizenship

actions taken to put CSR into effect

Corporate Power

• capability of corporations to influence the government, economy, and society, based on organizational resources

• companies can be bigger than countries & market shares are increasing

• Compare large corporations to size of countries. 100 largest produce 70% of greenhouse emissions

enlightened self-interest

the realization that by helping others we are really helping ourselves in the end

Iron Law of Responsibility

In the long run, those who do not use power in a manner which society considers responsible will tend to lose it

• aka law of long-run self-interest

Triple Bottom Line

people, planet, profit = social, environment, financial

Global reporting initiative

Economic

environmental

labor practices

human rights

society (impact on communities and indigenous people)

product responsibility

Ecopreneurship

Main goal: earn money by solving environmental problems

Core motivation: Contribute to solving environmental problem and create economic value

Social Entrepreneurship

NGOs

Main Goal: Achieve social goal and secure funding to achieve this

Core motivation: Contribute to solving societal problem and create value for society

Sustainable entrepreneurship

Main goal: create sustainable development through entrepreneurial corporate activities

Core motivation: contribute to solving societal and environmental problems through the realization of a successful business

Integrated Reporting

Annual financial documents mixed with social reporting such as GRI or Triple bottom line

Support for CSR

• Balances corporate power and responsibility

• Discourages need for regulation

• promotes long-term profits

• improves stakeholder relationships

• enhances your reputation

Concerns for CSR

• focus should be on profit

• lowers economic efficiency (distracts)

• unequal costs among competitors

• imposes hidden costs

• requires skills executives may lack

Examples of Market stakeholders

Owners

Employees

Suppliers

Customers

Examples of non market stakeholders

Government

Community

General public

NGOs

14th Amendment original purpose

• meant to give equal rights to and protect freed slaves

• used by corporations to say they are a “person” → allowed corporations to donate unlimited amounts of money under freedom of speech

Ethics

Study of what is moral and just

Kyrgyz Meta-Perspective Model

• What is ethical in one culture, may not be ethical in another; vice versa

• Some things are always unethical - murder, kidnap

• what I think they think

Morals

Principles of right and wrong behavior, as practiced by individuals or by society.

Justice

Fairness

• if the share seems fair of who pays costs and gets benefit the action is ethical

Amorality

having a different set of ethics for different situations ex: personal life vs business life

Moral unity

same set of ethics for everything

Ethical Relativism

What is right/wrong varies depending on societal values

Ethical Universalism

principles that apply across all contexts/cultures

Moral identity

the degree to which a person self-identifies as a moral person

moral judgement

reflects the process people use to determine whether a particular course of action is ethical or unethical (having to think about what is right or wrong)

Teleological

(Consequentialism) The end justifies the means

Deontological

its the path and not the outcome that matters, principles guide behavior

Procedural Justice

perceived fairness of a process

Distributive Justice

perceived fairness of the amount and allocation of rewards among individuals

Four Strict Principles on Business

Golden Rule ( treat others how you want to be treated)

Categorical Imperative ( do i want others doing what i'm doing?)

Intuition ( follow your gut)

Disclosure Rule (would i want to tell everybody about this)

Three Loose Principles on Business

Organization first (loyalty to organization)

Conventionalism (if its legal its ok)

Machiavellianism (ends justify the means)

Stages of Moral Development

Most managers are stages 3 and 4

Stages 5 and 6 are principle-centered reasoning

• stage 1: Punishment avoidance; avoid harm, obedience to power

• stage 2: Reward seeking; self-interest, own needs, reciprocity

• stage 3: social groups: friends, school, coworkers, family

• stage 4: society at large: customs, traditions, laws

• stage 5: moral beliefs above and beyond specific social custom: human rights, social contract, broad constitutional principles

• stage 6: universal principles; justice, fairness, universal human rights

Ethical analysis

1. identify the issue

2. analysis

• virtues/moral values

• utilitarian analysis (stakeholders)

• rights/laws

• justice

• principles

2. Hierarchy & decision

3. bias & reflection

Virtues

Values and character

Utilitarian

Comparing benefits and costs - greatest good for the greatest number

Rights

Respecting entitlements - human rights

• people are entitled to be treated a certain way

Categorical Imperative

asking yourself “what would happen if everyone acted how I acted”

Disclosure rule

Would you like it if your behavior was on the front paper

Ethical climate

represents an unspoken understanding among employees of what is and is not acceptable behavior

Intuition

gut feeling