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Stakeholders:

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The people whose interests are affected by an organization's activities.

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Two Types of Stakeholders:

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Internal and External.

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Internal Stakeholders:

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Consist of employees, owners, and the board of directors, if any.

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Owners:

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Consist of all those who can claim the organization as their legal property.

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Board of Directors:

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Members elected by the stockholders to see that the company is being run according to their interests.

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In non-profit organizations, the board of directors may be called:

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The Board of Trustees or The Board of Regents.

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External Stakeholders:

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People of groups in the organization's external environment that are affected by it.

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An organization's external environment consists of:

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The task environment and the general environment.

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Task Environment:

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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.

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Customers:

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Those who pay to use an organization's goods or services.

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Competitors:

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People or organizations that compete for customers or resources.

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Supplier:

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A person or an organization that provides supplies--that is, raw materials, services, equipment, labor, or energy--to other organizations.

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Distributor:

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A person or an organizations that helps another organization sell its goods and services to customers.

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Strategic Allies:

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

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Labor Unions tend to represent _____ workers.

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Hourly.

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Professional Associations tend to represent _____ workers.

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Salaried.

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Clawbacks:

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Rescinding the tax breaks when firms don't deliver promised jobs.

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Government Regulators:

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Regulatory Agencies that establish ground rules under which organizations may operate.

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Special-Interest Groups:

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Groups whose members try to influence specific issues.

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General Environment (AKA Macroenvironment):

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Includes 6 forces: economic, technological, sociocultural, demographic, political-legal, and international.

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Economic Forces:

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Consist of the general economic conditions and trends--unemployment, inflation, interest rates, economic growth--that may affect an organization's performance.

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Technological Forces:

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New developments in methods for transforming resources into goods and services.

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Sociocultural Forces:

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Influences and trends originating in a country's, a society's, or a culture's human relationships and values that may affect an organization.

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Demographic Forces:

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Influences on an organization arising from changes in the characteristics of a population, such as age, gender, or ethnic origin.

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Political-Legal Forces:

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Changes in the way politics shape laws and laws shape the opportunities for and threats to an organization.

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International Forces:

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

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Ethical Dilemma:

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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.

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Ethics:

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The standards of right and wrong that influence behavior.

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Ethical Behavior:

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Behavior that is accepted as "right" as opposed to "wrong" according to ethical standards.

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Value System:

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The pattern of values within an organization.

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Values:

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The relatively permanent and deeply held underlying beliefs and attitudes that help determine a person's behavior.

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Organizations may have two important value systems that can conflict:

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(1) The value system stressing financial performance versus (2) the value system stressing cohesion and solidarity in employee relationships.

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Utilitarian Approach:

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Guided by what will result in the greatest good for the greatest number of people.

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Individual Approach:

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Guided by what will result in the individual's best long-term interests, which ultimately are in everyone's self-interest.

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Moral-Rights Approach:

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Guided by respect for the fundamental rights of human beings.

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Justice Approach:

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Guided by respect for impartial standards of fairness or equity.

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Insider Trading:

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The illegal trading of a company's stock by people using confidential company information.

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Ponzi Scheme:

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Using cash from newer investors to pay off older ones.

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Sarbane-Oxley Act of 2002:

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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.

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Laurence Kohlberg:

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Proposed three levels of personal moral development.

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Level 1 of Kohlberg's Theories:

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Preconventional; Following rules.

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-managers are autocratic or coercive, expect employee obedience

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...

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Level 2 of Kohlberg's Theories:

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Conventional; Following expectations of others.

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-conformist, not slavish

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...

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-managers lead by encouragement, cooperation, and are group/team oriented

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...

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-most managers

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...

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Level 3 of Kohlberg's Theories:

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Postconventional; Guided by internal values.

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-farthest along in moral development

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...

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-independent souls who follow own values - focus on needs of employees, lead by empowering. 1/5 of american managers

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...

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One way an organization can promote ethics:

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Create a Strong Ethical Climate.

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One way an organization can promote ethics:

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Screen Prospective Employees.

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One way an organization can promote ethics:

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Institute Ethics Codes & Training Programs.

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One way an organization can promote ethics:

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Reward Ethical Behavior; Protect Whistle-Blowers.

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Ethical Climate:

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Represents employees' perceptions about the extent to which work environments support ethical behavior.

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Code of Ethics:

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Consists of a formal written set of ethical standards guiding an organization's actions.

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Whistle-Blower:

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An employee who reports organizational misconduct to the public.

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Social Responsibility:

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A manager's duty to take actions that will benefit the interests of society as well as of the organization.

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Corporate Social Responsibility (CSR):

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The notion that corporations are expected to go above and beyond following the law and making a profit.

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Archie B. Carroll:

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Creator of the Global Corporate Social Responsibility Pyramid.

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The top (first layer) of Carroll's Global CSR Pyramid:

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Philanthropic Responsibility; Be a good global corporate citizen; Do what is desired by global stakeholders.

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The second layer of Carroll's Global CSR Pyramid:

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Ethical Responsibility; Be ethical; Do what is expected by global stakeholders.

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The third layer of Carroll's Global CSR Pyramid:

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Legal Responsibility; Obey the Law; Do what is required by global stakeholders.

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The base (fourth layer) of Carroll's Global CSR Pyramid:

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Economic Responsibility; Be profitable; Do what is required by global capitalism.

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Philanthropy:

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Making charitable donations to benefit humankind.

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