Chapter 3 The Manager’s Changing Work Environment

CHAPTER 3: THE MANAGER’S CHANGING WORK ENVIRONMENT -Triple Bottom Line (People, Planet, and Profit): measures an organization’s social, environmental, and financial performance -social audit: a systematic assessment of a company’s performance in implementing socially responsible programs; often based on predefined goals - ethical dilemma: situation in which you have to decide whether to pursue a course of action that may benefit you or your organization but that is ur or even illegal -ethical behavior: acts that are morally acceptable by society; honesty, treating people with respect -unethical behavior: acts that are harmful to others and are either illegal or morally unacceptable to the larger community (Jones, 1991) -lying, cheating, and stealing -depends on the norms of the group what is unethical (therefore, unethical behavior can be subjective) Ethical Values within an Organization - values: relatively permanent and deeply held underlying beliefs and attitudes that help determine a person’s behavior - Organizations may have two value systems that conflict 1. The value system stressing financial performance 2. The value system stressing cohesion and solidarity in employer relationships Four Approaches to Deciding Ethical Dilemmas: 1. Utilitarian: guided by what will result in the greatest good for the greatest number of people 2. Individual: guide by what will result in the individual’s best long term interest, which ultimately are in everyone’s self-interest 3. Justice: guided by respect for impartial standards of fairness and equity 4. Moral-right: guided by respect for the fundamental rights of human beings How do people learn ethics? - Kohlberg’s theories 1. Level 1, preconventional - follows rules 2. Level 2, conditional - follows expectations of others 3. Level 3, postconventional - guided by internal values How Organizations Can Promote Ethics 1. Creating a strong ethical climate 2. Screening prospective employees 3. Instituting ethics codes and training programs 4. Rewarding ethical behaviorL protecting whistle-blowers a. Whistle-blower: an employees, or even an outside consultant, who reports organizational misconduct to the public, such as health and safety matters, waster, corruption, or overcharging of customers Social responsibility: manager’s duty to take actions that will benefit the interest of society as well as of the organization Corporate social responsibility: notion that corporations are expected to go above and beyond following the law and making a profit Sarbanes-Oxley of 2002 - Often shortened to SabOX or SOX, established requirement for proper financial record keeping for public companies and penalties of as much as 25 years in prison or noncompliance Philanthropy: making charitable donations to benefit humankind Corporate governance: the system of governing a company so that the interests of corporate owners and other stakeholders are protected The Need for Independent Directors - More attention is being paid to strengthening corporate governance so that directors are clearly separated in their authority from the CEO CHAPTER 3 CONCEPT CHECK 1. Which statement regarding ethical climates is TRUE? a. An ethical climate significantly affects the frequency of ethical behavior. 2. Which of the following aspects of a company's performance are measured by the company's triple bottom line? (Select all that apply.) a. Social b. Financial c. Environmental 3. A social audit a. is a systematic assessment of a company's performance in implementing socially responsible programs. 4. Millennials in the workforce: (Select all that apply) a. expect more from the organizations they do business with. b. expect more from the organizations they work for. c. want work/life balance. d. are concerned about a corporation's ethics, motives, and methods. 5. A company's decision to move its operations out of the country will affect its employees, owners, suppliers, distributors, and everyone else who has an interest in the business. All of these groups together make up the company's _____. a. Stakeholders 6. An organization's ethical _____ represents employees' perceptions about the extent to which the work environment supports ethical behavior. a. Climate 7. A company's triple bottom line represents which three aspects? a. Profit b. People c. Planet 8. An organization's internal stakeholders consist of a. employees, owners, and the board of directors. 9. True or false: Unlike generations before them, Millennials have little concern for the environment and are more interested in profit over planet. a. False 10. Which statement regarding ethical climates is TRUE? a. An ethical climate significantly affects the frequency of ethical behavior. 11. Forward-thinking organizations tend to consider _____ the most important resource of a company. a. Employees 12. If you purchase shares of stock in a company, you are a(n) _____ in that company. a. Stockholder 13. What are two functions of the board of directors for a company? a. set overall strategic goals for the firm b. approve salaries of top management 14. The ______ of an organization consist of all those who can claim it as their legal property. a. Owners 15. The eleven groups that present a company with its daily tasks to handle represent the company's _____ environment. a. Task 16. The principal types of ownership are a. Stockholders b. Sole proprietorship c. Private investors d. Partnership e. Employee owners 17. A company's external environment consists of which two environments? a. task b. General 18. Select four groups that make up the task environment. a. Distributors b. Government regulators c. Strategic allies d. Local communities 19. The people or organizations that vie with your company for customers or resources are known as _____. a. Competitors 20. Those who pay to use an organization's services or to buy their goods are called ______. a. Customers 21. A company or person that provides raw materials, services, equipment, labor, or energy to another organization is called a(n) _____. a. Supplier 22. People who are outside an organization but are still affected by the organization are called the ______. a. External stakeholders 23. A distributor is sometimes referred to as a(n) a. Middleman 24. When companies link up with one another in order to realize certain advantages, they are known as strategic _____. a. allies 25. The board of directors for a for-profit organization would be elected by the ______. a. Stockholders 26. Recent trends show that the percentage of the labor force represented by unions has _____. a. Decreased 27. Local communities are important organizational stakeholders. In fact, if a community gives a company tax breaks in return for the promise of new jobs and the firm fails to deliver those jobs, the community may be able to institute a _____ and rescind the tax breaks. a. Clawback 28. Banks, savings and loans, and credit unions are all examples of _______ institutions and are stakeholders within the task environment. a. financial institutions 29. A person or an organization that helps another organization sell its goods and services to customers is called a(n) a. Distributor 30. Federal agencies that establish ground rules under which organizations operate are called _______. a. government regulators 31. An employee organization that represents hourly workers as opposed to salaried employees is called a(n) ______. a. Union 32. True or false: Local communities can be affected greatly by the entrance or exit of large businesses. a. True 33. The popular television show shows the shark investors gaining ownership stake in businesses in exchange for providing the businesses with money. This money is a form of _____. a. Venture capital 34. ___ groups try to influence specific issues, some of which may affect your organization. a. Special-interrest 35. Which of these are forces within an organization's general environment? a. Sociocultural b. Economic c. Demographic d. International e. Political-Legal f. Technological 36. Which of these organizations are considered special-interest groups? Choose all that apply. a. People for the Ethical Treatment of Animals b. Mothers Against Drunk Driving 37. Sociocultural forces are defined as a. influences and trends originating in a country’s, a society’s, or a culture’s human relationships and values that may affect an organization or industry. 38. Which of the following economic forces within a company's general environment affect the company's performance? (Select all that apply.) a. The unemployment rate b. Bank interest rates 39. True or false: Ethical standards do not vary among countries or cultures. a. False 40. Changes in the way politics shape laws and laws shape the opportunities for and threats to organizations are called ______ forces. a. Political-legal 41. Behavior that is accepted as proper according to a society's prevailing values is known as _______ behavior. a. Ethical 42. International forces are defined as changes in the ___________ that may affect an organization. a. economic, political, legal, and technological global system 43. An organization's macroenvironment is also known as its _____ environment. a. General 44. Select the five most common unethical workplace behaviors. a. Workplace cheating b. Abusive behavior c. Violating corporate Internet policies d. Employee theft e. Misusing company time 45. Which of the following are true of an ethical dilemma in an organization? (Select all that apply.) a. It forces you to decide whether to pursue a course of action that may be good for you or the company but that is unethical and possibly illegal. b. It often involves choosing between economic performance and social performance. 46. ____ are the relatively permanent and deeply held underlying beliefs that help determine a person's behavior. a. Values 47. Ethical behavior is defined as behavior that is: a. accepted as < right= as opposed to < wrong= according to prevailing ethical standards 48. managers often use a(n) _____ approach when making organizational decisions - using financial performance such as profit as the best definition of what constitutes an ethical choice for the company. a. Utilitarian 49. Unethical acts intended to create an unfair advantage or help an employee attain benefits they would not otherwise be entitled to receive are known as workplace _____. a. Cheating 50. In the __________ approach to solving ethical dilemmas, there is the assumption that people will act ethically in the short run to avoid others harming them in the long run. a. Individual 51. Values and _____ are the underpinnings for organizational ethics and ethical behavior. a. Value systems 52. The ______ approach to solving ethical dilemmas involves ethical behavior being guided by what will result in the greatest good for the greatest number of people. a. Utilitarian 53. Abusive _____ represents subordinates' perceptions of the extent to which their supervisors engage in the sustained display of hostile verbal and nonverbal behaviors, excluding physical contact. a. Supervision 54. One flaw in the _____ approach to ethical decision making is that one person's short-term self-gain may not in fact be good for everyone in the long term. a. Individual 55. The moral-rights approach to solving ethical dilemmas is guided by _____. a. respect for human rights 56. Which approach to deciding ethical dilemmas asserts that an ethical decision should be guided by respect for impartial standards of fairness and equity? a. Justice approach 57. Managers often use a(n) _____ approach when making organizational decisions - using financial performance such as profit as the best definition of what constitutes an ethical choice for the company. a. Utiliatrian 58. People who buy or sell stock illegally based on confidential company information are engaging in _____. a. insider trading 59. What are two requirements established by the Sarbanes-Oxley Act of 2002? a. An organization must put procedures and guidelines in place for audit committees. b. A company's CEO and CFO must certify the accuracy of the company's financial reports. 60. An employee who reports organizational misconduct to the public is known as a(n) _____. a. Whistle-blower 61. A manager's responsibility to take actions that benefit both society and the business is known as _____ responsibility. a. Social 62. People who buy or sell stock illegally based on confidential company information are engaging in _____. a. Insider trading 63. According to Archie B. Carroll, the responsibilities of an organization can be arranged as a pyramid, with _____ at the base and _____ at the top. a. making a profit; corporate citizenship 64. True or False: Milton Friedman would have been highly supportive of today's notion of corporate social responsibility. a. False (Reason: Milton Friedman believed that the only corporate social responsibility was to make money for shareholders. This is in stark contrast to modern conceptualizations of corporate social responsibility. ) 65. The purpose of a code of ethics is to a. clearly state top management's expectations for all employees 66. Major changes in temperature, precipitation, wind patterns, and similar matters occurring over several decades is known as _______. a. Climate change 67. _____ sometimes risk their jobs by coming forward about organizational misconduct and thus need to be protected. a. Whistleblowers 68. Today, it is stressed even more that companies go beyond just making a profit and take into consideration the environment and philanthropic initiatives. This is known as practicing ______. a. corporate social responsibility 69. Corporate _______ is the system of company oversight designed to ensure that the interests of owners and other stakeholders are protected a. Governance 70. Select all the statements that accurately represent Hurley's views on the most important crisis in business today. a. In business today, there is a crisis of trust. b. What is important is that organizations deliver every day on what they promise. c. Customers may think certain organizations are ethical, but that does not mean they should trust them. 71. Natural capital is defined as the: a. value of natural resources, such as topsoil, air, water, and genetic diversity, which humans depend on. 72. Purchasing _____ items increases the chances that your money will help provide a decent wage for the people who made them. a. Fair trade 73. According to Fordham professor Hurley, there is not a crisis of ethics in business today but a crisis of _____. a. Trust 74. What are actions your book suggests that individuals can take to become more ethical consumers? a. don't purchase items that aren't ethically made or sourced b. don't buy knockoff items c. provide your own bags at the grocery store d. purchase fair trade items 75. Corporate _______ is the system of company oversight designed to ensure that the interests of owners and other stakeholders are protected. a. Governance