Chapter 3 – The Environment of Management
Key Questions
Section 3.1: Stockholders are only one group of stakeholders. Who are the stakeholders important to me inside the organization?
Section 3.2: Who are stakeholders important to me outside the organization?
Section 3.3: What does the successful manager need to know about ethics and value?
Section 3.4: Is being socially responsible really necessary?
Section 3.5: What trends in workplace diversity should managers be aware of?
Vocabulary
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toxic organizations
stakeholders
internal stakeholders
owners
board of directors
board of trustees/regents
inside directors
outside directors
external stakeholders
task environment
customers
competitors
suppliers
distributors
strategic allies
employee organizations
unions
professional organizations
financial institutions
government regulators
special interest groups
mass media
general environment
economic forces
technological forces
socio-cultural forces
demographic forces
political-legal forces
international forces
ethical dilemma
ethics
ethical behavior
values
value system
utilitarian approach
individual approach
moral-rights approach
justice approach
Sarbanes-Oxley Act
Laurence Kohlberg
preconventional moral development
conventional moral development
postconventional moral development
code of ethics
whistleblower
social responsibility
corporate social responsibility
Archie B. Carroll
Milton Friedman
Paul Samuelson
Jeb Emerson
blended value
sustainability
philanthropy
diversity
personality
internal dimensions of diversity
external dimensions of diversity
organizational dimensions of diversity
glass ceiling
Americans with Disabilities Act
underemployed
ethnocentrism
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Independent Sections
ü Manager’s Toolbox – p. 71
ü Practical Action - p. 88
THE ORGANIZATIONAL ENVIRONMENT
THE DIVERSITY WHEEL
Post Project Homework:
Read pages 81 to the top of page 83 in your text. Then answer these questions:
1. How are ethics and values the same? different?
2. What two value systems often conflict in organizations?
3. Why can it often be difficult to determine the “greatest good” when using the utilitarian approach?
4. What is the flaw with the individual approach to ethics?
5. In what situations is applying the moral-rights approach difficult?
6. Give an example of how the justice approach is used at Council Rock North.
7. What is a “golden parachute”?
Section 3.3 Homework:
Below are some decisions a manager may face that have ethical implications. Analyze each situation and identify which of the four approaches you use in deciding each ethical dilemma.
1. Your accountant advises you to pay your part-time workers in cash to avoid paperwork.
2. At the annual industry convention you notice your general manager making sexual advances to his assistant. The woman looks uncomfortable and leaves the room.
3. An information technology manager at a major competitor offers to do consulting work for you after hours.
4. A report on your desk shows that your major product may cause skin cancer.
5. In negotiations with a major supplier in another country, you are approached by the supplier’s representative. If you reimburse the representative for his travel expenses to visit your U.S. facilities, he will approve the contract on favorable terms.
6. Your business is facing bankruptcy because of a recession. To obtain financing to cover expenses for the next few weeks, you will have to shade the truth when talking with your banker.
Section 3.4 Homework
Most companies now publish codes of ethics to provide ethical guidelines for employees. Many of the larger companies publish these codes on their web sites, but they may be hard to find. The Center for the Study of Ethics in the Professions (CSEP) has collected over 850 codes of ethics and put them on their website. You can access the website at http://ethics.iit.edu; then click on the link for the Codes of Ethics. Their collection includes codes of ethics for professional societies, corporations, government, and academic institutions. Earlier versions of codes of ethics of some organizations are available so you can study the development of codes.
1. Locate the code of ethics for an educational institution, a media organization, and a business organization. What do the three codes have in common? In what ways do they differ?
2. Find a company for which a previous code is available (such as IBM.) Review the key sections. How has the code changed?
Section 3.5 Homework
1. Define these terms: Primary dimensions of diversity; secondary dimensions of diversity; illiterate; salient
2. Why is the United States the only developed economy to have enough young people?
3. What factors keep minorities from breaking through the glass ceiling?
4. Gay and lesbian workers report more discrimination from males than females. Why do you think this is so?
5. Why is underemployment a concern for the business manager?
6. Why is an illiterate workforce a problem for managers?
Part A - Questions for Review
- List three internal stakeholders.
- List the six components of the general environment.
- List six of the eleven groups representing the task environment.
- What are demographic forces? List at least two.
- Contrast ethics and values.
- Summarize the reasoning for and against social responsibility.
- List the internal and external dimensions of diversity.
- Summarize some of the effects of the glass ceiling.
- Based on what you have uncovered in this chapter, does "being good" pay off financially for businesses? Describe why or why not?
- Based on trends in workforce diversity covered in this chapter, what trends and challenges do you predict for companies in the next decade?
Part B – Vocabulary Review
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Americans with Disabilities Act
Code of Ethics
Competitors
Demographics forces
distributor
diversity
economic forces
ethnocentrism
ethical behavior
ethics
external dimensions of diversity
external stakeholders
general environment
glass ceiling
internal dimensions of diversity
internal stakeholders
international forces
justice approach
moral-rights approach
owners
philanthropy
political-legal forces
socio-cultural forces
stakeholders
strategic allies
supplier
task environment
technological forces
underemployed
utilitarian approach
value system
values
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1. ______are the people whose interests are affected by an organization's activities.
2. ______consists of employees, owners and the board of directors whereas ______are the people or groups in the organization's external environment that are affected by it.
3. The ______consists of groups that interact with your organization on a day-to-day basis.
4. The ______consists of forces that are beyond your organization's control.
5. ______are the standards of right and wrong that influence behavior.
6. A(n) ______is a situation in which you have to decide between whether to pursue a course of action that may benefit you or your organization but could actually be illegal.
7. Behavior that is accepted as "right" as opposed to "wrong" is ______behavior.
8. A ______is the pattern of values within an organization and
9. ______are the relatively permanent and deeply held underlying beliefs and attitudes that help determine a person's behavior.
10. There are four approaches to deciding ethical dilemmas ______, ______, ______, and ______.
11. A______of ______consists of formal written sets of ethical standards guiding an organization's actions.
12. ______is a manager's duty to take action that will benefit the interests of society as well as the organization.
13. ______is donating money to worthwhile recipients.
14. ______represents that ways people are unalike and alike.
15. There are two dimensions of diversity: ______dimensions are human difference throughout each stage of our lives and ______dimensions include an element of choice.
Part C – Multiple Choice
1. All of the following are part of the task environment except:
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a. distributors
b. suppliers
c. customers
d. demographics
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2. Which of the following is an extern dimension of diversity?
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a. gender
b. income
c. age
d. race
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3. All of the following make up the four parts of a system except:
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a. subsystems
b. inputs
c. outputs
d. feedback
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4. Approximately how many individuals are working in jobs for which they are overqualified?
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a. 20%
b. 33%
c. 50%
d. 66%
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5. Which of the following is true regarding diversity?
a. Fewer women are entering the workforce
b. More able-bodied people are leaving the workforce
c. Some organizations regard diversity as being less and less important
d. More people of color are entering the workforce
6. Which of the following is a barrier to diversity?
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a. lack of support for family demands
b. lack of support for educations needs
c. fear of discrimination
d. unsupportive social atmosphere
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7. Which is true regarding statistics on ethical behavior?
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a. Social responsibility has little long-term effects.
b. A company is more attractive to potential employees when it has a reputation for social responsibility.
c. Eighty-eight percent of respondents said that they were no more likely to apply to an ethical company.
d. All of the above are true
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8. What is the glass ceiling?
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a. A cap on CEO salaries.
b. The invisible layer preventing women from being promoted.
c. The layer preventing minorities from being hired.
d. None of the above
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9. Managers operate in two environments. Name one.
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a. external
b. general
c. task
d. ethical
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10. There are four approaches to deciding ethical dilemmas. Which of the following is NOT one of these approaches?
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a. individual
b. utilitarian
c. justice
d. total quality
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11. What do suppliers do?
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a. Compete for customers and resources
b. Helps other organizations sell its goods and services to customers
c. Join forces to achieve advantages
d. Provide supplies to other organizations
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Part D – True and False
1. ______There are three approaches to solving ethical dilemmas.
2. ______External stakeholders exist in the task and general environments.
3. ______Owners are external stakeholders.
4. ______Boards of directors are part of the general environment.
5. ______Organizations can promote ethics in three ways.
6. ______Some business leaders argue against social responsibility.
7. ______"Being good" pays off financially.
8. ______Personal habits are internal dimensions of diversity.
9. ______Gays and lesbians make up approximately 6% of the U.S. population.
10. ______Most managers have achieved postconventional moral development.
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