A company using a reactive strategy to respond to demands for social responsibility will do less than society expects.
According to the ____ model, management’s most important responsibility is long-term survival (not just maximizing profits). Long-term survival, according to this model, is achieved by satisfying the interests of multiple corporate stakeholders.
All of the following are important factors in the creation of an ethical business climate EXCEPT ____.
official approval of the company’s ethics code by government regulators
For some time now, GlaxoSmithKline (GSK) has been making anti-AIDS drugs like Retrovir and Epivir available in hard-hit areas of Africa at up to 75 percent off the global price. But that wasn’t enough for AIDS prevention groups, which were outraged by GSK’s decision to use the World Trade Organization’s (WTO’s) patent protection rules to take action against governments importing lower-cost versions of these drugs. AIDS prevention groups saw GSK’s use of WTO regulation as acting at which level of social responsibility?
Define stakeholders. What are the two types of stakeholder groups? Give one example of each.
Stakeholders are persons or groups with a “stake” or legitimate interest in a company’s actions. There are two types of stakeholder groups: primary and secondary. A primary stakeholder group is any group on which an organization relies for its long-term survival. Examples include investors, customers, communities, employees, suppliers, and governments. Secondary stakeholders are any group that can influence or be influenced by the company and can affect public perceptions about its socially responsible behavior. Examples include the media and special interest groups.
In recent years Kowalski’s Markets expanded by purchasing four existing stores. One of the stores was located in Minneapolis’ Camden neighborhood, a lower-class community unlike the store’s typical upscale customer demographic. Rather than sell the property, the owners decided they had an obligation to provide a neighborhood grocery store to that community. Which of the following is an example of a primary stakeholder group for Kowalski’s markets?
customers in the Camden neighborhood
List the three factors that influence ethical decision making. How does ethical education and training influence these three factors and, thus, improve ethical decision making?
The three factors that influence ethical decision making are (1) the ethical intensity of the decision, (2) the moral development of the manager, and (3) the ethical principles used to solve the problems. Since ethical intensity refers to the degree of concern that people have about an ethical issue, it should be relatively easy for education and training to improve ethical decision making based upon this dimension. Similarly, education and training can be used to clarify specific ethical principles and how they might be used in decision making. Students might argue that moral development-an individual characteristic of an employee-would be much harder to impact through education and training. This position has merit, though the evidence does show that one’s level of moral maturity can change depending on individual and situational factors. Specifically, we know that as people age, become more educated, or deal with dilemmas high in ethical intensity, they are more likely to make ethical decisions using a higher level of moral maturity. Thus, education and training are indeed likely to have a significant impact on this dimension.
People at the postconventional level of moral development make moral decisions based on selfish reasons.
The first step in establishing an ethical climate in a company is for managers to act ethically themselves.
The stakeholder model holds that the only responsibility that businesses have is to maximize profits.
All four areas of social responsibility for companies (economic, legal, ethical, and discretionary) are equally important to a company’s overall level of social responsibility.
Probability of effect is the chance that something will happen and then result in harm to others.
Identify the four basic steps in the management by objectives process.
Management by objectives is a four-step process in which managers and employees (1) discuss possible goals, (2) participatively select goals, (3) jointly develop tactical plans, and (4) meet regularly to review progress toward goal accomplishment.
Planning is a three-step process which involves setting goals, then next developing effective action plans, and finally tracking progress toward goal achievement.
Tactical plans specify how a company will use its resources, budgets, and people to accomplish specific goals within its mission.
Budgeting is a critical management task, one that most managers could do better.
A strategic objective is a statement of a company’s purpose or reason for existing.
Groupthink is more likely to occur in a highly cohesive group that is insulated from others and has no established procedure for systematically defining problems and exploring alternatives.
The two approaches to maintaining flexibility in organizations while they plan are outcome-based planning and change-based planning.
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