Chapter ThreeThe Community of Stakeholders Inside the OrganizationThe Organization’s EnvironmentSlide 4The Community of Stakeholders Outside the OrganizationThe Task/Specific EnvironmentExample: Amazon.com and the Customer ExperienceThe Task EnvironmentSlide 9Slide 10The General EnvironmentSlide 12Slide 13Slide 14The Ethical Responsibilities Required of You as a ManagerDefining Ethics & ValuesValuesFour Approaches to Deciding Ethical DilemmasFour Approaches to Deciding Ethical Dilemmas (cont.)White-Collar Crime, SarbOx, & Ethical TrainingHow Organizations Can Promote EthicsThe Social Responsibilities Required of You as a ManagerTwo Types of Social ResponsibilityCarroll’s Global Corporate Social Responsibility PyramidThe Need for Independent DirectorsChapter ThreeThe Manager’s ChangingWork Environment & EthicalResponsibilities:Doing the Right ThingMcGraw-Hill/IrwinCopyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.3-3-22The Community of Stakeholders Inside the OrganizationStakeholders the people whose interests are affected by an organization’s activitiesInternal stakeholders consist of employees, owners, and the board of directorsExternal stakeholders are people or groups in the organization’s external environment that are affected by it3-3-33The Organization’s EnvironmentFigure 3.13-3-44The Community of Stakeholders Inside the OrganizationInternal stakeholders consist of employees, owners, and the board of directorsOwners consist of all those who can claim the organization as their legal propertyBoard of directors members elected by the stockholders to see that the company is being run according o their interests3-3-55The Community of Stakeholders Outside the OrganizationExternal stakeholders people or groups in the organization’s external environment that are affected by itTask, general environment3-3-66The Task/Specific EnvironmentCustomers those who pay to use an organization’s goods or servicesCompetitors people or organizations that compete for customers or servicesSuppliers A person or organization that provides raw materials, services, equipment, labor or energy to other organizations3-3-77Example: Amazon.com and the Customer ExperienceJeff Bezos, founder and CEO of Amazon.com is obsessed with customer serviceBelieves that company’s success is driven by the customer experienceExtremely customer focused companyIn 2011 the company’s revenue increased 41%3-3-88The Task EnvironmentDistributor a person or organization that helps another organization sell its goods and services to customersStrategic alliance describes the relationship of two organizations who join forces to achieve advantages neither can perform as well alone3-3-99The Task EnvironmentEmployee Organizations: Unions & AssociationsLocal Communitiesdepend on tax revenue and employmentFinancial InstitutionsGovernment regulators regulatory agencies that establish ground rules under which organizations may operate3-3-1010The Task EnvironmentSpecial interest groups groups whose members try to influence specific issuesexample: Buy AmericanMass Mediapositive or negative stories about companyexample: Clothing companies in Bangladesh3-3-1111The General EnvironmentEconomic forces consist of the general economic conditions and trends – unemployment, inflation, interest rates, economic growth – that may affect an organization’s performanceGDP, Unemployment rate, Prime Rate, 10-year T-notes3-3-1212The General EnvironmentTechnological forces new developments in methods for transforming resources into goods and servicesDisruptive technology (ex: email)Sociocultural forcesInfluences and trends originating in a country’s, a society’s, or a culture’s human relationships and values that may affect an organizationMillennial values transforming work3-3-1313The General EnvironmentDemographic forces influences on an organization arising from changes in the characteristics of a population, such as age, gender, or ethnic originEx: Rising number of HispanicsEx: Aging populationPolitical-Legal forces changes in the way politics shape laws and laws shape the opportunities for and threats to an organizationEx: New and changing regulations3-3-1414The General EnvironmentInternational forces changes in the economic, political, legal, and technological global system that may affect an organizationEx: World Trade Organization; Bank secrecy lawsEx: Arab spring, Syrian uprising3-3-1515The Ethical Responsibilities Required of You as a Manager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 unethical or even illegalExample: High sales commissions used to hide kickbacksExample: Paying small bribes at border crossings3-3-1616Defining Ethics & ValuesEthics standards of right and wrong that influence behaviorValues relatively permanent and deeply held underlying beliefs and attitudes that help determine a person’s behavior3-3-1717ValuesOrganizations may have two value systems that conflict:1. The value system stressing financial performance versus 2. The value system stressing cohesion and solidarity in employee relationships3-3-1818Four Approaches to Deciding Ethical DilemmasUtilitarian guided by what will result in the greatest good for the greatest number of peopleCost-benefit analysisIndividual guided by what will result in the individual’s best long term interest, which ultimately are in everyone’s self-interestIndividual acts ethically in the short run to avoid others harming the individual in the long run3-3-1919Four Approaches to Deciding Ethical Dilemmas (cont.)Moral-rights guided by respect for the fundamental rights of human beingsLife, liberty, health, safety (Bill of Rights)Justice guided by respect for impartial standards of fairness and equityImpartial treatment in decisions regardless3-3-2020White-Collar Crime, SarbOx, & Ethical TrainingSarbanes-Oxley of 2002 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Resulted from a series of corporate scandals (Ex: WorldCom and Enron) in the late