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38 Cards in this Set
- Front
- Back
- 3rd side (hint)
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GST/MGMT THEORY |
Business firms are embedded in a broader social environment with which they constantly interact. Business and society together form an interactive social system. |
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Business |
Any organization that is engaged in making a product or providing a service. |
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Society |
Human beings and the social structures they collectively create. |
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Milton Friedman |
Maximizing share price is the only responsibility of a corporation -firms are designed to make profits, nothing else -managers are not elected and are untrained to accomplish social goals, therefore they should not solve social problems -fiduciary responsibility |
Shareholder theory |
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Edward Freeman |
Maximizing share price IS NOT the only responsibility of a corporation -unethical to ignore stakeholders -stalls change -operates under unrealistic portrait of the firm |
Stakeholder theory |
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Shareholder theory |
Milton Friedman -firm is seen as property of its owners -owners interests are paramount and take precedence over the interests of others -the purpose of the firm is to maximize its long term market value; make the most money it can for shareholders |
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Stakeholder theory |
Edward Freeman -corporation serves larger purpose, to create VALUE for society -makes a profit for owners, but creates other value too -all stakeholder groups must be taken into account |
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Market stakeholder |
Engage in economic transactions with the company as it carries out its primary purpose of providing society with goods and services |
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Non market stakeholders |
Do not have direct economic exchange with a company, but are affected nonetheless. -community, government, the media etc. |
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Internal stakeholders |
This employed by the firm. -employees, managers |
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External stakeholders |
Transact with firm, but are not directly employed by it. -stockholders, customers, creditors, suppliers and wholesale retailers |
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Stakeholder power |
Ability to use resources to make an event happen or secure a desired outcome. -voting power -economic power -political power -legal power |
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Forces that shape business and society relationship |
-changing societal and ethical expectations -role of government -dynamic global economy -ecological and natural resource concerns -technology and innovation |
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Ethics |
The study of right, wrong, good or bad conduct. |
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Ethics |
The study of right, wrong, good or bad conduct. |
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Morality |
Because of society’s norms, I know what behavior is good or bad. |
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Values |
Principals and notions that people highly esteem. |
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Pluralist |
Type of ethical reasoning. Tolerance at it’s best. Will condemn certain acts. |
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Relativist |
Type of ethical reasoning. Tolerance to a fault. Who am I to judge? Is problematic, as living together in society requires ethics. |
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Utilitarian |
Type of ethical reasoning. Considers cost and benefits of a decision policy or action. These costs and benefits can be economic, social or human. |
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Deontology/kantianism |
Type of ethical reasoning. Rules and obligation. Follows rules independent of expected outcome. |
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Justice/Fairness |
Type of ethical reasoning. Just proceeders that lead to just outcomes. Who bears the burden and who traps the benefit. |
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Virtue Ethics |
Type of ethical reasoning. Focuses on integrity of moral actor rather than the act. Considers character, motive, intention- over a lifetime. Character determines behavior. Provides a better fit with our moral experience in life and business. (Aristotle) |
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Public issues |
Any issue that is of mutual concern to an organization and one or more of its stakeholders. -climate change, executive pay and bonuses, food safety, privacy |
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Performance-expectations Gap |
The gap between what firm wants to do about a public issue and what stake holders expect to be done. |
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Environmental Analysis |
Method managers use to gather info about external issues and trends so they can develop strategies that minimizes threat and takes advantage of new opportunities. |
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Environmental Intellegence |
Info gained from analyzing the multiple environments affecting organizations. |
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Environments |
-customer -competitor -economic -technological -social -political -legal -geophysical |
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Issue Management Process |
-identify -analyze -generate options -take action -evaluate results |
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Inactive Business/Stakeholder Relationship |
Company ignores stakeholders concerns. |
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Reactive Business/stakeholder Relationship |
Companies act only when forces to do so, and then in a defensive manner. |
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Proactive Business/Stakeholder Relationship |
Companies try to anticipate stakeholders concerns. |
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Interactive Business/Stakeholder Relationship |
Companies actively engage stakeholders in an ongoing relationship of mutual respect, openness and trust. |
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Corporate Social Responsibility (CSR) |
A corporation should act in a way that enhances society and be accountable for any of it’s actions that affect people, their communities and their environment. |
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Virtues in Business |
Heath -self control -courage -justice -generosity -honesty |
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Board of directors |
Vary in size, composition and structure to best serve the interests of the corporation and shareholders. Elected by shareholders. |
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Employee Rights/Employer Duties |
-right to organize and bargain -right to safe and healthy workplace -right to privacy -right to discipline fairly and justly -right to blow the whistle -right to equal employment -right to be treated with fundamental human rights |
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Employee Duties/Employer Rights |
-no substance abuse -no endangering others -treat others with respect -honesty -loyalty and commitment -respect for employers property and intellectual capital |
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