chapter 3

Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin

Management A Practical Introduction

Third Edition

Angelo Kinicki & Brian K. Williams

Kinicki/Williams, Management: A Practical Introduction 3e ©2008, McGraw-Hill/Irwin2

Chapter 3: The Manager’s Changing Work

Environment & Ethical Responsibilities

Doing The Right ThingInside StakeholdersOutside StakeholdersEthical Responsibilities of ManagersSocial Responsibilities of ManagersThe New Diversified Workforce


3.1 The Community Of Stakeholders Inside The Organization

WHAT ARE INTERNAL STAKEHOLDERS?

Stakeholders are people whose interests are affected by an organization’s activities

Internal stakeholders include • employees,

• owners, and the

• board of directors



Figure 3.1: The Organization’s Environment



Today, forward-looking companies recognize that employees can be the most important resource in the organization, and that conflict between management and employees can be detrimental to everyone’s stake in the firm Owners include all those who can claim an organization as their legal propertyThe goal of owners is to make a profit A company’s board of directors is elected by stockholders to ensure the company is being run properlyThe board of directors is responsible for helping to set strategic goals and approve major decisions and salaries for top management


Chapter 3: The Manager’s Changing Work Environment & Ethical Responsibilities

CLASSROOM PERFORMANCE SYSTEM

Which of the following is not an internal stakeholder?

A) board of directors

B) employees

C) suppliers

D) owners




Which of the following is not an internal stakeholder?

A) board of directors

B) employees

C) suppliers

D) owners


3.2 The Community Of Stakeholders Outside The Organization

WHAT ARE EXTERNAL STAKEHOLDERS?

External stakeholders are those people or groups in the organization’s external environment that are affected by itThe external environment consists of the

• task environment and the

• general environment



The task environment includes customers, competitors, suppliers, distributors, strategic allies, employee organizations, local communities, financial institutions, government regulators, special-interest groups, and mass media Customers are those who pay to use an organization’s goods or services Competitors are people or organizations that compete for customers or resourcesA supplier is a person or organization that provides supplies (raw materials, services, equipment, labor, or energy) to other organizations



Task Environment, cont. A Distributor is a person or organization that helps

another organization sell its goods and services to customers

Strategic allies describes the relationship between two organizations that join forces to achieve advantages neither can perform as well alone

Labor unions are usually associated with hourly employees and professional associations usually represent salaried workers

Local communities rely on companies for jobs, for tax revenues, for financial support, and so on



Task Environment, cont.Start-ups often rely on credit cards to tide them over,

and established companies rely on financial institutions like commercial banks, investment banks,

and insurance companies Government regulators are stakeholders because they are affected by organizations Special interest groups are groups whose members try to influence specific issuesMass media is a powerful disseminator of both positive and negative news about companies




Which of the following is not part of the task environment?

A) government regulatorsB) unionsC) mass mediaD) sociocultural forces



The general environment or macroenvironment includes six forces: economic, technological, sociocultural, demographic, political-legal, and international

Economic forces consist of the general economic conditions and trends (unemployment, inflation, interest rates, economic growth) that can affect a firm’s performanceTechnological forces are new developments in methods for transforming resources into goods or servicesSociocultural forces are influences and trends in a country’s, a society’s, or a culture’s human relationships and values that may affect an organization



The General Environment, cont.Demographic forces are influences on an organization arising from changes in the characteristics of a population, such as age, gender, or ethnic origin Political-legal forces are changes in the way politics shape laws and laws shape the opportunities for, and threats to, an organizationInternational forces are changes in the economic, political, legal, and technological global system that can affect an organization




How economic integration in Europe creates opportunities and threats for American companies is an example of which type of force?

A) economicB) political-legalC) internationalD) sociocultural


3.3 The Ethical Responsibilities Of You As A Manager

WHAT DO SUCCESSFUL MANAGERS NEED TO KNOW ABOUT ETHICS?

Managers need to understand ethics, values, the four approaches to ethical dilemmas, and how to promote ethics

Ethics are the standards of right or wrong that influence behavior, while ethical behavior is behavior that is accepted as “right” according to those standardsAn ethical dilemma is a 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



WHAT DO SUCCESSFUL MANAGERS NEED TO KNOW ABOUT ETHICS?

Values are the relatively permanent and deeply held underlying beliefs and attitudes that help determine a person’s behaviorEthical dilemmas can take place when a firm’s value system is challenged



WHAT ARE THE FOUR APPROACHES TO DECIDING ETHICAL DILEMMAS?

1. According to the utilitarian approach, ethical behavior is guided by what will result in the greatest good for the greatest number of people 2. Under the individual approach, ethical behavior is guided by what will result in the individual’s best long-term interests, which ultimately is in everyone’s self-interest 3. According to the moral-rights approach, ethical behavior is guided by respect for the fundamental rights of human beings4. Ethical behavior under the justice approach is guided by respect for impartial standards of fairness and equity



The recent frenzy of white-collar crime at companies like Enron and World.com has raised public and corporate awareness of corporate ethics In 2002, the Sarbanes-Oxley Act was passed to establish requirements for proper financial record keeping for public companies and penalties for non-compliance Laurence Kohlberg has suggested that personal morals can be developed at three levels: preconventional (follows the rules), conventional (follows expectations of others), and postconventional (guided by internal values)




The relatively permanent and deeply held underlying beliefs and attitudes that help determine a person’s behavior are called

A) valuesB) normsC) attitudesD) ethics



HOW CAN ORGANIZATIONS PROMOTE ETHICS?

Firms can promote ethics in three ways:

1. Top management needs to support a strong ethical climate

2. Companies can adopt a code of ethics – a formal written set of ethical standards guiding an organization’s actions

3. Companies can promote ethical behavior by rewarding whistleblowers - employees who report organizational misconduct to the public


3.4 The Social Responsibilities Required Of You As A Manager

WHAT ARE THE SOCIAL RESPONSIBILITIES OF MANAGERS?

Social responsibility is a manager’s duty to take the actions that will benefit the interests of society as well as the organizationSo, while ethical responsibility focuses on being a good individual citizen, social responsibility focuses on being a good organizational citizenIn the past, social responsibility was an afterthought for companies, but today, many firms believe it is critical to success



IS SOCIAL RESPONSIBILITY WORTHWHILE?

Milton Friedman argues that firms need to focus on making a profit, not on social responsibilityFriedman claims that firms that focus on social responsibility get distracted from their real purposeHowever, Paul Samuelson suggests that firms need to be concerned for the welfare of society as well as corporate profitsSamuelson claims that since firms create problems like pollution, they should help solve them



HOW DO MANAGERS APPROACH SOCIAL RESPONSIBILITY?

1. Obstructionist managers put economic gain first and resist social responsibility as being outside the organization’s self-interest 2. Defensive managers make the minimum commitment to social responsibility—obeying the law but doing nothing more 3. Accommodative managers do more than the law requires and demonstrate moderate social responsibility4. Proactive managers actively lead the way to being socially responsible for all stakeholders, using the organization’s resources to identify and respond to social problems



CAN FIRMS BE SOCIALLY RESPONSIBLE AND ECONOMICALLY RESPONSIBLE?

Jeb Emerson argues that firms do not have to make a tradeoff between making a profit or being socially responsible, they can do both simultaneously Emerson calls this idea blended value where all investments are understood to operate simultaneously in both economic and social realms



WHAT ABOUT SUSTAINABILITY & PHILANTHROPY?

Two issues linked to social responsibility are sustainability and philanthropySustainability is defined as economic development that meets the needs of the present without compromising the ability of future generations to meet their own needs Philanthropy involves making charitable contributions to benefit humankind



HOW DOES BEING GOOD PAY OFF?

Customers prefer to buy products from companies that are ethically and socially responsible even if the products cost moreManagers consider a company’s social and ethical track record when considering joining and staying with companies



A poor record of ethical and social responsibility can have a negative effect on profitsManagers at companies where dishonesty is common tend to see misconductEmployee fraud costs U.S. firms about $652 billion per year People prefer to buy stock in companies they perceive as being ethicalProfitability is enhanced by a reputation for honesty and good citizenshipDoing Good vs. Doing Well


3.5 The New Diversified Workforce

WHAT DIVERSITY TRENDS SHOULD MANAGERS BE AWARE OF?

Diversity represents all the ways people are unlike and alike—the differences and similarities in age, gender, race, religion, ethnicity, sexual orientation, capabilities, and socioeconomic backgroundThere are four layers of diversity: personality, internal dimensions, external dimensions, and organizational dimensions



Figure 3.2: The Diversity Wheel



Personality is at the center of the diversity wheel because it is the stable physical and mental characteristics responsible for a person’s identity



Internal dimensions of diversity are those human differences that exert a powerful, sustained effect throughout every stage of our lives



The personal characteristics that people acquire, discard, or modify throughout their lives are the external dimensions of diversity



A person’s management status, union affiliation, work location, seniority, work content, and divisions or department are all organizational dimensions of diversity



HOW WILL THE U.S. WORKFORCE CHANGE IN THE 21ST CENTURY?

There will be more older people in the workforce as the median age of the American worker goes up Today, women hold half of all management and professional jobs, and more women will enter the workforceHowever, the ability of women to rise to the top will continue to be limited by a glass ceilingBy 2020, people of color will make up 37 percent of the U.S. workforce



Reducing discrimination against gays and lesbians in the workplace will be another challenge for managersAs a result of the Americans with Disabilities Act organizations will need to ensure that there is no discrimination against people with disabilitiesAbout a quarter of the workforce may be underemployed (working in jobs that require less education than they have), while at the same time, high-school dropouts and others may not have the literacy skills needed for many jobs



WHAT ARE THE BARRIERS TO DIVERSITY?

Managers may reflect their resistance to making an organization more diverse in six ways:

1. Ethnocentric managers believe that their native country, culture, language, abilities, or behavior is superior to those of others, and so feel that diversity hiring means a sacrifice in competency and quality

2. Managers may fear reverse discrimination - the efforts to achieve greater diversity will result in just the opposite – more minorities being promoted over more qualified whites



3. Managers may resist special programs to teach tolerance for diversity because they believe the programs take time away from their “real work”

4. Minorities may face an unsupportive social atmosphere and be excluded from office camaraderie and social events

5. Firms that are not supportive of family demands and fail to offer options like flextime create a challenging environment especially for women

6. Minorities may not be assigned to work that gets them promoted to senior positions or get the informal mentoring that helps them with the networking needed to get ahead




Which of the following is not an internal dimension of diversity?

A) gender

B) marital status

C) race

D) sexual orientation

chapter 3

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europe creates

organizationthe

social responsibilities

social responsibility

ethical responsibilities

mass media

task environment

external dimensions