Inclass Overheads

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In-class Overheads

• Session 5

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SWOT Analysis

• Opportunities
• a major favorable situation in the firms
  environment
• Threats
• a major unfavorable situation in the firms
  environment
• Strengths
• a resource, skill or other advantage
• Weaknesses
• a limitation or deficiency in resources

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Limitations of SWOTas a tool

• Subjectivity
• Opportunity or threat?
• Yields few clear cut recommendations

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Ethics

• An individuals personal beliefs about whether a
  behavior, action or decision is right or wrong.

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Ethical/Unethical Behavior

• Does the behavior conform to generally accepted
  social norms.

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Two General Types of Ethical Problems in Business

• Problem Type A The Acute Dilemma
• Problems of ethical uncertainty what constitutes
  right and wrong
• Problem Type B The Acute Rationalization
• Failures where a manager knows what is right and
  wrong, but fails to do the right thing

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Areas of Special Concern for Managers

• How an organization treats its employees
• How employees treat the organization
• How employees and the organization treat other
  economic agents.

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Framework for Moral Decision Making

• The Utilitarian Approach
• What are the benefits and harms of each course of
  action?
• Which alternative will lead to best overall
  consequences?
• Balance good v. evil
• More will be helped than hurt by the action

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Framework for Moral Decision Making

• The Rights Approach
• The right to truth
• The right to privacy
• The right not to be injured
• The right to what is agreed
• Which course of action respects these rights?

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Framework for Moral Decision Making

• The Fairness or Justice Approach
• Equals should be treated equally and unequals
  unequally.
• Does not show favoritism or discrimination
• Must be a morally justifiable reason to treat
  people differently.

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A Framework for Moral Decision Making

• The Common-Good Approach
• Society is viewed as a community
• Individuals are joined in shared pursuit of
  values and goals they hold common
• Certain general consideration are to everyones
  advantage
• Which course of action advances the common good?

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A Framework for Moral Decision Making

• The Virtue Approach
• There are certain ideals toward which we should
  strive.
• A virtuous person will be disposed to act in ways
  consistent with moral principles
• Examples
• Honesty, courage, compassion, generosity,
  fidelity, integrity, fairness, self-control,
  prudence.
• Which action develops moral virtues?

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Ethics and the Law

• Law codifies only that part of ethics which
  society feels so strongly about that it is
  willing to support it with physical force.
• Combinations
• Legal and Ethical
• Legal, but Unethical
• Illegal, but Ethical
• Illegal and Unethical

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Quasi-Legal

• Certain practices can be condemned at the
  extreme, but may be tolerated in moderation.
• Example
• When does gift-giving become commercial bribery?

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Social Responsibility

• The impact of the organization on the
• Natural Environment
• General Social Welfare
• Organizational Constituents

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Approaches to Social Responsibility

• Social Obstruction obstructionist stance
• Social Obligation defensive stance
• Social Response - accommodative stance
• Social Contribution proactive stance

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Social Responsibility

• The set of obligations an organization has to
  protect and enhance in the societal context in
  which it functions.

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Arguments For/Against Social Responsibility

• For
• Business creates problems and should therefore,
  help solve them.
• Corporations are citizens of our society.
• Business has resources necessary to solve
  problems
• Business is a partner in our society, along with
  government and general population

• Against
• Purpose of business is to generate profits for
  owners.
• Involvement gives business too much power.
• Potential for conflict of interest
• Business lack expertise to manage social problems.

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Codes of Conduct

• Reasons for
• Federal Corporate Sentencing Guidelines (1991)
• Societys expectations
• Mix of cultures in business environment
• New organizational forms
• Codes may have little or no affect on ethical
  behavior.

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Pressures that Lead to Questionable Practices

• Overemphasis on Performance
• Intensity of Competition
• Expediency and Indifference
• Custom
• The Groupthink Mentality

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Thoughts on Why People areCheating More Often

• Fiscal policy encourages immoral economic
  behavior
• Widening gap between rich and poor
• Overemphasis on material values
• Penalties for wrong-doing are negligible
• Little moral censure

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A Matter of Ethics

• Company leaders set tone
• Must maintain honesty integrity
• Put it in writing
• There is a Ripple Effect
• Put integrity first
• A way of life