RSM 100 Term Test 2 Study Guide

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Rotman Commerce
Michael Szlachta

III. Conducting Business Ethically & Responsibly Ethics Individual standards or moral values regarding what is right/wrong or good/bad Ethical behaviour conforms to individual beliefs & social norms about what is right & good Unethical behaviour behaviour individual beliefs & social norms define as wrong & bad Business ethics ethical / unethical behaviour by a manager or employeeof an organization Managerial ethics standards of behaviour that guide individual managers in their work Conflict of interest occurs when an activity benefits an individual @expenseof employer Code of ethics formal, written acknowledgement of companys intent to do businessethically Ethical Judgement Making: Data Gathering Analysis Judgement Corporate social responsibility (CSR) refers to way in which a business tries to balance commitments to organizational stakeholders Organizational stakeholders are directly affected by the practices of an organization & have stake in performance Consumerism a social movement that seeksto protect & expand the rights of consumers in their dealings with businesses Collusion an illegal agreement among companies in an industry to fix prices for products Stealth advertising (undercover/guerrilla advertising involves companies paying individuals to extol virtues of products to others Whistle-blower employeewho discovers & tries to end companys unethical/illegal/socially irresponsible actions by publicizing them Cheque kiting involves writing a chequefrom oneaccount, depositing into a second account, then immediately spending money from the 2 account while money from 1 account is still in transit Insider trading useof confidential information to gain from purchase or sale of stock Spectrum of approaches to social responsibility Obstructionist Defensive stance Accommodative Proactive stance stance stance Does as little as Does only what is Meets all of its legal Actively seeks possible to solve legally required & & ethical opportunities to be social or nothing more requirements, & in socially responsible environmental some caseseven goes beyond what is problems & denies required / covers up wrongdoings Social audit a systematic analysis of how a firm is using funds earmarked for social- responsibility goals & how effective expenditures have been Triple bottom line reporting measuring the social, environmental & economic performance of company 4 Steps to Establishing a Social Responsibility Program Top Management Support Strategic Planning Appoint Director Social Audit Social Responsibility VI. Managing the Business Enterprise Management processof planning, organizing, leading & controlling an enterprises financial, physical, human & information resourcesto achievegoals of supplying various products / services Efficiency achieving the greatest level of output with a given amount of input Effectiveness achieving the organizational goals that have been set Planning processof determining the firms goals & developing a strategy for achieving them Prediction markets creating a market where people can buy shares in various answers to important questions that need to beanswered Strategic plans set by top management; reflect decisions about resource allocations, company priorities, & steps needed to meet strategic goals Tactical plans shorter-range plans concerned with implementing specific aspects of companys strategic plans. Typically involve upper & middle management Operational plans developed by middle & lower level managers that set short-term targets for daily / weekly / monthly performance Organizing mobilizing the resourcesthat are required to complete a particular task Leading (or directing) involves the interactions between managers & subordinates as they both work to meet firms objectives Controlling processof monitoring a firms performance to make sure that it is meeting its goals 3 Basic Levels of Management Top Managers Responsible for a firms overall performance & effectiveness & for developing long-range plans for the company Middle Managers Responsible for implementing decisions made by top managers First-line Managers Responsible for supervising the work of employees Areas of Management Human Resources; Operations; Information; Marketing; Financial Technical skills skills associated with performing specialized tasks within a company Human relations skills skills that enable managers to understand & get along with other people Conceptual skills a persons ability to think in the abstract, to diagnose& analyze different situations, & to seebeyond present situation Time management skills productive usethat managers make of their time Decision making choosing onealternative from among several options Decision-making skills skills in defining problems & selecting the best coursesof actions The Rational Decision-Making Process 1) Recognizing & defining the decision situation 2) Identifying alternatives 3) Evaluating alternatives 4) Selecting the best alternative 5) Implementing the chosen alternative 6) Following up & evaluating results Problem decision decision that is necessary when actual results do not conform to those expected Opportunity decision taking new initiatives/doing current activity more effectively even if no problem exists Organizational politics actions that people take as they try to get what they want Intuition an inner sense or hunch usually based on years of experience& practice in making decisions in similar situations Escalation of commitment when a manager makes a decision & then remains committed to its implementation in spite of clear evidencethat it was a bad decision Risk propensity how much a manager is willing to gamble when making decisions Strategic management the processof aligning the organization with its external environment Strategic goals the overall objectives that a businesswants to achieve Strategy broad set of organizational plans for implementing decisions made for achieving organizational goals Goals performance targets, means by which organizations & managers measure success/failure @every level Mission statement an organizations statement of how it will achieve its purposein the environment in which it conducts its business Long-term goals goals set for extended periods of time (typically five years or more) Intermediate goals goals set for period of 1 to 5 years Short-term goals set for very near future, typically less than 1 year SMART goals goals that are specific, measurable, achievable, relevant & time-framed Strategy formulation creation of a broad program for defining & meeting an organizations goals SWOT analysis identification & analysis of organizational strengths & weaknesses& environmental opportunities & threats as part of strategy formulation Organizational analysis processof analyzing a firms strengths & weaknesses Environmental analysis processof scanning the environment for threats & opportunities Strategy Formulation Set strategic goals Analyze the organization / environment Match the two Formulate strategy Corporate Level Strategy Identifies the various businesses that a company will be in & how these businesses will relate to each other Business Level (Competitive) Strategy Identifies the ways a business will compete in its chosen line of products or services Functional Strategies Identify the basic courses of action that each department in the firm will pursue so that it contributes to attainment of businesss overall goals Concentration strategy focussing the company on oneproduct or product line Market penetration boosting sales of present products by more aggressive selling in current markets Product development developing improved products for current markets Geographic expansion expanding operations in new geographic areas or countries Horizontal integration acquiring control of competitors in the same/similar markets with same/similar products Vertical integration owning or controlling inputs to firms processes&/or channels through which products / services are distributed Diversification expanding into related or unrelated products / market segments Investment reduction reducing the companys investment in oneor more of its lines of business
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