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RSM100Y1 (431)
Chapter 3

Chapters 3,6-10

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School
University of Toronto St. George
Department
Rotman Commerce
Course
RSM100Y1
Professor
Michael Szlachta
Semester
Winter

Description
Chapter 3 J Conducting Business Ethically and Responsibility Ethics in the Workplace Ethics are beliefs on what is right and wrong or good and bad. Ethical behaviour is behaviour that conforms to individual beliefs and social norms and what is right and good. Unethical behaviour is behaviour that individual beliefs and social norms that define as wrong or bad. Business ethics refers to ethical or unethical behaviour by a manager or employee of an organization. Because ethics are both personally and culturally defined, differences in opinion arise as to what is ethical and what is unethical. Managerial ethics are the standard of behaviour that guides managers in their work. It classifies behaviour in terms of three broad categories: Behaviour Toward Employees: This category covers such matters as hiring and firing, wages and working conditions, privacy and respect. Behaviour Toward the Organization: ethical issues can arise from employees towards employer, especially in areas as conflict of interest, confidentiality, and honestly. A conflict of interest occurs when an activity benefits an individual at the expense of the employer Behaviour Toward Other Economic Agents: ethic is also involved in the relationship between the firm and its so called primary agents of interest J mainly customers, competitors, stockholders, dealers, and unions. There is room for ethical ambiguity in just about every activity J ]Z]L27]LL ]o]Z o}Z7 ; Assessing Ethical Behaviour A three step model can be used for applying ethical judgement to situations that may arise during the course of business activities 1. Gather the relevant factual information 2. Determine the most appropriate moral values 3. Make an ethical judgment based on the rightness or wrongness of the proposed activity or policy Corporate social responsibility (CSR) refers to the way in which a business tries to balance its commitments to organizational stakeholders www.notesolution.com Areas of Social Responsibility In defining their sense of social responsibility, most firms must confront four areas of concern: responsibility towards environment, customers, employees and investors Responsibility towards the Environment: controlling the pollution (injection of harmful substances into the environment) is a significant challenge for businesses. Air, water and land pollution are the subject of most anti-pollution efforts Responsibility towards Customers: social responsibility towards customers falls into two categories: providing quality food and pricing fairly. Consumerism: a social movement that seeks to protect and expand the rights of consumers in their dealings with businesses Responsibility towards Employees: organizations also need to employ fair and equitable practise with their employees. A white-blower is an employee who notices unethical behaviour and puts an end to it by publicizing it. Responsibility towards investors: it may sound odd that firms can be irresponsible towards ]LZ}Z7Z]L ZZ}LZ}Z }KL:]KL2ZZ]K[Z]LL Z7 the ultimate losers are the owners, since they do not receive earnings, dividends or capital appreciation due to them. Insider trading is the use of confidential information to gain from the purchase or sale of a stock www.notesolution.com Chapter 6 J Managing the Business Enterprise Management is the process of planning, organizing, leading, and controlling LL]Z[Z ]LL ]o7ZZ] o7ZKL7L]L}K]}LZ} Z} Z]Z}2L]]}L[Z2}oZ. It is important to know the difference between management effectiveness and management efficiency. Efficiency means achieving the greatest level of output with a given amount input. Effectiveness is achieving the organizational goals that have been set. Planning is the process to determine the ]K[Z goals and developing a strategy of achieving them Plans can be made on three general levels: strategic, tactical, and operational. These levels constitute a hierarchy of plans because applying plans is practical only when there is a logical flow from one level onto the next. Strategic plans are set by top management; mainly decisions about resource allocation, company priorities and steps needed to reach goals. Tactical plans short-range plans (made typically by middle or lower level managers) concerned with applying specific aspects of the company`s goals. Operational plans, which are developed by middle and lower-level management, set short-term targets for daily, weekly or monthly performance. Organizing involves mobilizing the resources that are required to complete a particular task Leading involves the interactions between managers and their subordinates as they both work to meet the firm`s goals Controlling the process of monitor a firm`s performance to make sure it is meeting its goals Types of Managers Although all managers plan, organize, lead and control, managers differ in the specific application of these activities. Managers are divided by their level of responsibility or their area of responsibility. Level of Management There are three basic levels of management: top, middle and first-line management Top Managers: are responsible to the board of directors and shareholders for the firm`s overall performance and effectiveness. They are also responsible for developing long range plans for the company. Titles include CEO (chief executive officer), CFO (Chief Financial Officer), COO (Chief Operations Officer), president, vice-presidentZ7 ; www.notesolution.com Middle Managers: are responsible for implementing the decisions made by the top managers. These managers occupy the positions between top managers and first-line managers and take titles such as plant mL27}]}LKL27 ; The middle manager job has become precious in many companies due to ways middle managers can cut cost and save companies millions. First-line Managers: managers who are responsible for supervising the work of the employees. First-line managers also interact with material suppliers, government officials and middle and top managers. Areas of Management With any large company the top, middle, and first line managers work in a variety of different areas such as: human resource, operations, information, marketing and finance Human Resources Managers: provide assistance to other managers when they are hiring employees, training them, evaluating them, and determining their compensation level. Operations Managers: responsible for the production systems that create goods and services (production control, inventory control, quality control, etc;) Information Managers: responsible for designing and implementing systems that gather, process and distribute information Marketing Managers: responsible for getting product and services to buyers Finance Managers: management of firm[s finances, including investments and accounting functions. Nearly every company has a financial manager to plan and oversee its financial resources Business Management Skills Effective managers must have five key skills: technical, human relations, conceptual, time management, and decision-making skills Technical Skills: skills associated with performing specialized task within a company. Technical skills are extremely important for first-line managers, because most first-line managers spent a majority of their time helping employees with work related situations. As managers begin to move up the corporate ladder, technical skills become less useful. Human Relations Skills: enables managers to understand and get along with other people. Human relations skills are especially more important for middle-managers, who often act as the connections between top and first-line managers. www.notesolution.com
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