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Chapter 3

RSM100Y1 Chapter Notes - Chapter 3: Free Trade, Canada Labour Code, Vertical Integration

20 pages63 viewsWinter 2011

Department
Rotman Commerce
Course Code
RSM100Y1
Professor
Michael Szlachta
Chapter
3

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Chapter 3 t 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 t mainly customers, competitors,
stockholders, dealers, and unions. There is room for ethical ambiguity in just about every
activity t À]]vPU(]vv]o]o}µUY
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
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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
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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
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Chapter 6 t Managing the Business Enterprise
Management is the process of planning, organizing, leading, and controlling vv][
(]vv]oUZÇ]oUuvUv]v(}u]}v}µ}Z]ÀZ}Pv]}v[P}o. 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 (]u[ 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-presidentUY
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