Textbook Notes (363,232)
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Management (20)
33:620:301 (19)
Xi Wang (11)

Management Topic 12 Notes.docx

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Rutgers University
Xi Wang

Management Topic 12 Notes 11/27/13 Values-Based Management a) The nature of ethics - Ethical dilemma: the quandary people find themselves in when they have to decide if they should act in a way that might help another person or group and is the right thing to do, even though doing so might go against their own self interest - Moral scruples are thoughts and feelings that tell a person what is right and wrong, they are a part of a person’s ethics - Ethics are the inner guiding moral principles, values, and beliefs that people use to analyze or interpret a situation and then decide what is the right or appropriate way to behavior, also indicate what is inappropriate behavior - Neither laws nor ethics are fixed principles - Laws change or disappear/appear based on changing ethical beliefs - Ethical and legal rules are relative b) Stakeholders and ethics - Stakeholders are the people and groups affected by how a company and its managers behave; stakeholders supply a company with its productive resources and so have a claim on and a stake in the company - Stockholders have a claim on a company because when they buy its stock or shares they become its owners - Managers are a vital stakeholder because they are responsible for using a company’s financial, capital, and human resources to increase its performance and thus its stock price - Ethics applies to nonprofit organizations as well as for-profit ones - One principle way that a company can act ethically to employees and meet their expectations is by creating an occupational structure that fairly and equitably rewards employees for their contributions - Customers are often regarded as the most critical stakeholder because if a company cannot attract them to buy its products, it cannot stay in business - Decisions of companies also affect community, society, and nation - Community refers to physical locations like towns or cities or to social milieus like ethnic neighborhoods in which companies are located  provides company with physical and social infrastructure c) Rules for ethical decision making 1) Utilitarian rule: says that an ethical decision is a decision that produces the greatest good for the greatest number of people; choose action that provides most benefits OR least amount of harm to stakeholders 2) Moral rights rule: says that an ethical decision is one that best maintains and protects the fundamental or inalienable rights and privileges of the people affected by it, ex. rights to freedom, life and safety, property, privacy, speech; should choose action that best protects rights ofALL stakeholders 3) Justice rule: says that an ethical decision distributes benefits and harms among people and groups in a fair, equitable, or impartial way 4) Practical rule: says that an ethical decision is one that a manager has no reluctance or hesitation about communicating to people outside the company because the typical person in a society would think it is acceptable d) Why should managers behave ethically? - The relentless pursuit of self interest can lead to collective disaster when one or more people start to profit from being unethical because this encourages other people to act
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