Principles of management: Part 2 The environment of management

Individuals and groups that buy the goods and services an organization produces

Organizations that produce goods and services that are similar to a particular organization's goods and services

Economies of scale (EOS): Cost advantages associated with large operations
& 
Brand loyalty: Customers' preference for the products of organizations currently exisitn in the taks environment. 
Government regulations: Government policies that create barriers to entry and limit imports of goods from companies abroad. 

It is part of the general environment and affect the general heealth and well-being of a country or world region . They include interest rates, inflation, unemployment and economic groth and other factors

Is part of the general environment and is the combination of tools, machines, computers, skills, information and knowledge that managers use to design, produce, and distribute goods and services. 

Technologial forces are the ourcomes of changes in that technology

they are part of the general environment and are pressures coming from the social structure of a country or from the national culture. 

social structure is the traditional system of relationhip established between people and grous in society.

national culture is the set of values that a society coniders important and the norms of behavior that are approved or sanctioned in that society. 

Are part of the general environment and are outcomes of changes in, or chaning attitudes toward, the characteristic of a population, such as age, gender, ethinic, origin, race, sexual orientation, and social class

are part of the genearal environment. political and legal forces outcomes of changes in laws and regulations, such as deregulation of industries, privatization of organizations, and increased emphasis on environmental protection. 

Deregulation, privatization, and the removal of legal barries to trade and many others are examples. 

- The free-trade doctine: each country specialized

- Declining barries to trade and investment: GATT (General agreement on Tariffs and Trade) like free trade doctine between countries

- Declining barriers of distance and culture

- opened enormous opportunities for managers to expand the market for their goods and services. 

- allowed managers to buy and sel goods and services globally

-Increased intensity of global competititon can result to a more dynamic and complex manager job. 

The quandary people find themselves in when they have to decide if they should act in a way that might help another person even though doing so might go against their own selv interest

The people and groups that supply a company with its productive resources and so have a claim on and stake in the company. 

When the law does not specify how companies should behave, managers must decide what is the right er ethical way to behave toward the people and groups affected by their actions. 

Employees, Stockholders, Managers, Customers, Community, Society and Nation-State, Suppliers and Distributors

Shareholders want to ensure that managers are behaving ethically and not risking investor's capital by engaging in actions that could hurt the company's reputation. And they want to maximize their return on investment

-Responsible for using a company's financial capital and human resources to increate its performance. 

- have the right to expect a good return or reward by investing their human capital to improve a company's performance. 

- Frequently juggle multiple interests

1. Utilarian Rule: An ethical decision should produce the greatest good for the greatest number of people
2. Justice Rule: An ethical decision should distribute benefits and harm among people in a fair, equitable, and impartial manner.
3. Practical Rule: An ethical decision should be on ethat a manager has no hesitation about communication to people outside the company because the typical person in a society would think the decision is acceptable. 
4. Moral Rights Rule: An ethical decision should maintain and protect the fundamental rights and privileges of people

- An ethical decision is a decision that produces the greatest good for the greatest number of people. 

How do you measure the benefits and harm that will be done to each stakeholder group?

How do you evaluate the rights and importance of each group?

An ethical decision is one that best maintains and protects the fundamental or inalienable rights and privileges of the people affected by it. 

Managers should then choose the course of action that best protects and upholds the rights of all stakeholders. 

An ethical decision distributes benefits and harms among people and groups in a fair, quitable, or impartial way

An ehtical decision is one that a manager has no reluctance about communicating to people outside the company because the typical person in a society would think it is acceptable. 

• Does my decision fall within the acceptable values or standards that typicaly apply in business activity today?
• Am I willing to see the decision communicated to all people and groups affected by it - for example, by having it reported in newspapers or on television?
• Would the people with whom I have a significant personal relationship, such as family members friends, or even managers in other organizations, approve of the decision?

the relentless pursuit or self-interest can lead to a collective disaster when one or more people start to profit from being unethical because this encourages other people to act in the same way. 

business ethics are build from sources:

1. Societal Ethics
2. Individual Ethics
3. Occupatiional Ethics
4. Organizational Ethics

Standards that govern how members of a society should deal with one another in matters involving issues such as fairness, justice, poverty, and the rights of the individual.

People behave ethically because they have internalized certain values, beliefs, and norms

Standards that govern how members of a profession, trade, or creaft should conduct themselves when performing work-related activities

medical & legal ethics

Personal standards and values that determine how people view their responsibilities to others and how they should act in situations when their own sel-interests are at stake

Guiding practices and beliefs through which a particular company and its managers view their responsibility toward their stakeholders. 

Top managers play a crucial role in determining a company's ethics. 

The way a company's managers and employees view their duty or obligation to make decisions that protect, enhance, and promote the welfare and well-being of stakeholders and society as a whole. 

1. Obstructionist approach
2. Defensive approach
3. Accommondative approach
4. Proactive approach

Companies and their managers choose not to behave in a social responsible way and instead behave unethically and illegally

Companies and their managers behave ethically to the degree that they stay withing the law and strictly abide by legal requirements. 

Companies and their managers behave legally and ethically and try to balance the interest of different stakeholders as the need arises

Companies and their managers actively embrache socially responsible behavior, going out of their way to learn about th eneeds of different stakeholder groups and using organizational resources to promote the interest of all stakeholders

1. Demonstrating its social responsiblility helps a company build a good reputation
2. If all companies in a society act socially, the quality of life as a whole increases