Management 100 Test 2

Front 1

Marx’s Four Criticisms of Capitalism

Back 1

1. Exploitation
2. Alienation
3. Big Business Domination
4. Corporate Exploitation of Countries

Front 2

Corporate Exploitation of Countries

Back 2

In capitalist societies, large corporations will export their labor to countries with less strict labor laws and cheaper labor pools. This creates a situation in which large corporations exploit the uneducated populations of third world nations.

1. Natural resources and cheap labor
2. Commodities specialization
3. Richer country benefits more
4. Crops ignored for higher projects
5. US support for big business investments

Front 3

Big Business Domination

Back 3

In a capitalist society, businesses are allowed to grow so large that they suffocate the market. This makes it nearly impossible for smaller companies to compete with the larger companies and allows the larger business to have too much power.

1. Economic power is political power
2. Government benefits business
a)Tax breaks
b)Subsidies
c)Bears social burden
3. Government tempers discontentment
4. Business leaders determine major policies

Front 4

Alienation

Back 4

Alienation in capitalist societies occurs because in work each contributes to the common wealth, but can only express this fundamentally social aspect of individuality through a production system that is not publicly social, but privately owned, for which each individual functions as an instrument, not as a social being.

1. Job dissatification
2. Lack of commitment
3. Dehuminizing of jobs
4. Scientific management

Front 5

Exploitation

Back 5

Marx argues that in a capitalist economy, the educated have the ability to, and will, exploit those who are less-educated and therefore oblivious to the ways to secure wealth and advance their financial security.

1. Exploitation of the worker
2. Economic growth feeds on human suffering
3. Outsourcing to low wage countries
4. Inequitable distribution of wealth
5. Income gap grows
6. Profits are rewards of control not hard work
7. Investments produce more wealth than work

Front 6

Milton Friedman and his Teachings

Back 6

(1912 – 2006) an American economist, statistician, a professor at the University of Chicago, and the recipient of the Nobel Memorial Prize in Economic Sciences

1. Economic freedom is essential for political freedom
2. Corporations are predominant and responsible for the stockholders
a.Business has no role in social issues
3. Government has no role in economics
4. Public interest groups hurt the market
5. Abolish taxes with a “negative” income tax

Front 7

Social Democracy

Back 7

Political philosophy and movement which aims to create a Socialist society by democratic means

1. Government is the conscience of the free market
2. Jobs are the foundation of society
3. Taxes are the price of civilization

Front 8

Mondragon Model

Back 8

1. Worker owned and managed since 1941
2. 120 firms in Basque, Spain
3. Highly diversified business
4. Cooperative decisions
5. Social programs supported

Front 9

Current Trends in Capitalism

Back 9

1. ESOP: a program under which employees regularly accumulate shares and may ultimately assume control of the company
2. Participative Management
3. Flex-Hours
4. Profit sharing
5. Stakeholder theory: theory of organizational management and business ethics that addresses morals and values in managing an organization

Front 10

Socialization

Back 10

influence of an organization on one’s attitudes, values or behavior

Front 11

Formal vs Informal Socialization

Back 11

Formal refers to training classes, code of ethics and feedback whereas informal socialization refers to the culture of the business including the social norms (expectations, peers, unwritten norms, culture)

Front 12

Maslow’s Hierarchy of Needs

Back 12

satisfaction progression process, Self-Actualization—ethical and unselfish

Physiological --->safety --->belongingness--->esteem--->self actualization

Front 13

Equity Theory and over and under rewarding

Back 13

focuses on fairness

How we decide whether or not resources are distributed fairly. We expect to receive the appropriate output for the input that we put in. We usually judge this by using social comparison. Over-reward inequity refers to us receiving more reward for less work. Under-reward inequity refers to our sense that we are receiving too little for our work.

Front 14

Theory X and Theory Y

Back 14

McGregor’s Management styles

Theory x(authoritarian management) argues that humans are lazy and need a manager constantly on top of them in order to perform

Theory y(participative management) argues that humans have the ability to be self-motivated and do not need constant supervision to succeed.

Front 15

Work Pressure

Back 15

increased demands, mobile and detached

Front 16

Obedience

Back 16

60% will violate personal ethics

Front 17

Careerism

Back 17

Selling oneself- market value determines self-worth, Flexibility

American’s are PRAGMATIC vs. PRINCIPLE

Front 18

Factors to balance life and work

Back 18

Spirituality
Vocations
Executives who act as leaders

Front 19

Spirituality

Back 19

1. A world view + a path
2. Promote religious tolerance
3. Institutions and schools

Front 20

Vocations

Back 20

1. To be called
2. Stirs emotions
3. Fulfills values

Front 21

Executives as Leaders

Back 21

1. Set the ethical tone
2. James Autry: ..co-workers are the new extended familty”
3. Max DePree: ..at the dying edge…p.245
4. Malcolm Baldrige Award winners

Front 22

Expectancy Theory

Back 22

effort --- performance---- outcome 1, outcome 2 or outcome 3 (+/-)

Effort-to-performance expectancy
Performance-to-outcome expectancy

Front 23

Trust

Back 23

A psychological state comprising of the intention to accept vulnerability based upon positive expectations of the intent or behavior of another person.

Front 24

Three Levels of Trust

Back 24

1.Identity-based trust (High)
2. Knowledge-based trust (Medium)
3. Calculus-based trust (Low)

Front 25

Identity-based trust

Back 25

1. Based on social identity theory
2. Tend to forgive transgression because team is part of our personal identity

Front 26

Executive Compensation

Back 26

1. 2003 it was up 23%
2. CEO makes 120x more than regular employee
3. Compensation level undermines trust, communication, and cooperation
4. Pay not based on individual performance
5. Justifications- great performance, needed to attract the best, return for contributions, signal of comparative worth

Front 27

Our Economy Values Short Term Results

Back 27

1. Capital allocation is faulty
2. Manage by numbers- focus on the earnings, ROI, ROE, and market share
3. Performance based on last year’s numbers
4. Ethics goes out the window

Front 28

Boards of Directors

Back 28

Hire, evaluate, and approve actions of CEO

1. Inside
2. Outside
a) Independent
b) Lead directors

Responsible for insuring that there are people that are independent from the business overseeing its operations as well as people within the business knowledgeable about the inter-workings of the company.

Front 29

Effective Directors

Back 29

all independent members, directors are prepared, skeptical and questioning

Front 30

Sarbanes-Oxley Act

Back 30

1. Passed in 02’
2. Both CEO and CFO must sign financial documents
3. Audit committee made up of outsiders
4. Auditing firm cannot be the consulting firm
5. Lead auditor must rotate every five years
6. SEC has stronger leadership and budget

Front 31

Ethical Programs

Back 31

1. Training
2. Auditing
3. Reporting
4. Ethical Officers

Should have an active ethics and social policy committee

Front 32

Globalization

Back 32

1. The integration of communications, markets and technologies such that Individuals, corporations and nations are able to operate internationally
2. The challenge is to create a system of values shared by all markets to be the glue of a global economy

Front 33

Issues facing Multinationals

Back 33

1. Internet
2. Sweatshops
3. Pollution
4. Speculation
5. Corruption

Front 34

Internet

Back 34

no ethical or legal boundaries, porn, scams, piracy

Front 35

Sweatshops

Back 35

Unsafe or unclean working conditions used to overwork/underpay employees. Used to meet demand for lower prices

Front 36

Pollution

Back 36

Global warming/ greenhouse effect, climate changes (Kyoto Treaty of 2001) reduce the greenhouse effect

Front 37

Speculation

Back 37

Traders vs. Investors. Causes Chaos, Short term churning (dishonesty for personal gain)

Front 38

Corruption

Back 38

Biggest obstacle to development. Creates lack of trust in legal system

Front 39

Transparency International

Back 39

$400 billion lost worldwide to bribery, info about corrupt countries, us is ranked 17th out of 146 as most corrupt nation

Front 40

Advantages of MNC Help

Back 40

1. Stimulates economy with purchases and taxes
2. Encourages technical skills
3. Jobs/ Income
4. Training
5. Aids development

Front 41

Disadvantages of MNC Help

Back 41

1. Exploitation
2. Sweatshops
3. Bribes
4. Sends profit back to rich country
5. Widens gap between rich and the poor

Front 42

Universal Declaration of Human Rights

Back 42

(1948) The Declaration arose directly from the experience of the Second World War and represents the first global expression of rights to which all human beings are inherently entitled.

Front 43

ILO Code

Back 43

International Labor Organization Code 1977

a specialized agency of the United Nations that deals with labour issues. Its headquarters are in Geneva, Switzerland. Its secretariat — the people who are employed by it throughout the world — is known as the International Labour Office. The organization received the Nobel Peace Prize in 1969.

Front 44

Coalition for Environmental Responsible Economies

Back 44

10 principles for which 70 companies would abide by

Front 45

Organization for Economic Co-op. And Development (OECD)

Back 45

(1997) Provides guidelines to criminalize bribery

An international economic organization of 34 countries founded in 1961 to stimulate economic progress and world trade. It defines itself as a forum of countries committed to democracy and the market economy, providing a platform to compare policy experiences, seeking answers to common problems, identifying good practices, and coordinating domestic and international policies of its members.

Front 46

Caux Round Table

Back 46

Principles for business in 1994. Includes human dignity. Benchmark and self assessment scores. Includes Kyosei.

an international organization of senior business executives aiming to promote ethical business practice.[1] It was founded in 1986 by Frits Philips, president of Philips, and Olivier Giscard d'Estaing, along with Ryuzaburo Kaku, president of Canon. Frits Philips had been alarmed to hear from reliable sources that the Japanese were dumping their products on the western market and he feared a growing trade war. He saw the need for trustbuilding between international executives and for Corporate Social Responsibility practices. The CRT’s Principles for Business were published in 1994, incorporating western concepts (human dignity...) and Japanese ones (kyosei, interpreted as “living and working together for the common good”).

Front 47

UN global compact for business

Back 47

(2003) 10 principles to support the environment. 800 firms from 6 continents. Has prestige of UN, learning forums to enhance simplicity and transparent reporting

Front 48

Global Reporting Initiative (GRI)

Back 48

(1997) Practical guidelines for reporting. Measures progress on the triple bottom line economic, environmental, and social performance. Used on governments, corporations, and NGO’. Analysts use the GRI reports to make stock recommendations

Front 49

Nine Emerging Values

Back 49

1. Central Role of the Person
2. Technology and Innovation
3. Sustainable Growth
4. Local Control of Business
5. Human Measures of Success
6. Vision and Hope
7. Long-Range Perspective*
8. Business for People*
9. Spiritual Roots*

*On the online study guide but not on ours.

Front 50

Central Role of the Person

Back 50

Have Variety, identity, Autonomy and significance as an individual

Front 51

Technology and Innovation

Back 51

1. Choice of Tech. reflects values.
2. Must regulate internet and also not neglect the poor and disadvantaged

Front 52

Long-range Perspective*

Back 52

1. Funding research
2. Recognize planning as a practice of effective leaders

Front 53

Sustainable Growth

Back 53

1. Respect natural resources / Waste Disposal
2. New commandments to preserve and conserve

Front 54

Business for People*

Back 54

Value of a job is = contribution of worker + contribution to society

Front 55

Local Control of Business

Back 55

1. Increased personal involvement
2. Clearer responsibilities
3. Eliminates Bureaucracy

Front 56

Spiritual Roots*

Back 56

1. Civil rights movement
2. 100 best companies to work , 10% are clustered in highly religious areas

Front 57

Human Measures of Success

Back 57

1. Benefit all STAKEHOLDERS
2. Regulations for an even playing field

Front 58

Vision and Hope

Back 58

Individuals can have a profound impact.

Front 59

Marx Views

Back 59

1. Economic forces are primary and social
2. Cause of class differences
3. Provoke social and political struggles
4. Capitalist systems ignore humans and society

Front 60

Communal Societies

Back 60

1. Leadership
2. Attract new, vibrant, talented members
3. Shared vision
4. Discipline to resolve differences

Front 61

Calculus-based Trust

Back 61

1. easily broken by a violation of expectations
2. cannot sustain a team’s relationship

Front 62

Knowledge-based Trust

Back 62

1. More stable than calculus-based trust
2. Develops over time