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116 Cards in this Set

  • Front
  • Back
Business
any organization that is engaged in making a product or providing a service for profit.
2) Society
- Refers to human beings and to the social structures they collectively create.
3) General systems theory
Introduced in 1940s. Argues that all organisms are open to, and interact with, their external environments. Although most organisms have clear boundaries, they cannot be understood in isolation, but only in relationship to their surroundings.
4) Interactive social system
Business and society need each other, and each influences the other. They are entwined so completely that any action taken by one will surely affect the other.
5) Ownership theory of the firm-
the firm is seen as the property of the owners. The purpose of the firm is to maximize returns to shareholders; that is, to make the most money it can for the people who own stock in the company.
6) Stakeholder theory of the firm-
argues that corporations serve the broad public purpose: to create value for society.
7) Stakeholder-
- refers to persons and groups that affect, or are affected by, an organization’s decisions, policies, and operations.
8) Market stakeholders (AKA PRIMARY STAKEHOLDERS
are those that engage in economic transactions with the company as it carries out its primary purpose of providing society with goods and services.
9) Nonmarket stakeholders (AKA SECONDARY STAKEHOLDERS
- Are people and groups who- although they do not engage in direct economic exchange with the firm- are nonetheless affected by or can affect its actions. Include community, various levels of gov, activist groups and NGOs, media, etc.
10) Stakeholder Analysis
- Identify relevant stakeholders and to understand both their interests and the power they have to assert these interests. Asks four questions.
11) Stakeholder Interests
Essentially the nature of each group’s stake. What are their concerns, and what they want from their relationship with the firm.
12) Stakeholder power
- means the ability to use resources to make an event happen or to secure a desired outcome. 4 types of stakeholder power- voting power, economic power, political power, legal power.
13) Stakeholder coalitions
are not static. Temporary alliances to pursue a common interest
14) Stakeholder engagement
-used to refer to this process of ongoing relationship building between a business and its stakeholders.
15) Stakeholder dialogue
- a business and its stakeholders come together for face-to-face conversations about issues of common concern.
1) Public Issue
- is an issue that is of mutual concern to an organization and one or more of the organization’s stakeholders.
2) Performance- expectations gap-
gap between what the firm wants to do and what the stakeholders expect.
3) Boundary spanning departments
- are departments, or offices, within an org that reach across the dividing line that separates the company from groups and people in society.
4) Public affairs management-
refers broadly to the active management of a company’s external relations, especially its relations with stakeholders such as government and regulatory agencies, customers, investors, and communities.
5) Issue management
- is a structured and systematic process to aid organization in identifying, monitoring, and selecting public issues that warrant organizational action. These are the issues considered to be of the greatest importance to the org.
6) Environmental analysis-
provides managers with the information about external issues and trends that enables an organization to develop a strategy that minimizes threats and takes advantage of new opportunities.
7) Environmental intelligence
- is the acquisition of information gained from analyzing the multiple environments affecting organizations.
8) Competitive intelligence
is the systematic and continuous process of gathering, analyzing, and managing external information about the org’s competitors that can affect the org’s plans, decisions, and operations.
9) Issue management process
5 steps or stages. Issue identification, issue analysis, policy options, program design, and results.
10) Issue identification
- involves anticipating emerging concerns, sometimes called “horizon issues” by managers because they seem to be just coming up over the horizon.
1) Corporate social responsibility
means that a corporation should be held accountable for any of its actions that affect people, their communities, and their environment.
2) Iron law of responsibility
says that in the long run, those who do not use power in ways that society considers responsible will tend to lose it.
3) Charity principle-
the idea that the wealthiest members of society should be charitable toward those less fortunate, is a very ancient notion.
4) Stewardship principle-
- believe they have an obligation to see that everyone—particularly those in need or at risk—benefits from their firms’ actions. According to this view, corporate managers have been placed in a position of public trust. They can control vast resources that affect people.
5) Reputation
refers to desirable or undesirable qualities associated with an organization or its actors that may influence the organization’s relationships with its stakeholders. It’s a valuable intangible asset.
6) Enlightened self- interest
It is in a company’s self-interest in the long term to provide true value to its customers, help its employees to grow, and to behave responsibly as a corporate citizen.
7) Legal obligations
As a member of society, a firm must abide by the laws and regulations governing the society.
1) Corporate citizenship
Came into use in 1990s. Broadly refers to putting corporate social responsibility into practice. It entails proactively building stakeholder partnerships, discovering business opportunities in serving society, and transforming a concern for financial performance into a vision of integrated financial and social performance.
2) Citizenship profile
where companies choose a configuration of citizenship activities that fits the setting in which the company is working.
3) Global corporate citizenship-
- process of identifying, analyzing, and responding to the company’s social, political, and economic responsibilities as defined through law and public policy, stakeholder expectations, and voluntary acts flowing from corporate values and business strategies. Involves actual results and the processes through which they are achieved.
5) Social performance audit
-is a systematic evaluation of an organization’s social, ethical, and environmental performance. Examines impact of business against two benchmarks: a company’s own mission statement and social norms.
7) Balanced scorecard
A focused set of key financial and nonfinancial indicators, with four quadrants or perspectives—people and knowledge, internal customer, and financial.
8) Triple bottom line
when financial, social, and environmental results, taken together as an integrated whole, constitute a company’s triple bottom line.
9) Transparency
clear public reporting of an org’s performance to various stakeholders, and full reporting of not only financial but also social and environmental data.
1) Ethics-
conception of right and wrong conduct that tells us whether our behavior is moral or immoral, good or bad
2) Ethical principles
- are guides to moral behavior.
3) Ethical relativism
which holds that ethical principles should be defined in context of various periods in history, a society’s traditions, the special circumstances of the moment, or personal opinion.
4) Business ethics
is the application of general ethical ideas to business behavior.
5) U.S. Corporate Sentencing Guidelines
which provides a strong incentive for businesses to promote ethics at work. The sentencing guidelines come into play when an employee of a firm has been found guilty of criminal wrongdoing and the firm is facing sentencing for the criminal act, since the firm is responsible for actions taken by its employees.
6) Sarbanes-Oxley Act:
2002. Born from the ethics scandals at Enron, Worldcom, Tyco, and others , this law sought to ensure that firms maintained high ethical standards in how they conducted and monitored business operations.
7) Ethical egoist
A manager or employee who puts his or her own self-interest above all other considerations is called an ethical egoist.
8) Conflict of interest
-occurs when an individual’s self-interest conflicts with acting in the best interest of another, when the individual has an obligation to do so.
9) Virtue ethics
based on values and personal character. It focuses on character traits that a good person should possess, theorizing that these values will direct the person toward good behavior.
10) Personal Spirituality-
- that is, a personal belief in a supreme being, religious organization, or the power of nature or some other external, life-guiding force, has always been a part of human makeup.
12) Utilitarian reasoning
Emphasizes utility, the overall amount of good that can be produced by an action or a decision. It is often referred to as cost-benefit analysis because it compares the costs and benefits of a decision, a policy, or an action.
13) Human rights
A right means that a person or group is entitled to something or is entitled to be treated in a certain way. The most basic human rights are the right to life, safety, free speech, freedom, to be informed, due process, property, and others.
14) Justice-
or fairness, exists when benefits and burdens are distributed equitably and according to some accepted rule.
15) Whistle-blower-
that is, speak with the media or appropriate government agency.
16) Noisy withdrawal
meaning that when a lawyer sees evidence of a client company’s committing a material securities law violation and is unable to get the company’s board to stop it, the lawyer must quit and inform the SEC that the resignation is for professional considerations.
1) Corporate culture-
is a blend of ideas, customs, traditional practices, company values, and shared meanings that help define normal behavior for everyone who works in a company.
2) Ethical climates
the unspoken understanding among employees of what is and is not acceptable behavior.
3) Ethics policies or codes-
their purpose is to guide guidance to managers and employees when they encounter an ethical dilemma.
4) Ethics officer, compliance officer or ombudsperson
An ombudsperson is an impartial, confidential, and informal resource for resolving conflicts within an org.
5) Ethics assist line or helpline
when employees are troubled about some ethical issue but may be reluctant to raise it with their immediate supervisor, they can call these.
6) Ethics audit-
auditor is suppose to note any deviations from the company’s ethics standards and bring them to the attention of the audit supervisor.
7) Bribery
unethical activity. A questionable or unjust payment often to a government official to ensure or facilitate a business transaction.
U.S Foreign Corrupt Practices Act (FCPA
)-Executives representing U.S based companies are prohibited from paying bribes to foreign government officials, political parties, or political candidates.
9) Laws
and ethics are not quite the same. Laws are similar to ethics because both define proper and improper behavior. Laws are a society’s attempts to formalize the general public’s ideas about what constitutes right and wrong.
10) White- collar crime
Crimes involving embezzlement, money laundering, and check fraud, among others.
1) Globalization-
refers to the increasing movement of goods, services, and capital across national borders.
2) Transnational corporations (TNCs)-
defined by UN as firms that have assets broad.
3) International financial and trade institutions (IFTIS)-
)- Global commerce is carried out by these. Examples are the world bank, International Monetary Fund, and World Trade Organization.
4) World Bank-
setup in 1944, near end of WWII, to provide economic development loans to its member nations. Main motivation at time was help rebuild war-torn economies of Europe. Today, it is one of the largest sources of economic development assistance. Gets its funds from dues paid by member countries and from money it borrows from international capital markets.
5) International Monetary Fund
WB’s sister org. Founded at same time. Narrower purpose. To make currency exchange easier for member countries so that they can participate in global trade. Does this by lending foreign exchange to member countries.
7) World Trade Org-
international body that establishes ground rules for trade among nations. Major objective to promote free trade.
8) Anti-Americanism
: reflects resentment at the penetration of the values of dominant U.S based transnational corporations into every corner of the world.
9) Democracy-
refers broadly to the presence of political freedom. Four defining features→ Fair elections, independent media, separation of powers, open society where people have rights
10) Military dictatorships
repressive regimes ruled by dictators who exercise total power through control of the armed forces.
11) Free enterprise systems
- are based on the principle of voluntary association and exchange. People with goods and services to sell take them voluntarily to the marketplace, seeking to exchange them for money or other goods and services.
12) Central state control
- in which economic power is concentrated in the hands of government officials and political authorities.
13) Constructive engagement
some people believe that when transnational corporations operate according to strong moral principles, they can become a force for positive change in other nations where they operate.
14) Global codes of conduct
- seek to define acceptable and unacceptable behavior for today’s transnational corporations.
15) Civil Society
comprises nonprofit, educational, religious, community, family, and interest-group orgs.
17) Collaborative partnerships-
alliances among orgs from the three sectors.
1) Negative externalities
or spillover effects, result when the manufacture or distribution of a product gives rise to unplanned or unintended costs borne by consumers, competitors, neighboring communities, or other business stakeholders.
2) Public policy-
is a plan of action undertaken by government officials to achieve some broad purpose affecting a substantial segment of a nation’s citizens.
3) Fiscal policy-
- refers to patterns of government taxing and spending that are intended to stimulate or support the economy.
4) Monetary policy-
refers to policies that affect the supply, demand, and value of a nation’s currency.
5) Social assistance policies
Ex: healthcare and education
6) Regulation-
primary way of accomplishing public policy. Government establishes rules of conduct for citizens and orgs.
7) Market failure
the marketplace fails to adjust prices for the true costs of a firm’s behavior.
8) Natural monopolies
Ex- electric utility industry
9) Economic Regulations
- oldest form of regulation. Aim to modify the normal operation of the free market and forces of supply and demand.
10) Social regulations-
are aimed at such important social goals as protecting consumers and the environment and providing workers with safe and healthy working conditions.
11) Cost-benefit analysis
- helps the public understand what is at stake when new regulation is sought. Sometimes benefits exceed costs, and vice versa.
12) Deregulation
- removal or scaling down of regulatory authority and regulatory activities of government.
13) Reregulation
- the increase or expansion of government regulation, especially in areas where regulatory activities had previously been reduced.
1) Ad hoc coalitions-
bring diverse groups together to organize for or against particular legislation or regulation.
2) Corporate political strategy
- involves the “activities taken by orgs to acquire, develop, and use power to obtain an advantage”.
3) Lobbying-
Job is to represent the business before the people and agencies involved in determining legislative and regulatory outcomes. Tries to convince and persuade.
4) Revolving door
- this circulation of individuals between business and government. Business hiring former gov employees.
5) Business Roundtable
- One of the most effective organizations promoting direct communications between business and policy makers.
6) Political Action Committees (PACs)-
Independently incorporated organizations that can solicit contributions and then channel those funds to candidates seeking political office.
7) Economic leverage-
occurs when a business uses its economic power to threaten to leave a city, state, or country unless a desired political action is taken.
8) Advocacy advertising
- common method of influencing constituents. Focus not on a particular product or service, but on a company’s views on controversial political issues.
9) Trade associations
coalitions of companies in the same or related industries—to coordinate their grassroots mobilization campaigns.
10) Bundling
company takes all of the contributions to the candidate or candidates, clearly indicating that the contributions are from the firm’s stockholders.
12) Soft money-
unlimited contributions to the national political parties by individuals or orgs for party building activities.
13) 527 orgs
groups organized under section 527 of the IRS tax code for the sole purpose of influencing elections.
1) Corporate power-
refers to the capability of corporations to influence government, the economy, and society, based on their organizational resources.
2) Antitrust laws-
are laws that prohibit unfair, anticompetitive practices by business.
3) Predatory pricing-
practice of selling below a producer’s cost to drive rivals out of business.
4) Monopoly-
exists when one company dominates the market for a particular product or service.
5) Tying-
When a firm requires someone to buy an unwanted product or service in order to get another one they want. This is illegal and U.S Antitrust laws.
6) Corporate merger
combination of one company with another.
7) Vertical mergers
- occur when combining companies are at different stages of production in the same general line of business.
8) Horizontal mergers-
occur when the combining companies are at the same stage or level of production or sales.
9) Conglomerate merger
Occurs when firms that are in totally unrelated lines of business are combined.
10) Hostile takeovers
target firm does not want to be taken over. Bidder generally makes an offer to buy outstanding shares of the company for more than the current market price.
11) Competition policies-
other nations have their own version of antitrust laws, often referred to as competition policies.
12) National competitiveness-
13) Harmonization
As more and more countries have adopted competition policies, efforts have been made to coordinate laws and enforcement efforts among nations.