Business Ethics and Decision Making

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Questions and Answers

What is described as a borderless organization that exists everywhere and adapts fully?

Global Corporation

Domestic Organization

Transnational (correct)

Multinational

Which of the following involves creating a separate, independent office in a foreign country?

Exporting

Franchising

Foreign subsidiary (correct)

Licensing

What is the primary purpose of global sourcing?

To expand brand recognition abroad

To minimize costs by purchasing from the cheapest sources (correct)

To develop new international markets

To establish manufacturing operations locally

Which strategy allows an organization to grant rights to sell or make its product to another entity?

Licensing Signup and view all the answers

What term describes the viewing of the world solely from one’s own perspective, often leading to a narrow viewpoint?

Parochialism Signup and view all the answers

What characterizes disruptive innovation?

Innovations that redefine industry rules. Signup and view all the answers

Why is it critical for large organizations to manage disruptive innovation?

They risk losing market position due to existing market saturation. Signup and view all the answers

What role do managers play in an organization?

They coordinate the work of others to achieve organizational goals. Signup and view all the answers

What distinguishes multi domestic corporations from global companies?

Multi domestic corporations grant independence to local units. Signup and view all the answers

What should individuals in organizations do to remain competitive in the face of disruptive innovation?

Stay marketable and actively manage their careers. Signup and view all the answers

What is the definition of business ethics?

Principles, values, and beliefs that define right and wrong decisions and behavior Signup and view all the answers

Which of the following is NOT an element of business ethics?

Ambiguity Signup and view all the answers

What is generally the first step in resolving an ethical dilemma?

Clarifying what the dilemma is Signup and view all the answers

At what level of moral development does a person primarily consider personal gain?

Preconventional Level Signup and view all the answers

Which of the following is a structural variable that can influence ethical behavior?

Performance appraisals Signup and view all the answers

What does the concept of 'issue intensity' include?

Consensus of wrong and likelihood of harm Signup and view all the answers

How should international businesses approach ethical considerations?

By considering the culture and social differences of the host country Signup and view all the answers

Which factor is related to the individual characteristics of ethical decision-making?

Ego strength and individual values Signup and view all the answers

What primarily shapes the values and beliefs of individuals in a national culture?

Social traditions, political and economic philosophy, and legal systems Signup and view all the answers

Which management attitude accepts the notion that the best work practices come from around the world?

Geocentric Signup and view all the answers

Which of the following is NOT a benefit of workplace diversity?

Decreased creativity in problem-solving Signup and view all the answers

What challenge is associated with older workers in the workplace?

Difficulty adapting to new technologies and methods Signup and view all the answers

What type of economy is characterized by prices for products and services that are increasing?

Inflationary economy Signup and view all the answers

Which of these statements accurately reflects the role of national culture in organizations?

National culture influences employees more than organizational culture Signup and view all the answers

What is a common consequence of gender inequality in the workplace?

Lower morale and productivity for women Signup and view all the answers

Which of the following is a potential source of competitive advantage through diversity?

Improved innovation efforts Signup and view all the answers

Which strategy involves a voluntary employee-led subgroup that shares similar qualities or goals?

Employee Resource Groups Signup and view all the answers

What type of bias involves focusing on a particular part of a situation while ignoring other relevant parts?

Framing Signup and view all the answers

Which term describes the analysis method that enables machines to perform functions similar to humans?

Artificial Intelligence Signup and view all the answers

What process involves an experienced worker providing guidance and support to newer employees?

Mentoring Signup and view all the answers

Which bias involves believing that an event's outcome was predictable only after it has happened?

Hindsight Signup and view all the answers

What approach involves redesigning a process or object based on how designers solve design problems?

Design Thinking Signup and view all the answers

Which of the following biases leads individuals to attribute success to their own efforts and failures to external factors?

Self-serving Bias Signup and view all the answers

What method uses algorithms to create a structure resembling human brain functions for data analysis?

Deep Learning Signup and view all the answers

Study Notes

Business Ethics

Business ethics are the principles, values, and beliefs that define right and wrong decisions and behavior in the workplace.
Key elements of business ethics include integrity, fairness, law-abiding, respect, and responsibility.

Ethical Dilemmas

An ethical dilemma is a situation where it's not clear what's right and wrong.
Steps to follow when faced with an ethical dilemma:
- Define the dilemma.
- Identify those affected by the dilemma.
- Determine the important factors in the decision.
- Consider alternative solutions.
- Make a final decision and implement it.

Stages of Moral Development

Preconventional Level: Based on personal gain and avoiding punishment.
Conventional Level: Focuses on societal expectations and fulfilling obligations.
Principled Level: Driven by personal ethical principles and a sense of justice.

Moderators of Ethical Decision Making

Individual Characteristics:
- Values: Personal convictions about right and wrong.
- Ego Strength: The strength of an individual's convictions and commitment.
- Locus of Control: Beliefs about the extent to which an individual can control their own destiny.
Structural Variables:
- Organizational structure, goals, performance appraisals, and reward allocation can influence ethical behavior.
Issue Intensity:
- Greatness of Harm: The severity of the potential negative consequences.
- Consensus of Wrong: The level of agreement that the action is unethical.
- Probability of Harm: The likelihood of the negative consequences occurring.
- Immediacy of Consequences: How quickly the negative consequences will occur.
- Proximity to Victims: The closeness of the individuals affected by the unethical action.
- Concentration of Effect: The extent to which the negative consequences impact a large number of people.

Ethics in an International Context

It's crucial to consider cultural and social differences when conducting business internationally.
The Foreign Corrupt Practices Act applies to American companies operating abroad, prohibiting bribery and other corrupt practices.

Managing Disruptive Innovation

Disruptive Innovation: Innovations that fundamentally change an industry's rules and dynamics.
Large, established businesses are often vulnerable to disruption due to their focus on existing markets and technologies.
Organizations need to embrace innovation, stay adaptable, and manage risks to stay ahead.

Managers

Managers coordinate and oversee the work of others to achieve organizational goals.
Managers are crucial for guiding organizations through uncertain times ensuring productivity and enhancing performance.

Global Business

Types of International Organizations:
- Multi-Domestic Corporation: Each unit operates independently in its respective country.
- Global Company: Management and decisions are centralized in the home country.
- Transnational: Operates globally with a decentralized structure and adapts to local markets.
Reasons for Globalization:
- Global Sourcing: Purchasing materials or labor from the cheapest source worldwide.
- Exporting: Selling products made domestically internationally.
- Importing: Selling products made in other countries domestically.
- Licensing: Granting rights to another organization to manufacture or sell a product.
- Franchising: Giving another organization the right to use your brand name and operating methods.
- Strategic Alliance: A partnership between organizations to share resources and knowledge.
- Joint Venture: Two partners creating an independent organization together.
- Foreign Subsidiary: Investing in a foreign country by establishing a separate, independent office.
Global Challenges:
- Nationalism: Policies that promote a country's values and interests.
- Parochialism: A narrow, limited view of the world from one's own perspective.
- Globalization: Expanding organizational influence across national borders.
Economic Environments:
- Free Market Economy: Prices and production are determined by supply and demand.
- Planned Economy: Government controls prices and production.
- Inflation: A sustained increase in prices for goods and services.
National Culture:
- The values and attitudes shared by people from a specific country that shape their behavior and beliefs.
- Influenced by social traditions, political and economic philosophies, and legal systems.
- Often has a stronger impact on employees than organizational culture.
Managerial Approaches to Globalization:
- Ethnocentric: Belief that home-country practices are superior.
- Polycentric: Belief that host-country practices are superior.
- Geocentric: A global perspective, adopting best practices from around the world.

Workplace Diversity

Types of Diversity: Age, gender, race, religion, disability, sexual orientation, and other factors.
Benefits of Diversity:
- People Management: Enhanced talent utilization, creativity, and employee attraction and retention.
- Organizational Performance: Reduced costs, improved problem-solving, and greater flexibility.
- Strategic Advantage: Improved market understanding, sales growth, innovation, and competitive advantage.
Challenges of Diversity:
- Age: Potential for generational gaps in work styles and technology skills.
- Gender: Inequality and lack of opportunities for women.
- Race: Discrimination and prejudice can create a hostile work environment.
- Disability: Individuals with disabilities may face discrimination and lack of opportunities.
Managing Diversity Strategies:
- Employee Resource Groups: Voluntary, employee-led subgroups within an organization.
- Mentoring: Experienced employees providing guidance to newer colleagues.
- Diversity Training: Focuses on knowledge, attitudes, and behaviors related to diversity.

Bias that Affects Decision Making

Bias: A preference toward a particular perspective or ideology.
Types of Bias:
- Anchoring Effect: Overreliance on initial information, even if it's inaccurate.
- Self-Serving Bias: Taking credit for successes and blaming external factors for failures.
- Hindsight Bias: The tendency to believe that an event was predictable after it has occurred.
- Overconfidence Bias: An exaggerated sense of one's own abilities and knowledge.
- Immediate Gratification Bias: Prioritizing immediate rewards over long-term benefits.
- Framing Bias: The way information is presented can influence decision-making.
- Selective Perception Bias: Filtering information based on personal biases.
- Representativeness Bias: Drawing inaccurate analogies and seeing similarities that don't exist.

Cutting-Edge Approaches for Improving Decision Making

Design Thinking: Applying design principles to solve managerial problems.
Big Data: Analyzing large, complex datasets to identify patterns and insights.
Artificial Intelligence (AI): Using computers to replicate human functions.
Machine Learning: Automating the building of analytical models.
Deep Learning: Using algorithms to create artificial neural networks that simulate the human brain.

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Description

Explore the principles and values that guide ethical behavior in the workplace. This quiz covers ethical dilemmas, the stages of moral development, and factors influencing ethical decision-making. Challenge your understanding of how to navigate complex ethical situations effectively.