Understanding Ethics and Ethical Behavior

Ethics

• Ethics are standards of right and wrong that vary across countries and cultures.

Ethical Behavior

• Ethical behavior involves actions accepted as right and wrong based on established standards.

Ethical Dilemma

• An ethical dilemma is a situation requiring a decision on a course of action, potentially benefiting an organization but being unethical or illegal.

Conflicting Value Systems in Organizations

• Value systems may stress financial performance or prioritize cohesion and solidarity in employee relationships.

Common Unethical Behaviors at Work

• Common unethical behaviors include misusing company time, abusive behavior, employee theft, workplace cheating, and violating corporate internet policies.

Utilitarian Approach

• The utilitarian approach is guided by maximizing the greatest good for the greatest number of people.

Individual Approach

• The individual approach is guided by actions resulting in the individual's best long-term interests.

Moral-Rights Approach

• The moral-rights approach is guided by respect for the fundamental rights shared by everyone.

Justice Approach

• The justice approach is guided by respect for impartial standards of fairness and equity.

Rock Star Theory Hypothesis

• Variation in outcomes primarily arises from differences in expectations, endowments, engagement, or environments due to initial conditions.

Feedforward Control

• Feedforward control focuses on preventing future issues.

Feedback Control

• Feedback control involves collecting real-time performance information.
• It identifies and fixes issues based on past results.

Total Quality Management (TQM)

• Total Quality Management is a philosophy where everyone in the organization focuses on quality throughout all activities, to improve customer service.

ISO 9000

• ISO 9000 includes ethical procedures a company must adhere to, excluding the environment.

ISO 14000

• ISO 14000 extends ISO 9000 by identifying standards for the environment.

Developmental Processes

• New strategy, new capabilities, new business development and new product development are types of developmental processes.

Balance Scorecard

• The Balance Scorecard is a strategy implementation tool using internal and external performance metrics to balance financial and strategic goals.

Types of Balance Scorecards

• The four types of balance scorecards are: Customer satisfaction, internal processes, innovation and improvement activities and financial measures.

Growth Strategies

• Growth strategies include market penetration, market development, product development, and diversification.

Managing Cooperative Strategies

• Managing Cooperative Strategies include cost minimization and opportunity maximization.

Cost Minimization

• Cost minimization focuses on producing a specific quantity of output at minimum cost.

Opportunity Maximization

• Opportunity maximization maximizes value-creating opportunities by sharing ideas and resources.
• It uses less formal contracts with fewer constraints, based on trust, respect, and transparency.

Types of Change

• From least to most threatening, there is adaptive, innovative, and radically innovative change.

Lewin's Change Model for the Individual

• Lewin's Change Model for the individual includes unfreezing, changing, refreezing, and a feedback loop.

Lewin's Change Model for Development

• Lewin's Change Model for development includes diagnosis and intervention.
• Followed by evaluation and feedback loop.

Product Innovation

• To be innovative a product must be commercialized and make a profit.

Code of Values

• A code of values are the standards a company abides by.

Value Chain

• A value chain is the steps taken to develop a code of values.

Joint Venture

• A joint venture is where a company forms a strategic alliance with a foreign company to share risks and rewards by starting new business in a foreign country.

Strategic Alliance

• With strategic alliances, firms combine some resources for the purpose of creating a competitive advantage

Franchising

• Franchising is where a firm uses a contract relationship to describe and control sharing of resources with its franchises.

Licensing

• Licensing allows foreign companies to pay a fee to make and sell products/services.

Globalization

• Globalization is a trend of the world economy becoming more interdependent.

Rise of Globalization

• The rise of global village and ecommerce, the world becoming one market, and the rise of megafirms and internet minifirms worldwide have spurred on globalization.

Global Village

• Global Village entails the "shrinking" of time and space by air travel and electronic media to allow global communication.

Ecommerce

• Ecommerce is the buying and selling of goods and services over the internet.

Ethnocentric

• Ethnocentrism is the belief in the superiority of one's nation or ethnic group.

Polycentric

• Polycentrism is the belief that managers in the host country know the best approaches.

Geocentric

• Geocentrism is the belief that both countries have valid ideas, and the best approaches vary based on the circumstances.

Free Trade

• Free trade is international trade free of government interference.

Protectionism

• Protectionism includes national policies designed to restrict international trade, usually to protect domestic businesses.

World Trade Organization (WTO)

• The WTO is designed to monitor and enforce trade agreements.

World Bank

• The World Bank is an international bank that offers advice, information and low-interest loans to developing nations.

Trading Blocs

• Trading blocs are groups of neighboring countries promoting trade with each other and erecting barriers to limit trade with other blocs; NAFTA is the most relevant.

Low-Context Culture

• In low-context cultures, shared meanings are primarily derived from written and spoken words; this includes the USA.

High-Context Culture

• In high-context cultures, people rely heavily on situational cues for meaning when communicating.

Stakeholders

• Stakeholders are people whose interests are affected by an organization's activities.

Stakeholder Environments

• Stakeholders exist within internal (owners, employees, board of directors), external-task, and external-general environments.

Social Responsibility

• Social responsibility is the manager's duty for ethics, and corporate social responsibility is a corporate duty for ethics.

Benchmarking

• Benchmarking is a process where a company compares its performance to that of high-performing organizations.

Control Chart

• A control chart is a time-ordered diagram used to determine whether observed variations are abnormal.

Control Process Steps

• The control process steps are to establish standards, measure performance, compare performance to standards, and take corrective action if necessary.

Control Standard

• A control standard is the desired performance level for a given goal.

Deming Management

• Deming management includes proposed ideas for making organizations more responsive, more democratic, and less wasteful.

Financial Ratios

• Financial ratios are calculations typically used to track a business's liquidity (cash), efficiency, and profitability over time compared to other businesses in its industry.

Incremental Budgeting

• Incremental budgeting is a method where new funds (an increment) are added onto the amount previously budgeted (in last year's budget).

Backward/Forward Integration

• Backward/forward integration occurs when a firm owns or controls the inputs it uses.

Market Power

• Market power is the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices.

Diseconomies of Scale

• Diseconomies of scale is the situation in which a firm's long-run average costs rise as the firm increases output.

Economies of Scale

• Economies of scale is a proportionate saving in costs gained by an increased level of production.

Diversification Strategies

• Diversification strategies emphasize both new products and new markets to achieve growth.

Organic Growth

• Organic growth is achieved through the expansion of current business activities.

Unrelated Diversification

• Unrelated diversification is a growth strategy whereby a new business lacks any common elements with the present business.

Countertrading

• Countertrading is a complex form of bartering in which several countries may be involved, each trading goods for goods or services.

Cross-Cultural Awareness

• Cross-cultural awareness is the ability to interact effectively and appropriately with people from different language and cultural backgrounds.

Dumping

• Dumping includes selling products in a foreign country at lower prices than those charged in the producing country.

Embargo

• An embargo is an official ban on trade or other commercial activity with a particular country.

Exchange Rate

• An exchange rate is the measure of how much one currency is worth in relation to another.

Expatriate

• An expatriate is a migrant worker who is a professional or skilled worker in their profession.

Expropriation

• Expropriation is the forced transfer of assets from a company to the government with compensation.

Foreign Corrupt Practices Act

• The Foreign Corrupt Practices Act prohibits U.S. corporations from making illegal payments to public officials of foreign governments to obtain business rights or enhance business dealings in those countries.

Global Outsourcing

• Global outsourcing uses suppliers outside the US to provide labor, goods, or services.

GLOBE Project

• The GLOBE project is a massive and ongoing cross-cultural investigation of 9 cultural dimensions involved in leadership and organizational processes.

Greenfield Venture

• A greenfield venture establishes a foreign subsidiary by building an entirely new operation in a foreign country.

Hofstede Model of Four Cultural Dimensions

• The Hofstede model of four cultural dimensions includes power distance, uncertainty avoidance, individualism, and masculinity.