Introduction to Management Study Guide Chapter 4 PDF

Dhruv Chaudhari 09/04/2024 Chapter 4: Doing What’s “Right” Leader needs to consider ethical, legal, social, and value-based aspects of the work that needs to be done. Business Law: a variety of laws that businesses must follow: ○ Labor Laws: movement in the industrialization era to pr...

Dhruv Chaudhari 09/04/2024 Chapter 4: Doing What’s “Right” Leader needs to consider ethical, legal, social, and value-based aspects of the work that needs to be done. Business Law: a variety of laws that businesses must follow: ○ Labor Laws: movement in the industrialization era to protect worker’s rights and since then there have been several rules that have been followed, examples include: The National Labor Laws Act of 1935 gave workers in private industries the legal right to organize, engage in collective bargaining, and strike The Fair Labor Standards Act of 1938 which established 40-hour work weeks and eliminated the use of child labor The Social Security Law of 1935 provided retirement income for workers once they reached 65+ The Equal Pay Act made it illegal to have different pay rates for the same jobs based on gender The Civil Rights Act of 1964 made it illegal to discriminate in employment decisions based on race, color, religion, sex, or national origin. The Occupational Safety and Health Act of 1970 to help protect the Safety and health of workers The Uniform Commercial Code: a set of laws that regulates and facilitates commercial transactions. ○ Used as standards when market participants are doing business or are actively in a dispute ○ The Uniform Commercial Code(UCC) is adopted by all 50 states and was developed in 1952 by the American Law Institute and National Conference of Commissioners. ○ States were allowed to keep it as it was or modify it to suit their local needs. ○ This allowed for easier interstate commerce because there was less legal risk and legal complexity. Environmental Protection Laws and Regulations: The responsibility of businesses to protect the environment is governed by federal regulations, several judicial decisions, and common law ○ 25 Federal laws like the Clean Air Act, The Clean Water Act, and the Noise Control Act  Creation of The EPA which is responsible for enforcing the laws and acts to make sure businesses are following them. Industry Specific Regulations: ○ Publicly traded companies: These companies have to follow certain rules like the Sarbanes-Oxley Act which requires senior executives in companies to take responsibility for the accuracy of their financial reports ○ Oil and Gas Industry: Most states have regulations on the exploration and production of oil ○ Financial Services: The SEC and various bank regulations establish rules that specifically apply to stock exchanges, investment banks, commercial banks, and insurance companies. For example, commercial banks are regulated based on capital reqs, reserve reqs, corporate financial disclosures, and credit ratings. ○ Professional Baseball: the league is exempt from the application of a law that applies to all other industries, which is the Sherman Antitrust Act Ethical Decision Making ○ Several unethical things take place in Business like the Woldcom scandal, Bridgestone Tire blowouts, and many more. ○ “What happened” Both internal and external factors that are responsible Internal ○ Level of moral development of the individual ○ Willingness to accept and obey authority from others ○ Ability to control one’s behavior ○ Relationships with others who influence the perpetrator’s behavior External ○ Culture of the organization ○ Consequences for unethical behavior ○ Ease of opportunity ○ Characteristics of the work ○ “What Should Happen” Moral Awareness: realize there is a moral issue Moral Judgement: figure out what should be done and take appropriate moral action Moral Intention: Give Priority to moral values Action or implementation: implement plans based on strength of conviction and overcome all obstacles to do the “right” thing  ○ Ways to take a “Moral Course of Action” Utilitarian approach: should choose the option that produces the greatest good for the greatest number of people Individualism approach: Choose the option that promotes the individual’s best long-term interests. Moral Rights Approach: should choose actions that do not violate any moral rights Justice Approach: Distributive, Procedural, and Compensatory Justice Impartial Opinion: discuss the situation with an independent, objective, knowledgeable, and respected third party to obtain an unbiased view Full Disclosure: to openly present a decision to the public Core Values: norms of behavior and actions that are expected of all employees in an organization ○ Core values are essential for a company to do the “right” thing Corporate Social Responsibility: Are the Actions of an organization to recognize and proactively respond to the needs and expectations of all stakeholders ○ CSR is a requirement nowadays, unlike in the past ○ CSR is viewed as a tool to create value for an organization by enhancing its reputation ○ Leaders Proactive in CSR as studied by McKinsey: Changing your mindset to act as a role model in your daily decisions Using empathy to find common ground and win-win solutions Creating a broader vision that points toward meaning A good example of doing what’s “Right” is J&J’s Credo which is etched in the stone of the lobby of their corporate headquarters. ○ Articulates company responsibilities to its customers, employees, communities, and stockholders ○ An example of them following their responsibility is when CEO James Burke, in the 1980s, decided to take all the Tylenol off the shelf because it was tainted with a deadly substance.