business copyright 2005 prentice- hall, inc. 2-1
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Copyright 2005 Prentice- Hall, Inc. 2-1
1-2
Session #2
Understanding the Environments of Business, Ethics, and Corporate Responsibility
Business Introduction - Teaching TeamBusiness and Management DepartmentFaculty of Economics UNPAD
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UNDERSTANDING THE ENVIRONMENTS OF BUSINESS
1-3
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Organizational Boundaries& Environments
• External Environment
• Organizational Boundary- Separates Organization From Environment
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Dimensions ofExternal Environments
The Business
Organization
Economic
Technological
Political-Legal
Business
Sociocultural
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Economic Environment
• Business Cycle• Aggregate Output–Standard of Living
–Gross Domestic Product (GDP)• Real• Nominal
–Gross National Product (GNP)
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Technological Environment
Product/Service Technologies
Business Process Technologies- Enterprise Resource Planning
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Political-Legal Environment
• Regulation- Defines Relationship Between Government & Business
• Government = Pro vs. Anti-Business Sentiment
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Sociocultural Environment
• Customer Preferences/Tastes- Vary– International–National
• Ethical Compliance & Responsible Behavior–Enron–Arthur Andersen
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Business Environment
• Redrawing Corporate Boundaries- Core Competencies
• Challenges/Opportunities– Outsourcing
– Vertical Integration
– Viral Marketing
– Business Process Management
– Post-9/11
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ETHICS AND CORPORATE RESPONSIBILITY
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Ethics In The Workplace
• Beliefs in Right/Wrong & Good/Bad Actions
• Ethical- Conforms To Social Norms
• Unethical Behavior• Business Ethics
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Individual Ethics
• Ambiguity/Law/Real World• Sources of Individual Values &
Codes–Parents–Peers–Experience
• Personal Priorities–Financial Gain–Family/Friends
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Business Ethics
• Managerial
• Behavior Toward–Employees–Organization–Others
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Ethical NormsUtility
Rights
Justice
Caring
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Model Of Ethical Judgment Making
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Social Responsibility• Business Commitments To
Stakeholders
• Stakeholders Affected:–Groups– Individuals–Organizations
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Stakeholders
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SocialResponsibility - Environment
• Pollution–Air–Water
• Toxic Waste• Recycling
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Consumer Rights• Safe Products• Informed About
Product• To Be Heard• Choose What To Buy• To Be Educated• Courteous Service
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Unfair Pricing• Collusion
• Gouging
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Advertising Ethics• Food Product Labeling• Misleading Product
Claims• Deceptive• Morally Objectionable
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Employer Commitments To Employee
• Job Skills
• Respect & Compassion–Nondiscrimination–Equal Opportunities–Physically & Socially Safe
Workplace
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ResponsibilityTo Investors
• Improper Financial Management
• Check Kiting- Check 21• Insider Trading• Financial Misrepresentation-
GAAP
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Social Responsibility Approaches/Stances
• Obstructionist• Defensive• Accommodative• Proactive
Low Level High Level
Obstructionist
Defensive Accommodative
Proactive
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Social Responsibility Auditing Success of Program
• Starts At Top• Requires
Management Support
• Single Manager In Charge
• Conduct Social Audits