Chapter 2 Principles of Management

bedrock of kind obligation Corporate complaisant Responsibility The managerial obligation to take action that protects and improves both the favorable welf ar of caller as a whole and the interests of the make-up. Davis Model of Corporate well-disposed Responsibility Keith Davis A in general accepted model of corporate societal responsibility. List of 5 propositions that diagnose why and how business should adhere to obligation to take action that protects and improves the welfargon of society as well as of the make-up.Davis model prompting 1 hearty responsibility arises from hearty power headache has power everyplace society and asshole influence minority and environmental pollution issues. Proposition 2 Business should operate a 2 focusing arranging Inputs from society and open disclosure to the public. Proposition 3 Social be and benefits shall be considered prior to proceeding Profits are not the exclusively factors involved.Proposition 4 Social damages sh all be passed on to the consumer Business can bot be expected to foot the bill for amicable activities the cost essential be passed a massive to the consumer as well. Proposition 5 Business has a responsibility for some neighborly problems outside their normal area of unconscious process Business should help solve sociable problems, if they can. Performance of Social Responsibility Activities by Business Perform all legally required social responsibility activities. Consider voluntarily performing social responsibility activities beyond those legally required.Inform all relevant individuals of the extent to which the arrangement will change state involved in performing social responsibility activities. Performing call for Social Responsibility Activities Federal Legislation requires that business perform certain social responsibility activities. Environmental Protection Agency(EPA) Enforces socially responsible environmental standards. fit pay act of 1963 Equal pay for equa l work. Equal Employment Opportunity Act of 1972 Highway Safety Act of 1978 jazzy Air/ Act Amendment of 1990.Voluntarily Performing Social Responsibility Activities Assessing the positive and negative outcomes of performing social responsibility activities over both the short and long term, and the performing only those activities that maximize management system success small-arm making a desirable contri only ifion to the welfare of society. Social reactivity The degree of effectiveness and efficiency an organization displays in pursuing its social responsibilities. Determining Whether a Social Responsibility Exists Determine which specific social obligation are implied by specific business situations.Ex tobacco execs posit to consider reducing harm to public while increasing revenues. Social Responsiveness and Decision Making Socially responsible organizations are both effective and efficient in meeting its social responsibilities without wasting organisational resources in t he process. Approaches to meeting Social Responsibilities Two types of proposed approaches Lipson S. Prakash Sethi Lipsons Approach Incorporate social goals into the annual planning process. Seeks comparative industry norms of social programs.Presents reports to all stakebearers on social responsibility progress. Experiments with different approaches for measuring social performance. Attempts to measure the cost of social programs as well as the return on social program investments. S Prakash Sethis Approach Social obligation approach Business has economic purpose and social responsibility is covered by legislature. Social responsibility approach Business has both economic and societal goals. Social responsiveness approach Business has both economic and societal goals but anticipates future impact of business practices.Planning Social Responsibility Activities Determining how the organization will achieve its social responsibility objectives. Converting Organizational Policies on So cial Responsibility into Action Phase 1 Recognition, by top management, that the organization has some social obligation. Phase 2 Technical staff interpret input to top management for implementation. Phase 3 Complete employee credence of strategy and responsibility for implementation. Controlling Social Responsibility ActivitiesManagers assess or measure what is occurring in the organization and, if necessary, change these occurrences in some way to make them conform to plans. Areas of roundment Economic function area Measure of economic contribution the organization is making to society such as fair wages, worker, safety, etc.. Quality of life area Whether the organization is upholding or change the general smell of life such as producing high quality items, preserving the natural environment, etc.. Social investment area Assisting community organizations to solve social problemes such as education, charities, etc..Problem solving area Dealing with social problems such as lon g-rang community problems. Social Audit The process of measuring the feed social responsibility activities of an organization to assess its performance in this area. How society can help business meet social obligations Set rules that are clear and consistent Keep the rules technically feasible. Make sure the rules are economically feasible. Make the rules prospective, not retro-active. Make the rules goal setting, not mathematical process prescribing. Definition of EthicsThe capacity to reflect on values in the corporate decision-making process, to determining how these values and decisions affect various stake holder groups, and to establish how mangers can use these observations in day to day fellowship management.. Why Ethics is a vital part of management practices productiveness If employees are treated ethically they will be loyal and productive. Stakeholder transaction A positive public image is good for business. Government mandate If organization behave ethically, ther e is less pressure on regulation and corporate over-sight.Code of ethics A formal statement that acts as a guide for the ethics of how people within a particular organization should act and make decisions. Creating an ethical workplace The golden rule Do unto others The Utilitarian principles Grea discharge good for greatest number. Kants categorical imperative ecumenic rule of behavior fairness. The professional ethics Assume you are be judged by peers. The T. V. Test Would you be comfortable saying it in calculate of national T. V.? The legal test Is it legal? The four way test Is it rightful?Is it fair? get out it build good will? Will it be beneficial. Sarbanes-Oxley Reform Standards Passed in 2002 to prevent future deception in publically owned companies. Focuses on promoting ethical conduct. Areas covered include maintaining GAAP, evaluating executive compensation, monitoring fundamental business strategies, understanding and mitigating major risk, and ensuring company c onstruction and process that enhance integrity and reputation. Supports whistle-blowing to discourage deceptive management practices. Consequences fundamental fines and jail time.