Honors Business Management
Chapter 3 – The Environment of Management
Key Questions
Section 3.1: Stockholders are only one group of stakeholders. Who are the
stakeholders important to me inside the organization?
Section 3.2: Who are stakeholders important to me outside the organization?
Section 3.3: What does the successful manager need to know about ethics and value?
Section 3.4: Is being socially responsible really necessary?
Section 3.5: What trends in workplace diversity should managers be aware of?
Vocabulary
toxic organizations
stakeholders
internal stakeholders
owners
board of directors
board of trustees/regents
inside directors
outside directors
external stakeholders
task environment
customers
competitors
suppliers
distributors
strategic allies
employee organizations
unions
professional organizations
financial institutions
government regulators
special interest groups
mass media
general environment
economic forces
technological forces
socio-cultural forces
demographic forces
political-legal forces
international forces
ethical dilemma
ethics
Business more than any
other occupation, is a
continual dealing with
the future; it is a
continual calculation, an
instinctive exercise in
foresight.
Henry R. Luce
ethical behavior
values
value system
utilitarian approach
individual approach
moral-rights approach
justice approach
Sarbanes-Oxley Act
Laurence Kohlberg
preconventional moral development
conventional moral development
postconventional moral development
code of ethics
whistleblower
social responsibility
corporate social responsibility
Archie B. Carroll
Milton Friedman
Jeb Emerson
blended value
sustainability
philanthropy
diversity
personality
internal dimensions of diversity
external dimensions of diversity
organizational dimensions of diversity
glass ceiling
Americans with Disabilities Act
underemployed
ethnocentrism
AT THE
LIBRARY
Independent Sections
 Manager’s Toolbox – p. 71
 Practical Action - p. 88
1
THE ORGANIZATIONAL ENVIRONMENT
Economic Forces
International
Forces
Customers
Media
Technological
Forces
Competitors
Suppliers
Interest
Groups
Employees
Owners
Governments
PoliticalLegal
Forces
Distributors
Board of
Directors
Allies
Lenders
Unions
Demographic Forces
2
SocioCultural
Forces
Ethics
Values
Ethics
Behaviors
APPROACHES TO ETHICAL DECISION-MAKING
1. Managers must
______________________ a
strong ethical climate.
2. Develop a formal,
written _____________ of
ethics.
3. ______________________ of
staff.
4. Support those who
report misconduct.
___________________________
3
Level
Focus
Managers
Federal law which established
requirements for proper
_________________ record
keeping and _______________
for noncompliance.
Social Responsibility
Social responsibility is a _________________________ responsibility to take actions that will benefit the interests of
society _____________________________ the organization. Corporate social responsibility (CSR) is the notion that
____________________________ are expected to go above and ____________________ following the law and
making a profit.
1.
1.
2.
2.
3.
3.
4.
4.
Notion that all investments are
understood to operate
_________________________
in the _________________ and
___________________ realms.
% willing to pay higher prices for ethics
% of job applicants who consider the ethics
record of a company “very important”
% of employees who state good ethics is a
key reason for them staying in their position
Effect on Sales Growth and Profits
% of every dollar earned that goes to cover
employee fraud
% of investors who consider ethics when
making stock purchase decisions
4
THE DIVERSITY WHEEL
Workplace Trends
Barriers to Diversity
Age:
Gender:
Ethnicity:
Gay/Lesbian:
Physically/Mentally Challenged:
Other:
Ethnocentrism-
5
Chapter 3 Review
Part A - Questions for Review
1. List three internal stakeholders.
2. List the six components of the general environment.
3. List six of the eleven groups representing the task environment.
4. What are demographic forces? List at least two.
5. Contrast ethics and values.
6. Summarize the reasoning for and against social responsibility.
7. List the internal and external dimensions of diversity.
8. Summarize some of the effects of the glass ceiling.
9. Based on what you have uncovered in this chapter, does "being good" pay off financially for businesses? Describe
why or why not?
10. Based on trends in workforce diversity covered in this chapter, what trends and challenges do you predict for
companies in the next decade?
Part B – Vocabulary Review
Americans with Disabilities Act
Code of Ethics
Competitors
Demographics forces
distributor
diversity
economic forces
ethnocentrism
ethical behavior
ethics
external dimensions of diversity
external stakeholders
general environment
glass ceiling
internal dimensions of diversity
internal stakeholders
international forces
justice approach
moral-rights approach
owners
philanthropy
political-legal forces
socio-cultural forces
stakeholders
strategic allies
supplier
task environment
technological forces
underemployed
utilitarian approach
value system
values
1. _____________________ are the people whose interests are affected by an organization's activities.
2. _____________________ _______________________ consists of employees, owners and the board of directors
whereas _____________________ _____________________ are the people or groups in the organization's
external environment that are affected by it.
3. The _____________________ _______________________ consists of groups that interact with your organization
on a day-to-day basis.
4. The _____________________ _______________________ consists of forces that are beyond your organization's
control.
5. _______________________ are the standards of right and wrong that influence behavior.
6. A(n) _____________________ _______________________ is a situation in which you have to decide between
whether to pursue a course of action that may benefit you or your organization but could actually be illegal.
7. Behavior that is accepted as "right" as opposed to "wrong" is _____________________ behavior.
8. A _____________________ _______________________ is the pattern of values within an organization and
9. _____________________ are the relatively permanent and deeply held underlying beliefs and attitudes that help
determine a person's behavior.
6
10. There are four approaches to deciding ethical dilemmas _____________________, _______________________,
_____________________, and _______________________.
11. A_____________________ of _______________________ consists of formal written sets of ethical standards
guiding an organization's actions.
12. _____________________ _______________________ is a manager's duty to take action that will benefit the
interests of society as well as the organization.
13. _____________________ is donating money to worthwhile recipients.
14. _____________________ represents that ways people are unalike and alike.
15. There are two dimensions of diversity: _____________________ dimensions are human difference throughout
each stage of our lives and _______________________ dimensions include an element of choice.
Part C – Multiple Choice
1. All of the following are part of the task environment except:
a. distributors
c. customers
b. suppliers
d. demographics
2. Which of the following is an extern dimension of diversity?
a. gender
c. age
b. income
d. race
3. All of the following make up the four parts of a system except:
a. subsystems
c. outputs
b. inputs
d. feedback
4. Approximately how many individuals are working in jobs for which they are overqualified?
a. 20%
c. 50%
b. 33%
d. 66%
5. Which of the following is true regarding diversity?
a. Fewer women are entering the workforce
b. More able-bodied people are leaving the workforce
c. Some organizations regard diversity as being less and less important
d. More people of color are entering the workforce
6. Which of the following is a barrier to diversity?
a. lack of support for family demands
b. lack of support for educations needs
c. fear of discrimination
d. unsupportive social atmosphere
7. Which is true regarding statistics on ethical behavior?
a. Social responsibility has little long-term effects.
b. A company is more attractive to potential employees when it has a reputation for social responsibility.
c. Eighty-eight percent of respondents said that they were no more likely to apply to an ethical company.
d. All of the above are true
8. What is the glass ceiling?
a. A cap on CEO salaries.
b. The invisible layer preventing women from being promoted.
c. The layer preventing minorities from being hired.
d. None of the above
7
9. Managers operate in two environments. Name one.
a. external
b. general
c. task
d. ethical
10. There are four approaches to deciding ethical dilemmas. Which of the following is NOT one of these approaches?
a. individual
c. justice
b. utilitarian
d. total quality
11. What do suppliers do?
a. Compete for customers and resources
b. Helps other organizations sell its goods and services to customers
c. Join forces to achieve advantages
d. Provide supplies to other organizations
Part D – True and False
1. ______ There are three approaches to solving ethical dilemmas.
2. ______ External stakeholders exist in the task and general environments.
3. ______ Owners are external stakeholders.
4. ______ Boards of directors are part of the general environment.
5. ______ Organizations can promote ethics in three ways.
6. ______ Some business leaders argue against social responsibility.
7. ______ "Being good" pays off financially.
8. ______ Personal habits are internal dimensions of diversity.
9. ______ Gays and lesbians make up approximately 6% of the U.S. population.
10. ______ Most managers have achieved postconventional moral development.
8