Chap005_4.pptEthics and Corporate ResponsibilityChap.docx

Chap005_4.ppt
Ethics and Corporate Responsibility
Chapter 05
Copyright © 2011 by the McGraw-Hill Companies, Inc. All
rights reserved.
McGraw-Hill/Irwin
Learning Objectives
LO1 Describe how different ethical perspectives guide decision
making
LO2 Explain how companies influence their ethics environment
LO3 Outline a process for making ethical decisions
LO4 Summarize the important issues surrounding corporate
social responsibility
LO5 Discuss reasons for businesses’ growing interest in the
natural environment
LO6 Identify actions managers can take to manage with the
environment in mind
5-*
*
EthicsEthicsThe system of rules that governs the ordering of

values
5-*
Telling the Truth and Lying: Possible Outcomes
5-*
It’s a Personal IssueMost of us believe we are ethical but most
have unconscious biases that favor ourselves and their own
group
5-*
*
It’s a Personal IssueManagers often: Hire people who are like
themThink they are immune to conflicts of interestTake more
credit than they deserveBlame others when they deserve some
blame themselves
5-*
*
It’s a Personal IssueIs it ethical to: Shop online during company

time?Using office equipment for personal use?Read personal
emails while at work?
5-*
*
It’s a Personal IssueOne suggestion is to change your
vocabularyThe word “ethics” is too loadedSubstitute
“responsibility” or “decency” insteadAct accordingly
5-*
EthicsEthical issueSituation, problem, or opportunity in which
an individual must choose among several actions that must be
evaluated as morally right or wrongBusiness ethicsThe moral
principles and standards that guide behavior in the world of
business.
5-*
Ethical SystemsMoral philosophyPrinciples, rules, and values
people use in deciding what is right or wrongUniversalismThe
ethical system stating that all people should uphold certain
values that society needs to function.
5-*
Caux PrinciplesKyosei living and working together for the

common good, allowing cooperation and mutual prosperity to
coexist with healthy and fair competitionHuman dignity
concerns the value of each person as an end, not a means to the
fulfillment of others’ purposes
5-*
Question
Which ethical system bases ethical behavior on the opinions and
behaviors of relevant other people?
Egoism
Utilitarianism
Relativism
Virtue ethics
5-*
The correct answer is c – relativism. See slide 5-14
*
Ethical SystemsEgoismAn ethical system defining acceptable
behavior as that which maximizes consequences for the
individualUtilitarianismAn ethical system stating that the
greatest good for the greatest number should be the overriding
concern of decision makers.
5-*
Ethical SystemsRelativismPhilosophy that bases ethical
behavior on the opinions and behaviors of relevant other
peopleVirtue ethicsClassification of people based on their level

of moral judgment.
5-*
Ethical SystemsKohlberg’s model of cognitive moral
developmentPerspective that what is moral comes from what a
mature person with “good” moral character would deem right.
5-*
Question
What act passed into law by Congress in 2002 established strict
accounting and reporting rules?
Wagner Act
Sarbanes-Oxley Act
Chapin Act
GAAP Act
5-*
The correct answer is b – Sarbanes-Oxley. See next slide
*
The Ethics EnvironmentSarbanes-Oxley ActAn act passed into
law by Congress in 2002 to establish strict accounting and
reporting rules in order to make senior managers more
accountable and to improve and maintain investor confidence
5-*

Some Ethical Issues in
Business
5-*
Table 5.2
Business EthicsEthical climateIn an organization, the processes
by which decisions are evaluated and made on the basis of right
and wrong
5-*
Danger Signs
Excessive emphasis on short-term revenues over longer-term
considerations.
Failure to establish a written code of ethics.
A desire for simple, “quick fix” solutions to ethical problems.
An unwillingness to take an ethical stand that may impose
financial costs.
5-*
Danger Signs (cont.)
Consideration of ethics solely as a legal issue or a public
relations tool
Lack of clear procedures for handling ethical problems.
Responding to the demands of shareholders at the expense of
other constituencies
5-*

Danger SignsEthical leaderOne who is both a moral person and
a moral manager influencing others to behave ethically.
5-*
Ethics ProgramsCompliance-based ethics programsCompany
mechanisms typically designed by corporate counsel to prevent,
detect, and punish legal violations.
5-*
Ethics ProgramsIntegrity-based ethics programsCompany
mechanisms designed to instill in people a personal
responsibility for ethical behavior
5-*
A Process for Ethical Decision Making
5-*
Figure 5.1
Ethical Decision Making
Making ethical decisions takes: Moral awareness realizing the
issue has ethical implications Moral judgmentknowing what
actions are morally defensible Moral character the strength and
persistence to act in accordance with your ethics despite the
challenges
5-*

CourageWhy might employees lack courage in ethical issues?A
belief that the company would not take corrective actionA fear
that management would retaliate against the employee for
speaking upDoubt that the employee’s report would be kept
confidential
5-*
*
The Business Costs of Ethical Failure
5-*
Figure 5.2
Corporate Social ResponsibilityCorporate social responsibility
(CSR)Obligation toward society assumed by business.
5-*
Corporate Social ResponsibilityEconomic responsibilitiesTo
produce goods and services that society wants at a price that
perpetuates the business and satisfies its obligations to
investors.Legal responsibilitiesTo obey local, state, federal, and
relevant international laws
5-*
Corporate Social ResponsibilityEthical responsibilitiesMeeting

other social expectations, not written as law.
5-*
Corporate Social ResponsibilityPhilanthropic
responsibilitiesAdditional behaviors and activities that society
finds desirable and that the values of the business support.
5-*
Pyramid of Global Corporate Social
Responsibility and Performance
5-*
Figure 5.3
Corporate Social ResponsibilityTranscendent educationAn
education with five higher goals that balance self-interest with
responsibility to othersEmpathy, generativity, mutuality, civil
aspiration, intolerance of ineffective humanity
5-*
Contrasting Views
First - holds that managers act as agents for shareholders and,
as such, are obligated to maximize the present value of the firm
Second - managers should be motivated by principled moral
reasoning
5-*

Reconciliation Profit maximization and corporate social
responsibility used to be regarded as antagonistic, leading to
opposing policies. But the two views can convergeRecent
attention has also been centered on the possible competitive
advantage of socially responsible actions
5-*
Ecocentric ManagementEcocentric managementGoal is the
creation of sustainable economic development and improvement
of quality of life worldwide for all organizational stakeholders.
5-*
Ecocentric ManagementSustainable growthEconomic growth
and development that meet present needs without harming the
needs of future generations
5-*
Ecocentric ManagementLife-cycle analysis (LCA)A process of
analyzing all inputs and outputs, though the entire “cradle-to-
grave” life of a product, to determine total environmental
impact
5-*
Destination CEO: Bank of AmericaWhat communication pitfalls
might exist at Bank of America?
Discuss the ethics of job cutting that result when mergers or

acquisitions occur.
5-*
BusinessWeek TV’s Destination CEO
Name: Bank of America Corporation
CEO of Company: Ken Lewis
Themes: International management, Communication, Ethics
Suggested chapters: 6, 15, 5
Short paragraph about the video.
If you carry a credit card, there is a good chance that it was
issued by Bank of America Corporation. And if you have visited
an ATM recently, it may have been at 1 of the over 16,000 Bank
of America terminals located throughout the U.S.
After acquiring MBNA in 2006 under the direction of CEO Ken
Lewis, Bank of America became the largest credit card issuer in
the U.S. The Charlotte, North Carolina, company with over
176,000 employees remains poised to further grow its business
through global acquisitions. China's fast-expanding banking
sector looks especially attractive as Bank of America seeks to
compete with Citigroup, the world’s largest financial services
company. Bank of America also acquired an interest in a
Mexican bank as it attempts to move into new markets.
Described as tough, no-nonsense, and no excuses leader, Lewis
grew up in Mississippi the son of a single mother who worked
double shifts as a nurse to support him and his sister. Lewis was
began working at Bank of America as a credit analyst, where he
has spent the last 37 years. He was named President of Bank of
America in 1999 and then CEO in 2001. Lewis is a CEO who

demands high performance, and so far Bank of America (BAC:
NYSE) is delivering.
3-4 multiple choice questions with answers regarding video
topics
Who is credited as serving as a role model for Lewis and his
competitive attitude?
mother
father
grandmother
uncle
Bank of America became the largest credit card issuer after its
acquisition of what company?
Citigroup
China Construction Bank
MBNA
Flee Financial
Where is Bank of America headquartered?
Atlanta, Georgia
Charlotte, North Carolina
Dallas, Texas
Chicago, Illinois
2-3 essay or discussion questions with suggested answers
regarding video topics
What are some of the obstacles that Lewis must consider as
Bank of America seeks further acquisitions in China?
Students’ responses will vary. Various examples of differences
in political, legal, economic, sociocultural, and technological

environments of the U.S. and China might be provided.
Protection against intellectual property infringement is not
guaranteed. Infrastructure in many areas of China is not well
developed, making transportation difficult to impossible.
What communication pitfalls might exist at Bank of America?
Students’ responses will vary. Perception could be an especially
prevalent pitfall with a company as large and diverse as Bank of
America. Filtering could also be a pitfall with a CEO like
Lewis. Employees and managers may withhold or distort
information rather than provide an honest response.
Communication between people from different countries can
also be the cause of mixed signals. Word choice can interfere
with communication success. Nonverbal signals often convey
completely different meaning in different countries.
Discuss the ethics of job cutting that result when mergers or
acquisitions occur.
Students’ responses will vary. With each merger or acquisition,
Lewis accomplished major cost savings as a result of thousands
of layoffs. Some students will defend a company’s right to
remain competitive, while other students will strongly oppose
such tactics.
*
Chap001_5.ppt

Managing
Chapter 01
rights reserved.
McGraw-Hill/Irwin
Learning Objectives
LO 1 Summarize the major challenges of managing in the new
competitive landscape
LO 2 Describe the sources of competitive advantage for a
company
LO 3 Explain how the functions of management are evolving in
today’s business environment
LO 4 Compare how the nature of management varies at different
organizational levels
LO 5 Define the skills you need to be an effective manager
LO 6 Discuss the principles that will help you manage your
career
1-*
GlobalizationToday’s enterprises are global, with offices and
production facilities in countries all over the worldMeans that a
company’s talent can come from anywhere Internet makes
globalization inevitable
1-*
Technological Change: The InternetMarketplaceMeans for
manufacturing goods and services Distribution channelAn

information service
1-*
Technological Change: The InternetDrives down costs and
speeds up globalization. Improves efficiency of decision
making. Facilitates design of new products, from
pharmaceuticals to financial services
1-*
Knowledge ManagementKnowledge managementPractices aimed
at discovering and harnessing an organization’s intellectual
resourcesKnowledge workers
1-*
Collaboration across “Boundaries”Requires productive
communications among different departments, divisions, or
other subunits of the organization
1-*
Collaboration across “Boundaries”Companies today must
motivate and capitalize on the ideas of people outside the
organization e.g. its consultants, ad agencies, and suppliers
1-*
Managing for Competitive Advantage
1-*

Question
___________ is the fast and timely execution, response, and
delivery of results.
Innovation
Quality
Speed
Service
1-*
The correct answer is c – speed. See slide 1-10
*
Managing for Competitive Advantage
1-*Innovation the introduction of new goods and servicesoften
the most important innovation is not the product itself, but how
it is delivered
Managing for Competitive AdvantageQualityThe excellence of
your product (goods or services)Historically, quality referred to
attractiveness, lack of defects, reliability, and long-term
dependability
1-*
Managing for Competitive AdvantageToday quality is about
preventing defects and having continuous improvement in how

the firm operates
1-*
Managing for Competitive AdvantageServiceThe speed and
dependability with which an organization delivers what
customers want
1-*
Managing for Competitive AdvantageSpeedFast and timely
execution, response, and delivery of results.
1-*
Managing for Competitive AdvantageCost
competitivenessKeeping costs low to achieve profits and be able
to offer prices that are attractive to consumers.
1-*
The Functions of ManagementManagementThe process of
working with people and resources to accomplish organizational
goalsEfficient, effective
1-*
Question
____________ is monitoring performance and making needed
changes.
Planning

Organizing
Leading
Controlling
1-*
The correct answer is D - controlling
*
The Functions of ManagementPlanningSystematically making
decisions about the goals and activities that an individual, a
group, a work unit, or the overall organization will
pursueanalyzing current situations, anticipating the future,
determining objectives, deciding in what types of activities the
company will engage
1-*
The Functions of ManagementOrganizing assembling and
coordinating the human, financial, physical, informational, and
other resources needed to achieve goalsspecifying job
responsibilities, grouping jobs into work units, marshaling and
allocating resources,
1-*
The Functions of ManagementLeading stimulating people to be
high performersControllingmonitoring performance and making
needed changes.
1-*

The Functions of Management
1-*
Performing All Four Management FunctionsA typical day for a
manager is not neatly divided into the four functionsDays are
busy and fractionated, and spent dealing with interruptions,
meetings, and firefighting
1-*
Performing All Four Management FunctionsGood managers
don’t neglect any of the four management functions
1-*
Management Levels and Skills
1-*
Management Levels and SkillsTop-level managersSenior
executives responsible for the overall management and
effectiveness of the organization.Middle-level
managersManagers located in the middle layers of the
organizational hierarchy, reporting to top-level executives.
1-*
Management Levels and SkillsFrontline managersLower-level

managers who supervise the operational activities of the
organization
1-*
Transformation of Management
Roles and Activities
1-*
Table 1.1
Managerial Roles: What
Managers Do
1-*
Table 1.2
Question
Which management skill is the ability to lead, motivate, and
communicate effectively with others?
Technical
Conceptual
Decision
Interpersonal
1-*
The correct answer is D – interpersonal. See slide 1-27
*

Management SkillsTechnical skillThe ability to perform a
specialized task involving a particular method or process
1-*
Management SkillsConceptual and decision skillsSkills
pertaining to the ability to identify and resolve problems for the
benefit of the organization and its members.
1-*
Management SkillsInterpersonal and communication
skillsPeople skills; the ability to lead, motivate, and
communicate effectively with others.
1-*
You and Your CareerEmotional intelligenceThe skills of
understanding yourself, managing yourself, and dealing
effectively with others.Social capitalGoodwill stemming from
your social relationships
1-*
You and Your Career
1-*

Keys to Career Management
1-*
Table 1.3
Two Relationships:
Which Will You Choose?
1-*
Figure 1.1
Managerial Action Is Your
Opportunity to Contribute
1-*
Figure 1.2
Common Practices of Successful ExecutivesThey ask “What
needs to be done?” rather than “What do I want to do?”They
write an action plan. They don’t just think, they do, based on a
sound, ethical plan.They take responsibility for decisions.They
focus on opportunities rather than problems.
1-*
Destination CEO: Darden RestaurantsWhat position did Otis
hold before being named CEO of Darden Restaurants?What
management skills are you developing in a job or in college that

will aid you in your future career?
1-*
From restaurant server to CEO. . . Growing up in the Watts
ghetto of Los Angeles during the 60s as the son of a janitor,
Clarence Otis’ parents set high expectations for him. Instead of
getting involved in neighborhood gangs, Otis became a standout
student who went on to graduate from college with Phi Beta
Kappa honors; eventually earning a law degree from Stanford
University.
A strong financial and legal background prepared Otis for his
position of CEO of Darden Restaurants, the largest publicly
traded casual dining chain in the world. Yet Otis learned the
importance of getting along with all types of people early in his
career while working as a server at a restaurant at the Los
Angeles International Airport.
Otis has guided Darden to healthy earnings as a result of his
sound financial strategies, while also creating a shared vision
for Darden that embraces diversity. Otis is one of less than a
handful of African American chief executives of a Fortune 500
corporation. Darden Restaurants, Inc., (NYSE:DRI) is the
parent company of over 1,400 eating establishments, among
them Red Lobster and Olive Garden.
Multiple Choice Questions
Which of the following positions did Otis hold before being
named CEO of Darden Restaurants?
CEO of McDonalds
CFO of Darden
Legal council for Darden
President of Citicorp
An important part of Otis’ background involves his childhood

growing up in what city?
New York
Chicago
Biloxi
Los Angeles
Otis learned a great deal about working with diverse groups of
people from his first job, where he was employed as a:
Server in a restaurant
Law clerk in Washington, D.C.
Janitor at the Los Angeles International Airport
Carrier for a newspaper route
Essay Questions
What management skills are you developing in a job or in
college that will aid you in your future career?
Students’ responses will vary. Typical answers may include
technical skills such as Otis’ finance and law background.
Another response may include soft skills such as Otis’ ability to
get along with a diverse group of people. Finally, students may
identify conceptual skills such as Otis’ ability to create a vision
of diversity for Darden.
Provide examples of forces in the external environment that
Otis must consider.
Students’ responses will vary. As an example, the Food and

Drug Administration could pass new laws regarding food safety.
Economic conditions such as growth or recession affect
availability and cost of capital. Laws regarding affirmative
hiring may change.
Conduct research on the number of minority CEOs in Fortune
500 companies. Report your findings with citations.
Students’ responses will vary. As of 2007, only 10 of the 500
Fortune 500 CEOs were female. Fortune does not provide data
on the number of minority CEOs, yet their number remains in
single digits. More minority-owned businesses are being created
in this country than ever before, leading to more minority CEOs
which eventually may become Fortune 500 companies. Look
especially for Hispanic CEOs to increase as the U.S. population
continues to increase in the number of Hispanic entrepreneurs.
*
Chap004_8.ppt
rights reserved.
McGraw-Hill/Irwin
Planning and Strategic Management
Chapter 04
Learning Objectives
LO1 Summarize the basic steps in any planning process

LO2 Describe how strategic planning should be integrated with
tactical and operational planning
LO3 Identify elements of the external environment and internal
resources of the firm to analyze before formulating a strategy
LO4 Define core competencies and explain why they provide
the foundation for business strategy
4-*
*
Learning Objectives
LO5 Summarize the types and choices available for corporate
strategy
LO6 Discuss how companies can achieve competitive advantage
through business strategy
LO7 Describe the keys to effective strategy implementation
4-*
*
Decision Making Stages and
Formal Planning Steps
4-*
Figure 4.1

PlanningPlanning conscious, systematic process of making
decisions about goals and activities that an individual, group,
work unit, or organization will pursue in the future.a purposeful
effort that is directed and controlled by managers and often
draws on the knowledge and experience of employees
throughout the organization.
4-*
The Basic Planning Process
Step 1 Situational Analysis
Step 2 Alternative Goals and Plans
Step 3 Goal and Plan Evaluation
Step 4 Goal and Plan Selection
Step 5 Implementation
Step 6 Monitor and Control
4-*
*
Situational AnalysisSituational analysisA process planners use,
within time and resource constraints, to gather, interpret, and
summarize all information relevant to the planning issue under
consideration.
4-*
Alternative Goals and PlansShould stress creativity and
encourage managers and employees to think in broad terms

about their jobs.Goal A target or end that management desires
to reachSpecific, measurable, attainable, relevant, time-bound -
SMART
4-*
Question
___________ are the actions or means managers intend to use to
achieve organizational goals.
Missions
Plans
Strategies
Services
4-*
The correct answer is b – plans. See next slide
*
Alternative Goals and PlansPlans The actions or means
managers intend to use to achieve organizational
goalsContingency planssets of actions to be taken when a
company’s initial plans have not worked well or if events in the
external environment require a sudden change
4-*
Goal and Plan Evaluation Managers will evaluate the
advantages, disadvantages, and potential effects of each
alternative goal and plan.Must prioritize those goals and even
eliminate some of them.Managers must consider carefully the

implications of alternative plans for meeting high priority goals.
4-*
Goal and Plan SelectionManagers will select the option that is
most appropriate and feasible The evaluation process will
identify the priorities and trade-offs among the goals and
plansScenario A narrative that describes a particular set of
future conditions.
4-*
Implementation Managers and employees must understand the
plan, have the resources to implement it, and be motivated to do
soSuccessful implementation requires a plan to be linked to
other systems in the organization, particularly the budget and
reward systems
4-*
Monitor and ControlManagers must continually monitor the
actual performance of their work units against the unit’s goals
and plans. Manager’s also need to develop control systems to
measure that performance and allow them to take corrective
action when the plans are implemented improperly or when the
situation changes
4-*
Strategic PlanningStrategic planningA set of procedures for
making decisions about the organization’s long-term goals and
strategiesStrategic goals major targets or end results that relate

to the long-term survival, value, and growth of the organization.
4-*
Strategic PlanningStrategy A pattern of actions and resource
allocations designed to achieve the organization’s goals
4-*
Strategic Planning
Where will we be active?
How will we get there?
How will we win in the marketplace?
How fast will we move and in what sequence will we make
changes?
How will we obtain financial returns
4-*
Hierarchy of Goals and Plans
4-*
Figure 4.2
Tactical and Operational PlanningTactical planningA set of
procedures for translating broad strategic goals and plans into
specific goals and plans that are relevant to a distinct portion of
the organization, such as a functional area like marketing.
4-*

Tactical and Operational PlanningOperational planningThe
process of identifying the specific procedures and processes
required at lower levels of the organization.
4-*
The Strategy Map
4-*
Figure 4.3
Strategic PlanningStrategic managementA process that involves
managers from all parts of the organization in the formulation
and implementation of strategic goals and strategies.
4-*
The Strategic Management Process
4-*
Figure 4.4
Question
An organization’s __________ is the basic purpose and scope of
operations.
Mission
Strategy
Goal
Policy
4-*

The correct answer is a - mission. See next slide
*
Establishment of Mission, Vision, and GoalsMissionAn
organization’s basic purpose and scope of operations.
4-*
Environmental Analysis
4-*
Table 4.1
Analysis of External Opportunities and
ThreatsStakeholdersGroups and individuals who affect and are
affected by the achievement of the organization’s mission,
goals, and strategies
4-*
Analysis of Internal Strengths and WeaknessesResourcesInputs
to a system that can enhance performanceTangible, intangible
assets
4-*
Internal Resource Analysis
4-*
Table 4.2

Resources and Core Competencies
4-*
Figure 4.5
Analysis of Internal Strengths and
WeaknessesBenchmarkingprocess of assessing how well one
company’s basic functions and skills compare with those of
another company or set of companies. goal of benchmarking is
to thoroughly understand the “best practices” of other firms and
to undertake actions to achieve both better performance and
lower costs
4-*
SWOT Analysis and Strategy FormulationSWOT analysisA
comparison of strengths, weaknesses, opportunities, and threats
that helps executives formulate strategy.
4-*
SWOT Analysis and Strategy FormulationCorporate strategyThe
set of businesses, markets, or industries in which an
organization competes and the distribution of resources among
those entitiesConcentrationA strategy employed for an
organization that operates a single business and competes in a
single industry.
4-*

Summary of Corporate Strategies
4-*
Figure 4.6
SWOT Analysis and Strategy FormulationVertical
integrationThe acquisition or development of new businesses
that produce parts or components of the organization’s
productConcentric diversification A strategy used to add new
businesses that produce related products or are involved in
related markets and activities.
4-*
SWOT Analysis and Strategy FormulationLow-cost strategyA
strategy an organization uses to build competitive advantage by
being efficient and offering a standard, no-frills
productDifferentiation strategyA strategy an organization uses
to build competitive advantage by being unique in its industry
or market segment along one or more dimensions.
4-*
Strategy Implementation
Define strategic risks
Assess organization capabilities
Develop an implementation agenda
Create an implementation plan
4-*

Strategic ControlStrategic control systemA system designed to
support managers in evaluating the organization’s progress
regarding its strategy and, when discrepancies exist, taking
corrective action.
4-*
BCG Matrix
4-*
Figure 4.7
Destination CEO: V.F. Corp.
What is a key strength of V.F. Corp.?Discuss the pros and cons
of moving manufacturing facilities overseas.
4-*
Name: VF Corp.
CEO of Company: Mackey McDonald
Themes: Planning and Strategic Management
Suggested chapters: 4
Check your closet, and most likely you will find something
made by V.F. Corp. While you might not know the name, you

know its brands. They include Wrangler, Lee, North Face, Vans,
Reef, and Nautica; to name a few.
CEO Mackey McDonald grew up in Georgia, and worked at a
men’s clothing store while in high school. After graduating
from college, he spent time in Vietnam and later worked at
Hanes before coming to V.F.
McDonald credits planning and preparation as a key lessons he
learned early. He is well known for his knack for branding, and
he had made V.F. into a “lifestyle” apparel company with strong
consumer recognition.
McDonald has faced his share of challenges at V.F. One
example is when the company cut 13,000 jobs and moved
manufacturing overseas to better compete. The company
continues to search for new brands to acquire in order to grow.
V.F. trades under the symbol of VFC on the NYSE.
Note: In April 2007, VF Corp sold its women’s intimate apparel
line to Fruit of the Loom.
http://www.brandweek.com/bw/news/apparelretail/article_displa
y.jsp?vnu_content_id=1003566207
topics
V.F. brands include all of the following except:
Lee
Nautica
Lucky
North Face
Before coming to V.F., McDonald was employed at what
company?
Tommy Hilfiger

Ralph Lauren
Fruit of the Loom
Hanes
Which of the following was identified as a key strength of V.F.
Corp.?
advertising
branding
manufacturing
communicating
Conduct research on V.F. Corp. Has the company acquired new
brands? If so, name them.
Student responses will vary. In September 2007, VF acquired
trendy jeans maker Seven for All Mankind.
http://www.inteletex.com/NewsDetail.asp?PubId=&NewsId=544
7
What V.F. brands do you own?
Student responses will vary. Most likely, students will identify
with several of the V.F. brands.
Discuss the pros and cons of moving manufacturing facilities
overseas.
Student responses will vary. Labor savings is the main reason
why companies choose to relocate manufacturing facilities
overseas. One con is the loss of U.S. jobs. Yet management
often maintains that it is creating more jobs for the company by

cutting labor costs. Companies must also consider reliability
and delivery when moving manufacturing overseas.
Management control is significantly reduced when
manufacturing relocates. Political risk is also a major
consideration in some countries. Product piracy can be an issue
in countries such as Viet Nam, China, and Indonesia.
*
Chap002_6.ppt
The External Environment
and Organizational Culture
Chapter 02
rights reserved.
McGraw-Hill/Irwin
Learning Objectives
LO 1 Describe how environmental forces influence
organizations and how organizations can influence their
environments
LO 2 Distinguish between the macro environment and the
competitive environment
LO 3 Explain why managers and organizations should attend to
economic and social developments.
LO 4 Identify elements of the competitive environment.
2-*

Learning Objectives
LO 5 Summarize how organizations respond to environmental
uncertainty
LO 6 Define elements of an organization’s culture
LO 7 Discuss how an organization’s culture affects its response
to its external environment
2-*
Organization Inputs and Outputs
2-*
Figure 2.1
Open SystemsOpen systemsOrganizations that are affected by,
and that affect, their environment.
2-*
Open SystemsInputsGoods and services organizations take in
and use to create products or services.OutputsThe products and
services organizations create.
2-*
Open SystemsExternal environmentAll relevant forces outside a
firm’s boundaries, such as competitors, customers, the
government, and the economy.Competitive environmentThe
immediate environment surrounding a firm; includes suppliers,
customers, rivals, and the like.

2-*
Open SystemsMacroenvironmentThe general environment;
includes governments, economic conditions, and other
fundamental factors that generally affect all organizations.
2-*
The External Environment
2-*
Figure 2.1
*
Laws and RegulationsRegulators include agencies such
as:Occupational Safety and Health Administration
(OSHA)Interstate Commerce Commission (ICC)Federal
Aviation Administration (FAA)Equal Employment Opportunity
Commission (EEOC)National Labor Relations Board
(NLRB)And many others
2-*
*
The EconomyThe economic environment dramatically affects

managers’ ability to function effectively and influences their
strategic choices. Interest and inflation rates affect the
availability and cost of capital, growth opportunities, prices,
costs, and consumer demand for products.
2-*
Twelve Month Comparison of
Stock Markets
2-*
Figure 2.3
The EconomyIn publicly held companies, managers may feel
required to meet Wall Street’s earnings expectations.Managers
may focus on short-term results at the expense of long-term
successSome managers may be tempted to engage in unethical
or unlawful behavior that misleads investors
2-*
TechnologyTechnological advances create new products,
advanced production techniques, and better ways of managing
and communicating.As technology evolves, new industries,
markets, and competitive niches develop.
2-*
DemographicsDemographicsMeasures of various characteristics
of the people who make up groups or other social units

2-*
*
DemographicsDemographic trendsGrowth of the labor
forceIncreasing education and skill levelsImmigrationIncreased
numbers of women in the workforceIncreasingly diverse
workforce
2-*
*
Social Issues and the Natural EnvironmentSocietal trends
regarding how people think and behave have major implications
for management of the labor force, corporate social actions, and
strategic decisions about products and markets.Family leave,
domestic partner benefits
2-*
The Competitive Environment
2-*
Figure 2.4
*

CompetitorsCompetition is most intense when:There are many
direct competitorsIndustry growth is slowProduct/service is not
easily differentiated
2-*
New EntrantsBarriers to entry conditions that prevent new
companies from entering an industrycapital requirements,
restrictive distribution channels
2-*
*
Substitutes and ComplementsSubstitutes alternative products or
isionComplements
products or services that increase purchases of other
2-*
*
Question
____________ costs are fixed costs buyer face if they change
suppliers.

Exchange
Lever
Switching
Transfer
2-*
The correct answer is C – switching.
*
SuppliersSuppliers provide resources or inputs needed for
production Switching costs fixed costs buyer face if they change
suppliers
2-*
*
SuppliersSupply chain management managing the network of
facilities and people that obtain materials from outside the
organization, transform them into products, and distribute them
to customers
2-*
The goal of effective supply chain management is to have the
right product in the right quantity available at the right place at
the right cost.
*

CustomersFinal customers purchase products in their finished
formIntermediate customers purchase raw material or wholesale
products before selling them to final customers
2-*
*
Environmental AnalysisEnvironmental uncertainty Lack of
information needed to understand or predict the future.
2-*
Environmental UncertaintyEnvironmental complexityThe
number of issues to which a manager must attend as well as the
interconnectedness of these issuesEnvironmental dynamismThe
degree of discontinuous change that occurs within an industry
2-*
*
Environmental AnalysisEnvironmental scanning searching out
information that is unavailable to most people and sorting that
information to interpret what is important and what is
not.Competitive intelligenceInformation that helps managers
determine how to compete better.

2-*
Environmental AnalysisScenario developmentA narrative that
describes a particular set of future conditionsBest-case, worst-
caseForecastingMethod for predicting how variables will change
the future
2-*
Question
What is the process of comparing an organization’s practices
and technologies with those of other companies?
Comparative technology
Benchmarking
Process synchronization
Process asynchronization
2-*
The correct answer is B – benchmarking.
*
Environmental AnalysisBenchmarkingThe process of comparing
an organization’s practices and technologies with those of other
companies.
2-*
Adapting to the EnvironmentBufferingCreating supplies of
excess resources in case of unpredictable

needs.SmoothingLeveling normal fluctuations at the boundaries
of the environment.
2-*
Influencing Your EnvironmentIndependent strategiesStrategies
that an organization acting on its own uses to change some
aspect of its current environment.Cooperative
strategiesStrategies used by two or more organizations working
together to manage the external environment.
2-*
Independent Action
2-*
Table 2.4
Cooperative Action
2-*
Table 2.5
Changing the Environment You are InStrategic maneuveringAn
organization’s conscious efforts to change the boundaries of its
task environment.Domain selectionEntrance to a new market or
industry with an existing expertiseDiversificationOccurs when a
firm invests in a different product, business, or geographic area
2-*
*

Changing the Environment You are InMergersOne or more
companies combine with anotherAcquisitionsOne firm buys
anotherDivestitureA firm sells one or more businesses
ProspectorsContinuously change the boundaries or their task
environment by seeking new products and markets, diversifying
and merging, or acquiring new enterprisesDefendersStay within
a stable product domain as a strategic maneuver
2-*
*
Culture and the Internal Environment of the
OrganizationOrganizational culture The set of important
assumptions about the organization and its goals and practices
that members of the company shareIn strong cultures, the
majority of people within the organization agree on
organizational goalsIn weak cultures, the majority of people
within the organization disagree on organizational goals
2-*
*
Competing Values Model of Culture
2-*

Figure 2.6
Destination CEO: The Nielsen Company How might the Internet
figure into the future of A.C. Nielsen?
What are the pros and cons of becoming CEO of a privately held
company versus a publicly traded firm.
2-*
Name: The Nielson Company
CEO of Company: David Calhoun
Themes: Technology
Suggested chapters: 17
David Calhoun left a lucrative executive position at General
Electric (GE) to become CEO of A.C. Nielson, a global
information leader in providing measurement and analysis for
media and entertainment companies. Calhoun spent 27 years at
GE, but decided to leave for the privately held company famous
for tracking television usage of households. The company uses
technology-driven products to enable business clients to make
informed decisions regarding their advertising spending. A.C.
Nielson is part of The Nielson Company, a conglomerate whose
businesses include Billboard Magazine and The Hollywood
Reporter.
Calhoun made a personal as well as a business decision to leave
GE, but soon found himself leading an industry with a key
challenge: helping outdated measurement tracking technology

advance to the digital age. Under his leadership, A.C. Nielson is
developing a technology roadmap which involves a
comprehensive media rating system which will digitally record
viewership; whether someone is watching a home television set,
a television station passed in an airport, or an interactive
billboard passed along the highway.
topics
Before being named CEO of A.C. Nielson, Calhoun had a career
at what company?
General Electric
CBS
Wal-Mart
Bank of America
In what business does A.C. Nielson engage?
Rating of major motion pictures
Tracking and measuring viewership of various media sources
Determining ad revenue value of magazine publications
Tracking and measuring purchases in grocery stores
A.C. Nielson is part of a conglomerate including which of the
following companies?
Sports Illustrated
Time Magazine
People Magazine
Billboard Magazine

How might the Internet figure into the future of A.C. Nielson?
Students’ responses will vary. As television and computer
technologies continue to merge, online tracking capabilities will
likely play a major role in the future of A.C. Nielson. Online
technology is already being used to track user movements,
purchases, and preferences.
Brainstorm the pros and cons of becoming CEO of a privately
held company versus a publicly traded firm.
A privately held company does not have to concern itself with
the favor or disfavor of shareholders. Another advantage of a
privately held is that there is less public disclosure required.
Yet a big advantage of a publicly traded firm is its ability to
raise capital through the issuance of stock. However, publicly
traded companies must file quarterly earnings reports with the
Securities and Exchange Commission.
Would you be willing to leave a high-profile position like
Calhoun did to assume a position at a company like A. C.
Nielson?
Students’ responses will vary. Calhoun left for both personal
and business reasons. Some students will understand Calhoun’s
desire to spend more time with his family, while others will
identify with the large payout that GE was reported to have
made to Calhoun.
*
Chap003_5.ppt

Managerial Decision Making
Chapter 03
rights reserved.
McGraw-Hill/Irwin
Learning Objectives
LO1 Describe the kinds of decisions you will face as a manager
LO2 Summarize the steps in making “rational” decisions
LO3 Recognize the pitfalls you should avoid when making
decisions
LO4 Evaluate the pros and cons of using a group to make
decisions
3-*
*
Learning Objectives (cont.)
LO5 Identify procedures to use in leading a decision-making
group
LO6 Explain how to encourage creative decisions
LO7 Discuss the process by which decisions are made in
organizations
LO8 Describe how to make decisions in a crisis
3-*

*
Characteristics of Managerial Decisions
3-*
Figure 3.1
Lack of StructureProgrammed decisionsDecisions encountered
and made before, having objectively correct answers, and
solvable by using simple rules, policies, or numerical
computations.Non programmed decisionsNew, novel, complex
decisions having no proven answers.
3-*
Comparison of Types of Decisions
3-*
Table 3.1
Uncertainty and RiskCertaintyThe state that exists when
decision makers have accurate and comprehensive
information.UncertaintyThe state that exists when decision
makers have insufficient information.
3-*
Uncertainty and RiskRiskThe state that exists when the

probability of success is less than 100 percent and losses may
occur.
3-*
ConflictConflictOpposing pressures from different sources,
occurring on the level of psychological conflict or of conflict
between individuals or groups.
3-*
Two Levels of ConflictIndividual decision makers experience
psychological conflict when several options are attractive, or
when none of the options is attractiveConflict arises between
people
3-*
The Stages of Decision Making
3-*
Identifying and diagnosing the problem
Identifying and Diagnosing the ProblemTypically, a manager
realizes some discrepancy between the current state (the way
things are) and a desired state (the way things ought to be).
3-*
Identifying and Diagnosing the ProblemSuch discrepancies may
be detected by comparing current performance against (1) past

performance, (2) the current performance of other organizations
or units, or (3) future expected performance as determined by
plans and forecasts.
3-*
Generating Alternative
Solution
sReady-made solutionsIdeas that have been seen or tried
beforeCustom-made solutionsNew, creative solutions designed
specifically for the problem
3-*
Evaluating AlternativesEvaluating alternativesInvolves
determining the value or adequacy of the alternatives that were
generatedWhich solution will be the best?
3-*
Evaluating AlternativesContingency plansAlternative courses of
action that can be implemented based on how the future unfolds.

3-*
Making the ChoiceMaximizing A decision realizing the best
possible outcome
3-*
Question
___________ is achieving the best possible balance among
several goals
Maximizing
Satisficing
Optimizing
Minimizing
3-*
The correct answer is c – optimizing. See next slide
*

Making the ChoiceSatisficingChoosing an option that is
acceptable, although not necessarily the best or
perfectOptimizingAchieving the best possible balance among
several goals
3-*
Implementing the Decision
Determine how things will look when the decision is fully
operational.
Chronologically order the steps necessary to achieve a fully
operational decision.
List the resources and activities required to implement each
step.
Estimate the time needed for each step.
Assign responsibility for each step to specific individuals.
3-*
Implementing the DecisionWhat problems could this action
cause?What can we do to prevent the problems?What

unintended benefits or opportunities could arise?How can we
make sure they happen?How can we be ready to act when the
opportunities come?
3-*
Evaluating the DecisionFeedback that suggests the decision is
working implies that the decision should be continued and
applied elsewhere in the organization. Negative feedback means
that either (1) implementation will require more time, resources,
effort, or thought or (2) the decision was a bad one
3-*
Question
___________ is the process in which a decision maker carefully
executes all stages of decision making.
Innovation
Quality
Satisficing
Vigilance
3-*

The correct answer is d – vigilance. See next slide.
*
The Best DecisionVigilanceA process in which a decision maker
carefully executes all stages of decision making
3-*
Barriers to Decision Making
3-*
Psychological BiasesIllusion of controlPeople’s belief that they
can influence events, even when they have no control over what
will happenFraming effectsA decision bias influenced by the
way in which a problem or decision alternative is phrased or
presented.
3-*

Psychological BiasesDiscounting the futureA bias weighting
short-term costs and benefits more heavily than longer-term
costs and benefits.
3-*
Pros and Cons of Using a
Group to Make Decisions
3-*
Table 3.2
Potential Problems of Using a GroupGroupthinkA phenomenon
that occurs in decision making when group members avoid
disagreement as they strive for consensusGoal displacementA
condition that occurs when a decision-making group loses sight
of its original goal and a new, less important goal emerges.
3-*

Managing Group Decision Making
3-*
Constructive ConflictCognitive conflictIssue-based differences
in perspectives or judgments.Affective conflictEmotional
disagreement directed toward other people.
3-*
Constructive ConflictDevil’s advocateA person who has the job
of criticizing ideas to ensure that their downsides are fully
explored.DialecticA structured debate comparing two
conflicting courses of action.
3-*
Encouraging Creativity
3-*

bring a new thing into being ( creation )
join two previously unrelated things (synthesis)
improve something or give it a new application ( modification ).
*
BrainstormingBrainstormingA process in which group members
generate as many ideas about a problem as they can; criticism is
withheld until all ideas have been proposed.
3-*
Models of Organizational Decision ProcessesBounded
rationalityA less-than-perfect form of rationality in which
decision makers cannot be perfectly rational because decisions
are complex and complete information is unavailable or cannot
be fully processedIncremental modelModel of organizational
decision making in which major solutions arise through a series
of smaller decisions
3-*

Models of Organizational Decision ProcessesCoalitional
modelModel of organizational decision making in which groups
with differing preferences use power and negotiation to
influence decisions.Garbage can modelModel of organizational
decision making depicting a chaotic process and seemingly
random decisions.
3-*
Two Disasters
3-*
Table 3.3
Decision Making in a CrisisWhat kinds of crises could your
company face?Can your company detect a crisis in its early
stages?How will it manage a crisis if one occurs?How can it
benefit from a crisis after it has passed?
3-*

Elements of a Crisis Plan
Strategic actions
Technical and structural actions
Evaluation and diagnostic actions
Communication actions
Psychological and cultural actions
3-*
Destination CEO: AllstateWhat do you think would be the most
challenging part of being CEO of Allstate?
Do you agree with Liddy’s decision not to write or renew
homeowners’ policies in hurricane-prone areas? Why or why
not?
3-*
Name: Allstate
CEO of Company: Edward M. Liddy
Themes: Decision making, managerial skills, ethics

Suggested chapters: 3, 1, 4
You have probably heard their commercials. “You’re in good
hands with Allstate.” Allstate Corporation, headquartered in
Northbrook, Illinois, has survived in a competitive insurance
environment for over 75 years. It is the largest publically held
insurer of automobiles and homes in the U.S., doing$35 billion
of business annually.
Edward Liddy served as Allstate CEO from 1999 until late
2006*. Liddy’s first job after graduation was as an analyst with
Ford Motor Company. Liddy was described as unflappable and
analytical during the years when hurricanes Rita, Katrina, and
Wilma hit coastal areas and Allstate experienced catastrophic
losses. Yet the company continued to earn a profit as a result of
Liddy’s willingness to make some difficult decisions. Liddy
began his career as chief financial officer at Sears, Roebuck and
Co., when Allstate was a subsidiary of the retail giant. While at
Sears, Liddy was known for making tough financial choices,
such as getting rid of the legendary Sears catalog. He converted
full-time Allstate agents to independent contractors. In his final
years as CEO, Liddy faced criticism from customers regarding
Allstate’s decision to refuse to write new policies in hurricane-

prone coastal areas.
In an industry based on risk, former Allstate CEO Ed Liddy
faced many challenging decisions. Although not all of his
decisions have been popular, Liddy has helped Allstate remain a
profitable company during some troubled times. Allstate trades
on the NYSE under the symbol ALL.
*Edward Liddy was replaced by Thomas J. Wilson, No. 2 in
command as Allstate CEO in 2006.
http://findarticles.com/p/articles/mi_qn4155/is_20060919/ai_n1
6732521
topics
Allstate was once a subsidiary of what company?
Nordstrom’s
Sears
Ford Motor Company
Coca Cola
Allstate is headquartered in what city?
Albany New York

San Antonio, Texas
Indianapolis, Indiana
Northbrook, Illinois
Liddy began his career at Allstate working as a(n)?
Chief financial officer
Chief information officer
Chief executive officer
Analyst
Discuss the importance of Liddy’s technical, conceptual and
personal skills as CEO at Allstate.
Students’ responses will vary. Students should indicate that
Liddy possessed strong financial technical skill which continued
to aid him as he became CEO. Top-level managers are typically
more concerned with the overall organization and spend more
time on strategy, so their conceptual and decision-making skills
are very important. While Liddy made made tough financial
decisions, his interpersonal and communication skills (people

skills) were sometimes criticized.
What do you think would be the most challenging part of being
CEO of Allstate?
Students’ responses will vary. Typical responses might include
making tough financial decisions and knowing if you are
making the correct (ethical) decisions.
Do you agree with Liddy’s decision not to write or renew
homeowners’ policies in hurricane-prone areas? Why or why
not?
Students’ responses will vary. Some students may see it more
ethical for insurance companies not to accept the business.
Insurance companies need to be profitable to remain in
business. Customers must be able to afford insurance rates in
order to purchase policies. Even though insurers use risk
modeling firms to estimate the probability of loss, unpredictable
weather in recent years has made it almost impossible to
accurately forecast rates.

*
Portfolio 10 – Argument for or against schools being regarded
as assessment factories.
Present an argument agreeing or disagreeing with for the
following statement – "Schools risk becoming 'exam factories'
as teachers come under increasing pressure to meet the demands
of a national curriculum, and calls to ensure that all students
attain benchmark levels in national testing".
Although the Australian context is important to keep in mind
and your reference to it will add essential content to the
discussion in this portfolio piece, your writing should not focus
solely on NAPLAN.
You are required to formulate an academic argument in
response to the contention that too much time and attention is
placed on formal, system-wide testing, at the expense of teacher
or school-formulated assessments.
In order to construct your argument, you will need to consider
both global and local trends, and determine what you see as the
appropriate place and purpose for these assessments and
whether this is being reflected, in your opinion, in current
practice.

By all means draw from experience and local knowledge that
you may have but avoid writing that is anecdotal and don’t be
tempted into hyperbole.
You may find that you do not want to categorically agree or
disagree – this is fine, but you should still argue the points for
and against and make some concluding statement.
You will not be marked in accordance with whether your tutor
agrees with your stance, but according to how well you present
and support your statements.
Textbook reference:
McMillan, J. H. (2011) Classroom assessment. Principles and
practice for effective standards-based instruction. (5th Ed).
Boston: Pearson Education, Inc.

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