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There is little question that personal and business consumers buy products from businesses that they like and respect.  In Chapters 4, 5, and 6 we read and extend our study of the role of business in society.   Understanding how the business operates in a global society is pivotal, as is understanding why businesses focus on and train employee ethics expectations.

1-2 page single-spaced paper discussing the following:

PART 1 –

Identify three key learnings from each of our chapters (9 total learnings) that are important to your, personal, learning in managing the social and political environments of Business.

1 – Identify and explain the learning, the page, and the chapter that learning is on.   Example – (Chapter 5, P.12)

2 – Explain these nine elements are important to your business learning and how you can use each to make better business decisions.

Social and Political Environments of Business
Chapter 4
Business in a Globalized World
• What is Globalization? How has doing business Changed?
• What are the differences / impacts on Leadership and Management, Finance and Trade
• Let’s discuss the benefits and detriments of doing business with international considerations
• What are the two forms of Political and Economic business?
• How do global inequities – wealth, income, special challenges – impact our managing?
• How do political and social impacts impact our work as managers?
Business in a Globalized World
Chapter 4
• Example: Peru – Newmont mining BOD approved expansion in 2011, but political and social
issues resulting in violent protests stalled plant development – $4.8B investment. 7,000
workers, 30% country tax benefit, 60% country export vs. violent protests over water use.
The company “… could not continue without tranquility and social peace…”
• Class Question: Who wins and who loses?
• The Process of Globalization – Goods, services and capital management and flow across
international boarders… and the resulting impacts these have on societies.
• Globalization is a business process
• Globalization has far reaching impacts on many types of stakeholders
• Friedman – “Globalization is a system, a process with its own rules impacting politics,
governments and the economies of many countries.”
• P.86 – 3 Major Sectors Impacting Society – Governments – Business – Civil Society
Business in a Globalized World
Chapter 4
• Businesses must consider – Export, labor, construction, service interruptions, support,
• Make – Sell – Source – How to… when to… what to..
• Transnational Corporations –
• A small number dominate industries – GE, Ford, Facebook, Mercedes, BMW, Toyota, Shell, Exon
• FDI – Foreign Direct Investment and Sovereign wealth funds – Forms of National buying and investments in industries
outside the capabilities of the country – currency and economic diversity by investing in companies elsewhere. $1.4
Trillion in 2013
• World Bank – 1944 – Economic development investments – $66B in 2014 – Roads, infrastructure, sustainability
• Inversion tax – Corp. US =35%, Canada =26.5, UK = 21, Ireland = 12. Companies shopping for beneficial tax
• International Monetary Fund – common attempts to stabilize currencies and exchanges
• WTO – World Trade Organization – Replaced GATT – Establishes rules of fairness in international transactions and
• Venture Funds – Private Equity – Returns – Stakeholders
• P.84- Micro financing
• P. 85 Global Action Networks and NGOs – Non Government Organizations founded to drive societal benefits
Business in a Globalized World
Chapter 4
• Benefits and Costs of Globalization
• Larger markets and exposure
• Increased economic productivity
• Technology and transfer business and social benefits
• Economist David Ricardo – Skills sharing and enhanced use of national resources, economic
opportunity, access. Theories of competitive advantage
• Futurist Allen Hammond – World Trade supports democracy, freedom and reduced military
• Costs – Job insecurity, off shoring, more rapid movement of jobs between countries
• P.78 – Examining counter trends of insourcing – Race to the bottom potential costs
• Democracy – 140/200+ countries are now democratic. Others are (1) dictatorships, many
with human rights issues, or (2) Central State Control – amassing property and controlling
Business in a Globalized World
Benefits and Costs of
Chapter 4
Global Wealth – $4B people make
less than $3,000 per year. Cost of living
considerations vary by country.
Social and Political Environments of Business
Chapter 5
Ethics and Ethical Reasoning
• What roles do ethics and ethics issues have in business?
• Understanding the steps to be taken in dealing with ethical issues.
• What are industry and business codes of conduct?
• Who are the stakeholders and which ethics issues apply most often to each?
Ethics and Ethical Reasoning
Chapter 5
• Example: P.93 – 2014 – Mathew Martoma – SAC Capital – Insider trading – data influence,
insider trading benefiting SAC who owned more than $700M in Wythe Pharmaceutical stock
= 9 years in prison and $9.8M in damages.
• Example – Dov Charney, CEO – American Apparel – 2011 – sexualized issues in the
apparel industry – use of former lover naked photos – many, many other sex discrimination
issues – Board of Directors removal of Charney as the founder.
• Ethics are concepts of right and wrong, imposed and sometimes changing by the view of
• Ethical principles are common guides in business behavior.
• Businesses must keep promises and act consistent with the expectations of society in order to
keep their customers.
• Ethics Sources – Family – religion – society – internet and electronics influences and access
• Laws – Society’s formal rules
• Ethics – the choices we make as judged by society’schoices
Ethics and Ethical Reasoning
Chapter 5
• Why should businesses be ethical? – (1) Enhance business respect and performance, (2)
comply with laws, (3) prevent and minimize harm, and (4) promote morality and benefit
society as a whole
• Lack of ethics causes negative financial consequence and employees leave.
• Companies that lie about financials suffer 41% value on average.
• United States Criminal Sentencing Guidelines
• Sarbanes Oxley – 2002-2012 – the business and the individual share equal responsibility for
ethics compliance. Respondiate Superior – The business is responsible for the individual.
Bear Stearns – J.P. Morgan / Chase = Severely challenged Sarbanes Oxley
• Business Manager Handling of Ethical issues: (1) Observe, (2) Identify, (3) Monitor, (4)
Manage, (5) Discipline, (6) Fix, (7) Deploy prevention
• Class Work – What are the effects of Worldcom, Enron, Tyco
Ethics and Ethical Reasoning
Chapter 5
• The Manager’s Role – Preserve shareholder interests, manage reputations, retain employees, drive
positive values through the business and into society.
• P.98 – Coop Bank – Social lending standards – strong ethical standards = and increase in
commercial lending of more than sixteen percent.
• E&Y determined that in Asia 80% of the employees would not work for corrupt companies.
• Personal Gain and Selfish Interest Issues:
• Competitive Pressure on Profits
• Conflicts of Interest
• Cross cultural contradictions – Impacts on multinational company internal and external dealings
Core Elements of Ethical Character
– Manager’s values – (Nurse is the #1 most trusted profession)
– Spirituality in the workforce – Positively impacts work – but several managing issues exist. (Ford – Interfaith network),
(PWC –Prayer rooms).
– What are “reasonable workplace accommodations in modern society?
Ethics and Ethical Reasoning
Chapter 5
• Stages of Management Moral Character:
• Early phase – self centered, self serving
• More interaction with others – more pleasing others
• Acknowledge and follow rules and laws
• Moral reasoning and growth
Virtue Ethics – Plato / Aristotle – Character traits and moral values prevail. Aristotle
notes that values are the conflict between “excess and deficiency”
Modern Utility vs. Cost Arguments – Utilitarian reasoning – What is best for the
preponderance of society = right.
Ethics Issues in “Right to Try” Laws – Terminal patients have a right to try unapproved,
but in process medicines. State approvals. Federal 2007 prohibition
Is Justices Fair? – Benefits and burderns of every day life must be distributed fairly
Ethics and Ethical Reasoning
• Textbook Considerations:
Chapter 5
Ethics and Ethical Reasoning
• Textbook Considerations:
Chapter 5
Ethics and Ethical Reasoning
• Textbook Considerations:
Chapter 5
Social and Political Environments of Business
Organizational Ethics
• What does it mean to Conduct Business Ethically?
• What is Organizational Ethics and why do we study it?
• What is Organization Culture and how does it impact ethics?
• What are some of the modern ethical challenges for businesses?
• What are Ethics Policies? Codes or Conduct?
• What are the strengths and weaknesses of ethical businesses?
Chapter 6
Organizational Ethics
Chapter 6
• Example: 2014 Takato Corporation exploding airbags – 11 auto makers – 34 M unit.
Boeing – Identification of the lithium ion battery explosion – grounded all 787s
• Why do managers and companies cut corners?
• Personal Values should lead to good, ethical decision making.
• What is a good ethical climate?
• How does corporate culture impact management ethics?
• Egotism?
Benevolent Climate?
Principled Self Interest?
Personal Morality?
Information technology?
• Multiple Ethical Climates and Sub Climates may exist in the same business.
• Accounting Ethics?
• American Institute of CPAs
Financial Ethics?
Marketing /Advertizing Ethics?
Certified Financial Analyst Ethics
Organizational Ethics
Chapter 6
• P. 118 – Examples of Financial Ethics issues in modern Business
• Wells Fargo and JP Morgan – Kickbacks for steering certain mortgages and financial
documents to defined title insurance companies. $24M penalty. $10.8M compensation
• Libor Financial – Collusion to fix foreign currency before trading. $5B in penalties.
• Facebook – Information tech manipulation of users.
• Mylan Pharmaceutical – 3rd largest generic drug maker – violated government mandated
quality control
• Building Ethical Safeguards
• Codes of conduct
Supportive training
Management leadership
• Lynn Sharpe-Pain – Harvard
Compliance based ethics programs
and Integrity based ethics programs
• The importance of management commitment
• Common Management Titles – Compliance and Monitoring – Chief Compliance Officer – Chief Integrity Officer
Organizational Ethics
Chapter 6
• Bribery – Alston – $772M damages – guilty plea in bribery claims
• 2012 – Walmart Mexico – expedite the processing of building permits
• American Foreign Corrupt Practices Act – 2013 – $635M recovery –Civil and Criminal
• PBS Black Money Video Discussion in Class

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