Friedman: “There is one and only one responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.”
Milton Friedman
- Pro- prostitution, drugs
- Advocate of free market.
- Note: US has a regulated market.
- Advocated end of draft.
Carroll’s 4 responsibilities, in order of priority:
Economic – Must do
Legal – Have to do
Ethical – Should do
Discretionary – might do
Social capital – the goodwill of stakeholders. Useable for competitive advantage.
Corporate stakeholders – they affect or are affected by the achievement of the firm’s objectives.
Primary – sufficient bargaining power to affect outcomes
Secondary – indirect stake but affected by corporate actions
Corporate practices
Writedowns
Misclassification
Pirating corporate assest
Perceptions
Bending Rules
Organizational performance required
Ambiguous or out of date rules
Pressure external
Governance
Relationship-based
Rule-based
Moral relativism – morality is relative to some personal, social, or cultural standard
Kohlberg’s levels of moral development
1. Preconventional level – concern for self, avoid punishment.
2. Conventional level – consideration of society’s actions or laws.
3. Principled level – adherence to an universal moral code.
Cultural – differences, which trumps which
Code of ethics – how an org expects its employees to behave.
Ethics – consensually accepted standards of behavior for an occupation.
Morality – precepts of personal behavior based on religious or social grounds
Law – formal codes that permit or forbid certain behaviors
Approaches to Ethical Behavior
1. Utilitarian approach – actions and plans should be judged by their consequences – least harm and the lowest cost.
Problem: those with power, legitimacy, and urgency will be given priority.
2. Individual rights approach - humans have fundamental rights. Ex. Bill of rights under the constitution.
3. Justice approach – decision makers be fair, equitable, and impartial.
Problems distributive justice, and fairness versus retributive justice, and compensatory justice.
Cavanagh’s questions for testing ethical decisions
1. Utility – Does it optimize the satisfactions of all stakeholders?
2. Rights – Does it respect the rights of the individuals involved.
3. Justice – Is it consistent with the canons of justice?
Immanual Kant’s Categorical Imperitives (Principles)
1. Golden rule
2. Never treat another as means but only as an end.
Badaracco:
Right vs. right problems, dirty hands problems.
St. Thomas:
Goodpaster: Books
Mike Knotten
Kennedy
Sailboat – tac’ing strategy?
Temporal decision – not an absolute?
Ethical decisions – Hussein/Iraq?
What’s a Business For?
What is the strategic perspective?
Who owns the framework?
Course
- suspend your disbelief
- perception vs. reality
- what is reality
What are you trying to be?
- Myths - what societal/corporate myths exist?
- Look at differential
- (Positive/negative) energy
- Strategic inflection
10 years:
- China as a military superpower?
- Shift in wealth: M-> F?
Discursive formations
- Dialogues
- The narratives of the day
- Intersections
- Strategic formulations
Liberal arts - what does it mean?
- What are the duties and privileges?
Cognitive formations
- Company revelations
- Personal revelations
Population Ecology
- Cannot let go
- Inertia
- Sanctioning is a powerful force
Construction of reality
- What is the vision document of US?
- What is the vision of the company?
- Who owns it? CEO? Board? (not the employees)
Governace vs. Capital models
- Communist china engaged in capitalist market.
Understanding needed to advance
Are you synched up?
Do you understand the system?
How does it function?
How do you want it to function?
Entropy?
- 2nd law of thermodynamics
- anything which does not have a positive energy applied to it will tend toward a rest state.
- rest state may be less ordered (ex. water).
Strategy
- Governing systems to generate an outcome.
- positive force on the system.
MBA Academy
- Truth and knowledge
- To advance, explore, challenge
- School of thought
- Others in the academy: BA + Professionals
- Duties and obligations
- Privileges
- Following a doctorate
- Reverence
- Earned
- Obligations to community
-- When not followed, community steps in with SOX.
Strategic management - managerial decisions and actions that determines the long-run performance of a corporation.
1. Basic financial planning.
2. Forecast-based planning.
3. Externally-oriented planning.
4. Strategic management.
Strategic management includes four elements:
1. environmental scanning,
2. strategy formulation,
3. strategy implementation, and
4. evaluation and control.
Benefits:
1. Clearer sense of strategic vision
2. Sharper focus
3. Improved understanding of a rapidly changing environment.
Simple questions
1. Where is the organization now?
2. If no changes are made, where will the organization be in 1 year? 2 years? 5 years? 10 years?
3. What specific actions should management undertake?
The real value of modern strategic planning is more in the strategic thinking and organizational learning.
Globalization, the internationalization fo markets and corporations. To reach economies of scale, low costs, low prices to be competitive, companies need to think of a global market.
NAFTA - North American Free Trade Agreement
Mercusur (Argentina, Brazil, Uruguay, and Paraguay)
CAFTA - Central American Free Trade Agreement
ASEAN - Association of Southeast Asian Nations
Electronic commerce - refers to the use of the Internet to conduct business transactions.
Population: China, India, US, Indonesia, Brazil.