Lecture The evolution of management thought (6th edition) - Chapter 22: Management thought in a changing world

Ethics, codes of moral conduct, have long been a concern of history, but people still struggle to make the right decisions. Managers’ responsibilities are more complex with the introduction of stakeholders. Advancements in transportation and communication have made the world a closer place and accelerated the pace of change.

THE EVOLUTION OF MANAGEMENT

THOUGHT, 6TH

EDITION

Electronic Resource by:

Regina Greenwood and Julia Teahen

Management Thought in a Changing World

Chapter Twenty-Two

 Business and Society

 Management Opportunities in a Global Arena

 The Globalization of Business

 Managing Across Cultures

Individuals, Organizations, and Evolving Expectations

 Ethics

 “The moral ‘oughts’ that sustain a civilized

society.”

 Business ethics is an ancient issue:

 St Thomas Aquinas – the “just price” as the market price without collusion, fraud, and

coercion

 Johannes Nider (from Chapter 2) and the

quest for ethical business practices in the

early fifteenth century.

 Joseph Wharton , founder of the first

collegiate school of business, was specific

about including ethics in the business school curriculum.

Business Ethics

 Johnson and Johnson’s credo is illustrative of both ethical and social responsibility issues (ex: Tylenol crisis).

 Agency Theory – considered new, but an old issue relative to principal-agent relations As the ownership of firms was separated from its management, there was heightened

interest in this notion of agency.

 John Shad – donation of $23 million to the Harvard Graduate School of Business to

teach business ethics.

Can business schools make a difference in

society by teaching about ethics? Do we

expect business schools to do this?

Business Schools and Ethics

Source: http://blog.lib.umn.edu/mose0169/architecture/2008/03/blog_prompt_5_the_built_enviro.html

Business & Society

 Ethics – individual moral conduct

 Social Responsibility – expectations by others about the conduct of the firm

 Business leaders are long-standing

patrons of the arts

 Example: Carnegie gave $480 million during his lifetime

Business & Society

 The Federal Revenue Act of 1935 was a step toward corporate philanthropy—but

it became law during an economic

See Morrell Heald’s quote about business people and philanthropy Do you agree with this point of view?

Morrell Heald regarding Social

Responsibility

Business & Society

 Donna Wood’s findings concerning the Meat Inspection Act (1906) and the Pure Food and Drug Act (1906) show the

positive role of business leaders

 Howard Bowen provided one definition

of social responsibility and observed

that business firms alone could not solve the problems of economic life

Business & Society

 Keith Davis suggests an interesting

maxim: “If you mess it up, you clean it up.”

 “Stakeholder” – a term that has come into use to describe those others who are affected by business decisions

(originated by the Stanford Research Institute)

 Ansoff’s distinction between

“objectives” and “responsibilities” –

secondary responsibilities cannot be met unless economic objectives had

been achieved (Ideas taken from Peter Drucker)

Business & Society – Archie Carroll

Business & Society – Archie Carroll

 Archie Carroll was a student in Dan Wren’s first doctoral course on management history

at Florida State University.

 Notes from that first course became the foundation of Dr

Carroll’s own management history course at the

University of Georgia

 The notes from that course would also be the foundation for Dr Wren’s first edition of this book.

Dr Daniel A Wren

Management Opportunities in a Global Arena: Globalization of Business

 Trade – political strategy

 Example: policy of

mercantilism

 Adam Smith advocated a

market economy to

replace mercantilism and

the wars fostered those

policies.

 David Ricardo (an early

19 th century economist

and advocate of free

trade with each nation) –

finding its comparative 

advantage. David Ricardo

How might the scarcity of resources, such as water and oil, be a factor in trade relations?

Trade Relations

Management Opportunities in

a Global Arena

 Advances in transportation and

communication technology enabled a new era for multinational business

 The U.S was an importer of capital until about 1914, i.e., the U.S was a debtor nation

 The tire and rubber industry is

presented as one example of the

disappearance of U.S firms in the global market Are there other industries?

Where does the U.S have comparative advantage?

What do these metaphors mean for business?

What is the Lexus? What is the Olive

Tree?

Source:http://peakenergy.blogspot.com/2008_06_01_archive.html

Managing Across Cultures

Managing Across Cultures

 “Hypernorms” are certain rights that are

respected across cultures:

Managing Across Cultures

 A variety of international groups agreed upon:

 adequate health and safety

 For managers and employees, this

suggests expectations about certain

behaviors that exist across cultures, but vary within particular cultures

Managing Across Cultures

 Bill England and his colleagues focused

on differences in the meaning of

working

 The “centrality of work” notion affects how leaders would motivate in different countries

Managing Across Cultures

Hofstede maintained that U.S management theories are culturally constrained because management is different in every country Do you agree?

U S Management Theories

U.S Foreign Corrupt Practices Act

of 1977

 Amended in 1988

 Forbade publicly traded U.S companies from making illicit payments to officials

of foreign governments or to foreign

political parties, their officials, or

intermediaries for the purpose of

acquiring or maintaining its business

 Controversy arises over distinction

between “grease” and bribery

“Good business and good ethics go hand

in hand” (Enderle) Do you agree?

“Good Business and Good

Ethics”

Last Thought from Peter Drucker

“I would hope that American

managers—indeed, managers

worldwide—continue to appreciate

what I have been saying almost since day one: that management is so much more than exercising rank and

privilege; it’s so much more than

‘making deals.’ Management affects people and their lives, both in

business and in many other aspects as well The practice of management

deservers our utmost attention; it

deserves to be studied” (Drucker,

1995, p 351-352).

 Ethics, codes of moral conduct, have

long been a concern of history, but

people still struggle to make the right decisions

 Managers’ responsibilities are more

complex with the introduction of

stakeholders

 Advancements in transportation and

communication have made the world a closer place and accelerated the pace of change

 Global markets bring new opportunities, yet jingoism threatens the prospects of more open markets

END OF PART FOUR