CHAPTER 5

#Discuss what it means to be socially responsible and what factors influence that decision.

Social obligation, which reflects the classical view of social responsibility, is when a firm engages in social
actions because of its obligation to meet certain economic and legal responsibilities. Social responsiveness
is when a firm engages in social actions in response to some popular social need. Social responsibility is a
business’s intention, beyond its economic and legal obligations, to pursue long-term goals that are good for
society. Both of these reflect the socioeconomic view of social responsibility. Determining whether
organizations should be socially involved can be done by looking at arguments for and against it. Other
ways are to assess the impact of social involvement on a company’s economic performance and evaluate
the performance of SRI funds versus non-SRI funds. We can conclude that a company’s being socially
responsible doesn’t appear to hurt its economic performance.

#Explain green management and how organizations can go green.

Green management is when managers consider the impact of their organization on the natural environment.
Organizations can “go green” in different ways. The light green approach is doing what is required legally,
which is social obligation. Using the market approach, organizations respond to the environmental
preferences of their customers. Using the stakeholder approach, organizations respond to the environmental
demands of multiple stakeholders. Both the market and stakeholder approaches can be viewed as social
responsiveness. With an activist or dark green approach, an organization looks for ways to respect and
preserve the earth and its natural resources, which can be viewed as social responsibility. Green actions can
be evaluated by examining reports that companies compile about their environmental performance, by
looking for compliance with global standards for environmental management (ISO 14000), and by using
the Global 100 list of the most sustainable corporations in the world.

#Discuss the factors that lead to ethical and unethical behavior.

Ethics refers to the principles, values, and beliefs that define right and wrong decisions and behavior. The
factors that affect ethical and unethical behavior include an individual’s level of moral development
(preconventional, conventional, or principled), individual characteristics (values and personality
variables—ego strength and locus of control), structural variables (structural design, use of goals,
performance appraisal systems, and reward allocation procedures), organizational culture (shared values
and cultural strength), and issue intensity (greatness of harm, consensus of wrong, probability of harm,
immediacy of consequences, proximity to victims, and concentration of effect). Since ethical standards
aren’t universal, managers should know what they can and cannot do legally as defined by the Foreign
Corrupt Practices Act. It’s also important to recognize any cultural differences and to clarify ethical
guidelines for employees working in different global locations. Finally, managers should know about the
principles of the Global Compact and the Anti-Bribery Convention.

#Describe management’s role in encouraging ethical behavior.

The behavior of managers is the single most important influence on an individual’s decision to act ethically
or unethically. Some specific ways managers can encourage ethical behavior include paying attention to
employee selection, having and using a code of ethics, recognizing the important ethical leadership role
they play and how what they do is far more important than what they say, making sure that goals and the
performance appraisal process don’t reward goal achievement without taking into account how those goals
were achieved, using ethics training and independent social audits, and establishing protective mechanisms.

#Discuss current social responsibility and ethics issues.

Managers can manage ethical lapses and social irresponsibility by being strong ethical leaders and by
protecting employees who raise ethical issues. The example set by managers has a strong influence on
whether employees behave ethically. Ethical leaders also are honest, share their values, stress important
shared values, and use the reward system appropriately. Managers can protect whistle-blowers (employees
who raise ethical issues or concerns) by encouraging them to come forward, by setting up tollfree ethics
hotlines, and by establishing a culture in which employees can complain and be heard without fear of
reprisal. Social entrepreneurs play an important role in solving social problems by seeking out opportunities
to improve society by using practical, innovative, and sustainable approaches. Social entrepreneurs want to
make the world a better place and have a driving passion to make that happen. Businesses can promote
positive social change through corporate philanthropy and employee volunteering efforts.

CHAPTER 6

#Compare and contrast views on the change process.

The calm waters metaphor suggests that change is an occasional disruption in the normal flow of events
and can be planned and managed as it happens. In the white-water rapids metaphor, change is ongoing and
managing it is a continual process. Lewin’s three-step model says change can be managed by unfreezing
the status quo (old behaviors), changing to a new state, and refreezing the new behaviors.

#Classify types of organizational change.

Organizational change is any alteration of people, structure, or technology. Making changes often requires
a change agent to act as a catalyst and guide the change process. Changing structure involves any changes
in structural components or structural design. Changing technology involves introducing new equipment,
tools, or methods; automation; or computerization. Changing people involves changing attitudes,
expectations, perceptions, and behaviors.

#Explain how to manage resistance to change.

People resist change because of uncertainty, habit, concern over personal loss, and the belief that the change
is not in the organization’s best interest. The techniques for reducing resistance to change include education
and communication (educating employees about and communicating to them the need for the change),
participation (allowing employees to participate in the change process), facilitation and support (giving
employees the support they need to implement the change), negotiation (exchanging something of value to
reduce resistance), manipulation and co-optation (using negative actions to influence), and coercion (using
direct threats or force).

#Discuss contemporary issues in managing change.

The shared values that comprise an organization’s culture are relatively stable, which makes it difficult to
change. Managers can do so by being positive role models; creating new stories, symbols, and rituals;
selecting, promoting, and supporting employees who adopt the new values; redesigning socialization
processes; changing the reward system, clearly specifying expectations; shaking up current subcultures;
and getting employees to participate in change. Stress is the adverse reaction people have to excessive
pressure placed on them from extraordinary demands, constraints, or opportunities. To help employees deal
with stress, managers can address job-related factors by making sure an employee’s abilities match the job
requirements, improve organizational communications, use a performance planning program, or redesign
jobs. Addressing personal stress factors is trickier, but managers could offer employee counseling, time
management programs, and wellness programs. Making change happen successfully involves focusing on
making the organization change capable, making sure managers understand their own role in the process,
and giving individual employees a role in the process.

#Describe techniques for stimulating innovation.

6.5 Creativity is the ability to combine ideas in a unique way or to make unusual associations between
ideas. Innovation is turning the outcomes of the creative process into useful products or work methods.
Important structural variables include an organic-type structure, abundant resources, frequent
communication between organizational units, minimal time pressure, and support. Important cultural
variables include accepting ambiguity, tolerating the impractical, keeping external controls minimal,
tolerating risk, tolerating conflict, focusing on ends not means, using an open-system focus, providing
positive feedback, and being an empowering leader. Important human resource variables include high
commitment to training and development, high job security, and encouraging individuals to be idea
champions.

CHAPTER 7

#Describe the eight steps in the decision-making process.

A decision is a choice. The decision-making process consists of eight steps: (1) identify problem;
(2) identify decision criteria; (3) weight the criteria; (4) develop alternatives; (5) analyze
alternatives; (6) select alternative; (7) implement alternative; and (8) evaluate decision
effectiveness.

#Explain the four ways managers make decisions.

The assumptions of rationality are as follows: the problem is clear and unambiguous; a single,
well-defined goal is to be achieved; all alternatives and consequences are known; and the final
choice will maximize the payoff. Bounded rationality says that managers make rational decisions
but are bounded (limited) by their ability to process information. Satisficing happens when
decision makers accept solutions that are good enough. With escalation of commitment,
managers increase commitment to a decision even when they have evidence it may have been a
wrong decision. Intuitive decision making means making decisions on the basis of experience,
feelings, and accumulated judgment. Using evidencebased management, a manager makes
decisions based on the best available evidence.

#Classify decisions and decision-making conditions.

Programmed decisions are repetitive decisions that can be handled by a routine approach and
are used when the problem being resolved is straightforward, familiar, and easily defined
(structured). Nonprogrammed decisions are unique decisions that require a custom-made
solution and are used when the problems are new or unusual (unstructured) and for which
information is ambiguous or incomplete. Certainty is a situation in which a manager can make
accurate decisions because all outcomes are known. Risk is a situation in which a manager can
estimate the likelihood of certain outcomes. Uncertainty is a situation in which a manager is not
certain about the outcomes and can’t even make reasonable probability estimates. When
decision makers face uncertainty, their psychological orientation will determine whether they
follow a maximax choice (maximizing the maximum possible payoff); a maximin choice
(maximizing the minimum possible payoff); or a minimax choice (minimizing the maximum
regret—amount of money that could have been made if a different decision had been made).

#Describe different decision-making styles and discuss how biases affect decision making.

A person’s thinking style reflects two things: the source of information you tend to use (external
or internal) and how you process that information (linear or nonlinear). These four dimensions
were collapsed into two styles. The linear thinking style is characterized by a person’s preference
for using external data and processing this information through rational, logical thinking. The
nonlinear thinking style is characterized by a preference for internal sources of information and
processing this information with internal insights, feelings, and hunches. The 12 common
decision-making errors and biases include overconfidence, immediate gratification, anchoring,
selective perception, confirmation, framing, availability, representation, randomness, sunk costs,
self-serving bias, and hindsight. The managerial decision making model helps explain how the
decision-making process is used to choose the best alternative(s) either through maximizing or
satisficing and then implement and evaluate the alternative. It also helps explain what factors
affect the decision-making process including the decision-making approach (rationality, bounded
rationality, intuition), the types of problems and decisions (well structured and programmed or
unstructured and nonprogrammed), the decision-making conditions (certainty, risk, uncertainty),
and the decision maker’s style (linear or nonlinear). The 75 employees of Atomic Games worked
nearly four years creating a realistic video game called Six Days in Fallujah, “weaving in real war
footage and interviews with Marines who had fought there.”33 Now, relatives of dead Marines
are angry. Said one mom whose son was killed by a sniper in Fallujah, “By making it something
people play for fun, they are trivializing the battle.” Company executive Peter Tamte relied on
the advice of a number of Fallujah veterans and calls the video game a “documentary-style
reconstruction that will be so true to the original battle, gamers will almost feel what it was like
to fight in Fallujah in November 2004.” What do you think? What ethical issues do you see here?
Should the company proceed with the game’s release? Why or why not?

#Identify effective decision-making techniques.

Managers can make effective decisions by understanding cultural differences in decision making,
knowing when it’s time to call it quits, using an effective decision-making process, and building
an organization that can spot the unexpected and quickly adapt to the changed environment. An
effective decision-making process (1) focuses on what’s important; (2) is logical and consistent;
(3) acknowledges both subjective and objective thinking and blends both analytical and intuitive
approaches; (4) requires only “enough” information as is necessary to resolve a problem; (5)
encourages and guides gathering relevant information and informed opinions; and (6) is
straightforward, reliable, easy to use, and flexible. The five habits of highly reliable organizations
are (1) not being tricked by their successes; (2) deferring to experts on the front line; (3) letting
unexpected circumstances provide the solution; (4) embracing complexity; and (5) anticipating,
but also recognizing, limits.