LEADERSHIP AND ETHICS (WEDNESDAY 6:30-8:30 PM)
CHAPTER I a positive corporate culture, and ultimately supports
Normative ethical theories:
Utilitarianism suggests that an ethical action is one whose
consequence achieves the greatest good for the greatest
number of people.
Deontology- it is the means that lend nobility to the ends.
virtue theory- focuses on the character of the decision-maker
—a character that reflects the training we receive growing up.
-our ethical analysis of a decision is intimately
connected with the person we choose to be.
Adopting a Single Ethical Behaviour/Standard
-Culture and family also influence each other because
the family exists in and responds to its cultural context, as well
as providing us with the bedrock for our deepest values.
Why should we choose a single ethical code for all the
contexts in which we live?
-The Greek philosophers and later proponents of the
normative ethical theories we discussed earlier would say that
if you apply your reason to determine how to behave, it makes
rational sense to abide by a single ethical code for all
interactions with all persons in all contexts. By doing so, you
maximize your ethical behavior no matter who the other party
is.
- you have an internally consistent behavior for all
family, friends, customers, clients, and anyone else with
whom you interact.
-we need not choose different values in different
contexts, and when people see us in different situations, they
are more likely to trust us because they see we uphold the
same values regardless of the context.
-Being a truly ethical person requires that no matter
what hat we wear, we exhibit a single ethical code and that it
includes, among others, such universal principles of behavior
as honesty, integrity, loyalty, fairness, respect for law,
and respect for others.
PROFITABILITY AND ETHICS
-Satisfying consumers’ demands, going green, being
socially responsible, and acting above and beyond the basic
requirements all take time and money.
social contract- an implicit agreement among all members to
cooperate for social benefits.
-intangible assets, goodwill might include the worth
of a business’s reputation, the value of its brand name, the
intellectual capital and attitude of its workforce, and the
loyalty of its established customer base. Even being socially
responsible generates goodwill.
-the most ethical and enlightened companies in the
United States consistently outperform their competitors.
-from the proper long-term perspective, conducting
business ethically is a wise business decision that generates
goodwill for the company among stakeholders, contributes to
profitability.
A Moral Global Economy
-An economic system that rewards amoral self-
interest creates economic instability, fractures economic
insecurity, fosters concentrations of economic power,
exacerbates economic inequality and violates ecological
sustainability.
-The necessary changes must ultimately be structural,
such that it ceases to be profitable to act in ways that cause the
anti-social and anti-ecological fallout described in this article.
Unethical Business Practices
 Misleading Product Information
 Unfair Competition
 Mistreating Employees
 Manipulating Accounts
 Bribery
 Dumping toxins into air or water
 Over-billing customer
Examples of corporate fraud
1. PERSONAL PURCHASES
- An employee can divert funds to buy goods or
services on his own behalf. This is usually done
by approving his own expense reports or supplier
invoices.
2. GHOST EMPLOYEES
- The payroll staff can create fake employees and
then pay these "ghost employees," directing the
funds into their own bank accounts.
3. SKIMMING
- Incoming funds are intercepted before they can
be recorded in a company's accounting records.
4. TAX AVOIDANCE AND ASSET THEFT
- A company can alter its tax returns to reveal less
taxable corporate income than is really the case,
resulting in lower tax remittances.
- Any employee can steal from an organization by
making off with assets, such as cash or fixed
assets.
5. UNAUTHORIZED USE
- An employee may use company assets in an
unauthorized manner, such as driving a company
car for personal use, or using a company
condominium for personal use.
6. FINANCIAL STATEMENT FALSIFICATION
- An organization can falsify its financial
statements to reveal excellent financial results.
Examples of such falsification are as follows:
• Extending the depreciation period to delay
depreciation recognition
• Shifting debt to special purpose entities
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 LEADERSHIP AND ETHICS (WEDNESDAY 6:30-8:30 PM)
• Accelerate the recognition of revenues and delay the -Responsibilities to manage the firm’s assets and
recognition of expenses raising capital.
• Capitalize expenses Example of ethical issues:
• Counting nonexistent inventory, which reduces the  Barclays PLC was accused of fraud.
cost of goods sold  The Royal Bank of Scotland scandal.
-Self-regulation as the best path for ethical
Corporate Culture and Ethical Climates compliance.

Corporate culture- A blend of ideas, customs, traditional

practices, company values, and shared meanings. Marketing Ethics
Ethical climate - The unspoken understanding among -Marketing: advertising, distributing, and selling
employees of what is and is not acceptable behavior. products or services.
- Based on the expected standards and norms. - Issues in marketing ethics emphasize honesty
- Multiple climates (or subclimates) can exist within and transparency in advertising.
one organization. American Marketing Association (AMA) code of ethics:
• Do no harm.
The Components of Ethical Climates • Foster trust.
• Embrace ethical values.
Ethical Focus of Organizatio Society
Criteria Individual n Information Technology Ethics
Person Ethical challenges in this field involve:
• Invasions of privacy.
Egoism (self- Self-interest Company Economic • The collection and storage of, and access to,
centered interest efficiency personal and business information.
approach) • Confidentiality of electronic mail
communication.
Benevolence Friendship Team interest Social • Copyright protection regarding software,
(concern for- responsibility music, and intellectual property.
others • Cyberbullying.
approach)
Supply Chain Ethics
Principle Personal Company Laws and
(integrity morality rules and professional Supply Chain - production and operations functions
approach) procedures codes needed to create a product or service.
- Issues in supply chain ethics emphasize
Business Ethics Across Organizational Functions integrity, value and loyalty in business dealings.
-Business operations can be highly specialized,
leading to ethical challenges related to those functional areas. Institute for Supply Management (ISM) principles and
Accounting Ethics standards:
-Critically important component of every business • Avoid impropriety.
firm. • Be responsible.
-Financial records must be audited by a certified • Protect confidentiality.
professional accounting firm. • Follow the law.

Building Ethics Safeguard into the Company

Requirements of the accounting function:
• Responsibilities. - To improve the quality of a company’s ethical
• Public interest. performance you have to change the culture so
• Integrity. that ethics is part of everyday decision-making.
• Objectivity and independence. - To do so means institutionalizing ethics or
• Due care. building ethics safeguards in to everyday
Conflict of interest routines.
- Conflict with self-interest (of the accounting
firm) and the interests of others (shareholders Two Ethics Approaches
and the public). 1. Compliance-based approach:
• Seeks to avoid legal sanctions.
Financial Ethics • Emphasizes the threat of detection and
punishment.
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 LEADERSHIP AND ETHICS (WEDNESDAY 6:30-8:30 PM)
2. Integrity-based approach:
• Combines concern for law with employee
responsibility.
• Promotes acting with integrity and conduct
business with honesty and fairness.
- Both approaches have been found to lessen
unethical conduct, but in somewhat different
ways.
Ethics Programs and Policies
Top Management Commitment and Involvement:
• Critical to fostering employee ethical
behavior.
• Dow Jones Anti-Corruption Survey
Ethics Policies or Codes:
• As a guidance to managers and employees
to solve ethical dilemma.
• In U.S. policies tend to be instrumental,
providing rules and procedures.
• In Japan policies tend to be combination of
legal compliance and company values.
• Ethics programs must be widely distributed
and associated with ethics training.
Ethics and Compliance Officers:
• Many created as early as the 1980s.
• Membership in professional association,
Ethics and Compliance Officers Association
(ECOA), doubled between 2000 and 2004.
• Recently ECOA and Ethics Resource Center
merged into the Ethics Compliance Alliance.
Ethics Reporting Mechanisms:
• Often called the “helpline” or “hotline.”
• Purposes:
• To provide interpretations of proper
ethical behavior.
• To create avenue for reporting
unethical conduct.
• To provide information-sharing
tools for employees and
stakeholders.
• Executives tend to use the helpline more
often than middle managers.
Ethics Programs and Policies
Ethics Training Programs:
• Generally the most expensive and time-
consuming element of an ethics program.
• Found regularly in larger business
organizations.
• Small and medium businesses are more
likely to offer training in alignment with
regulatory guidelines.
Ethics in a Global Economy
- Doing business in global context brings up host
of complex ethical challenges.
Bribery - a questionable or unjust payment often to a
government official to ensure or facilitate a business
transaction.
- International watchdog agency, Transparency
International, publishes a survey of countries’
levels of corruption.
-Bribe-taking more likely in countries with
low per capita income, low salaries for government
officials, and less income variation.
Efforts to Curtail Unethical Practices
-Seventy-one percent of respondents stopped or
delayed business dealings with corrupt partners.
Numerous efforts to prohibit bribery:
• U.S. Foreign Corrupt Practices Act (FCPA).
• The United Kingdom’s Bribery Act
prohibits bribery.
• Anti-Bribery Law in Brazil, India and
Mexico.
-Organization’s culture and ethical work climate play
a central role in encouraging employees to act ethically.
WHY ETHICS MATTER?
-Each of us makes innumerable decisions every day.
In a business context, these choices have consequences for
ourselves and others whom we must take into account in our
decision-making process. (credit: modification of “business
paper office laptop”.
Stakeholders- are the individuals and entities affected by a
business’s decisions, including clients, customers, suppliers,
investors, retailers, employees, the media, the government,
members of the surrounding community, the environment, and
een competitors
Extension: Stakeholder v. Shareholder Distinction
-All shareholders are stakeholders in a company
because they are affected by a company’s actions.
-Still, not all stakeholders are shareholders.
Shareholders specifically hold shares, or stock, in a for-profit
firm that is publicly traded.
- Traditionally, shareholders have been given
preeminence in a company’s strategic decisions. Today,
however, that priority is weakening as firms accord additional
value to other stakeholders, as well.
Immanuel Kant- was an eighteenth-century philosopher, now
associated with deontology, who spent nearly all his
professional life teaching at the university in Königsberg
(which today is Kaliningrad, the westernmost point in Russia)
- Kantianism (Deontology)
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 LEADERSHIP AND ETHICS (WEDNESDAY 6:30-8:30 PM)
- As creatures with reason, we are “duty bound” to
follow logical ethical principles and avoid
contradiction.
Critical Thinking
- the authors stress the importance of being well
versed in the liberal arts, such as philosophy,
history, literature, and in the fine arts to cultivate
judgment
Warren Buffett- is an investor and philanthropist who was
born in 1930 in Omaha, Nebraska.
CHAPTER II
1. What is the nature of leadership and the
leadership process?
-The many definitions of leadership each have a different
emphasis. Some definitions consider leadership an act or
behavior, such as initiating structure so group members know
how to complete a task. Others consider a leader to be the
center or nucleus of group activity, an instrument of goal
achievement who has a certain personality, a form of
persuasion and power, and the art of inducing compliance.
Some look at leadership in terms of the management of group
processes. In this view, a good leader develops a vision for the
group, communicates that vision, orchestrates the group’s
energy and activity toward goal attainment, “[turns] a group of
individuals into a team,” and “[transforms] good intentions
into positive actions.”
Leadership- defined as a social (interpersonal) influence
relationship between two or more persons who depend on each
other to attain certain mutual goals in a group situation.
Leader versus Manager
- The two dual concepts, leader and manager, leadership and
management, are not interchangeable, nor are they redundant.
- effective leadership often necessitates the ability to manage
—to set goals; plan, devise, and implement strategy; make
decisions and solve problems; and organize and control.
Management and Organizational Behavior - we defined
management as a process consisting of planning, organizing,
directing, and controlling.
1. Leadership as a social (interpersonal) influence
relationship between two or more people who are
dependent on each another for goal attainment.
2. Managers and leaders are commonly differentiated in
terms of the processes through which they initially
come to their position.
3. Managers and leaders often differ in terms of the
types and sources of the power they exercise.
Managers commonly derive their power from the
larger organization.
4. From the perspective of those who are under the
leader’s and manager’s influence, the motivation to
comply often has a different base.
5. Finally, it is important to note that while managers
may be successful in directing and supervising their
subordinates, they often succeed or fail because of
their ability or inability to lead.
2. What are the processes associated with people
coming to leadership positions?
Leadership- is a process, a complex and dynamic exchange
relationship built over time between leader and follower and
between leader and the group of followers who depend on
each other to attain a mutually desired goal.
- There are several key components to this “working
relationship”: the leader, the followers, the context (situation),
the leadership process per se, and the consequences
(outcomes)
What Makes a Great Leader?
- Leaders are people who take charge of or guide the
activities of others.
- They are often seen as the focus or orchestrater of
group activity, the people who set the tone of the group so that
it can move forward to attain its goals.
The Follower
- is not a passive player in the leadership process.
- is the most critical factor in any leadership event.
- it is the follower who either rejects leadership or
accepts acts of leadership by surrendering his
power to the leader to diminish task uncertainty,
to define and manage the meaning of the
situation to the follower, and to orchestrate the
follower’s action in pursuit of goal attainment.
- High-self-esteem individuals tend to have a
strong sense of self-efficacy, that is, a
generalized belief they can be successful in
difficult situations.
- The strength of the follower’s self-concept has
also been linked to the leadership process
The Leader-Follower Power Relationship
Leader
 Influence/ Power tactic
Follower
 -Alienation & Resistance
 -Calculative compliance
 -Identification
 -Internalization
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 LEADERSHIP AND ETHICS (WEDNESDAY 6:30-8:30 PM)
-Commitment
Group Effectiveness
 Follower satisfaction
 Follower motivation
 Follower performance
- Effective leadership is more likely to occur when
leader’s influence flows out of rationality, expertise,
moralistics appeal, and/or referent power.
Tannenbaum and Schmidt’s Leadership Continuum
3. How do leaders influence and move their followers
to action?
-Leaders hold a unique position in their groups, exercising
influence and providing direction.
-Leonard Bernstein was part of the symphony, but his role as
the New York Philharmonic conductor differed dramatically
from that of the other symphony members. Besides conducting
the orchestra, he created a vision for the symphony.
Two kinds of leaders:
1. Formal leader
- is that individual who is recognized by those
outside the group as the official leader of the
group.
- is appointed by the organization to serve in a
formal capacity as an agent of the organization.
2. Informal leader
- by contrast, are not assigned by the organization.
- is that individual whom members of the group
acknowledge as their leader.
- Athletic teams often have informal leaders,
individuals who exert considerable influence on
team members even though they hold no official,
formal leadership position.
-the terms leader and manager are not synonymous.
Designated leader- University-based ROTC programs and
military academies (like West Point) formally groom people to
be leaders.
Emergent leaders- arise from the dynamics and processes
that unfold within and among a group of individuals as they
endeavor to achieve a collective goal.
Leadership as an Exercise of Influence
- Leadership is the exercise of influence over
those who depend on one another for attaining a
mutual goal in a group setting.
How do leaders effectively exercise this influence?
- Social or (interpersonal) influence is one’s
ability to effect a change in the motivation,
attitudes, and/or behaviors of others.
How do leaders influence their followers?
- The answer often is that a leader’s social
influence is the source of his power.
French and Raven provide us with a useful typology that
identifies the sources and types of power that may be at the
disposal of leaders:
 Reward power
—the power a person has because people
believe that they can bestow rewards or outcomes,
such as money or recognition that others desire
 Coercive power
—the power a person has because people
believe that the person can punish them by inflicting
pain or by withholding or taking away something that
they value
 Referent power
—the power a person has because others
want to associate with or be accepted by him
 Expert power
—the power a person has because others
believe that the person has and is willing to share
expert knowledge that they need
 Legitimate power
-- others believe that the person possesses
the “right” to influence them and that they ought to
obey.
-This right can originate in tradition; in the
charisma or appeal of the person; and in laws,
institutional roles within society, moralistic appeal,
and rationality (that is, logical arguments, factual
evidence, reason, and internally consistent positions).
French and Raven's Bases of Power
1. Consider the following list of leadership scenarios. For
each situation, describe the kind(s) of power from French
and Raven’s five different types that the leader has. If the
leader were the same but the situation changed—for
example, if you thought of the president as the head of
his/her family rather than of the military—would your
answers change? Why? Remember to think of all the
possible categories that might apply:
• The president of the United States is
Commander in Chief of the U.S. military.
• An airline pilot oversees a flight.
• Fans look up to a movie star or other
celebrity.
• Your teacher is the head of your class.
4. What are the trait perspectives on leadership?
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 LEADERSHIP AND ETHICS (WEDNESDAY 6:30-8:30 PM)
- Ancient Greek, Roman, Egyptian, and
Chinese scholars were keenly interested in
leaders and leadership.
- Homer, in his poem The Odyssey, portrays
Odysseus during and after the Trojan War as a
great leader who had vision and self-confidence.
- His son Telemachus, under the tutelage of
Mentor, developed his father’s courage and
leadership skills.
great man theory of leadership- states that some
people are born with the necessary attributes to be
great leaders.
- Alexander the Great, Julius Caesar,
Joan of Arc, Catherine the Great, Napoleon,
and Mahatma Gandhi are cited as naturally
great leaders, born with a set of personal
qualities that made them effective leaders.
Leader Trait Research
Ralph Stogdill, -while on the faculty at The Ohio State
University, pioneered our modern (late 20th century) study of
leadership.
Scholars taking the trait approach attempted to identify:
 physiological (appearance, height, and weight)
 -demographic (age, education, and
socioeconomic background)
 -personality (dominance, self-confidence, and
aggressiveness)
 -intellective (intelligence, decisiveness,
judgment, and knowledge)
 task-related (achievement drive, initiative, and
persistence)
 -social characteristics (sociability and
cooperativeness) with leader emergence and
leader effectiveness.
The [successful] leader is characterized by:
• a strong drive for responsibility and task completion,
vigor and persistence in pursuit of goals
• venture sameness and originality in problem solving
• drive to exercise initiative in social situations
• self-confidence and sense of personal identity
willingness to accept consequences of decision and
action
• readiness to absorb interpersonal stress
• willingness to tolerate frustration and delay
• ability to influence other person’s behavior
• capacity to structure social interaction systems to the
purpose at hand
Among the core traits identified are:
 Drive—a high level of effort, including a strong
desire for achievement as well as high levels of
ambition, energy, tenacity, and initiative
 Leadership motivation—an intense desire to lead
others
 Honesty and integrity—a commitment to the truth
(nondeceit), where word and deed correspond
 Self-confidence—an assurance in one’s self, one’s
ideas, and one’s ability
 Cognitive ability—conceptually skilled, capable of
exercising good judgment, having strong analytical
abilities, possessing the capacity to think strategically
and multidimensionally
 Knowledge of the business—a high degree of
understanding of the company, industry, and
technical matters
 Other traits—charisma, creativity/originality, and
flexibility/adaptiveness
-Knowledge, skills, ability, vision, strategy, and
effective vision implementation are all necessary for the
person who has the “right stuff” to realize their leadership
potential.
-As followers, people are attracted to and inclined to
follow individuals who display, for example, honesty and
integrity, self-confidence, and the motivation to lead.
Behavior = f [(Person) (Situation) - Personality
psychologists remind us that behavior is a result of an
interaction between the person and the situation.
Walter Mischel - adds the important observation that
personality tends to get expressed through an individual’s
behavior in “weak” situations and to be suppressed in “strong”
situations.
Self-confidence - is developed, honesty and integrity are a
matter of personal choice, motivation to lead comes from
within the individual and is within his control, and knowledge
of the business can be acquired.
Other Leader Traits
1. Sex and Gender Role-
2. Dispositional Trait
3. Self-Monitoring
Stop Hiring Sales Candidates Who Fail to Deliver
1. If indeed “drive” is composed of the three elements
identified in the video (Need for Achievement,
Competitiveness, and Optimism), do you think people
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 LEADERSHIP AND ETHICS (WEDNESDAY 6:30-8:30 PM)
can be trained to have these elements, or are people
born with these qualities? Why?
2. Could training possibly help a person reach some
level of competency in this area, with that level
depending upon some qualities specifically found in
that person?
3. Might a trained level of competency still “lag”
behind the level of “drive” found in a person who
apparently was born that way?
4. If you thought people needed to be born with “drive”
or instead you thought it was a trainable attribute,
could there still be a discernable difference in
performance between the two types of individuals?
Blake and Mouton’s Managerial Grid
leaders display trust in their employees, develop
a vision, keep their cool, encourage risk, bring
expertise into the work setting, invite dissent,
and focus everyone’s attention on that which is
important.
two major sets of leader behaviors:
1. consideration - is the “relationship-oriented”
behavior of a leader.
2. initiating structure- involves “task-oriented” leader
behaviors.
Fiedler’s Contingency Model of Leader-Situation
Matches

- stated that “the qualities, characteristics, and

skills required in a leader are determined to a
large extent by the demands of the situation in
which he is to function as a leader.”

The Path-Goal Leadership Model

5. What are the behavioral perspectives on -

leadership?
- The nearly four decades of research that
- focused on identifying the personal traits
associated with the emergence of leaders and
leader effectiveness resulted in two observations.
1. leader traits are important—people who are
endowed with the “right stuff” (drive, self-
confidence, honesty, and integrity) are more 6. What are the situational perspectives on
likely to emerge as leaders and to be effective leadership?
leaders than individuals who do not possess
these characteristics. - stated that “the qualities, characteristics, and
2. Traits only account for part of why someone skills required in a leader are determined to a
becomes a leader and why they are (or are not) large extent by the demands of the situation in
effective leaders. which he is to function as a leader.”
- It is now common to think of effective leadership
in terms of what leaders do. CEOs and Situational Leadership
management consultants agree that effective
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 LEADERSHIP AND ETHICS (WEDNESDAY 6:30-8:30 PM)
- is a model created by Paul Hersey and Ken - Neutralizers of leadership, on the other hand, are
Blanchard not helpful; they prevent leaders from acting as
they wish.
least-preferred coworker (LPC) - the person with
whom they least like to work.
8. What are the characteristics of transactional,
transformational, and charismatic leadership?
Three factors work together to determine how favorable a
- Many have come to believe that the
situation is to a leader: transformational, visionary, and charismatic
leader represents the style of leadership needed
1. leader-member relations—the degree of the group’s to
acceptance of the leader, their ability to work well
together, and members’ level of loyalty to the leader; transformational leader
2. task structure—the degree to which the task specifies
a detailed, unambiguous goal and how to achieve it
3. position power—a leader’s direct ability to influence - they don’t cause change by offering
group members. inducements. Instead, they inspire others to
action through their personal values, vision,
passion, and belief in and commitment to the
path-goal theory of leadership
mission.
-The model of leadership advanced by House and Evans
Visionary leaders
-it suggests that an effective leader provides organizational
members with a path to a valued goal. - are those who influence others through an
Behavior Dimensions: emotional and/or intellectual attraction to the
leader’s dreams of what “can be.”
1. Supportive leadership- effective leaders demonstrate
concern for the well-being and personal needs of Charismatic Leadership
organizational members. Supportive leaders are
friendly, approachable, and considerate to individuals - The effectiveness of these leaders originates in
in the workplace. Supportive part in their charisma, a special magnetic charm
2. Directive leadership- effective leaders set goals and and appeal that arouses loyalty and enthusiasm.
performance expectations, let organizational
- people who possess legitimate power that arises
members know what is expected, provide guidance,
from “exceptional sanctity, heroism, or
establish rules and procedures to guide work, and
exemplary character.”103 Charismatic leaders
schedule and coordinate the activities of members.
“single-handedly” effect changes even in very
3. Participative leadership- effective leaders consult
large organizations.
with group members about job-related activities and
consider their opinions and suggestions when making
9. How do different approaches and styles of
decisions. Participative leadership is effective when
leadership impact what is needed now?
tasks are unstructured.
What is the role of leadership in the 21st century?
Cross-Cultural Context
- The role of leadership in the 21st century is critical in
navigating the fundamental changes occurring in the world of
Multiculturalism - is a new reality as today’s society and
business. Effective leaders must be strategic opportunists,
workforce become increasingly diverse.

7. What does the concept “substitute for leadership”

mean?
- Substitutes for leadership behavior can clarify
role expectations, motivate organizational
members, or satisfy members (making it
unnecessary for the leader to attempt to do so).

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globally aware, capable of managing highly decentralized and
diverse organizations, interpersonally competent, and builders
of an organizational community. The complexity of the
current business environment requires leaders to be agile,
adaptable, and visionary, with the ability to inspire and
motivate their teams to achieve organizational goals. In times
of great transition, leadership becomes even more crucial as
leaders provide a pathway of confidence and direction as we
move through seeming chaos. Ultimately, the role of
leadership in the 21st century is to guide organizations
towards success in an ever-evolving and highly competitive
business landscape.
CHAPTER III
MANAGERIAL DECISION
1. What are the basic characteristics of managerial
decision-making?
Decision-making is the action or process of thinking through
possible options and selecting one.
Stakeholders -are all the individuals or groups that are
affected by an organization (such as customers, employees,
shareholders, etc.).
Poor decision-making by lower-level managers is unlikely to
drive the entire firm out of existence, but it can lead to many
adverse outcomes such as:
 reduced productivity if there are too few workers or
insufficient supplies,
 increased expenses if there are too many workers or
too many supplies, particularly if the supplies have a
limited shelf life or are costly to store, and
 frustration among employees, reduced morale, and
increased turnover (which can be costly for the
organization) if the decisions involve managing and
training workers.
Before You Decide: 3 Steps to Better Decision Making
1. Often sports teams carry out what is called a port-
mortem (literally after death) review of a completed
game by watching tapes and critiquing their
performance. How is this different to the Pre-
Mortem decision tactic suggested by Confer?
2. What about the idea to “check the basics”; what
exactly did Confer mean by that?
3. Were there any other take-aways of value that you
learned from this video presentation?
2. What are the two systems of decision-making in
the brain?
The human brain processes information for decision-making
using one of two routes:
1. reflective system - is logical, analytical, deliberate,
and methodical
2. reactive system is quick, impulsive, and intuitive,
relying on emotions or habits to provide cues for
what to do next.
Reactive Decision-Making- making is based on quick,
intuitive responses and past experiences, allowing managers to
make rapid decisions in familiar situations.
Reflective decision-making- is necessary to analyze
information logically, analytically, and methodically for
complex and novel situations
The Role of Emotions
Emotional intelligence- is the ability to recognize,
understand, pay attention to, and manage one’s own emotions
and the emotions of others.
- also involves empathy—the ability to understand
other peoples’ emotions (and an interest in doing
so)
- involves social skills to manage the emotional
aspects of relationships with others.
What is emotional intelligence, and why is it important for
decision-making?
- Emotional intelligence is the ability to recognize,
understand, pay attention to, and manage one's
own emotions and the emotions of others. It
involves self-awareness, self-regulation,
empathy, and social skills. Emotional
intelligence is important for decision-making
because it allows managers to understand their
own emotions and the emotions of others, which
can help guide their decision-making processes.
Managers who possess emotional intelligence
skills can exercise control over their emotions to
regulate them appropriately in different
situations. They can also recognize the emotions
of others and utilize that information to facilitate
better communication and relationship building.
This can lead to more effective decision-making
and better group dynamics. Emotional
intelligence is a crucial trait for effective
leadership and can be developed and improved
with practice.
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3. What is the difference between programmed and
nonprogrammed decisions?
- Because managers have limited time and must
use that time wisely to be effective, it is
important for them to distinguish between
decisions that can have structure and routine
applied to them (called programmed decisions)
and decisions that are novel and require thought
and attention (nonprogrammed decisions).
Programmed decisions - those that are repeated over time
and for which an existing set of rules can be developed to
guide the process.
nonprogrammed decisions - a novel, unstructured decisions
that are generally based on criteria that are not well-defined.
With nonprogrammed decisions, information is more likely to
be ambiguous or incomplete, and the decision maker may
need to exercise some thoughtful judgment and creative
thinking to reach a good solution.
The Decision-Making Process
1.Recognize that a decision needs to be made.
2.Generate multiple alternatives.
3. Analyze the alternatives.
4.Select an alternative.
5.Implement the selected alternative.
6.Evaluate its effectiveness.
4. What barriers exist that make effective decision-
making difficult?
1. Bounded Rationality- the idea that for
complex issues we cannot be completely
rational because we cannot fully grasp all
the possible alternatives, nor can we
understand all the implications of every
possible alternative.
2. Escalation of Commitment- is the
tendency of decision makers to remain
committed to poor decision, even when
doing so leads to increasingly negative
outcomes.
3. Time Constraints- is the tendency of
decision makers to remain committed to
poor decision, even when doing so leads to
increasingly negative outcomes.
4. Uncertainty- is more modern and edgier,
and might bring much better results . . . or it
might be a spectacular failure.
5. Personal Biases - we tend to pay more
attention to information that confirms our
existing beliefs and less attention to
information that is contrary to our beliefs, a
shortcoming that.
5. How can a manager improve the quality of her
individual decision-making?
- Managers can use a variety of techniques to
improve their decision-making by making better-
quality decisions or making decisions more
quickly.
The Importance of Experience
-having experienced managers can greatly benefit a company
by improving decision-making, reducing risk, and fostering a
culture of learning and mentorship.
Techniques for Making Better Programmed Decisions
Satisficing,-a decision maker selects the
first acceptable solution without engaging in additional effort
to identify the best solution.
Techniques for Making Better Nonprogrammed Decisions;
1. Recognize that a decision needs to be made.
2. Generate multiple alternatives.
3. Analyze the alternatives.
4. Select an alternative.
5. Implement the selected alternative.
6. Evaluate its effectiveness.
Do you have the best-quality data and evidence?
Evidence-based decision-making - is an approach to
decision-making that states that managers should
systematically collect the best evidence available to help them
make effective decisions. The
Talk to other people
- it can be worthwhile to get help from others
when generating options. Another good time to
talk to other people is while analyzing those
options; other individuals in the organization
may help you assess the quality of your choices.
Are you thinking critically about the options?
Critical thinking - is a disciplined process of evaluating the
quality of information, especially data collected from other
sources and arguments made by other people, to determine
whether the source should be trusted or whether the argument
is valid.
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Have you considered the long-term implications?
Common Logical Fallacies
Yes, considering the long-term implications is an important
factor in effective decision-making. Managers must weigh
short-term gains against potential long-term consequences to
make informed decisions. Focusing solely on short-term
outcomes can lead to problems in the future, such as missed
opportunities or negative impacts on the company's overall
success. In order to make effective decisions, managers must
carefully consider all potential outcomes and plan for the
future.

Are there ethical implications?

Yes, ethical implications play an important role in decision-

making. Managers must consider not only the financial and
practical implications of their decisions but also the ethical
implications. Unethical decisions can have serious
consequences, not only for the company but also for
individuals or society as a whole. In some cases, unethical
decisions may even be illegal and can result in legal action or
damage to the company's reputation. To avoid these situations,
effective managers should think through the possible ethical
implications of their decisions and strive to make ethical
choices. Decision-making tools like decision trees can help
managers make ethical decisions by guiding them through a
series of ethical considerations.

Ethical Decision Tree

four components to ethical decision-making:

1. Moral sensitivity—recognizing that the issue has a

moral component;
2. Moral judgment—determining which actions are
right vs. wrong;
3. Moral motivation/intention—deciding to do the right
thing; and
4. Moral character/action—actually doing what is right.

What are the advantages and disadvantages of group

decision-making, and how can a manager improve the
quality of group decision-making?

- Involving more people in the decision-making process can

greatly improve the quality of a manager's decisions and
outcomes.

Advantages of Group Decisions

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- group decision-making can be a valuable tool for generating
diverse ideas and perspectives, but it is important to carefully
manage group dynamics and ensure that all relevant
information and options are considered in the decision-making
process.
Brainstorming - is a process of generating as many solutions
or options as possible and is a popular technique associated
with group decision-making.
Disadvantages of Group Decisions
Groupthink - occurs when group members choose not to
voice their concerns or objections because they would rather
keep the peace and not annoy or antagonize others.
- Another challenge with group decision-making is the
potential for unequal participation, where some members
dominate the conversation and others are marginalized. Group
discussions may involve individuals with different
communication styles or cultural backgrounds, which can
contribute to misunderstandings and misinterpretations. It is
also possible for groups to become too focused on achieving
consensus, leading to compromising on important factors or
not fully considering all available options.
How to Form a Quality Group
Effective managers can form diverse groups to ensure quality
decision-making, encourage everyone to speak up and assign a
devil's advocate to reduce groupthink. However, when
conflicts arise, managers can help group members find
common ground and stay focused on their goals.
CHAPTER IV
1. What are ethics and business ethics?
Ethics - essentially involves how we act, live, lead our lives,
and treat others.
Normative ethics - refers to the field of ethics concerned with
our asking how should and ought we live and act?
Business ethics- is applied ethics that focuses on real-world
situations and the context and environment in which
transactions occur—How should we apply our values to the
way we conduct business?
1. What individual and organizational ethical issues can
we expect to occur?
- Individual ethical issues that can occur include
conflicts of interest, bribery, discrimination, and
harassment. Organizational ethical issues can
include fraud, corruption, environmental
concerns, and social responsibility. These issues
can cause harm to individuals, society, and the
environment and can result in legal and financial
consequences for organizations. As businesses
continue to operate in an increasingly global and
technologically advanced environment, new
ethical issues are likely to emerge, such as those
related to the use of artificial intelligence and
automation, privacy and data protection, and
global supply chain management
2. What are some signs of unethical activities you might
notice individually and organizationally?
- signs of unethical activities may include
employees being asked to engage in illegal
behavior or cover up unethical practices,
ignoring concerns or complaints raised by
employees about ethical issues, frequent turnover
among employees, and a lack of transparency in
decision-making processes. Other signs may
include a lack of diversity, equity, and inclusion
in the workplace, poor working conditions, and
negative public perception or media coverage.
2. What types of values affect business ethics at the
individual level?
- Values that affect business ethics at the
individual level can include honesty, integrity,
fairness, respect for others, responsibility, and
compassion. These values can influence an
individual's decision-making both in personal
and professional contexts. Personal experiences,
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cultural background, religion, and education can
also shape an individual's ethical beliefs and
values. It's important for individuals to be aware
of their own values and ethical principles and
how they relate to the specific contexts in which
they operate, including the organizational and
societal levels of ethical analysis. Understanding
how one's values and beliefs interact with those
of others can facilitate ethical decision-making
and promote just and fair relationships between
individuals and groups in business contexts.
The Nash equilibrium - is a framework to understand
decision-making in situations where two or more individuals
or groups interact, with each pursuing theirown self-interest.
What are terminal and instrumental values?
Ethical values - are important in organizations because they
guide behavior and decision-making, and help restore trust
among customers and the community. Individuals need to be
aware of their values to act ethically and prevent harm to
themselves or others.
Terminal values -are desired goals or objectives, such as
freedom, friendship, and happiness, while instrumental values
are preferred means of behavior used to obtain those goals,
such as being honest
What are ways organizations can employ values to induce
people to make ethical choices?
- The passage outlines several approaches for
organizations to promote ethical values and
behavior, such as creating a psychologically safe
environment, setting realistic targets, avoiding
conflicting goals, promoting regular discussions
of ethics, providing positive examples, and
emphasizing a culture of ethical values and
behaviors.
3. What are major ethical principles that can be
used by individuals and organizations?
1. Utilitarianism: The principle of utilitarianism holds
that an action is ethical if it results in the greatest
overall happiness for the greatest number of people.
2. Universalism: This principle advocates for the idea
that ethical standards should be consistent and
applicable to all individuals and situations, regardless
of cultural or social differences.
3. Rights/Legal: This principle emphasizes the
importance of protecting individual rights and
freedoms, as well as abiding by legal obligations and
regulations.
4. Justice: The principle of justice emphasizes fairness
and impartiality in decision-making.
5. Virtue: This principle promotes the development of
personal virtues, such as honesty, integrity, and
compassion, as integral to ethical behavior.
6. Common Good: The principle of common good holds
that ethical decisions should prioritize the well-being
of the community or society as a whole, rather than
individual interests.
7. Ethical Relativism: Ethical relativism suggests that
there are no universal ethical principles or values, and
that ethical standards are culturally and socially
constructed.
What are some ethical guidelines individuals and
organizations can use to make ethical choices?
There are several ethical guidelines individuals and
organizations can use to make ethical choices, including:
1. Utilitarianism: This ethical theory suggests
that we should make choices based on the
outcome that produces the greatest good for
the greatest number of people.
2. Deontological ethics: This theory is duty-
based and suggests that we should make
choices based on the inherent morality of the
action, regardless of the outcome.
3. Virtue ethics: This theory suggests that we
should strive to have virtuous character
traits, such as honesty and compassion, and
make choices that align with these traits.
4. Justice-based ethics: This theory suggests
that we should make choices that treat
people fairly and equitably, and that
promote social justice.
Can being aware of the actual values you use to
guide your actions make a difference in your
choices?
- Yes, being aware of our values can significantly
influence our choices. It helps us prioritize goals
and objectives, resolve ethical conflicts, and
create a more meaningful life. By aligning
choices with our values, we can contribute to the
greater good of society.
4. Why is ethical leadership important in
organizations?
- Ethical leadership is important in organizations
because it sets the tone for the company's values
and behavior towards stakeholders.
1. What role does leadership play in how
ethically organizations and its members act
and perform?
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- Leadership plays a critical role in shaping the
ethical behavior of organizations and its
members. Leaders set the tone for the company's
values and behavior, and their actions and
decisions influence how employees
Explain what stewardship is and the role of servant
leadership?
-Stewardship is a leadership approach that emphasizes
leadership without dominating followers. Steward leaders
genuinely care about their followers and help them develop
and accomplish individual as well as organizational goals.
Good steward leadership breeds a team-oriented environment
in which everyone works together, and power is distributed
among all stakeholders. Steward leaders believe in sharing
power and decision-making to empower.
5. What are the differences between values-based
ethics and compliance in organizations?
- values-based ethics focuses on promoting ethical
behavior through shared values and principles
that guide behavior, while compliance focuses
on ensuring adherence to laws and regulations
through formal structures and systems to enforce
compliance. Both approaches are necessary to
maintain an ethical corporate culture, with
values-based ethics serving as a foundation for
ethical behavior and compliance providing the
necessary structures to enforce compliance with
legal requirements.
In what ways do law and compliance complement ethics in
organizations?
- law and compliance complement ethics in
organizations by providing a minimum standard
for behavior, promoting transparency and
accountability, and helping to deter and prevent
unethical behavior. However, a strong ethical
culture requires more than just compliance with
legal and regulatory requirements; it also relies
on promoting positive behaviors and values that
go beyond legal requirements.
How does stakeholder management differ from
stockholder management?
- stakeholder management and stockholder
management are two different approaches to
managing an organization's relationships with
stakeholders and owners. Stakeholder
management considers the interests of all
stakeholders and seeks to create mutual benefits,
while stockholder management prioritizes the
interests of shareholders over other stakeholders.
6. What value do CSR (corporate social
responsibility) programs offer to organizations
and society?
- CSR programs offer organizations and society a
range of benefits, including building and
maintaining a positive reputation, enhancing
brand image, increasing customer loyalty,
improving employee engagement, addressing
social and environmental issues, contributing to
sustainable development, creating jobs,
supporting local initiatives, promoting
accountability and transparency, and fostering
trust and legitimacy.
How do sustainable business practices benefit consumers?
Sustainable business practices benefit consumers:
- providing healthier and safer products,
- reducing waste and pollution,
- leading to cost savings
- promoting a more sustainable economy
- planet for future generations.
Consumers benefit from supporting companies that prioritize
sustainability, as it promotes better health and a better
lifestyle.
Sustainable business practices have become increasingly
important as consumers become more conscious of the
environment and their impact on the planet.
Differentiate the roles compliance and CSR programs
serve in organizations. Are these the same, or are there
differences? Explain.
- compliance programs are focused on ensuring
legal compliance, while CSR programs are
voluntary initiatives that focus on social and
environmental good beyond legal requirements.
Organisations with effective compliance and
CSR programs can benefit from improved
business reputation, stakeholder engagement,
and long-term financial performance.
7. What are ethical issues we encounter in the global
environment?
Ethical issues that are encountered in the global
environment include:
 Cybersecurity and political threats
 International conflict and warfare
 Income inequality
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 Planetary climate and environmental
pollution and instability
 Corruption
 Human and diversity rights violations
These issues are complicated by cultural,
political, economic, technological, and market
factors, which can lead to ethical problems and
misunderstandings for global organizations.
MNEs must manage these risks and ensure they
are following laws related to doing business
abroad, while also creating an inclusive and
ethical corporate culture that adapts to local
cultural norms while balancing home country
ethics and values.
1. What ways can and do some MNEs demonstrate
social responsibility in foreign countries?
Multinational Enterprises (MNEs) can and do
demonstrate social responsibility in foreign countries in
several ways, including:
 Providing local employment opportunities and
treating employees fairly and ethically.
 Supporting and investing in local communities to
improve quality of life, education, and
healthcare.
 Implementing environmentally sustainable
practices and reducing their carbon footprint.
 Building local partnerships and working with
local suppliers.
 Promoting respect for human rights and
diversity, and implementing policies to ensure
non-discrimination.
 Providing products and services that align with
local cultural values and needs.
 Contributing to disaster relief efforts and
providing aid during critical times.
 Being transparent about their business practices
and engaging in open communication with
stakeholders.
- MNEs can also demonstrate social responsibility by
aligning their business strategy with the United Nations
Sustainable Development Goals (SDGs), which include
17 objectives that aim to eradicate poverty, protect the
planet, and ensure global prosperity. By actively working
towards accomplishing these goals, MNEs can make
significant contributions to sustainable and responsible
development in foreign countries.
2. What are some specific ethical business practices
other countries (besides the United States) and
regional governing bodies (such as the European
Union) practice and demonstrate with regard to the
environment and competition?
- Other countries and regional governing bodies
besides the United States and the European
Union practice specific ethical business practices
regarding the environment and competition.
Germany promotes the use of renewable energy
and has incentives for companies to reduce
greenhouse gas emissions. Denmark has a green
tax system that taxes products and services
according to their environmental impact, and
Japan has strict laws regulating competition
practices. Brazil has implemented laws to aid in
the preservation of the environment. These
governments aim to promote sustainable and
ethical practices to ensure social responsibility,
reduce environmental degradation, and promote
fair competition.
8. Identify forecasts about contemporary ethical and
corporate social responsibility issues.
- Forecasts about contemporary ethical and
corporate social responsibility issues suggest a
shift towards more responsible business practices
that are transparent and accountable. This is
driven by a growing awareness of the impact of
corporate activities on the environment, society,
and human rights. In response, companies are
expected to take a more proactive approach to
sustainability and promote social justice. There is
also a greater focus on technology's role in
promoting ethical and responsible business
practices. Other key trends include the rise of
impact investing, the increasing importance of
corporate governance, and the growing role of
stakeholders in shaping corporate behavior.
CHAPTER 1V
Ethical Decision-Making and Leadership in the Workplace
-creating an ethical workplace is not only the right thing to do,
it's also good for business. By promoting a positive working
environment, companies can attract and retain top talent, build
a positive reputation, and foster increased productivity and
profitability. As business leaders, it is our responsibility to
prioritize ethics in all aspects of our operations and create a
workplace culture that prioritizes the well-being of our
employees.
What Constitutes a Fair Wage?
Determining what constitutes a fair wage is a complex issue
that involves multiple factors, including the cost of living, the
skills and experience required for the job, and the industry and
region in which the job is located. Some common factors that
are often considered when determining a fair wage include:
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1. Cost of living: The cost of living can vary greatly
depending on the region and location.
2. Industry standards: Wages can also be influenced by
industry standards and benchmarks.
3. Skill and experience: Wages may also be influenced
by an employee's skill level and experience.
4. Benefits: Employers can also offer benefits in
addition to wages, such as health insurance,
retirement plans, and paid vacation time.
An Organized Workforce
- Employees seek fair treatment in the workplace and
sometimes gain a negotiating advantage with management by
choosing to be represented by a labor union. Union
membership in the United States has fallen in recent years as
federal and state law have expanded to include worker
protections unions fought for, and as the nation has shifted
from a manufacturing to a service economy. Public-sector
employee groups such as teachers, professors, first responders,
and nurses are unionized in some cities and states. U.S.
workers have contributed to a long rise in productivity over
the last forty years but have not generally shared in wage
gains.
Privacy in the Workplace
- Monitoring of employees, whether electronically or through
drug testing, is a complex area of workforce management.
Numerous state and federal legal restrictions apply, and
employers must decide not only what they are legally allowed
to do but also what they should do ethically, keeping in mind
the individual privacy concerns of their employees.
business purpose exception-an exception to the Electronic
Communications Privacy Act of 1986 that permits employers
to monitor all oral and electronic communications, assuming
they can show a legitimate business purpose for doing so
closed shop-a union environment that requires new hires to be
automatically enrolled in the labor union and union dues to be
automatically deducted from their pay
codetermination-a concept popular in Europe that gives
workers the right to participate on the board of directors of
their company
collective bargaining-union negotiations with an employer on
behalf of employees
comparable worth-the idea that pay should be based upon a
job holder’s worth to the organization rather than on salary
history
consent exception-an exception to the Electronic
Communications Privacy Act of 1986 that allows employers
to monitor employee communications provided employees
have given their consent
EEOC-the Equal Employment Opportunity Commission,
created by the U.S. Civil Rights Act of 1964 and which
attempts to eliminate discrimination in the workplace based on
race, gender, or creed
employment at will-a legal philosophy that holds that either
the employee or the employer may dissolve the employment
arrangement at will (i.e., without cause and at any time unless
an employment contract is in effect that stipulates differently)
OSHA-the Occupational Safety and Health Act, which
governs workplace safety, and the Occupational Safety and
Health Administration, which administers the act at the federal
level
pay ratio-the number of times greater the average executive’s
salary is than the average worker’s
right-to-work law-a state law that says a worker cannot be
forced to join a union
sexual harassment-unwelcome touching, requests for sexual
favors, and other verbal or physical harassment of a sexual
nature from a supervisor, coworker, client, or customer
CHAPTER VI
Importance of International Management
Why is it important to understand and appreciate the
importance of international management in today’s
world?
- Any serious management student needs to
understand and appreciate the importance of
international management in today’s global business
environment. Whether you work for a domestic
company or a foreign company, you will likely need
to interact with someone from another country or do
business in another country. Understanding
international management is therefore critical to
address future challenges.
factors contributing to making globalization a reality:
 the growth of trade between countries
 the growing importance of foreign direct
investment
 the growing competition from emerging market
multinationals
 the globalization-fueling pervasiveness of the
Internet
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Hofstede's Cultural Framework
What is culture, and how can culture be understood
through Hofstede’s cultural framework?
The most popular cultural framework, the Hofstede scheme,
was developed by Geert Hofstede, a Dutch social scientist
who surveyed over 88,000 employees in 72 countries in which
IBM had subsidiaries.
He developed this cultural model primarily on the basis of
differences in values and beliefs regarding work goals.
This effort resulted in four main dimensions:
 -power distance (the degree to which societies accept
power differences and authority in society)
 -individualism (the degree to which a society focuses
on the relationship of the individual to the group)
 -uncertainty avoidance (the degree to which people in
a society are comfortable with uncertainty and
unpredictable situations),
 -masculinity (degree to which a society emphasizes
traditional masculine qualities such as advancement
and earnings)
The GLOBE Framework
How are regions of the world categorized using the
GLOBE framework, and how does this categorization
enhance understanding of cross-cultural leadership?
The GLOBE project cultural framework -is a much more
recent effort that involved 170 researchers who collected data
on 17,000 managers from 62 countries around the world.
The seven important clusters of the GLOBE project:
1. Anglo cluster
2. Confucian Asia cluster
3. Germanic Europe cluster
4. Latin America cluster
5. Middle East cluster
6. Nordic Europe cluster,
7. Sub-Saharan cluster.
Six leadership profiles:
1. charismatic types (degree to which the leader can
inspire and motivate others)
2. participative type (degree to which leaders involve
others in decision making)
3. humane-oriented type (degree to which the leader
shows compassion and generosity
4. autonomous (degree to which the leader reflects
independent and individualistic leadership)
5. self-protective (degree to which the leader is self-
centered and uses a face-saving approach)
Cultural Stereotyping and Social Institutions
Why is an understanding of cultural stereotyping
important, and what can students do to prepare for
cultural stereotyping by looking at social institutions?
While the Hofstede and GLOBE culture frameworks are
certainly useful and can provide a solid basis for
understanding cultural differences, relying solely on cultural
dimensions can lead to problems when managers are
confronted with cultural paradoxes (when reality doesn’t
coincide with expectations based on cultural dimensions) and
cultural stereotyping (when it is assumed that everyone within
the same culture acts and behaves similarly).
three main types of social institutions that affect how people
act and behave:
1. social stratification (degree to which social benefits
are unequally distributed and those patterns are
perpetuated for life)
2. education (the socializing experiences which prepare
individuals to act in society)
3. eligion (the shared set of beliefs, activities, and
institutions based on faith in supernatural forces).
Cross-Cultural Assignments
What steps can you undertake to be better prepared for
cross-cultural assignments?
The goal of any training is to increase cultural intelligence, the
ability to function and manage effectively in culturally diverse
settings.
various types of training:
1. low-rigor training (where individuals are exposed to
critical information but are not necessarily actively
engaged in their learning)
2. high-rigor training (methods of training where
participants are much more actively engaged in the
training process).
3.
Strategies for Expanding Globally
What are the main strategies that companies can use to go
international?
The three strategies:
1) the global strategy, in which all operations and activities are
managed fairly similarly worldwide
2) the regional strategy, in which the multinational adapts
activities and operations to regional requirements
3) the local strategy, in which the company’s operations are
adapted to fit some specific countries.
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The Necessity of Global Markets
Why might it be necessary for a company to go
international, and how might it accomplish this goal?
Companies can go international in many ways:
 exporting (an entry mode where a company
sends a product to an international market and
fills the order like a domestic order)
 licensing and franchising (a contractual
agreement whereby a company is given the right
to another company’s trademarks, know-how,
and other intangible assets in return for a royalty
or a fee)
 strategic alliances (where two or more
companies from different countries enter into an
agreement to conduct joint business activities),
and foreign direct investment (which involves a
company investing in another country through
the construction of facilities and buildings in
another country).
Born globals-Companies that operate internationally from the
day that they are created.
Christianity-Faith based on the life, teachings, death, and
resurrection of Jesus.
Clusters-Representing countries that share similar cultural
characteristics.
Cultural intelligence-Refers to the individuals’ capabilities to
function and manage effectively in culturally diverse settings.
Cultural paradox-Insights from an understanding of culture
may not necessarily coincide with reality in that culture.
Cultural stereotyping-Occurs when one assumes that all
people within a culture act, think, and behave the same way.
DHL Global Connected Index-Index tracking the flow of
capital, information, trade, and human resources and
representing the degree of globalization.
E-commerce-Buying and selling of products using the
Internet.
Education-Socializing experiences that prepare individuals to
act in society.
Emerging market multinationals-Influential companies
from emerging markets that are competing head-on with
established multinationals and rewriting the rules of
competition by using new business models.
Emerging markets-Those markets in countries that present
tremendous potential for multinationals.
Expatriate-Foreign employee who moves and works in
another country for an extended period of time.
Exporting-International entry mode where a company sends a
product to an international market and fills the order like a
domestic order.
Foreign direct investment (FDI)-Involves a company
investing in another country through the construction of
facilities and buildings in another country.
Foreign direct investment (FDI)-Refers to deliberate efforts
of a country or company to invest in another country through
the form of ownership positions in companies in another
country.
Global strategy-Where all operations and activities are
managed fairly similarly worldwide.
Globalization
Worldwide phenomenon whereby the countries of the world
are becoming more interconnected and where trade barriers
are disappearing.
GLOBE project
More recent cultural project involving 170 researchers who
collected data on 17,000 managers from 62 countries around
the world.
High-rigor cross-cultural training
Methods of training where participants are much more
actively engaged in the training process and can learn some
tacit aspects of cross-cultural differences.
Hinduism
Represented by all those who honor the ancient scriptures
called the Vedas.
Hofstede model of national culture
Project involving survey of over 88,000 employees in IBM
subsidiaries from 72 countries.
Immigration
Movement of people from their home country to other
countries; will continue to grow worldwide.
Individualism
Degree to which a society focuses on the relationship of the
individual to the group.
International franchising
Where a company will license the complete business model.
International strategic alliances
Two or more companies from different countries enter into an
agreement to conduct joint business activities.
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 LEADERSHIP AND ETHICS (WEDNESDAY 6:30-8:30 PM)
Islam fundamental problems in . . . sustaining viable societal
structures within a given environment.
Religion whose essence is described in the Qur’an as the
submission to the will of Allah (God). Social stratification

Licensing Degree to which social benefits are unequally distributed;

Contractual agreement whereby a company is given the right
to another company’s trademarks, know-how, and other
intangible assets in return for a royalty or a fee.
Local strategy
Company’s operations are adapted to fit some specific
countries.
Low-rigor cross-cultural training
Training where individuals are exposed to critical information
to help them understand the realities of a different culture but
are not actively engaged in their learning.
Masculinity
Degree to which a society emphasizes traditional masculine
qualities, such as advancement and earnings.
Political risk
Degree to which political decisions can impact a business’s
ability to survive in a country.
Postarrival cross-cultural training
those patterns are perpetuated for life.
Tariffs
Extra charges that are added to the price of international
products in the form of additional taxes or higher prices as a
way to give domestic companies a price advantage while also
protecting these companies from foreign competition.
Trade agreements
Popular policy instruments that countries agree on to eliminate
cross-border barriers to trade and to promote global
integration.
Uncertainty avoidance
Refers to the degree to which people in a society are
comfortable with uncertainty and unpredictable situations.
Uppsala model of internationalization
Model that argues that as firms learn more about a specific
market, they become more committed by investing more
resources into that market.

Training provided after the expatriate has arrived to the

intended destination.

Power distance

Refers to the degree to which societies accept power

differences and authority in society.

Predeparture cross-cultural training

Learning opportunities provided prior to departure.

Regional strategy

Where the multinational adapts activities and operations to

regional requirements.

Religion

Shared set of beliefs, activities, and institutions based on faith

in supernatural forces.

Social institution

Complex of positions, roles, norms, and values lodged in

particular types of social structures and organizing relatively
stable patterns of human resources with respect to

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