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Small Business Management 17th Edition Longenecker Solutions Manual
Small Business Management 17th Edition Longenecker Solutions Manual
https://testbankfan.com/download/small-business-management-17th-edition-longenec
ker-solutions-manual/
CHAPTER OUTLINE
Spotlight: PortionPac Chemicals
(http://www.portionpaccorp.com)
1) What is Integrity?
LO1: Define integrity, and understand its importance to small businesses.
i) The general sense of honesty and reliability that is expressed in a strong
commitment to doing the right thing, regardless of the circumstances.
2) Integrity and the Interests of Major Stakeholders
LO2:Explain how integrity applies to various stakeholder groups
a) Ethical Issues
i) Questions of right and wrong. Frequently observed forms of workplace
misconduct – Exhibit 2.1
(1) Category One – related to customers and competitors
(2) Category Two – the way a company treats its employees
(3) Category Three – obligations of employees to their employers
ii) Stakeholders – those who either can affect or are affected by the performance of
the company.
iii) Four types of responsibilities for small businesses- Exhibit 2.2
(1) Economic- be profitable
(2) Legal- obey all laws, adhere to all regulations
(3) Ethical- avoid questionable practices
(4) Discretionary- be a good corporate citizen, give back
b) “Big Three” Stakeholders- Owners, Customers, and Employees
i) Some say companies must follow the Golden Rule- that is those that hold the gold
(owners) make the rules! Others lean on the philosophy that the customer is
always right. The truth is that all of these groups (sometimes called primary
stakeholders because they interact very directly with the company) pack the
greatest punch when it comes to influence.
c) Promoting the Owner’s Interests
i) Business owners have an obligation to make choices that protect the financial
investment that others have in the company
d) Caring about Customers
i) Customers are the most important stakeholder groups – without customers there is
no business
e) Valuing Employees
i) Fairness, honesty and impartiality inherent in decisions and practices
ii) Fairness works both ways – FBI statistics indicate employees who steal supplies,
merchandise, tools, or equipment from work may cost employers as much as $150
billion each year (figure doesn’t include embezzlement)
f) Social Responsibility and Small Business
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2-1
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2-2
Chapter 2: Integrity and Ethics: Foundations for Success in Small Business
iii) There are numerous long-term benefits to adopting ethical and responsible
business practices including:
(1) Improved financial performance
(2) Enhanced brand image and reputation
(3) Increased sales and customer loyalty
(4) Improved productivity and quality
(5) Better recruitment and reduced employee turnover
(6) Fewer regulatory inspections and less paperwork
(7) Improved access to capital
4) Building a Business with Integrity- The goal of a small business owner with integrity
should be to operate honorably in all areas of practice, which sets the entrepreneur on the
path toward crafting the worthy legacy. The build a business with integrity, those at the
top must provide the leadership, culture, and instruction that support appropriate ethical
perspectives and proper behavior.
LO4: Suggest practical approaches for building a business with integrity.
a) The Foundations of Integrity
i) Underlying values
(1) Have students discuss a difficult ethical dilemma faced at work or at school
(2) Unarticulated ethical beliefs that provide a foundation for ethical behavior in a
firm
(3) “Actions speak louder than words” – behavior reflects the level of a person’s
commitment to honesty, respect, truthfulness, etc.
b) Leading with Integrity
i) Establishing high standards of integrity is more apparent in small firms than in
large ones
ii) Personal integrity of the founder or owner is the key to a firm’s ethical
performance
c) An Ethical Organizational Culture
i) Ideally the instinctive resolution of every ethical issue is doing what is right
ii) Kenneth Blanchard and Norman Vincent Peale (The Power of Ethical
Management) suggest five fundamental principles:
(1) Purpose – the vision for the company and your core values will guide business
conduct
(2) Pride – when employees take pride in their work and their company, they are
much more likely to be ethical in their dealings
(3) Patience – if you push too hard for short-term results, sooner or later acting
unethically will seem to be the only way to achieve the outcomes you seek
(4) Persistence – stand by your work, which is the foundation of trust
(5) Perspective – stop from time to time to reflect on where the business is going,
why it is going that way, and how to plan to get there to assure your are on the
right track
iii) Code of ethics – official standards of employee behavior formulated by a firm
(1) Ask students about Codes of Ethics they have come into contact with and have
them discuss what those Codes included
d) Better Business Bureaus- encourages ethical business practices
i) Ethical conduct is promoted by:
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2-3
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