Transcript Seminar Four

THE EVOLUTION OF
MANAGEMENT
THOUGHT, 6TH EDITION
Electronic Resource by:
Regina Greenwood and Julia Teahen
Chapter Twenty-Two
Management Thought in a Changing
World
Obligations and Opportunities

Individuals, Organizations, and Evolving
Expectations
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Ethics
Business and Society
Management Opportunities in a Global Arena
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The Globalization of Business
Managing Across Cultures
Individuals, Organizations, and
Evolving Expectations
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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
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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.
Business Schools and Ethics
Can business schools make a difference in society by
teaching about ethics? Do we expect business schools to
do this?
Source: http://blog.lib.umn.edu/mose0169/architecture/2008/03/blog_prompt_5_the_built_enviro.html
Business Ethics
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
Individual and
corporate wrong
doing is typically
followed by
legislation.
Examples:
 Securities
Exchange
Act of 1934
 Sarbanes-Oxley Act
(2002)
Business & Society
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
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:
lifetime
Carnegie gave $480 million during his
Business & Society
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
The Federal Revenue Act of 1935 was a step
toward corporate philanthropy—but it became law
during an economic depression.
A. P. Smith Manufacturing Company vs. Barlow
established the precedent for modern corporate
philanthropy
Morrell Heald regarding Social Responsibility
See Morrell Heald’s quote about business people and
philanthropy. Do you agree with this point of view?
Business & Society
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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
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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

Archie Carroll’s
categories of
responsibilities:
 Economic
- primary
 Legal – regulations &
rules
 Ethical – expectations
of how the firm should
conduct its business
 Discretionary –
voluntary choices.
Archie Carroll
Courtesy of Professor Carroll
Business & Society – Archie Carroll
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Dr. Daniel A. Wren
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.
Management Opportunities in a Global
Arena: Globalization of Business
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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 19th
century economist and advocate
of free trade with each nation) –
finding its comparative
advantage.
David Ricardo
Trade Relations
How might the scarcity of resources, such as water and oil,
be a factor in trade relations?
Management Opportunities in a
Global Arena
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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 is the Lexus? What is the Olive Tree?
What do these metaphors mean for business?
Source:http://peakenergy.blogspot.com/2008_06_01_archive.html
Managing Across Cultures
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“Culture” is hard to
define but is used here
as a set of beliefs held
in common by a group of
people about economic,
social, and political
behavior.
Bernard Bass noted
differences between
cultures in the leadership
literature in Bass and
Stogdill’s Handbook of
Leadership
Managing Across Cultures
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“Hypernorms” are certain rights that are respected across
cultures:
 freedom of movement,
 freedom from torture
 ownership of property
 physical security
 a fair trial
 freedom of speech and association
 subsistence
 minimal education
 political participation
 nondiscriminatory treatment on the basis of such rights as
gender or sex.
Managing Across Cultures
A variety of international groups agreed upon:
 adequate health and safety standards;
 the rights of all persons to life, liberty, personal
security, and privacy;
 environmental standards regarding pollution.
 For managers and employees, this suggests
expectations about certain behaviors that exist
across cultures, but vary within particular cultures.

Managing Across Cultures
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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

Geert Hofstede (1928 - )
describes cultural differences in
different countries.
 Individualism vs. collectivism
(group orientation);
 Power Distance: The level of
preference for equality or
inequality within groups:
 Uncertainty avoidance: The
preference for risk vs. structure.
 Masculinity (assertiveness) vs.
femininity (tender values).
 Long term vs. Short term
orientation.
GeertHofstede
Courtesy of Prof. Hofstede
U. S. Management Theories
Hofstede maintained that U.S. management theories are
culturally constrained because management is different in
every country. Do you agree?
U.S. Foreign Corrupt Practices Act of 1977
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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”
“Good business and good ethics go hand in hand”
(Enderle). Do you agree?
“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).
Last Thought from Peter Drucker
Summary
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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