INTRODUCTION

What is Management? Simply speaking, management is what managers do. Coordinating work activities so that they are completed efficiently and effectively with and through other people. Efficient and effective completion of organizational work activities, or at least thats what managers aspire to do. Efficiency refers to getting the most output from the least amount of inputs. Effectiveness is often described as doing the right things that is, those work activities that will help the organization reach its goals. Efficiency is concerned with the means of getting things done; effectiveness is concerned with the ends, or attainment of organizational goals. Efficiency (Means) Resource Usage Low Waste Effectiveness (Ends) Goal Attainment High Attainment

Management Strives for: Low Resources Waste (high efficiency) High Goal Attainment (high effectiveness) Management is not only concerned with getting activities completed and meeting organizational goals (effectiveness) but also with doing so as efficiently as possible. High efficiency and high effectiveness typically go hand in hand. Poor management is most often due to both inefficiency and ineffectiveness or to effectiveness achieved through inefficiency. What do managers do? As no two organizations are alike, no two managers jobs are alike! Three specific categorization schemes to describe what managers do: functions roles

skills

Meaning of Business Management Integrating All the resources with efficiency and effectiveness Functional Approach: Distinct process of planning, organizing , implementing and controlling Leadership Approach: Art of getting the things done from others Management is considered as; Science, Art and Profession

Importance of Business Management Acquisition and utilization of resources: Man, Material, Money, Machine and method Facing environmental challenges: Challenges from internal and external environment Development of personality: Through training, seminar, observational tours, research etc. Provides methods to solve the problems: Develops different techniques to solve the problems Controlling: Various techniques to control over the activities Coordination: Among the various activities of Org. Business Environment Socio-cultural - Factors like beliefs, techniques that characterize the human population - Society is composed of people and their culture - Thus socio- cultural environment makes the social institutions, class structure, beliefs, values, behavior and expectations Components of Socio-cultural Environment Demographics Pressure Groups Reference Groups Life style Social class Religion Language Political- legal Environment Political philosophy Political system Legal System Court Administration of law Political Institutions Management Functions Managers perform certain activities or duties as they efficiently and effectively coordinate the work of others. In the early part of the twentieth century, a French industrialist, Henri Fayol, first proposed that
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all managers perform five functions: planning, organizing, commanding, coordinating, and controlling (POC3) In the mid-1950s, a management textbook first use the functions of planning, organizing, staffing, directing, and controlling as a framework. Today, the functions have been condensed to four basic and very important ones: planning, organizing, leading, and controlling. Planning Management function that involves defining goals, establishing strategies for achieving those goals, and developing plans to integrate and coordinate activities. Organizing Management function that involves determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom, and where decisions are to be made. Leading Management function that involves motivating subordinates, influencing individuals or teams as they work, selecting the most effective communication channels, or dealing in any way with employee behavior issues. Every organization includes people, and a managers job is to work wit and through people to accomplish organizational goals. This is the leading function. Controlling Management function that involves monitoring actual performance, comparing actual to standard, and taking action, if necessary. After the goals are set (planning), the plans formulated (planning), the structural arrangements determined (organizing), and the people hired, trained, and motivated (leading), there has to be some evaluation of whether things are going as planned. To ensure that work is going as it should, managers must monitor and evaluate performance. Actual performance must be compared with the previously set goals. If there are any significant deviations, its managements job to get work performance back on track. This process of monitoring, comparing, and correcting is what we mean by the controlling function. Management Roles Henry Mintzberg, a prominent management researcher, studied actual managers at work. Mintzbergs 10 management roles are grouped around interpersonal relationships, the transfer of information, and decision making. Interpersonal roles are roles that involve people (subordinates and persons outside the organization) and other duties that are ceremonial and symbolic in nature. The roles include being a figure head, leader, and liaison. Informational roles involve receiving, collecting, and disseminating information. The roles include monitor, disseminator, and spokesperson.
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Decisional roles revolve around making choices. The four decisional roles include entrepreneur, disturbance handler, resource allocator, and negotiator. As managers play these different roles, Mintzberg concluded that their actual work activities involved interacting with others, with the organization itself, and with the context outside the organization. He also proposed that a managers activities in these roles fall somewhere between reflection (thoughtful thinking) and action (practical doing). Management Skills Managers need certain skills to perform the duties and activities associated with being a manager. Robert L. Katz found that managers needed three essential skills Technical skills include knowledge of and proficiency in certain specialized field, such as engineering, computers, accounting, or manufacturing. These skills are more important at lower levels of management since these managers are dealing directly with employees doing the organizations work. Human skills involve the ability to work well with other people both individually and in a group. Because managers deal directly with people, this skill is crucial! Managers with good human skills are able to get the best out of their people. They know how to communicate, motivate, lead, and inspire enthusiasm and trust. These skills are equally important at all levels of management. Conceptual skills are the skills managers must have to think and to conceptualize about abstract and complex situations. Using these skills, managers must be able to see the organization as a whole, understand the relationships among various subunits, and visualize how the organization fits into its broader environment. These skills are most important at the top management levels. Relation of Management to other Disciplines Connectedness between core business courses and between course in business and the liberal arts. Often lost when management concepts are studied in isolation Cross-disciplinary perspective may help gain a greater appreciation of how general education courses are useful to students of management Anthropology Anthropology is the study of societies, which helps us learn about human beings and their activities. Cultures Better understand differences in fundamental values, attitudes, and behaviour between people in different countries and within organizations Economics Economics is concerned with the allocation and distribution of scarce resources. It provides us with an understanding of the changing economy as well as the role of competition and free markets in a global context. An understanding of free trade and protectionist policies is absolutely essential to any manager operating in the global marketplace, and these topics are addressed by economists.
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Philosophy Philosophy courses inquire into the nature of things, particularly values and ethics. Ethics are standards that govern human conduct. Ethical concerns go directly to the existence of organizations and what constitutes proper behaviour within them. The liberty ethic by John Locke o freedom, equality, justice, and private property (legal rights) The Protestant ethic by John Calvin o hard work, success The market ethic by Adam Smith o market and competition These ethics have shaped todays organizations by providing a basis for legitimate authority, linking rewards to performance, and justifying the existence of business and the corporate form. Political Science Political science is the study of the behaviour of individuals and groups within a political environment. Specific topics of concern to political scientists include structuring of conflict, allocating power, and manipulating power for individual self-interest. Management is affected by a nations form of government by whether it allows its citizens to hold property, by its citizens ability to engage in and enforce contracts, and by the appeal mechanisms available to redress grievances. In a democracy, for instance, people typically have the right to private property, the freedom to enter or not enter into contracts, and an appeal system for justice. A nations stand on property, contracts, and justice, in turn, shapes the type, form, and policies of its organizations. Psychology Psychology is the science that seeks to measure, explain, and sometimes change the behaviours of humans and other animals. Psychologists concern themselves with studying and attempting to understand individual behaviour. The field of psychology is leading the way in providing managers with insights into human diversity. Todays managers confront both a diverse customer base and diverse set of employees. Psychologists effort to understand gender and cultural diversity provide managers wit a better perception of courses are also relevant to managers in terms of gaining a better understanding of motivation, leadership, trust, employee selection, performance appraisals, and training techniques. Sociology Sociology is the study of people in relation to their fellow human beings. Some of the sociological issues that have relevance to managers How are societal changes such as globalization, increasing cultural diversity, changing roles, and varying forms of family life affecting organizational practices? What are the implications of schooling practices and education trends on future employees skills and abilities? How are changing demographics altering customer and employment markets? What will the information age society look like 10 years from now? Answers to questions such as these have a major effect on how managers operate their business. Management does not exist in isolation. Rather, management practices are directly influenced by research and practices in such fields as
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anthropology (learning about individuals and their activities) economics (understanding allocation and distribution of resources) philosophy (developing values and ethics) political science (understanding behaviour of individuals and groups in a political setting) psychology (learning about individual behaviour) sociology (understanding relationships among people)

Changes Impacting the Managers Job

Changes

Impact of Changes

Changing Technology (Digitization)

Shifting organizational boundaries Virtual workplaces More mobile workforce Flexible work arrangements Empowered employees

Increased Threats to Security

Risk management Work life personal life balance Restructured workplace Discrimination concerns Globalization concerns Employee assistance

Increased Emphasis on Organizational and Managerial Ethics

Redefined values Rebuilding trust Increased accountability

Increased Competitiveness

Customer service Innovation Globalization Efficiency/productivity

Management Practices: yesterday and today

Management Theories

Historical Background

Scientific Management

General Administrative Theory

Quantitative Approach

Organizational Behaviour

Systems Approach

Contingency Approach

Early Examples of Management

Early Advocates

Adam Smith

Hawthorne Studies

Industrial Revolution

Six major approaches to management. Each approach is concerned with the same animal; the differences reflect the backgrounds and interests of the writer. A relevant analogy is the classic story of the blind men and the elephant, in which each man declares the elephant to be like the part he is feeling: - The first man touching the side declares that the elephant is like a wall; - The second touches the trunk and says the elephant is like a snake; - The third feels one of the elephants tusks and believes to be like a spear; - The fourth grabs a leg and says an elephant is like a tree; and - The fifth touches the elephants tail and concludes that the animal is like a rope. Each is encountering the same elephant, but what each observes depends on where he stands. Similarly, each of the six perspectives is correct and contributes to the overall understanding of management.

Historical Background
Adam Smith In 1776, Adam Smith published The Wealth of Nations, in which he argues for the economic advantages that organizations and society would gain from division of labour, the breakdown of jobs into narrow and repetitive tasks.
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 Scientific Management
Frederick Winslow Taylor In the year of 1911, the book The Principles of Scientific Management was published. The book described the theory of scientific management the use of the scientific method to define the one best way for a job to be done. During the time the standard of living was low and production was highly labour intensive. Taylors Four Principles of Management 1. Develop a science for each element of an individuals work, which replaces the old rule-ofthumb method. 2. Scientifically select and then train, teach, and develop the work. (Previously, workers chose their own work and trained themselves as best they could.) 3. Heartily cooperate with the workers so as to ensure that all work is done in accordance with the principles of the science that has been developed. 4. Divide work and responsibility almost equally between management and workers. Management takes over all work for which it is better fitted than the workers. (Previously, almost all the work and the greater part of the responsibility were thrown upon the workers.)

General Administrative Theories

Henri Fayol Management as a set of universal functions that include planning, organizing, commanding, coordinating and controlling ( POC3) Wrote during the same time period as Taylor. While Taylor was concerned with first-line managers and the scientific method, Fayols attention was directed at the activities of all managers. His belief - management is an activity common to all human endeavors in business, government, and even in the home. Developed 14 principles of management fundamental rules of management 1. 2. 3. 4. 5. Division of work Specialization increases output making employees more efficient Authority Managers must be able to give orders and authority gives them this right Discipline Employees must obey and respect the rules that govern the organization Unity of command Every employee should receive orders from only one superior Unity of direction The organization should have single plan of action to guide manages and workers 6. Subordination of individual interests to the general interest The interests of any one employee or group of employees should not take precedence over the interests of the organization as a whole. 7. Remuneration Workers must be paid a fair wage for their services
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8. Centralization This term refers to the degree to which subordinates are involved in decision making. 9. Scalar chain The line of authority from top management to the lowest ranks is the scalar chain 10. Order People and materials should be in the right place at the right time. 11. Equity Managers should be kind and fair to their subordinates 12. Stability of tenure of personnel Management should provide orderly personnel planning and ensure that replacements are available to fill vacancies 13. Initiative Employees who are allowed to originate and carry out plans will exert high levels of effort 14. Esprit de corps Promoting team spirit will build harmony and unity within the organization Max Weber In early 1900s, he developed a theory of authority structures and relations. An ideal type of organization called bureaucracy a form of organization characterized by division of labor, a clearly defined hierarchy, detailed rules and regulations, and impersonal relationships. His theory became the model structural design for many of todays large organizations. Webers Ideal Bureaucracy 1. Division of Labour Jobs are broken down into simple, routine, and well-defined tasks. 2. Authority Hierarchy Offices or positions are organized in a hierarchy, each lower one being controlled and supervised by a higher one. 3. Formal Selection All organizational members are to be selected on the basis of technical qualifications demonstrated by training, education, or formal examination. 4. Formal Rules and Regulations To ensure uniformity and to regulate the actions of employees, managers must depend heavily on formal organizational rules. 5. Impersonality Rules and controls are applied uniformly, avoiding involvement with personalities and personal preferences of employees. 6. Career Orientation Managers are professional officials rather than owners of the units they manage. They work for fixed salaries and pursue their careers within the organizations.

Quantitative Approach
Involves quantitative techniques to improve decision making. Also called operations research or management science. Introduced after the World War II. After the war, many of the quantitative techniques that had been applied to military problems were moved into the business sector. It involves application of statistics, optimization models, information models, and computer simulations to management activities. Linear programming, for instance, is a technique that managers use to improve resource allocation decisions. The quantitative approach contributes directly to management decision making in the areas of planning and control.

Organizational Behaviour (behavioural approach)

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Focus on the organizations human resources. Often called Human Resources Approach. The importance of the human factor to an organizations success. The field of study concerned with the actions (behaviour) of people at work is called organizational behaviour (OB). Much of what currently makes up the field of human resource management, as well as contemporary views on motivation, leadership, trust, teamwork, and conflict management, has come out of organizational behaviour research.

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Early Advocates o Robert Owen (late 1700 AD), Scottish businessman who bought his first factory in 1789 when he was just 18 years old. Concerned about deplorable working conditions Proposed idealistic workplace Argued that money spent improving labour was smart investment o Hugo Munsterberg (early 1900s), who created the field of industrial psychology the scientific study of individuals at work to maximize their productivity and adjustment, the book Psychology and Industrial Efficiency (1913) Created field of industrial psychology scientific study of people at work Suggested using psychological tests for employee selection, learning theory concepts for employee training, and study of human behaviour for employee motivation o Mary Parker Follett (early 1900s), one of the earliest writers to recognize that organizations could be viewed from the perspective of individual and group behaviour. One of the first to recognize that organizations could be viewed from perspective of individual and group behaviour. Proposed more people-oriented ideas than scientific management followers Thought organizations should be based on group. The notion of power with rather than power over employees. Managers and workers should view themselves as partners as part of a common group. Her humanistic ideas influenced the way we look at motivation, leadership, power, and authority. o Chester Barnard (1930s), President of New Jersey Bell Telephone Company. The book The Functions of the Executive (1938) Actual manager who thought organizations were social systems that required cooperation. Believed managers job was to communicate and stimulate employees high levels of effort. First to argue that organizations were open systems. An organizations success depended on the cooperation of its employees, called the acceptance of authority.

Hawthorne Studies o The most important contribution to the human resources approach to management. o Undertaken at the Western Electric Companys Hawthorne Works during 1920s and 1930s with two groups, control and experimental groups o Conclusions (Hawthorne Effect) Behaviours and sentiments are closely related Group influences significantly affect individual behaviour Group standards establish individual worker output Money is less a factor in determining output than are group standards, group sentiments, and security.
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Dale Carnegie the book How to Win Friends and Influence People read by millions in 1930s, 40s and 50s. The way to succeed was to (1) make others feel important through a sincere appreciation of their efforts; (2) make a good first impression; (3) win people over to your way of thinking by letting others do the talking, being sympathetic, and never telling a man he is wrong; and (4) change people by praising good traits and giving the offender the opportunity to save face.

The Systems Approach

A system is a set of interrelated and interdependent parts arranged in a manner that produces a unified whole. Two basic types of systems Closed systems are not influenced by and do not interact with their environment. Open systems dynamically interact with their environment todays systems The Organisation as an Open System

Environment System Inputs Raw Materials Human Resources Capital Technology Information Transformation Process Employees Work Activities Management Activities Technology and Operations Methods Feedback Environment An organization being made up of interdependent factors, including individuals, groups, attitudes, motives, formal structure, interactions, goals, status, and authority. Outputs Products and Services Financial Results Information Human Results

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Managers coordinate the work activities of the various parts of the organization and ensure that all the interdependent parts of the organization are working together so that the organizations goals can be achieved. Decisions and actions taken in one organizational area will affect others and vice versa. For example, if the purchasing department doesnt acquire the right quantity and quality of inputs, the production department will not be able to do its job effectively. Organizations are not self-contained. They rely on their environments for essential inputs and as sources to absorb their outputs. No organization can survive for long if it ignores government regulations, supplier relations, etc.

The Contingency Approach

An approach that says that organizations are different, face different situations (contingencies), and require different ways of managing. Division of labour is valuable and widely used, but jobs can become too specialized. Bureaucracy is desirable in many situations, but in other circumstances, other structural designs are more effective. Management is not (and cannot be) based on simplistic principles to be applied in all situations. Different and changing situations require managers to use different approaches and techniques.

This is contingency approach, sometimes called the situational approach. Four Popular Contingency Variables Organization Size The number of people in an organization is a major influence on what managers do. As size increase, so do the problems of coordination. For instance, the type of organization structure appropriate for an organization of 50,000 employees is likely to be inefficient for an organization of 50 employees. Routineness of Task Technology To achieve its purpose, an organization uses technology; that is, it engages in the process of transforming inputs into outputs. Routine technologies require organizational structures, leadership styles, and control systems that differ from those required by customized or nonroutine technologies. Environmental Uncertainty The degree of uncertainty caused by political, technological, sociocultural, and economic changes (environmental changes) influences the management process. What works best in a stable and predictable environment may be totally inappropriate in a rapidly changing and unpredictable environment.

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Individual Differences Individuals differ in terms of their desire for growth, autonomy, tolerance of ambiguity, and expectations. These and other individual differences are particularly important when managers select motivation techniques, leadership styles, and job designs. How the Managers Job is Changing In todays world where mangers everywhere are dealing with the continued aftermaths of 9/11 and corporate ethics scandals, global economic and political uncertainties, and technological advancements, change is a constant. Two changes that appear to be having a significant impact on mangers job: Importance of Customers to the Managers Job o Emotions, frustrations, comfort of customers o Voice mails are more significant that e-mails o Without customers, most organizations would cease to exist o Employee attitudes and behaviours play a big role in customer satisfaction o Employees must create a customer-responsive organization where employees are friendly and courteous, accessible, knowledgeable, prompt in responding to customer needs and willing to do whats necessary to please the customer. Importance of Innovation to the Managers Job: o Nothing is more risky than not innovating o Innovation means doing things differently, exploring new territory, and taking risks. o Innovation isnt just for high-tech and technologically advanced organizations o Organizational managers at all levels and in all areas need to encourage their employees to be on the lookout for new ideas and new approaches, not just in the products or services the organisation provides, but in everything thats done.

Current Trends and Issues Several trends and issues are changing the way managers do their jobs. Globalization Ethics Workforce diversity Entrepreneurship E-business Knowledge management and learning organizations Quality management Globalization Management is no longer constrained by national borders eg. McDonalds sells hamburgers in China, Swiss company ABB Ltd. Has constructed power generating plants in Malaysia, South Korea, China and Indonesia. Significant opportunities from globalization The world has become a global village A question whether the openness of globalization has made countries more vulnerable to conflicts over political and cultural differences.
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Managers in organizations of all sizes and types around the world have to confront the challenges of operating in a global market, regardless of the controversy Think Globally

McDonalds has plans to expand throughout India with fast-food menus that bear little resemblance to those served in the United States. Flavored with Indian spices to cater to local tastes and featuring many vegetarian dishes, the food is also free of beef and beef products in deference to Hindu beliefs. A McDonalds was attacked a few years ago because it was thought to be using beef tallow in its cooking processes. Workforce Diversity Todays organizations are characterized by workforce diversity a workforce thats more heterogeneous in terms of gender, race, ethnicity, age, and other characteristics that reflect differences. Employees dont set aside their cultural values and lifestyle preferences when they come to work. The challenge for managers is to make their organizations more accommodating to diverse groups of people by addressing different lifestyles, family needs, and work styles. Smart mangers recognize that diversity can be an asset because it brings a broad range of viewpoints and problem-solving skills to a company, and additionally helps organizations better understand a diverse customer base.

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Entrepreneurship The process whereby an individual or group of individuals uses organized efforts to pursue opportunities to create value and grow by fulfilling wants and needs through innovation and uniqueness, no matter what resources the entrepreneur currently has. Three important themes o The pursuit of opportunities (environmental trends and changes that no one else has seen or paid attention to) o Innovation (changing, revolutionizing, transforming, or introducing new products or services or new ways of doing business) o Growth (not content being small or the same size) Managing in an E-Business World E-business (electronic business) is a comprehensive term describing the way an organization does its work by sing electronic (Internet-based) linkages with its key constituencies (employees, manger, customers, clients, suppliers, and partners) in order to efficiently and effectively achieve its goals. o E-commerce is essentially the sales and marketing component of e-business o Intranet is an internal organizational communication system that uses Internet technology and is accessible only to organizational employees, to communicate with is global workforce. Knowledge Management and Learning Organizations Organizations of the twenty-first century o must be able to learn and respond quickly o will be led by managers who can effectively challenge conventional wisdom, manage the organizations knowledge base, and make needed changes o will need to be learning organizations

Knowledge management o Cultivating a learning culture where organizational members systematically gather knowledge and share it with others in the organization so as to achieve better performance. Document best practices (in-house) Unusual problems dealt with Work information knowledge is shared with all employees through computer-based applications and through COIN (community of interest) teams that meet regularly throughout the company. Quality Management A philosophy of management driven by continual improvement and responding to customer needs and expectations. Customers are not only the purchasers but anyone who interacts with the organizations product or services internally or externally employees, suppliers and people who purchase the organizations goods or services. What is Quality Management? o Intense focus on the customer o Concern for continual improvement
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o o o o

Process-focused (work process) Improvement in the quality of everything the organization does Accurate measurement Empowerment of employees

How Culture Affects Managers

Because it constrains what they can and cannot do, an organizations culture is particularly relevant to managers. These constraints are rarely explicit. Theyre not written down. Its unlikely that theyll even be spoken. But theyre there, and all managers quickly learn what to do and what not to do in their organization. The following values can not be found written down anywhere, but each comes from a real organization. Look busy even if youre not. If you take risks and fail around here, youll pay dearly for it. Before you make a decision, run it by your boss so that he or she is never surprised. We make our product only as good as the competition forces us to. What made us successful in the past will make us successful in the future. If you want to get to the top here, you have to be a team player.

Organizations Culture A unique personality a set of relatively permanent and stable traits that influence the way we act and interact with others. When we describe someone as warm, open, relaxed, shy, or aggressive, were describing personality traits. An organization, too, has a personality, which we call its culture. Organizations culture is a system of shared meaning and beliefs held by organizations members that determines, in large degree, how thy act toward each other and outsiders. In every organization, there are values, symbols, rituals, myths, and practices that have evolved over time. Definition of culture implies three things Culture is a perception. o Individuals perceive the organizational culture on the basis of what they see, hear, or experience within the organization. Shared aspect of culture o Even though individuals may have different backgrounds or work at different organizational levels, they tend to describe the organizations culture in similar terms. Culture is descriptive o It describes rather than evaluates

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Managerial Decisions Affected by Culture Planning The degree of risk that plans should contain Whether plans should be developed by individuals or teams The degree of environmental scanning in which management will engage Organizing How much autonomy should be designed into employees jobs Whether tasks should be done by individuals or in teams The degree to which department managers interact with each other Leading The degree to which managers are concerned with increasing employee job satisfaction What leadership styles are appropriate Whether all disagreements even constructive ones should be eliminated Controlling Whether to impose external controls or to allow employees to control their own actions What criteria should be emphasized in employee performance evaluations What repercussions will occur from exceeding ones budget

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The impact of external environment on managing The general environment Economic conditions Interest rates, inflation, changes in disposable income, stock market fluctuations and the stage of the general business cycle When consumers incomes fall or when their confidence about job security declines, they will postpone purchasing anything that isnt a necessity. Political/Legal conditions Central, state, and local governments influence what organizations can and cannot do. Significant legislation affecting businesses Organizations spend a great deal of time and money to meet governmental regulations, but the effects of these regulations go beyond time and money. Consider the decision to dismiss an employee laws and court decisions have put increasing limits on what employers may do. Political conditions and the general stability of a country where an organization operates and the attitudes that elected governmental officials hold toward business. Political conditions can influence decisions and actions Socio-cultural Conditions Managers must adapt their practices to the changing expectations of the society in which they operate. As societal values, customs, and tastes change, managers also must change. Increasing violence and crime More emphasis on religion and spiritual activities. Increasing dependence on technology. Demographic conditions The conditions encompass trends in the physical characteristics of a population such as gender, age, level of education, geographic location, income, family composition, and so forth. Changes in these characteristics may constrain how managers plan, organize, lead, and control. Technological conditions Information gadgets are getting smaller and more powerful. The whole area of technology is radically changing the fundamental ways that organizations are structured and the way that managers manage. Global conditions

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Managers of both large and small organizations are challenged by an increasing number of global competitors and markets as part of the external environment.

Social Responsibility and Managerial Ethics As managers go about their business, social factors can influence their actions. Two views of social responsibility Classical view The view that managements only social responsibility is to maximize profits. Socio-economic view The view that managements social responsibility goes beyond making profits to include protecting and improving societys welfare Ethics Rules and principles that define right and wrong conduct Code of ethics A formal document that states an organizations primary values and the ethical rules it expects managers and operatives to follow. Four views of ethics Utilitarian view A view of ethics that says that ethical decisions are made solely on the basis of their outcomes or consequences. Rights view A view of ethics thats concerned with respecting and protecting individual liberties and privileges Theory of justice view A view of ethics in which managers impose and enforce rules fairly and impartially and do so by following all legal rules and regulations. Integrative social contracts theory A view of ethics that proposes that ethical decisions be based on existing norms in industries and communities in order to determine what constitutes right or wrong.

Guidelines for Acting Ethically

1. Know your organizations policy on ethics. Company policies on ethics, if they exist, describe what the organization perceives as ethical behaviour and what it expects you to do. This policy will help you to clarity that is permissible and the managerial discretion you will have. This becomes your code of ethics! 2. Understand the ethics policy. Just having the policy in your hand does not guarantee that it will achieve what it is intended to do. You need to fully understand it. Behaving ethically is rarely a cut-and-dried process. But the policy can act as a guiding light, providing a basis from which you act within the organization. Even if a policy does not exist, there are still several steps you can take before you deal with the difficult situation. 3. Think before you act. Ask yourself, Why am I going to do what Im about to do? What led up to the problem? What is my true intention in taking this action? Is my reason valid? Or are there ulterior motives behind it such as demonstrating organizational loyalty? Will my action
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injure someone? Would I disclose to my boss or my family what Im going to do? Remember, its you behaviour and your actions. You need to make sure that your are not doing something that will jeopardize your role as a manager, your organization, or you reputation. 4. Ask yourself what-if questions. If you are thinking about why you are going to do something, your should also be asking yourself what-if questions. For example, the following questions may help you shape your actions: What if I make the wrong decision? What will happen to me? To my job? What if my actions were described, in detail, on the local TV news show or in the newspaper? Would it bother or embarrass me or those around me? What if I get caught doing something unethical? Am I prepared to deal with the consequences? 5. Seek opinions from others: If it is something major that your must do, and about which you are uncertain, ask for advice from other managers. Maybe they have been in a similar situation and can give youre the benefit of their experience. Or maybe they can just listen and act ass a sounding board for you. 6. Do what you truly believe is right. You have a conscience, and you are responsible for your behaviour. Whatever you do, if you truly believe it was the right action to take, then what others say or what the Monday morning quarterbacks say is immaterial. Your need to be true to your own internal ethical standards. Ask yourself: Can I live with what Ive done?

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