Term
| Corporate Social Responsibility (CSR) |
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Definition
| theory of corporate self-regulation integrated into a business model. |
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Term
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Definition
| are any group, such as workers or shareholders, which has a vested or identifiable interest in the firm. |
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Term
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Definition
| have a direct stake in the firm and the outcomes of its decision-making and therefore are considered to have the most influence. |
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Term
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Definition
| have a less direct interest in the firm, which implies that the firm does not have to be as accountable to them. |
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Term
| Characteristics of a Monopoly |
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Definition
1. Only one firm exists in the market or at the very least one firm has an overwhelming market share.
2. The monopolist sells a unique product or one with no close substitutes.
3. There are significant entry barriers preventing any potential competitors from entering the market.
4. Given the above characteristics, the monopolist is able to set the market price and sell its product far in excess of marginal cost. This earns the monopolist a profit far greater than firms in a competitive market would earn. The lack of entry barriers prevents competing firms from gaining access to this market. |
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Term
| characteristic of perfectly competitive market |
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Definition
1. Many firms exist in the industry. No one firm has a significant share of the market or can exert any significant market power.
2. Information is readily available to both suppliers and buyers concerning available supply, demand, product characteristics, and the technologies needed to produce that output.
3. Each firm produces an identical or very similar product. Any product or marketing innovation can be quickly adopted by each firm’s competitors.
4. Since no significant differences exist between various firms’ products, each firm is forced to compete on the basis of price. No one firm has the ability to manipulate or set the market price.
5. There are no significant barriers to entry. Competing firms will come into the market whenever profits are high, and the resulting increase in supply will in the long run drive profits down to a normal rate of return. |
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Term
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Definition
1. Profitable businesses in competitive markets create jobs and income, which rewards the community and society in which the businesses operate. Opportunity and prosperity are advanced through this process.
2. Firms treat their stakeholders ethically and fairly.
3. Workers are paid a fair day’s wage for a fair day’s work.
4. Suppliers are paid a competitive price for their goods and services.
5. Customers are offered quality products at competitive prices.
6. Shareholders are rewarded with a competitive return on their investment.
7. In a competitive market, firms do not need to lie, cheat, or steal to get ahead. Governments will enforce rules that penalize such behavior. |
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Term
| American fur stakeholders |
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Definition
gov- expanded territory, obby succeeded when in getting the government to forbid foreigner from trading fur in the Northwest Territory.
employees- Astor treated his employees horrible. Astor exploited his employees every way that he could. He cut their salary from 100 a
year to 250 every 3-year. Because he own everything from the shops and
clothing and all other living expense the workers would need, he up
the price to profit from them over 100% |
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Term
| Am Fur- consistent with the
market capitalism model of competitive markets? |
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Definition
| One of the most specific facts to the market capitalism and the model
of competitive market was that the government was not a big part of interfering with The American Fur Company. During the beginning stages
of Astor’s fur business he had a few issues with the Government trying
to put post up so that the trading business would be more regulated.
But this didn’t work out so well because people and also Astor were
using Alcohol and other incentive to lure the Native to their
business. During the most successful part of the company’s career the
government stayed away from the company and put very regulations on
them. By doing so The American Fur Company succeeded in competing with
other companies. |
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Term
| Am Fur- not consistent with the
market capitalism model of competitive markets? |
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Definition
| The most inconsistent fact about The American Fur Company would be
that they had a monopoly over in the US. In area such as the North
West when the government agreed to not allow any foreign country to do
business The American Fur Company began their monopoly in this area.
Because the area was so new, there weren’t any regulation against the
company to treat the market fairly for other companies. Astor would
set up trading post next to other fur company such as the Columbian
Fur Company and Bernard Pratt and Company and “engaged with cutthroat
price competitive” which resulted in them bankrupting. |
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Term
Am Fur- consistent with the
stakeholder model of competitive markets?
t |
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Definition
| the American Fur Company was consistent in that they consistently made sure they made profit for the investors. In the case of The American
Fur Company even though Astor was the owner of 99.9 of the stock, he
manage to make profit for himself who was the biggest stockholder. |
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Term
| Am fur-not consistent with the
stakeholder model of competitive markets? |
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Definition
The American Fur Company was not consistent with treating their customers and their employees ethically right. Astor would not allow
their employees to buy product of other companies and while they were
working with him. He also cut their salary and sold them product that
was not to standard. By watering down Whisky and selling them to his
employee at price 100 percent more is not legitimate. The stakeholder
model says to treat your stakeholder ethically correct.
Stakeholder Model |
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Term
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Definition
| by contrast is an ethical theory of management
in which the welfare of each stakeholder must be considered as and
end.” |
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Term
| Am fur-fourteen different theories of ethical behavior
detailed in chapter 8 could best describe the firm's actual behavior?
Is this theory consistent with the market capitalism's model of
competitive markets? Explain your answer. |
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Definition
he American Fur Company and Astor had very little ethic to work with.
Astor deprived his stockholders of dividend and made profit for
himself. Astor ethical principal would only fall under two categories,
which were The Categorical Imperative and the Conventionalist Ethics.
Categorical Imperative: In the case of the American Fur Company Astor had use bribery and
loans to win his way to the government’s decision. During the early
1800 bribery was not an illegal matter, so Astor was not breaking any
law by doing so. Yet he did understand the it was not always the right
way to go about doing business. |
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Term
| Am Fur- firm’s philosophy concerning corporate
social responsibility in each case study as being consistent with the
market capitalism model? Explain your answer. |
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Definition
| The firm does not have characteristic that show social responsibility
that consist with the market capitalism model. The model explains that
the firm should be responsible to the environment and the people are
that is involves with or around the business. The American Fur Company
would go and clear out an area by over trapping fur and move on to the
next land available. They did not work to improve the society even
after they promise the government that they would help people settle
down in the new location. |
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Term
| Am fur- characterize the firm’s philosophy concerning corporate
social responsibility in each case study as being consistent with the
stakeholder model? Explain your answer. |
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Definition
| The firm does not hold corporate social responsibility, because they
did not allow competitors to compete in the market and they
consistently use illegal and non-ethical ways to run their business.
The American Fur Company had promise the government that they would
have many investors to start the company and do business legally with
others. Astor only allowed 4 other investors with very little
investment so that he could hold the stock percentage at 99.9 %. |
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Term
| Am fur-What specific role, if any, did the government play in each case
study? Was the government's actions influenced in any way by the
firm? |
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Definition
| The government had a large part of the company’s success. By having
very little regulation towards them it allowed the company to
monopolize in the industry. Because the company had connection with
government and the president they convince them to regulate on foreign
business and also Astor convince them to allow him to have his company
expand in the Louisiana area. Government official such as Cass had
been given as much as 35,000 by Astor. The president of US at one
point owed Astor 5,000 dollars. |
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Term
| Am fur- Were there any specific business practices in each case study that
stood out as either tremendously innovative or remarkably flawed?
Explain your answer. |
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Definition
| In 1831 Astor introduce the new technology innovation the steamboat
Yellowstone, Which could travel up from 50-100 miles a day in
comparison to the Keelboat that was used by his competitors which
would only travel 20 miles a day. This innovation made The American
Fur company even more competitive in the market. |
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Term
| KFC- several specific stakeholder groups in the case study and discuss their relevance. According to the stakeholder model, which of these stakeholder groups in each case study would be considered primary stakeholders? |
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Definition
People for the Ethical Treatment of Animals (PETA )is a secondary
stakeholder. According to the stakeholder model, examples, such as
activist groups are considered a secondary stakeholder because the
relationship to Kentucky Fried Chicken (KFC) is less mutually
immediate, beneficial, burdensome, or have the power to influence the
firm’s decision. PETA is boycotting KFC, and its suppliers, for the
treatment of chickens used in the production of their foods.
KFC, as well as the companies, under Yum! Brands is the primary
stakeholder. KFC buys chickens from 18 independent companies, which
operate over 50 chicken farms and slaughterhouses.
In theory, the perspective of who is a primary or secondary
shareholder is dependent on the stakeholder. For example, since PETA
declared “war” on KFC, PETA would consider the chicken suppliers for
KFC to be primary stakeholders. KFC, according to the stakeholder
model would consider their suppliers as secondary shareholders. |
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Term
| KFC- specific to the case study are consistent with the
market capitalism model of competitive markets? |
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Definition
Yum! Brands is the largest quick-service restaurant corporation with
35K restaurants world wide. This fact is consistent with the market
capitalism model of competitive markets; specifically, the model’s
assumption that business owners are powerfully motived to make profit,
as well as the ethical duty of management is to promote the interests
of the shareholders.
PETA’s formation to protect animal rights worldwide is consistent wit
the market capitalism model of competitive markets, specifically the
model’s assumption that markets discipline private economic activity
to promote social welfare.
KFC’s profitability during PETA’s boycott increased by 12% and net
income increased to 24%. This is another example that is consistent
with the market capitalism model of competitive markets. Even though
the boycott lasted for several years, KFC’s overall performance over
this time increased, which is consistent with the assumption that
business owners are powerfully motivated to make profit, as well as
the duty of management to promote the interests of the shareholders.
In addition to this, the following assumption is also relevant, that
the proper measurement of corporate performance is profit. |
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Term
| KFC- What facts specific to the case study are not consistent with the
market capitalism model of competitive markets? |
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Definition
KFC’s way of blaming the suppliers for the treatment of chickens and
not theirs, or their lack of taking some responsibility for the
mistreatment of chickens is not consistent with the market capitalism
model of competitive markets, specifically, the assumption that moral
restraint accompanies the self-interested behavior of business. This
fact undermines KFC’s, and Yum! Brands business by not being diligent
and ensure that their suppliers are humanely treating chickens.
KFC’s profitability during the time of is not consistent with the
market capitalism model assumption that if free competition exists,
the market will hold profits to minimum and the quality of products
and services will rise as firms to try to attract more buyers. This
fact is inconsistent because as one several companies under Yum!
Brands, it becomes the largest quick-service restaurant worldwide;
because the products offered were in question, whether the company
ethically treated the animals. |
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Term
| KFC- What specific facts of the case study are consistent with the
stakeholder model of competitive markets? |
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Definition
KFC’s profitability during the PETA campaign is a fact consistent with
the stakeholder model of competitive markets. The stakeholder model
is an ethical theory of management in which the welfare of each
stakeholder must be considered as an end. Stakeholder interests have
intrinsic worth; they are not valued only to the extent that they
enrich investors.
Along the lines of profitability, KFC was able to create income for
its investors and a product that was still in demand by consumers.
This fact is associated to the stakeholder model belief of managing
the stakeholders through the managers because it is ethical and the
stakeholders have moral rights that grow from the way powerful
corporations affect them. As a result of the profits, stakeholders,
primary and secondary, were influenced to stay loyal to KFC and Yum!
Brands. |
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Term
| KFc-What facts specific to the case study are not consistent with the
stakeholder model of competitive markets? |
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Definition
| KFC’s inadequate response to PETA’s campaign in the end is a fact that
is not consistent with the stakeholder model of competitive markets.
Even though PETA and those consumers that support PETA’s campaign, KFC
did not seem eager to make concessions to appease PETA and their
supporters because they do not directly influence the decisions made
at KFC. |
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Term
| KFC-Which one of the fourteen different theories of ethical behavior
detailed in chapter 8 could best describe the firm’s actual behavior?
Is this theory consistent with the market capitalism’s model of
competitive markets? Explain your answer. |
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Definition
| The conventional ethic best describes KFC’s (and Yum! Brands) actual
behavior in the case study. The conventional ethic states that
business is like a game with permissive ethics and any action that
does not violate the law is permitted. This ethic best describes
KFC’s actions for several reasons. First, when PETA announced their
campaign, KFC easily placed the blame of the treatment of chickens on
their suppliers, who were independent entities from KFC. KFC would
not acknowledge any unethical treatment on their behalf. Next, in
part of their response to PETA’s accusations, KFC felt they (their
suppliers) were operating under government regulations and felt that
their was no mistreatment on the behalf of KFC and their suppliers.
Finally, KFC was only trying to appease PETA when they made agreements
to improve the conditions for chickens. |
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Term
| KFC- Would you characterize the firm’s philosophy concerning corporate
social responsibility in the case study as being consistent with the
market capitalism model? Explain your answer. |
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Definition
| Yes in one sense and no on many levels that was more relevant to the
stakeholder model. KFC’s philosophy concerning corporate social
responsibility was consistent with the market capitalism model by
abiding to the following broad principle that corporations are
economic institutions run for profit. Over the duration of the PETA
campaign, KFC’s profits increased 24%. |
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Term
| KFC- ould you characterize the firm’s philosophy concerning corporate
social responsibility in each case study as being consistent with the
stakeholder model? Explain your answer. |
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Definition
| No. KFC’s philosophy concerning corporate social responsibility was
not consistent with the stakeholder model. Their philosophy went
against most of principles of corporate social responsibility.
Managers must act ethically. In the case study, only one of KFC’s
upper level managers, Bruce Friedrich, raised concerns for PETA’s
allegations. Corporations have a duty to correct adverse social
impacts they cause. In the case study, KFC did not do enough to
address conditions with their suppliers accused of mistreat of the
chickens. Managers should try to meet legitimate needs of multiple
stakeholders. KFC compromised the needs of animal rights activists to
ensure profits their profits by not nudging their suppliers to improve
animal conditions. |
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Term
| KFC- What specific role, if any, did government play in the case study?
Was the government’s actions influenced in any way by the firm? |
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Definition
| In the case study, government became involved in the PETA vs. Yum!
Brands case where PETA sued Yum! Brands claiming that Yum! Brands had
false statements on its website concerning the treatment of chickens. |
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Term
| KFC- Were there any specific business practices in the case study
that stood out as either tremendously innovative or remarkably
flawed? Explain your answer. |
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Definition
A specific business practice in the case study that was remarkably
flawed was how easily that KFC (and Yum! Brands) blamed their
suppliers for PETA’s accusations; not taking the allegations seriously
to make changes that were more humane in the mass production of
chickens.
Another example that I felt was remarkably flawed was PETA’s actions
used in their activism. I felt PETA’s actions were unprofessional and
its actions during this time I felt deterred many people from
listening to their cause to boycott KFC because of the mistreatment of
chickens. |
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Term
| GE- Identify several specific stakeholder groups in each case study and
discuss their relevance. According to the stakeholder model, which of
these stakeholder groups in each case study would be considered
primary stakeholders? Use facts from the case study to support your
argument. |
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Definition
The founding stakeholders are Thomas Alva Edison wih J.P. Morgan from
1947 to 1931. Edison started the Edison Electric Light Company to make
light bulbs and electrical equipment. Although he was a brilliant
inventor, Edison failed as a manager. J.P. Morgan took over and
organized the now named General Electric business. The company
expanded by introducing new electrical appliances, jet planes, silly
putty, and more.
Jack Welch took over in 1981 and changed the General Electric system
by closing or selling business sections that were failing and laying
off thousands of workers to make sure they are either the number one
or two business ranked in their industry. Welch made drastic changes
that influenced the company’s profitability. |
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Term
| GE- What facts specific to each case study are consistent with the
market capitalism model of competitive markets? |
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Definition
| General Electric was consistent in remaining profitable and
contributing to society by paying taxes, employing themselves in
philanthropic and community activities. Welch promoted pensions for
stakeholders and employees which met the standard requirements by
law. |
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Term
| GE- What facts specific to each case study are not consistent with the
market capitalism model of competitive markets? |
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Definition
General Electric changed drastically when Welch laid off tens of
thousands of employees because they were the bottom 10% employees that
did not fit within the company.
GE’s manufacturing plant in New York was releasing a cancer causing
chemical called PCB into the Hudson River. After years of battling
with the government’s Environmental Protection Agency, General
Electric became liable for the pollution and was forced to pay the
costs of the cleanup. |
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Term
| GE- What facts specific to each case study are consistent with the
stakeholder model of competitive markets? |
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Definition
| During Welch’s time, GE’s pension fund was distributed for
stakeholders, employees, and even retired workers.
General Electric contributed in philanthropic and community activities
while creating foundations for nonprofit organizations and college
grants. |
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Term
| GE- What facts specific to each case study are not consistent with the
stakeholder model of competitive markets? |
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Definition
| Although GE’s pension plans covered existing stakeholders, employees,
and retired workers, GE would not budge into increasing benefits for
retirees. Welch turned the surplus of the pension fund into profit for
the benefit of the company. Only after being pressured by unions and
pensioners, GE finally increased pensions from 15 to 35 percent. |
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Term
| GE-Which one of the fourteen different theories of ethical behavior
detailed in chapter 8 could best describe the firm's actual behavior?
Is this theory consistent with the market capitalism's model of
competitive markets? Explain your answer. |
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Definition
| Proportionality Ethic – Welch made decisions that were for the good
of the company for profit and for himself (higher pension plan and
benefits for himself). Every decision Welch made came with
consequences including increasing pension benefits and paying for
pollution cleanup. Another example would be increasing the
unemployment population at GE because he thought it would be good for
the company but he did not think about the good of the laid off
employees. |
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Term
| GE- Would you characterize the firm’s philosophy concerning corporate
social responsibility in each case study as being consistent with the
market capitalism model? Explain your answer. |
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Definition
| Yes, General Electric remained one of the top ranked companies
because of its consistent market in profitability and loyalty to its
stakeholders. General Electric remained competitive with its
businesses in their industry and sought out to keep increasing profit
and marketability. |
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Term
| GE-Would you characterize the firm’s philosophy concerning corporate
social responsibility in each case study as being consistent with the
stakeholder model? Explain your answer. |
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Definition
| Yes and no because General Electric, under the influence of Welch,
did “good” in terms of engaging in philanthropy, funding nonprofit
organization and the like, they still managed to remain greedy by
distributing no more than the law requires for pensions and battling
liability over their manufacturing plant’s pollution. |
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Term
| GE- What specific role, if any, did the government play in each case
study? Was the government's actions influenced in any way by the
firm? |
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Definition
| A specific role that the government played was claiming GE’s
manufacturing plants liable for polluting the Hudson River. GE refused
to pay the costs of removing the toxic chemicals and created a
campaign to show the public that the chemicals are harmless. This
battle influenced the company because it divided the public into
taking sides. People only shopped at places where the store owner’s
shared the same support position. |
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Term
| GE- Were there any specific business practices in each case study that
stood out as either tremendously innovative or remarkably flawed?
Explain your answer. |
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Definition
| Even though it was depressing to layoff so many employees, GE’s
efficiency increased. Decisions were made faster because they were no
longer passed down by layers of presidents to make a final decision.
GE’s locomotive plant decreased a little over 50 percent but increase
inventory about 3 times more. |
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Term
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Definition
| magine, solve, build and lead - four bold verbs that express what it is to be part of GE. Their action-oriented nature says something about who we are - and should serve to energize ourselves and our teams around leading change and driving performance. |
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Term
| Jack Welsh at GE-Identify several specific stakeholder groups in each case study and discuss their relevance. According to the stakeholder model, which of these stakeholder groups in each case study would be considered primary stakeholders? Use facts from the case study to support your argument. |
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Definition
| Although, here are several GE stakeholders, I believe that the primary stakeholder for this case study are the employees such as the manufacturing, service, financial, managers, and the directors.
(Page 147) states that “One underlying reason for the increasing profitability of GE is that through this churning of businesses GE’s center of gravity shifted from manufacturing to services. The GE he inherited earned 85 percent of its revenue from manufacturing; the GE he created got 70 percent of its revenue from services.”
“Welch wrung profits from GE by creating a performance culture. Managers were energized.”
Welsh also encouraged the employees to speak about their ideas and frustrations to their manager, as said on page 146, employees were introduced to a terminology called “work out” in which employees are given a chance to voice their frustrations, opinions and ideas to their managers. Without GE’s employees and Welsh training, GE would not be one of the best company in the world. |
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Term
| Jack Welsh at GE- What facts specific to each case study are consistent with the market capitalism model of competitive markets? |
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Definition
| As much as Welsh pushed his employees to work harder than other companies, GE paid a great amount of money and pension to its employees. GE also released a range of philanthropy and community activities. An example of which is, in year 2000, the GE made $40 million in grants to colleges, universities and nonprofit groups in the US and worldwide. (page 152) |
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Term
| Jack Welsh at GE- What facts specific to each case study are not consistent with the market capitalism model of competitive markets? |
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Definition
| GE’s tremendous amount of layoff is only one of the not consistent with the market capitalism model. Welsh’s “vitality curve” not only hurt the manager’s morale but also encouraged backstabbing in the company.
Pollution in the Hudson River is also a part of inconsistency with the market capitalism: although, it was proven that PCBs (Polychlorinated biphenyls) is not harmful to people’s health, GE was irresponsible to pass the EPA (Environmental Protection Agency) principle. In 2001 EPA finally ordered dredging that cost GE $460 million fine. (page 148-149, 150) |
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Term
| Jack Welsh at GE- What facts specific to each case study are consistent with the stakeholder model of competitive markets? |
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Definition
| Welsh top priorities are the stakeholders of the company, with this being said, pension was given to the shareholders and employees alike. |
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Term
| Jack Welsh at GE- What facts specific to each case study are not consistent with the stakeholder model of competitive market? |
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Definition
| GE’s pension fund covered approximately 485,000 people, including 195,000 who already retired. When the stock market rose in the 1950s, the fund also rose to $50 billion by 2001, GE’s retirees and their unions requested increased benefits and cost-of-living increases for pensioners but the company rejected their demands. (page 151) |
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Term
| Jack Welsh at GE- Which one of the fourteen different theories of ethical behavior detailed in chapter 8 could best describe the firm’s actual behavior? Is this theory consistent with the market capitalism’s model of competitive markets? Explain your answer. |
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Definition
| The Categorical Imperative – Welsh, like Immanuel Kant is a perfectionist. They only abide by their rules and they also implement the rules to their employees. Anyone who fails will be fired. This theory is consistent with the market capitalism’s model because both Kant and Welsh stayed the same to their employees until they retire, (or in Kant’s case, died). Kant and Welsh goals were to follow their law in the business world, which help with GE’s success. |
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Term
| Jack Welsh at GE- Would you characterize the firm’s philosophy concerning corporate social responsibility in each case study as being consistent with the market capitalism model? Explain your answer. |
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Definition
| Yes, because even though there are sections of GE’s that cost failure to its employees, GE was consistent with the market capitalism model because they have given their employees and shareholder the pension they deserved and also created different kind of community service in and out of their corporation. |
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Term
| Jack Welsh at GE- Would you characterize the firm’s philosophy concerning corporate social responsibility in each case study as being consistent with the stakeholder model? Explain your answer. |
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Definition
| No, given that Welsh did the right thing by giving the employees the pension they deserve with the help of the union of course, he was still thinking of himself and his retirement in the end. GE still tried fighting the pollution they cost in the Hudson River. |
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Term
| Jack Welsh GE-What specific roles, if any, did the government play in each case study? Was the government’s actions influenced in any way by the firm? |
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Definition
| EPA did a great job with reprimanding GE on their behavior when they were carelessly polluting the Hudson River. No matter how much GE fought for the case and hired people to prove that it was not danger to anyone’s health, the government still did a great job fining them $460 million. |
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Term
| Jack Welsh GE-Were there any specific business practices in each case study that stood out as either tremendously innovative or remarkably flawed? Explain your answer. |
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Definition
| The “vitality curve” is a remarkably flawed. Forced ranking hurts the morale of the employees who are not on top. The system also hurts teamwork by pitting people against each other that may encourage back-stabbing behavior. Managers were also force to set high goals for the company. Although this was rather painful to its employees, Welsh was considered a management icon that big and small companies alike copied his vitality curve idea. In the end, it helped employee to think big and outside the box and be more creative and innovative. |
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Term
|
Definition
| was predominant American integrated oil producing, transporting, refining, and marketing company. Established in 1870 as a corporation in Ohio, it was the largest oil refiner in the world and operated as a major company trust and was one of the world's first and largest multinational corporations until it was broken up by the United States Supreme Court in 1911. |
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Term
| Standard Oil-Identify several specific stakeholder groups in each case study and discuss their relevance. According to the stakeholder model, which of these stakeholder groups in each case study would be considered primary stakeholders? Use facts from the case study to support your argument. |
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Definition
Stakeholder groups – Stockholders such as Rockefeller, Key Employees such as Execs, Customers, Other Employees, Communities of Cleveland and New York, Suppliers (in the beginning), Competitors, Media such as Ida Tarbell, Land from Resources being used, etc.
Primary Stakeholders – Stockholders, Key Employees, Customers, Suppliers, Customers, Other Employees
Rockefeller originally invested money in refinery in Cleveland which was a small industry at the time (p73). He also wanted to avoid paying a profit to anyone so he creating factories and such to make his own supplies as well as buying a forest of trees to make the supplies. He also bought out at least many of his competitors to form a monopoly and be in control of the entire industry. |
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Term
| Standard Oil-What facts specific to each case study are consistent with the market capitalism model of competitive markets? |
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Definition
| Before Standard oil came along in the 1870s the oil refining market was much more competitive, with many smaller independent companies competing with each other so that their customers got what they needed at sensible. |
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Term
| Standard Oil-What facts specific to each case study are not consistent with the market capitalism model of competitive markets? |
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Definition
| However Rockefeller came along and went after his company’s interests only. It seems that Rockefeller obtained an unfair advantage over his competitors through secret meetings and establishing contracts with the railroads that shipped oil. He lowered his prices so much that the other companies weren’t able to compete. |
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Term
| Standard Oil- What facts specific to each case study are consistent with the stakeholder model of competitive markets? |
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Definition
| From his very first paycheck, Rockefeller tithed ten percent of his earnings to his church, gave to education, and other worthy causes. He himself believed that it was important to give back to the community financially. Over his lifetime he gave gifts of approximately $550 million (see pg 78 for details.) in charitable contributions. |
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Term
| Standard Oil-What facts specific to each case study are not consistent with the stakeholder model of competitive markets? |
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Definition
| Although Rockefeller himself seemed to believe in the stockholder model for his personal life, Standard Oil and Co was not held to the same standard. Standard Oil did the exact opposite of what Rockefeller stood for. Standard Oil controlled the majority of the refined oil flows in the United States and showed complete disregard for companies and those around the organization that were not making it money. |
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| Standard Oil-Which one of the fourteen different theories of ethical behavior detailed in chapter 8 could best describe the firm's actual behavior? Is this theory consistent with the market capitalism's model of competitive markets? Explain your answer. |
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Definition
Might equals right Ethic - Justice is defined as the interest of the stronger (pg 229)
Standard Oil consistently weeded out the competion through sneeky practices such as rebate schemes and ordering his marketing agents to destroy independent suppliers. Standard Oil acted as if because they were the dominant player they should be able to kick out any competition that existed. Rockefeller was building an empire but didn’t care much for anyone else. |
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| Standard Oil-Would you characterize the firm’s philosophy concerning corporate social responsibility in each case study as being consistent with the market capitalism model? Explain your answer. |
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Definition
| Yes, the Market Capitalism does not say much about corporate responsibility and discusses fair competion rather than “doing good” like in the Stakeholder model. So in that regard Standard Oil was consistent. The organization’s main allegiance was the interests of the shareholder. |
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| Standard Oil-Would you characterize the firm’s philosophy concerning corporate social responsibility in each case study as being consistent with the stakeholder model? Explain your answer. |
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Definition
| No, in the stakeholder model, allegiance should be to all stakeholders including their competion, effected communities and suppliers which Standard oil didn’t show much consideration at all. In fact, they seemed to either destroy or ignore them all together. |
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| Standard Oil-What specific role, if any, did the government play in each case study? Was the government's actions influenced in any way by the firm? |
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Definition
| Rockefeller came under attack from the federal government for having created a virtual monopoly over the oil industry. In 1890, John Sherman, a senator from Ohio, proposed an anti-trust act, authorizing the federal government to break up any businesses that prohibited competition. The Standard Oil Trust in effect eliminated competition. The United States Supreme Court eventually ruled in this case that Standard Oil was a trust and had to cease to exist. The company then splintered into numerous subsidiaries. In theory, these companies were no longer owned by a single person or operated by a single board of directors. |
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| Standard Oil-Were there any specific business practices in each case study that stood out as either tremendously innovative or remarkably flawed? |
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Definition
| Standard Oil business practices were not innovative but they were smart. Rockefeller’s idea of not paying profit to anyone in the beginning and buying his own forest and making his own barrels was a good idea, but the companies success in the long run was flawed by greed to take over the entire industry and not allowing for competition. |
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Definition
different code of conduct for business behavior
Business is a game that permits special lower ethics as long as no laws are violated. |
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| a test to determine whether or not a decision would survive disclosure and critical public scrutiny. |
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virtue through moderation, i.e., act conservatively
Vague and open to different interpretations. |
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worthwhile ends justify unscrupulous means
Emphasizes necessity of ethical compromise. |
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Definition
| do unto others as you would have them do unto you. |
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people have a moral sense about right and wrong based on intuition
Somewhat subjective. |
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what is ethical is what a firm has the strength to accomplish
Supports seizure by power. |
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Definition
| be loyal to the organization or firm you work for. |
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| principle of equal freedom |
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freedom of action as long as no other individual's freedom is deprived
You can't make others worse off by your actions. |
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| a decision is ethical if the good effects outweigh the bad and no better alternatives are available. |
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natural rights belong to individuals
Others have obligation to respect those rights. |
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act in such a way so as to maintain the orderly bonds of community
Emphasizes impartiality and equal treatment. |
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| act so as to create the greatest good for the greatest number of people. |
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universal code of behavior
Principles of action adopted by everyone without inconsistency. |
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