Term
|
Definition
| Founder, CEO and Chairman of Enron from 1985-2002 |
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Term
| Who is Jeff Skilling from Enron? |
|
Definition
| Joined in 1997. 2001 CEO from Feb to Aug. Resigned later that year, Presient & CEO before that |
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Term
| Who is Andy Fastow of Enron? |
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Definition
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Term
| What is Arthur Anderson on Enron? |
|
Definition
| Big 5 Accounting Firm, indighted for fraud |
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Term
| Who is Tim Belden of Enron? |
|
Definition
| Head of trading for Enron's energy services, responsible for the California energy black outs |
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Term
| Who is Sherron Watkins of Enron? |
|
Definition
| The whistle blower, working for Andy Fastow, discovered cooking of the books |
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Term
| Who is Cliff Baxtor of Enron? |
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Definition
| executive who commited suicide. Accused of fraud, high level exec |
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Term
| Who and when was Enron founded? |
|
Definition
| Founded in 1985 by Ken Lay |
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Term
|
Definition
| Rank & Yank was the companies policy that every year the bottom 15% of the firm was thrown out. Fostered a extremely competitive attitude |
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Term
| Describe the Vahalla Scnadal |
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Definition
| 1987, two traders in NY who owere gambling with Enron's funds, betting if it was going up or down in the stock market. Skimming money off the top for themselves. Ken Lay found out and gave them more money to continue what they were doing. |
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Term
| Describe the Mark to Market Accounting System |
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Definition
| Becomes extremely subjective. Say you could make profits down the line without any proof. |
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Term
| Describe the Dabhol project |
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Definition
| India power plant, other people were hesitant. Concern was people in india could not pay for energy. Cost the company a billion dollars but still showed profit on accounting books. |
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Term
|
Definition
| Fabricated company named after Lea, Jeffery, and Michael to buy Enron's poorly performing stocks and stakes and bolster Enron's financial statements. |
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Term
| What was Merril Lynch's involvement with Enron? |
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Definition
| Nigerian power barges. They have no need for them, harboring them for Enron to take them off their books. |
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Term
| What was the Milgram experiment? |
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Definition
| "Shock" ethical experiment |
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Term
| What was the deal with Enron causing Rolling blackouts in California? |
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Definition
| Call power plants and order blackouts. Deregulation of energy industry in CA. |
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Term
| What is SOX stand for, why did it come about and what does it do? What has it been criticized for? |
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Definition
| Sarbanes-Oxley Act, came about after Enron scandal. Orders companies to rotate auditing firms every five years. CEOs and CFOs to certify ever financial report for accuracy and requires the revelation of off-balance-seet transactions. It has been criticized for discouraging firms for listing in U.S. Stock exchange. |
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Term
| What are the take away points from the Friedman article? |
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Definition
Moral: robbing shareholders of the agency, taking money that is not necessarily theirs
Not effective, not qualified
Sole Proprietors ok? Yes, it's your own money.
Why not use CSR language to enhance profits? Could be effective but it would mean they were saying that CSR is true. Undermines own moral compass and do not increase profits enhancing the legitmacy of that business model. |
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Term
| Exxon Mobile: Who founded it and what are its values? |
|
Definition
Rockefellar started Standard Oil. Valued efficiency, cost control, centralization, competitor suppression
In 1911 broke up into 39 different companies & over 200 countries governments are involved.
Donated 196 million in 2009 but that was only .05% of revenues. |
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Term
| What are the three pillars of economic, political, and social activity? |
|
Definition
| Business, Government, and Society |
|
|
Term
| Define business as a pillar |
|
Definition
Profit-making activity that provides products and
services to satisfy human needs |
|
|
Term
| Define Government as a pillar |
|
Definition
Structures and processes in society that
authoritatively make and apply policies and rules |
|
|
Term
| Define society as a pillar |
|
Definition
A network of human relations composed of values,
institutions, and material things |
|
|
Term
| What are the three things that constitute societies? |
|
Definition
| Values, institutions and material things |
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Term
| Define cultural tightness and the material and institutional causes of it |
|
Definition
shared belief in the acceptability of deviation from social norms.
Material causes: high population density, resource scarcity, territorital conflict, disease
Institutional causes: stronger government, more regulations of daily behavior |
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Term
| Explain the Market Capitalism model |
|
Definition
| Markets are platforms of exchange. Market economies emerge when societies move from production to substance. Laissez-fair. Market stronger influence than sociopolitical environment |
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Term
| Explain the Dominance model |
|
Definition
Capitalism produces a powerful
elite, which enriches the few
and the expense of the many.
Populism: Common people feel
oppressed or disadvantaged;
seek to take power from a ruling
elite seen as thwarting the
collective welfare
Marxism: Workers should revolt
against property owning capitalists
who exploit them, replacing
economic and political domination
with more equal and democratic
socialist institutions |
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|
Term
| Explain the Countervailing Forces Model |
|
Definition
Business is a major force acting on government, the public, and environmental factors
To maintain broad public support, business must adjust to social, political, and economic forces. |
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|
Term
| Explain the Stakeholder Model |
|
Definition
| Stakeholders, Primary stakeholders, and secondary stakeholders |
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|
Term
| Criticism of Stakeholder Model |
|
Definition
An unrealistic assessment of the power relationships between corporations and other entities
Sets up a guideline that is too vague
The interests of stakeholders vary and often conflict
Pursuit of profit creates greater lasting good for society
than pursuit of profit tempered by compassion |
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|
Term
| Advocacy of Stakeholder Model |
|
Definition
A corporation that embraces stakeholders performs better
It is the ethical way to manage because stakeholders have moral rights that grow from the way powerful corporations affect them |
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|
Term
| What is Market Capitalism's nick name? |
|
Definition
|
|
Term
| What is the Dominance Model's nick name? |
|
Definition
|
|
Term
| What is the Countervailing Forces model's nick name? |
|
Definition
|
|
Term
| What is the stakeholder model's nick name? |
|
Definition
|
|
Term
|
Definition
| An intangible object of thought |
|
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Term
|
Definition
| an enduring belief about which fundamental life choices are correct |
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Term
|
Definition
| A bundle of values that creates a particular view of the world. |
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Term
|
Definition
| A formal pattern of relations that links people together to accomplish a goal |
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Term
|
Definition
| Tangible artifacts of a society that shape and are shaped by ideas and institutions |
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Term
|
Definition
| An underlying agreement between business and society on basic duties and responsibilities business must carry out to retain public support. It may be reflect in laws and regulations. |
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Term
| Why is the BGS field important to managers? |
|
Definition
| There are powerful nonmarkets forces to which many businesses, especially large ones, are exposed. If society, or one or more powerful interests within it, does not accept a company's actions, that firm will be punished and constrained. |
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Term
|
Definition
| The economy that emerges when people move beyond subsistence production for trade and markets take on a more central role. |
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Term
|
Definition
| An economy in which private individuals and corporations own the means of production and, motivated by the desire for profit, compete in free markets under conditions of limited restraint by government. |
|
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Term
|
Definition
| Wrote The Wealth of Nations, about what he called a "commercial society" or what today we call capitalism. |
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Term
| Define managerial capitalism |
|
Definition
| A market economy in which the dominant businesses are large firms run by salaried managers, not smaller firms run by owner-entrepreneurs |
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Term
|
Definition
| An economic philosophy that rejects government intervention in markets |
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Term
|
Definition
| A political pattern, recurrent in world history, in which common people who feel oppressed of disadvantaged seek to take power from a ruling elite seen as thwarting fulfillment of the collective welfare |
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|
Term
|
Definition
| An entity that is benefitted by the actions of a corporation or whose actions may benefit or burden the corporation. The corporation has an ethical duty toward these entities. |
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|
Term
| Define Primary stakeholders |
|
Definition
| Entities in a relationship with the corporation in which they, the corporation, or both are affected immediately, continuously, and powerfully. |
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|
Term
| Define secondary stakeholders |
|
Definition
| Entities in a relationship with the corporation in which the effects on them, the corporation, or both are less significant and pressing |
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|
Term
| Define strategic management |
|
Definition
| Actions taken by managers to adapt to changes in its market and sociopolitical environments |
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Term
|
Definition
| A statement or visions that creates insight by describing patterns or relationships in a diffuse subject matter. A good theory is concise and simplifies complex phenomena. |
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Term
|
Definition
| The study of phenomena moving through time. |
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Term
| Name three areas of theory in the BGS relationship |
|
Definition
1. How corporations interact with stakeholders.
2. The ethical duties of corporations and mangers.
3. Corporate social performance and how it can be measured. |
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Term
|
Definition
| A plausible story of the future based on assumptions about how current trends might play out |
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Term
|
Definition
| An economic policy of lowering tariffs and other barriers to encourage trade. |
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Term
|
Definition
| An environment mental force of unknown origin and mysterious action that provides the energy for events. The discussion divides this force, somewhat artificially, into nine separate but related forces causing distinct chains of events. |
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|
Term
| Define industrial revolution |
|
Definition
| Transforming changes that turn ogricultural economics into industrial economies. This transformation occurs in the presence of certain economic, technological, political, and philosophical conditions. |
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Term
|
Definition
| A statistical measure of inequality in which 0 is perfect equality (everyone has the same amount of wealth) and 100 is absolute inequality (a single person has all wealth) |
|
|
Term
| Define replacement fertility rate |
|
Definition
| The number of children a woman must have on average to ensure that one daughter survives to reproductive age. |
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Term
|
Definition
| The creation of networks of human interaction that span worldwide distances . |
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Term
|
Definition
| An international actor having a ruling authority, citizens, and a territory with fixed borders. |
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Term
|
Definition
| A set of reinforcing beliefs an values that constructs a worldview. |
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|
Term
| What are the seven environments of business? |
|
Definition
| Economic, Technological, Cultural, Government, Legal, Natural, Internal |
|
|
Term
|
Definition
marked by usually continuous and productive activity or
change |
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|
Term
| Name three things that constitute a dynamic environment |
|
Definition
1. Increase in demand
2. Decrease in supply
3. Increase in environment stressors |
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|
Term
| How was the industrial revolution afforded and what values did it reinforces? |
|
Definition
rded by cultural values (freedom; initiative;
debate), institutions (e.g. transportation) and natural resources (raw materials)
Reinforces values; drives growth and wealth |
|
|
Term
| What was population growth spurred by? |
|
Definition
| advances in medicine, sanitation, food production, etc |
|
|
Term
| Three implications of population growth |
|
Definition
1. Wealth gap between high and low income countries will widen
2. Growth will continue to strain the earth's ecosystems, especially as industrial activity spreads.
3. the West is in demographic decline compared with other peoples. |
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|
Term
| Technology fuels ____ and reshapes ____ |
|
Definition
Technology Fuels Commerce and Reshapes
Societies |
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|
Term
| ____________________ argues that ideas are susceptible to selective pressures, as when capitalism marginalized socialism |
|
Definition
|
|
Term
| Describe the economic environment |
|
Definition
| The Economic Environment consists of forces that influence market operations |
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|
Term
| Define trade liberalization |
|
Definition
| a philosophy in which nattions promote trade by easing restrictions, including both tariff and non-tariff barriers. This philosophy, sometimes referred to as simply liberalization, is the bedrock of economic globalization. |
|
|
Term
| Define foreign direct investment |
|
Definition
| Capital investment by private firms outside their home countries. |
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Term
|
Definition
| Technology that is developed on the scale of a nano-meter, which is one-billionth of a meter. |
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Term
|
Definition
| A web site open to collaborative editing by multiple individuals. |
|
|
Term
|
Definition
| A system of shared knowledge, values, norms, customs, and rituals acquired by social learning. |
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|
Term
| Describe technological environment |
|
Definition
| The Technological Environment consists of tech that influences and is utilized by businesses |
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|
Term
| Describe the cultural environment |
|
Definition
The Cultural Environment consists of a society’s shared knowledge, values, norms, and customs
MNCs can experience conflict when they cross cultural boundaries
Postmodern values can mitigate this trend |
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Term
|
Definition
| Values based on assumptions of affluence, for example, quality of life and self-expression |
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Term
|
Definition
| A form of government requiring three elements--popular sovereignty, political liberty, and majority rule. |
|
|
Term
| Describe government environment |
|
Definition
The Government Environment consists of the laws and regulations imposed by nation-states
More active leads to more democratic |
|
|
Term
| Describe legal environment |
|
Definition
| The Legal Environment consists of legislation, regulation, and litigation |
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|
Term
| Name the five enduring trends under the legal environment |
|
Definition
1. Laws and regulations are growing in number
2. Corporate duties to stakeholder rights are expanding
3. Cross-national legal issues are more relevant
4. Ethical behavior and CSR are codified in laws
5. Evolution is constant |
|
|
Term
|
Definition
| Voluntarily adopted codes of conduct setting forth rules about corporate behavior. Guidelines are often derived from emerging international conduct standards. |
|
|
Term
| Describe the natural environment |
|
Definition
| The Natural Environment consists of the ecological systems that influence and are influenced by a business’s activity |
|
|
Term
| Describe the internal environment |
|
Definition
The Internal Environment is within the
corporation
• Includes employees, managers, the board of directors, and
owners
• Each of these groups has different objective, beliefs, needs, and
functions that must be coordinated
• Forces in external environments have recently reduced the power
of these internal groups |
|
|
Term
|
Definition
| Ability to exert influence & control over oneself and other: Influence and Control. Can be a property of an individual or a group |
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|
Term
| Where do people and groups get their power? |
|
Definition
| Wealth, formal title, knowledge, resource control, weapons, status, charisma |
|
|
Term
| Name the five areas power can be derived from |
|
Definition
| Reward, coercive, legitimate, expert, referent |
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Term
|
Definition
| entails forcing someone to do something that they would prefer not to do. Usually, this is for fear of punishment |
|
|
Term
|
Definition
| is derived from an ability to give someone something desirable |
|
|
Term
|
Definition
entails feelings of obligation or
responsibility. Typically, this is associated with a
person’s formal title.
Requires a recognition of legitimacy by the person being influenced |
|
|
Term
|
Definition
is power from the other person’s
perception of your value. Can be altered through
persuasion
Even if your coworker doesn’t have formal authority over you, your admiration of him/her might lead you to do what he/she requests |
|
|
Term
|
Definition
entails the utilization of knowledge
or expertise
You might find that one of your group members attains power this way |
|
|
Term
| Define social attentiveness |
|
Definition
| powerful people are less dependent on others, and so pay less attention to them |
|
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Term
|
Definition
| powerful people act more like “themselves” |
|
|
Term
|
Definition
| power enhances self-esteem, agency, and control |
|
|
Term
| What gives a business power? |
|
Definition
| Wealth, knowledge, resource control, status, charisma, very similar to where people get their power |
|
|
Term
| Describe the two levels on which businesses exert their power |
|
Definition
On the surface, businesses determine what is bought and sold, who is hired, who is fired, the commercials we watch, the price of goods, etc
Beneath the surface, businesses can influence the deepest levels of society, from the structure of government to our cultural values. |
|
|
Term
| Name the seven realms of business power |
|
Definition
| economic, technological, cultural, political, legal, environmental, individuals |
|
|
Term
| When is a business power legitimate? |
|
Definition
Legitimacy refers to the rightful use of power. Its opposite is tyranny.
Businesses violate the social contract when they stop acting in line with society’s rules (i.e. laws) and values
The social contract legitimizes business power by giving it a moral basis |
|
|
Term
| Describe dominance theory |
|
Definition
Dominance theory argues that business is too powerful and unchecked
1. Monopolies and oligopolies Concentrate assets, reducing
competition and harming consumers
2. A small group of elite business people controls markets, public policy, etc. |
|
|
Term
|
Definition
a small group of people that controls the economy, government, and military
• Belong to exclusive organizations, set policies, and serve on
overlapping boards
• Larger than expected
• Not necessarily malicious |
|
|
Term
| Describe pluralist theory |
|
Definition
Pluralist theory argues that no entity or interest
has overriding power
• Consistent with democratic values
• Implicated by American diversity
• Protected by the Constitution
• Market forces demand stakeholder considerations |
|
|
Term
| Name the four areas of legitimacy |
|
Definition
Economic stakeholders
Social interest groups
Social values
Governments and Laws |
|
|
Term
|
Definition
| A society with a largely agricultural society |
|
|
Term
| What did Plato say about wealth? and what about in The Republic? |
|
Definition
| the pursuit of money is an insatiable appetite. In The Republic, rulers were prevented from owning possessions or even touching gold or silver |
|
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Term
|
Definition
| A price giving a moderate profit; one inspired by fairness, not greed |
|
|
Term
|
Definition
| A price determined by the interaction of supply and demand |
|
|
Term
|
Definition
| The lending of money for interest |
|
|
Term
|
Definition
| The belief that hard work and adherence to a set of virtues such as thrift, saving, and sobriety would bring wealth and God's approval. |
|
|
Term
| What did Aristotle think about wealth? |
|
Definition
| Aristotle believed that external goods were inferior to goods of the soul, and compromised happiness |
|
|
Term
| What was not renounced as a sin by Catholicism until 1917. |
|
Definition
|
|
Term
| Argued that prices should be set according to what? |
|
Definition
|
|
Term
| Describe the tension between business and society began with Hamilton and Jefferson |
|
Definition
• Alexander Hamilton believed that industrial growth would increase national power and designed a grand scheme to promote manufacturing and finance
• Thomas Jefferson believed than an agrarian economy of landowning farmers was the ideal social order |
|
|
Term
|
Definition
Broad coalition of workers lobby for government takeovers of railroads and other companies; argue that society’s ills stem from
businesses’ greed. |
|
|
Term
| Define progressive movement |
|
Definition
A less radical perspective on populism, with broader appeal. Broke up trusts, introduced regulatory agencies, and curbed child labor
practices. |
|
|
Term
|
Definition
| An anti-capitalist doctrine that promotes a classless society, where all labor and property are shared. Found support in the IWW in the early 1900s |
|
|
Term
|
Definition
| An economic movement arguing that government interventions can stabilize economies as a complement to free market systems |
|
|
Term
|
Definition
| More radical than old progressivism, with a focus on curbing corporate power through direct action. Argues that businesses are too powerful, have too many legal rights, and are inherently immoral |
|
|
Term
|
Definition
| A focus on freedom and individual rights, originating in France. |
|
|
Term
| Define economic liberalism |
|
Definition
| An economic philosophy that argues for limited government intervention in business. Exemplified by Adam Smith’s Wealth of Nations |
|
|
Term
|
Definition
| The rise of old liberalist ideals, with a focus on free market economies. |
|
|
Term
| Define nongovernmental organizations |
|
Definition
Nongovernmental entities are responsible for many present-day criticisms of business
• NGO's are voluntary, nonprofit
organizations that are not affiliated with governments
At their core, NGOs represent social change and organize likeminded people across the globe
Activism likewise stems from NGOs and less formally organized groups, utilizing a wide range of tactics
Usually, activism is organized and lawful. However, extreme activism often dominates news reports |
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