ENVIRONMENT
What is an organizational environment?
The set of forces and conditions that operate beyond an organization’s boundaries but affect its ability to acquire and use (scarce) resources to create value.
Define ethics?
Moral principals or beliefs about what is right or wrong
What is the role of the Top Management Team?
The Top Management Team defines an organization's goals, allocates resources, and drives overall business performance to ensure long-term success.
Which of the following is an outside stakeholder: managers, employees, shareholders or customers?
Customers
What are the 3 sources of uncertainty in an organizational environment?
Complexity, Dynamism and Richness
Which strategy involves competitors secretly agreeing to limit competition, such as by fixing prices?
Collusion/cartel
A company gets the right to use another company's brand and business model. What is this called?
Franchising
What does a shareholder contribute to the organization?
Money and capital
What is the main difference between symbiotic and competitive interdependencies?
Symbiotic is between the organization and its suppliers and distributors while competitive is between two companies who compete for resources.
Why can unethical behavior occur in organizations? (Name 3 reasons)
Because of societal ethics, professional ethics and individual ethics
Why can an agency problem occur between shareholders and managers?
Because managers may pursue their own interests (short term succes) instead of the interests of the shareholders (long term succes)
What is the main difference between outside and inside stakeholders?
Inside stakeholders are part of the organization, while outside stakeholders are outside the organization but have an interest in it.
According to Resource Dependance Theory, what drives a company to form interorganizational linkages?
To secure critical resources and reduce environmental uncertainty.
True or false: ethical behavior and legal behavior always mean exactly the same thing?
False
What is the difference between a merger and a takeover?
A merger is a mutual combination of two companies into a single new entity, whereas a takeover occurs when one company buys and absorbs another one.
How can stock-based compensation help reduce the agency problem?
A company spends a lot of time and money monitoring one supplier. Would taking over the supplier always solve the problem?
According to the Transaction Cost Theory: No, taking over the supplier can reduce transaction costs, but it can also increase bureaucratic costs. The organization should choose the mechanism that minimizes the total costs.
What is the main reason ethical rules develop?
To increase the value of interactions, protect people (from the pursuit of self-interest) and reduce transaction costs.
What is Keiretsu?
Keiretsu is a traditional Japanese business network where companies take small equity stakes in one another.
Why is it difficult for an organization to satisfy all stakeholders?
Since they might have different long or short term goals which can't be accomplished at the same time