Business decisions, by their nature, involve ethical considerations because (1) most economic decisions are choices where the decision-maker could have done otherwise, (2) every decision or action affects people, and (3) every decision or set of decisions is embedded in a belief system that presupposes some basic values or their abrogation. The task of justifying moral beliefs and integrating them into business situations and the process of applying ethical standards to everyday decision-making are incomplete and can be exasperating. But the business manager has recourse to the long tradition of ethical study. This note outlines some of the basic terms used in the study of ethics and describes the task of business ethics. Most important, the text describes five theories of moral reasoning-utilitarianism, rule-based morality, a rights approach, a contemporary Aristotelian approach to virtuous character, and social justice. They lay out minimum standards for an acceptable moral decision that can serve as criteria for moral business judgments.
This is an MIT Sloan Management Review article. In a global economy, managers constantly negotiate with people from other cultures, whether the issue is coordinating operations within a multinational firm, arranging a joint venture, or convincing a foreign government to approve construction of a plant. Yet, managers have had to rely on simplistic formulas--following lists of "dos and don'ts"--or very demanding ones--"Do as the Romans do"--to deal with the cultural aspects of these negotiations. But a number of strategies are available. The author presents these strategies according to the parties' level of familiarity with each other's cultures and the extent to which they can explicitly coordinate their strategies. These factors determine the subset of strategies that are realistically feasible for an individual manager.
Presents a model for understanding how private social-purpose ventures (nonprofit and for-profit) differ from traditional business firms in both their objectives and methods of operation. Identifies six dimensions that are useful for understanding the differences. Also discusses the role of social enterprise in society and current trends creating opportunities for social entrepreneurship.
Brion Applegate and Bill Collatos had already started a fund-raising campaign for their new venture-capital fund when the principals of a prestigious Wall Street investment bank asked them to become the two senior partners of an in-house $150 million fund. The case analyzes: (1) the venture capital investing process, (2) the experience, networks, and timing of starting a specialized fund, (3) the written prospectus of the new fund, and (4) the decisions and issues confronting Applegate and Collatos.
Explains why sales management has become an increasingly important and complex topic for top managers. Demonstrates the financial impact of a superior salesforce and then describes a way to gain superiority. The focus is on a salesforce that is responsive to customer needs and competing imperatives. Organization and management receive careful attention.
Describes the Darwinian internal and external processes that lead to poor performance from a previously well performing company. Demonstrates why any business design eventually fails and the role of organizational calcification and poor leadership in the failure. Also provides prescriptions to prevent and alleviate the problems.
In 1993, senior managers at Levi Strauss & Co., the world's largest brand-name apparel manufacturer, were deciding whether the company should have a business presence in China, given the human rights and other problems there. The China Policy Group has been asked to use the company's "principled reasoning approach" to make a recommendation based on the company's ethical values and newly-adopted global sourcing guidelines.
Bain & Co., a leading strategy consulting firm, faces major strategic and organizational issues regarding global expansion. The Bain partners must choose a course among many exciting and attractive opportunities for growth. Also explores organizational and managerial implications for various growth scenarios.
As a consequence of laying off half its workforce in a massive downsizing program, the company--a large manufacturer of medium and heavy trucks--struggles with a huge ($2.6 billion) liability for retiree medical costs. Although the company has promised its retirees (and their families) full lifetime medical coverage, it must negotiate a substantial reduction in these benefits to avoid bankruptcy.
A shift from seasonal to level production of toys will change the seasonal cycle of Toy World's working capital needs and necessitate new bank credit arrangements. A rewritten version of an earlier case.
A personal negotiation episode in purchasing a car is presented. Tactics and strategies commonly encountered by car buyers and car salespeople are illustrated.
VideoGuide is emerging from a development stage start-up and requires a significant capital infusion to commercialize its product. Various financing options are considered including going public, venture capital, private placement, or a strategic partner. Given the "heated" IPO market, VideoGuide is leaning toward going public.
Craig Weatherup, the president and CEO of Pepsi Cola, leads a change process that completely transforms his company. It includes a new vision, operating philosophy, strategy, and organizational structure. He also introduces process improvement techniques and builds new performance metrics around these processes and the newly desired behaviors.
In November 1993, Dr. Richard Lerner, president of the Scripps Research Institute, faces the challenge of maintaining his organization's financial and scientific vitality. A proposed cooperative venture with Sandoz has attracted considerable criticism. Meanwhile, a new proposal to conduct clinical trials presents intriguing possibilities. Teaching Purpose: To understand how federal policy directly and indirectly shapes high-technology industries, to explore financing new ventures in a nonprofit research organization, and to value a proposed new venture.
Introduces a framework for evaluating corporate investment projects as call options. Presumes readers are familiar with basic option pricing and basic capital budgeting rules. Explains the motivation for viewing projects as options; presents a mapping between a capital project and an option; shows how to price the option; and explores the managerial implications of this approach to capital budgeting. Concludes with a discussion of common practical, analytical questions that arise with this methodology.