Business 111

St. Francis Xavier University **We aren't endorsed by this school
Oct 11, 2023
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There are 3 main approaches to management: Financial Bottom Line: The focus on maximizing organizations financial performances. a) A consequential utilitarian moral point of view, where an actions rightness is measured by its e ff ect on the net overall happiness for everyone that is involved -Net happiness is typically measured via financial wealth created. b) The idea of an invisible hand which suggests that the good of a community is assured when every individual is permitted to pursue their own self-interests. -Assumes everyone is self-interested and materialistic shortcomings of FBL management prone to create negative social and ecological externalities. Triple Bottom Line: The focus on maximizing financial performance via sustainable development. a) An enlightened consequential utilitarian moral point of view, which recognizes that firms can increase their financial well-being via reducing negative social and ecological externalities. b) Sustainable development means "meeting the needs of the present generation without compromising the ability of of future generations to meet their needs c) Developing a business case that justifies/documents how a proposed new organizational initiative will enhance an organization's financial well-being - Over 90% of large corporations report on triple bottom line Shortcomings of TBL management Limited to improving socio-ecological well-being only when it serves to enhance financial well-being Social And Ecological Thought: The focus on socio-ecological well being ahead of maximizing financials, This seems to be the more dominant approach in the future. a) . A virtue ethics moral point of view, which focuses on how happiness is achieved by practicing virtues in community. Implies purpose of business is to provide goods and services that benefit society. b) Importance on creating positive socio-ecological externalities (rather than only reducing negative externalities) c) Managers focus on optimizing social and ecological well-being, while ensuring organizations remain financially viable (i.e., SET management does not focus on maximizing financial well-being) Shortcomings of TBL management Does not maximize financial well-being in the short-term Stakeholder: Any individual or group whose interests are a ff ected by the operations of a business. The Stakeholder theory sees the value creation for a broader range of stakeholders as a primary objective of the firm. Examples of a stakeholder are things like employees, consumer, shareholders, business partners, but also competitors, suppliers even the environment.
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