DATE, TIME AND PLACE

Duties come with being Part of an

Organization

OBEDIENCE – Laws, Rules and CustomsDUE CARE – Participate and InquireLOYALTY – Opportunities and Conflicts

Strictly Legal Perspective

Strictly Personal Perspective

Is It Legal? If “No,” Stop and Take Action

Is It Balanced?Compare Risks and Benefits

How Does It Make Me Feel?What is your Conscience telling You?

Are You doing the “Right Thing?”

NATIONAL or CULTURAL

LAYERED

ORGANIZATIONAL

FUNCTION or TEAM

PERSONAL VALUES

Financial: Self-dealing or Insider Trading

Professional: Outside Commitments infringe on Employer Resources

Personal: Family/Employee Conflicts, Nepotism, Fraternization

DEFINITION: Employee’s Personal Interests Interfere (“Conflict”) with Obligations to Employer

7

STRUCTURE is HOW Firm does WHAT it’s decided

to do…

STRATEGY Drives

STRUCTURE

8

FLATFew (No?) Layers between Management and Staff;

Horizontally-shaped

How do Organizations LOOK ?

HIERARCHICALPyramid-shaped; Strict Superior/ Subordinate relations;

Authority and Responsibility concentrated at top

9

10

How to Solve the “Agency Problem?”

Governance and Management(Checks and Balances)

11

MONITORING Performance Review

Reward or Punish

IMPLEMENTATION Execute Ratified

Decisions

RATIFICATION Choose Initiatives to be Implemented

Contrast with Textbook at p. 236-237

INITIATION Generate Proposals, Utilize Resources or Structure Contracts

GOVE

RNAN

CEM

ANAG

EMEN

T

12

MONITORING STEP Explain Strategic, Tactical, Ethical

and Financial Successes and Failures

EVALUATE EVERYTHING… Operations (Easy) Strategic Objectives (Hard)

EQUALLY Reward and Punish

Supply Chain ManagementMass Production (Batch)Lean Manufacturing: Toyota Production System (TPS)

How to Balance Need, Availability and Cost?

The Inventory Problem

The Inventory Problem

LONG-RUN TOTAL AVERAGE COST CURVE

Fixed Costs

Variable Costs

Maximum Capacity

Cost Mix determined by Optimal Production Quantity

17

AT-WILL EMPLOYEE “HIRED” to Perform Assigned Work “FOR” Firm May have Protections and Benefits Dischargeable without Notice

────────────────────── INDEPENDENT CONTRACTOR

“CONTRACTED” to Furnish Services “TO” Firm

No Protections and Benefits from Firm; Employer may have Duty

Contractual, not Employment-based

SEXUAL HARASSMENTUNWELCOM

EAdvances,

Requests for Favors or Other

Verbal or Physical Conduct

STOCK OPTION Right to Buy StockContractually Specified: Amount, Timing and Price

STOCK GRANT Right to Receive StockSpecified Amount that vests over Time

INCENTIVE-BASEDCOMPENSATION and

BENEFITS

Add to Text, p. 365-368 OPTION VALUE = Difference between Option’s

“Strike Price” and Stock’s “Market Price”

DEFINED BENEFIT Participant receives Specific Monthly AmountAdvantage No Risk/Guaranteed SecurityDisadvantage Difficult-to-Define Employer Costs

DEFINED CONTRIBUTIONBenefit based on Participant’s Account (Employer/ Employee Contributions and Investment Earnings)Advantage Predictable Employer CostsDisadvantage Investment Risks; Latecomer’s Penalty

RETIREMENT PLANS

Supplement Text at p. 369

21

SECTION 6 (487-491) Forms of Promotional

Messages for Push versus Pull Strategies

Purpose for Messages at Stages of Product Life Cycle

STRONG DOLLAR WEAK DOLLAR

Do Benefits outweigh Costs?BENEFITSEconomic Growth

Lower PricesJob Creation

COSTSShifting Job Distribution

Diminished Sovereign AuthorityMultiple Tax and Regulatory Standards

Is it worth it?

25

THREEINDEXES

26

EFFICIENT MARKET

HYPOTHESIS

27

VALUE =EPS ÷ ERR