Chapter 7 Notes

Characteristics of the Workers

● The US has become the world’s leading economic, technical, and political power
● The US has the world’s largest single country economy and relies highly on sophisticated
and modern means of production, transportation, and communication
● The US has enormous resources: the integrity of its people, a democratic form of
government, a social system that rewards individual initiative, and public policies that
encourage innovation
● Social changes affect how businesses work
● People are a firm’s most important resource
● The workers help achieve their organizational goals
● The GDP of a country cannot increase unless there are enough people to provide the
necessary labor and to the goods and services produced
● Growing Population
○ population of the US has grown steadily over the years
○ The growth rate is largely determined by the birth rate, the death rate, and the
level of immigration into the country
● Changing Population
○ The number of people living in the US has more than doubled between 1940 and
2010
○ The fluctuation in birth rate contributes to the percent of change in the population
○ Baby Boom Generation: the high birth rate between 1945 to 1964
○ Generation X/Baby Bust: the low-birth rate period between 1965 and 1980
○ Generation Y: the higher birth rate between 1981 and 1997, toward the end of
the millennium, the millennials
○ Fluctuations in population growth creates bubble and busts
○ The baby boomer bubbly created a large amount of workers who are now facing
retirement
○ The baby bust period, between baby boomers and millennials, created a shortage
of workers
○ The US experienced a new baby bust as a result of the 2007 recession and
families delaying children
○ Slow population growth means that there are fewer future workers, which can
show economic growth and provide fewer taxes to support the older populations
● Ethnic Populations
○ The nature of the population has been changing too
○ US Federal agencies use a minimum of five race categories: White, Black or
African American, American Indian or Alaska Native, Asian, Natice Hawaiian or
Other Pacific Islander
 ○ Hispanic origin is viewed as an ethnicity that could include five race categories
■ There are options for White Hispanic, Black Hispanics, etc.
○ Currently, over 35 percent of Americans can be racially classified as Hispanic or
other non-whire categories
○ Because of higher birth rates among Hispanics and African Americans, and recent
immigration, their proportions in the population have been growing
○ This growing diversity of the workforce increases need for better cross-cultural
communication and sensitivity to the interests and concerns of various groups
○ Managers must deal with people from multiple generation
■ These workers are influenced by the time which they were raised
○ Baby boomers grew up in a time of limited technology and narrow global
perspectives
○ Millennials, who are children of the of the baby boomers and baby busters, do not
know a world without the Internet and global competition
● Moving Population
○ Every year, on average, one out of seven Americans change their address
○ They often move from cities to suburbs
○ Frost Belt: the colder states in the north and northeast
○ Sun Belt: the warmer states in the south and southwest
○ As business relocate to where customers are located, they affect where other
people move in order to find jobs
○ Rust Belt: the north central and northeastern states where major manufacturing
firms once dominated
○ When families and businesses leave cities in large numbers, the cities lose the
financial ability to provide high-quality services
○ As a result, crime and poverty have increased in some large cities
○ When businesses move from the Rust Belt, they leave behind unemployed
workers, closed factories, decaying towns, and homeless people
Labor Force
● Labor Force: includes most people aged 16 or over who are available for work, whether
employed or unemployed
● People who are actively looking for work are included in the labor force
● Labor Participation Rate: the percentage of the adult population that is in the labor
force
● The labor participation rate is calculated by dividing labor force by the adult population
● The participation rate is higher for men than women, however, the gap between men and
women participating in the labor force has narrowed over time
● Some reasons for the increase are that women are choosing not to marry, to delay
marriage, or marry and pursue careers before or while raising children
● The expansion of the economy from the mid 1980s until 2001 coaxed many people, such
as retirees, people with disabilities, and homemakers, to enter the labor force
● The job market is influenced by fluctuations in the economy, changes on the population
where people live, and technological advances
● One of the great strengths of the American economy is flexibility of the workforce
allowing for creation of new jobs
● New jobs have been in the service industries, such as computer services, banking and
insurance, leisure, food services, and health care
● A loss of a job can be an opportunity for a career change
● New technologies are allowing workers the flexibility of maintaining contact with an
office from any location, including working from home
● Many new jobs require more skills, which means workers have to be educated
● As a result, more people are attending college or getting training to acquire new skills
● Technology has simplified jobs, such as short order cook or bank teller, these jobs now
require little training and therefore pay low wages
● A large number of workers are in dead-end jobs and are not earning an adequate income
to maintain a reasonable standard of living
● For various reasons, including lack of financial resources, public schools in many areas
are failing to provide the quality of education historically expected of high school
graduates
● Businesses are sometime forced to provide remedial education in basic skills for newly
hired workers
● Poverty
○ The prosperity of Americans is not equally distributed among the population
○ This means that people are poorly housed, clothed, and fed
○ Many live in inner-city slums or in rural areas
○ The gap between the wealthy and the rest of the population is widening
○ Due to programs, such as Social Security, poverty among elderly people is much
lower today than previously
○ However, many children live in poverty because they reside in households where
one or more parents do not have the education and skills to hold high-paying jobs
○ The strongest influence on increased income is increases education
○ The government has several programs to reduce poverty, including minimum
wage rates, unemployment benefits, financial or food aid, and subsidized medical
care
● Equal Employment
○ Some groups of Americans have found it difficult to obtain jobs or be promoted
on an equal basis
○ Several laws have been passed to outlaw discrimination on the basis of race,
gender, national origin, color, religion, age, physical disability, and other
characteristics
○ In many occupations, the numbers of women and racial minorities are few, people
in these groups may encounter difficulties in being promoted to a certain level
 ○ Glass Ceiling: an invisible barrier to job advancement
○ Employers are now obligated to provide equal employment opportunities for all
○ Sticky Floor Syndrome: the inability to move up from low-paying jobs, such as
a restaurant server, sales clerk, or nurses aid
● Comparable Worth
○ There are few professions in which women predominate
○ Wages tend to be lower in jobs that employ lots of women than in jobs held
primarily by men
○ Comparable Worth: paying workers equally for jobs with similar but not
identical job requirements
○ Jobs compared may be distinctly different, such as legal secretary and carpenter
○ To determine whether work is of equal value, analysts compare factors such as
special skills, physical strength, job dangers, responsibility, and education
○ Many states have passed laws that promote using comparable worth for
determining wages in government jobs
7.2.1 Changing American Values
● Values - Underlying beliefs and attitudes
● Because of increased competition in the economy, managers are striving to produce more
while keeping cost low
● Many employers have increased their demands of their employees which causes
employees to feel the work environment is more stressful
● Job insecurity causes people to work longer hours and take less time off to meet the
requirements
● Millennials feel less loyal to a particular job than previous generations
● In 2014 women accounted for only 42% of managers
● Women hold about 60% of all associate degrees
● Women who feel trapped by the glass ceiling often quit their jobs to start their own
● Workplace sexual harassment has risen
● People are placing more emphasis on safety and active lifestyles
● Reflected in the cars, trucks, and sports utility vehicles, which have many safety features
● The rise of random gun related attacks have caused an uptick in personal security
business in many different forms
● To avoid a lawsuit businesses are very careful with the safety of their products and the
impact of their operations on employees
7.2.2 Employer Responses
● The changing society affects not only individuals but also organizations
● Social issues can transfer to work settings
● Personal concerns follow employees into the workplace which can affect the quality of
work they are doing
● REDESIGNING JOBS
 ● Jobs consist of repetitive tasks which causes workers to get bored, productivity drops,
and morale decreases
● Many workers quit their jobs to find something more interesting
● Employers redesign jobs to make them varied and challenging
● Some opt to do job rotations for workers
○ Rotations can increase workers’ interest in their jobs and enables employees to fill
in for their coworkers
● Workers now participate in job decisions and provide suggestions more often
● Employees often work in teams now so that morale and the quality of work can be
improved
● IMPROVING HEALTH AND SAFETY
● The U.S. is facing an obesity epidemic that is negatively affecting employee’ health
● Business have started wellness and fitness programs to combat this
● A physically unfit employee is more likely to miss work and call out sick
● Many places encourage their employees to become healthier by offering incentives to
quit smoking, memberships to health clubs, pay for treatment of drug, alcohol, and other
forms of addiction
● Businesses also offer incentives to help ensure worker safety
● The federal government has regulations to prevent workers from being killed or seriously
injured at work
● A safe and healthy work environment results in more motivated workforce and allows
businesses to control costs by keeping insurance rates low and reducing employee sick
days
● FAMILY FRIENDLY PRACTICES
● Employers are making efforts to address the changes in the family structures
● By law, employers provide unpaid leave to employees taking care of their sick children
or parents, or to give birth, adopt, or take care of newborns
● Progressive businesses provide day-care facilities to young children of employees
● Some provide flexible schedules to workers so they can avoid commuting during rush
hours and accommodate their family needs
● Telecommute - work from home, stay connected with their employees electronically
7.2.3 Sustainability Issues
● The growing population means that there are more people buying things
● With this causes more boxes and packaging, plus worn-out products to throw away
● Discarded plastic, chemical, and metal products take years to decompose
● Some products can be harmful to the environment if they are not disposed of properly
● The increasing demand for products places a big strain on natural resources
● It also affects the habitats of wild animals and native people
● Businesses must address this issue
● Businesses are responding to government and social concerns by focusing on sustainable
strategies
 ● Sustainability - Using strategies that consider the needs of the environment, society, and
the economy to meet present needs without compromising the ability of future
generations to meet their needs
● Many companies have made commitments to use sustainable practices
● MANAGING THE ENVIRONMENT
● Preserving the environment and properly disposing of waste has become a major
sustainability concern
● As the landfills have gotten more full, we have shifted our focus on reducing the growth
of waste and to recycle
● Recycling - Reuse products and packaging whenever possible
● We are trying conserve nonrenewable resources and use more renewable resources
● Pollution dangers have become more and more apparent
● Larger cities are often covered in smog because of all the cars
● Many residents suffer from breathing problems
● Pollutants have killed fish and other marine life in many rivers and lakes
● Chemicals that people use to get rid of insects and plant life have endangered waterways
and farmlands, and in some places entered the food chain
● CONTROLLING ENVIRONMENTAL PROBLEMS
● Many groups have put pressure on the government and employers to tighten pollution
standards and to conserve natural resources
● The federal government created the Environmental Protection Act (EPA) in 1970 to help
control and reduce pollution
● The EPA is planning on making sustainability a goal of the environmental protection by
using advances in science and technology
● Some EPA regulations require that car engines be both fuel-efficient and less polluting
● New waste disposal rules are strictly enforced but can be costly
○ The high cost can encourage illegal dumping in bodies of water or remote land
areas
● To conserve resources and to protect the environment, more companies are using
recycled materials for their products
● An issue arises when other countries show less concern for the environment
● Some countries have weaker laws or law enforcement when it comes to the environment
● As a result companies can make goods cheaper than in America
● One objection to increasing trade with Mexico is the fact that they have weaker laws
against pollution
Business Ethics
● Laws provide a minimum standard of behavior for people in businesses to follow
● Ethics: refers to standards of moral conduct that individuals and groups set for
themselves, defining what behavior they value as right or wrong
● Ethical behavior is closely linked to personal values, or underlying beliefs and attitudes
that individuals or groups possess
 ● Business Ethics: a collection of principles and rules that define right and wrong conduct
for an organization
● Notions of right and wrong vary from manger to manager, business to business, and
country to country
● Many business have created codes of ethic to guide managers and workers in their
behavior
● Code of Ethics: a formal, published collection of values and rules that reflect the firm’s
philosophy and goals
● These codes deal with such issues as accepting business gifts, respecting employee
privacy, using company property for personal use, and maintain information secret
● Ethical codes are communicated to employees through memos, newsletters, posters, and
employee manuals
● Organizations establish procedures to handle situations that arise when employees violate
the codes
● Ethical Dilemmas
○ Businesses are constantly faced with ethical dilemmas or various kinds
○ How businesses handle these issues determines whether they are acting in an
ethical manner
○ Notions of what is right or wrong change over time, answers are often not clear-
cut
○ Problems sometimes arise from firms involved in international businesses
○ Firms have to choose between the ethical practices of the foreign country and of
their home country
Social Responsibility of Business
● Profit is the primary goal of a business and plays a key role, however, businesses today
also emphasize on another business goal
● Social Responsibility: refers to the duty of a business to contribute to the well-ebing of
society
● Businesses depend on society to for resources, opportunities, and rights, they have an
obligation to the communities in which they operate
● Stakeholders: any individuals or groups that are affected by the firm’s actions, such as
owners, customers, suppliers, employees, creditors, government, and the public
● Stakeholders expect a business to be responsible and responsive to their interests
● Stakeholders
○ The conduct of business is being increasingly and closely examined by various
independent groups
○ Non Governmental Organizations (NGO’s): use lobbying, publicity, and
pressure tactics to influence businesses to alter their activities
○ They specialicze in particular issues, such as workplace discrimination or
environmental protection
● The Future
 ○ Given the fast pace of change in the world today, society and business will face
different issues in the future
○ Various economic and social data provide an in-depth picture of changes
occurring in American society
○ The racial and ethnic mix of the labor force will continue to change
○ The internet is dramatically altering how people communicate and businesses
operate
○ Businesses are apt to become more involved in providing social services to the
community that, in the past, have been provided by families, funded by the
government, or purchases by individuals
○ The general public has become more conscious of environmental and human
rights issues, and there is a growing concern over balancing family and work life
○ Social networks and cell phones have helped people draw attention to social
issues and organize protests against repressive governments
7.3.3 Choosing an Ethical Course
● What one person may find ethical, someone else might not
● Philosophers and thinkers have developed a number of ways to determine if a decision is
ethical
● The Project Management Institute (PMI) developed an Ethical Decision Making
Framework (EDMF) process
○ Managers need to access the situation to make sure no laws are broken
○ Managers also need to ensure that decisions abide by PMI’s code of ethics and
their business’s code of ethics
○ Managers should list and evaluate alternative courses of action
○ They need to analyze their decisions, such as by assessing the impact on both the
short and long term
○ In making the decision, managers should use one or more of the ethical
frameworks
○ Before making the final decision, managers should answer the following
questions: Are they willing to accept responsibility for the decision? Will they
feel good about the decision?
○ If so, managers are ready to act
● ETHICAL FRAMEWORKS
● Ethical Frameworks - Provide guidance for ethical decision making
● Represent your values and beliefs that guide you in problem solving
● There are a number of ethical frameworks
● SELF-INTEREST
● CEOs and managers often set the moral standards for their businesses
● Employees who see their managers use unethical practices often lose respect
● Acting unethical can cause a load of problems