In this unit, you will learn the basics of business strategy and ethics. There are many reasons why business strategy is important to organizations. First, the business strategy creates the vision for the organization that all functional department goals tie into. For example, suppose a company's vision is to "Provide the best shopping experience to customers". In that case, all functional areas, such as human resources, marketing, and even finance, should tie into this overall vision. Besides providing the vision for the organization, the strategy also allows a company to more easily set clear goals for the direction they want to go. Creating a successful strategy requires setting clear goals, which ties to the organization's overall vision. Creating the strategy for an organization also involves taking an ethical focus in all organization activities. The strategy must harness the vision of ethics and social responsibility to be effective. As you move through this unit, consider how companies you do business with tie their overall vision with ethical and socially responsible behaviors.
Completing this unit should take you approximately 25 hours.
Do you know the difference between morals and ethics? What about the difference between an ethical issue and an ethical dilemma? Do you know why companies have codes of ethics? This section will address some of the basics of ethics to better understand how ethics ties into overall business strategies.
Do you know how to identify an ethical situation? Read this text on ethics and social responsibility, which will provide you with information on how to identify ethical issues you could face in business.
There is a difference between ethics and morals, as this video will explain. Before watching the video, can you guess what the differences are and why understanding the difference is important as a manager?
Watch this video for examples of overarching strategies that actual companies use. You should be able to explain the components of an effective strategy statement.
This resource will address the main phases of the strategy. Consider the tasks associated with each phase, since we will be addressing these in detail later in the course.
As you read this section, look for the elements that guide a person's ethical behavior and watch how strategy and ethics tie together. Do you see the importance of ensuring an ethical business strategy? Can you think of companies that tie their vision and business strategy to ethics or social responsibility?
This resource defines ethics in the context of business decisions. What does ethics mean to you? Are business ethics different than personal ethics, in your opinion? Consider this as you read.
After you read this resource on why ethics matters, you should have a good understanding of why ethics is important in business and define the reasons for good ethics in business.
An important part of ethics is ethical leadership. As you watch this video, look for strategies you can implement as a leader to build ethical teams.
When companies implement strategies, they must consider some forces that could affect their strategies. In this section, consider how the 11 forces affect your business. Are there some that may affect your strategy more than others? Why is this?
This resource includes a chart summarizing how businesses may be affected by a strategy decision. As you examine this chart, think about how each level of strategy is interrelated with the others. Any structure must leverage each part's strengths.
Read this article, which explains Porter's five forces in business strategy development. This model has been the classical approach to industry analysis since the late 1970s.
Innovation in organizations is one of the main drivers of strategy. Although we often think about innovation as technology-driven, innovation isn't always with technology products and services, as you'll learn. This section will address the types of innovation, how companies can be more innovative, and how to tie innovation to business strategy. As you review this section, consider ethical issues during innovation processes. Have you experienced any of these ethical issues in a current or past company?
This text focuses on managing information technology in an organization, which is one key piece to innovation. Many companies use technology to innovate. Can you think of companies that use technology as a form of innovation?
Being creative and open to new ideas can be one-way companies innovate. After you read this resource, you should be able to identify and explain the five steps of creativity and the role of innovation in solving problems.
After watching this video, you should be able to define innovation briefly and explain what innovation "isn't".
Read this article on the role of innovation in strategic management. As our access to technology grows around the world, there continues to be a growing need to address the role technological advancement plays in the future of organizations. Management plays a pivotal role in ensuring their organizations are prepared to meet the demands of a growing innovative technological society. As a leader, consider the opportunities to embrace technology to best serve your consumers.
Read this article. Do you agree that Apple is an example of an innovator's dilemma? Why or why not?
Read this article. How does the diffusion of innovations affect access to technology for different cultures? Strategic managers often use this theory to explain the role diffusion innovation plays in helping to spread ideas throughout various groups and communities.
A market is the second driver of business strategy. As you look through this section, consider the various markets businesses can operate in. Which markets do you think are the easiest and the most difficult to do business in? How do you see business strategy change based on the markets? Do you think ethical considerations will be the same no matter what market, or will those change too?
Read this short article and study the diagram. This is a good reference item identifying and defining the four basic market structures. In developing a strategy, one needs first to determine the structure the firm is competing in.
This video defines and explains competition in each market structure from an economic viewpoint. In which structure might uniqueness be the most important? In which structure might uniqueness be the least important?
As you watch this video, pay attention to the terms you've heard in your economics courses. Pause the video and review any terms that are unfamiliar to you. Can you name at least one business or service in your community that is an example of (near) perfect competition?
Watch this video for a better understanding of monopolies. Consider the current evolution of these two structures (perfect competition vs. monopoly) in an expanding global-enterprise environment.
When considering the drivers of business strategy, diversification is our final driver. Diversification refers to the business managing risk by creating new products or services and expanding into new markets. The amount a company decides to diversify will help drive its overall business strategy. Can you think of any situation where diversification might not be a good idea for a company?
This text discusses how some companies will try to diversify their risk so if one area of business is not successful, they still have other areas they can focus on. As you read, consider that diversification is not just for finances, it can relate to product and process diversification, among many others.
There is a link between diversification and corporate performance. Read this article to find out how they relate to one another.
When operating in a global environment, an organization may use several strategies to diversify risk. You should know the advantages of diversification as part of a strategy. Can you name some of the advantages? Please read this resource to answer the question.
We can use several models to examine ethics at personal and organizational levels. This section will address ethical issues at the organizational level and the difference between ethical and compliance issues. Understanding this will allow you to apply the ethical models we will address throughout this section.
Some companies use value-based ethics and compliance to maintain a competitive edge. As you read this resource, consider the advantages and disadvantages of each approach.
Do you know that nearly every functional area of business can be affected by ethics? As you read this article, look for the variety of ethical issues we can face in each functional business area.
Ethics in an organization are often characterized by its leadership team. As you read throughout this section, consider how your current manager or CEO leads with ethics in mind. How do you see ethical leadership (or not) in your organization? Consider also how the theories of ethical behaviors we discussed in the last section may impact ethics in leadership.
Read this resource about ethics at the organizational level. How important do you think leadership is to instilling ethical values? This text will address this and provide actionable best practices for applying ethical leadership in your organization.
This chapter explains the difference between moral leaders and moral persons. As you read, look for why leaders should be role models for ethics in organizations.
We've been discussing ethics, but why are ethics and the creation of ethical values so important? This video will answer that question!
Read this article to identify the concept of integrity and its implications in business. How do you think integrity can be communicated in a strategic plan? Is this an important value to you personally, and do you think it is important in organizations?
To better understand ethics and its application to strategy, we will discuss theories as they relate to ethics. As you review this section, consider which of these theories may align with your ethical perspectives and values.
Many principles help individuals and companies make the right ethical choices. You should understand the different ethical approaches and how they can apply to business.
As you read this content, consider if you can only apply virtue ethics to personal situations or if they can be applied to organizations too.
This video about consequentialism and utilitarianism will continue our earlier discussions on ethical models. Consequentialism is an ethical theory that determines right from wrong by focusing on outcomes. Utilitarianism is a form of consequentialism that focuses on maximized happiness when judging whether an action is good or bad. How do you see consequentialism affecting business decisions versus personal decisions?
Watch this video on virtue ethics. You learned earlier about virtue ethics. In continuing this discussion, do you think the information provided here can apply to any industry and any functional business area? Why or why not?
This video discusses deontology, an ethical theory that uses a set of rules to determine whether actions are good or bad. When considering the conflicting duties described in this video, how might you approach your strategic plan to honor all seven areas?
Our last section in this unit will address how companies can promote ethical behavior, and we will also discuss social responsibility and how it ties into ethics and ethical behavior. Do you know the types of ethical issues within a business? Consider how companies can tie social responsibility into their overall business strategy. Can you think of companies that have done this successfully?
This resource will combine all you have learned throughout this unit. As you read, pay special attention to social responsibility and how social responsibility efforts relate to ethical companies and a company's overall strategic direction.
It has been proven that ethical companies earn more profit in the long term. As you read this content, look for the reasons why this occurs.
In this panel interview, business leaders address how to do business the right way and create trust in business. Watch for emerging themes on how companies can perpetuate positive responses from all stakeholders by being ethical.
This review video is an excellent way to review what you've learned so far and is presented by one of the professors who created the course.
Watch this as you work through the unit and prepare to take the final exam.
You can also download the presentation slides so you can make notes.
We also recommend that you review this Study Guide before taking the Unit 1 Assessment.
Take this assessment to see how well you understood this unit.