Professional Documents
Culture Documents
Good Governance and Social Responsibility
Good Governance and Social Responsibility
Good Governance
and
Corporate Social
Responsibility
2nd Semester S.Y. 2021-22
COURSE CODE:
COURSE DESCRIPTION: The course deals with the basic conceptual themes and ideas about the
interaction of business and society. It will tackle issues such as business
and the social, ethical, natural environment; business and stakeholders;
and current social issues that somehow affect business operations.
SEMESTER /TERM: 2nd
MODULE I
INTRODUCTION
“One of the greatest delusions in the world is the hope that the
evils in this world are to be cured by legislation.”
-Thomas B. Reed (1886)
Governance can be defined as: “The system by which entities are directed and controlled. It
is concerned with structure and processes for decision making, accountability, control and
behaviour at the top of an entity. Governance influences how an organization’s objectives are
set and achieved, how risk is monitored and addressed and how performance is optimised”.
Governance is a system and process, not a single activity and therefore successful
implementation of a good governance strategy requires a systematic approach that
incorporates strategic planning, risk management and performance management. Like culture, it
is a core component of the unique
characteristics of a successful organisation.
Why is good governance important?
The fundamental reasons why organisations should adopt good governance practises include:
1. To preserve and strengthen stakeholder confidence – nothing distracts an organisation
more than having to deal with a disgruntled stakeholder group caused by a lack of confidence
in the governing body. And on the positive side, a supportive stakeholder base can
generate benefits for the organisation though social and emotional support, intangible but
very valuable attributes that all organisations should strive to achieve and sustain;
7. Effectiveness and Efficiency is developed through the sustainable use of resources to meet
the needs of a society. Sustainability refers to both ensuring social investments carry
through and natural resources are maintained for future generations.
8. Accountability refers to institutions being ultimately accountable to the people and one
another. This includes government agencies, civil society, and the private sector all being
accountable to one another as well.
ORGANIZATIONAL THEORY
Organizational theory is especially useful for people who manage organizations, or who aspire to
do so in the future. But whether or not you are a manager, for example, if you work in public health, you
will be working with organizations (like hospitals, charities, local and national government etc.) so you
need to understand them. It enables the manager to see that his organization and its problems are rarely
wholly unique.
Organizations, especially large organizations are generally ‘complex’, having many inter-related
facets and areas that need to be coordinated, managed together to achieve efficiencies and effectiveness in
achieving stated goals and objectives. Organizations also need to be ‘adoptive’, they need to respond to
ongoing changes in the environment in which they operate (i.e. the political, social, economic and
technological conditions) that together form the environment in which organizations operate.
Even if you do not aspire to be a manager, organizational theory should be of interest to you for
it’s around us. Organizational theory can help explain how they work and why they work in the ways they
do.
Drucker suggests three criteria for effective organizations:
a. They must be organized for business performance.
b. Their structure should contain the least number of management levels.
c. Organizational structure should facilitate training and testing for future organization leaders.
ORGANIZATIONAL STRUCTURE
Organization structure is the pattern of relationships among positions in the organization among
members of the organization. The purpose of structure is the division of work among the members of the
organization, and the coordination of their activities so that they are directed towards achieving the same
goals and objectives of the organization. Structures defines tasks and responsibilities, work roles and
relationships and channels of communication.
Objectives of an Organizational Structure
Accountability for areas of wok undertaken by groups and individual members of the
organization
Coordination of different parts of the organization and different areas of work
Effective and efficient organizational performance including resource utilization
Monitoring the activities of the organization
Flexibility in order to respond to changing environmental factors
The social satisfaction of members of the organization
Dimensions of Organizational Structure
Child (1988) suggests six major dimensions as components of an organization structure:
Allocation of individual tasks and responsibilities, job specialization and definition
Formal reporting relationships, levels of authority and spans of control
Grouping together of sections, departments, divisions and larger units
Systems for communication of information, integration of effort and participation
Delegation of authority and procedures for monitoring and evaluating the action
Motivation of employees through systems for performance appraisal
Consequences of Structural Deficiencies (Child):
Low motivation and morale
Late and inappropriate decisions
Conflict and lack of coordination
Poor response to new opportunities and external change
Rising costs- e.g. diseconomies of scale
Principles of Organizational Design and Diagnosis
Mintzberg suggests that organizational structures fall into five basic categories:
Simple structure: a centralized, perhaps autocratic arrangement typical of the entrepreneur-
founded company. Little hierarchy or control exercised by the chief executive.
Machine bureaucracy: best at mass produced tasks and is characterized by many layers of
management and formal procedures
Professional bureaucracy: likely to include some parts of the administration is set by independent
professional bodies. It tends to be more democratic and more highly motivated, with its lines of
authority is less clearly set.
Divisionalized form of bureaucracy: applies more to multinational or industrial corporations
where a small central core controls key guidelines for a number of otherwise autonomous units.
Adhocracy: often found in new technology industries, which need constantly to innovate and
respond to quickly changing markets.
Disadvantages
Encourages sectional interests conflicts
Difficult for organization to adapt to product/service diversification
Product/Service- grouping by service/product. For example, in a hospital, into orthopedic, surgical,
psychiatric rather than medical, nursing, paramedical, hotel services (functional).
Advantages:
Increases diversification
Adaptability increased if service/product requires technical knowledge or large equipment
Disadvantage:
Encourages service conflicts
Geographical- a national service develops regions, areas or district authorities.
Advantage:
More responsive and local/regional issues and different cultures, national/local laws.
Disadvantage:
Can lead to localities/regions conflicting with each other
Divisional- grouping of services and/or geography and functionality (but with functions such as finance,
personnel, planning retained at headquarters).
Advantages:
Suitable for international companies who are highly diversified, working in more than one
country. For example, a pharmaceutical company with divisions in each country producing and
marketing products developed by the parent company.
Corporate strategic control with production and marketing independence at divisions
Matrix- grouping of projects and functions
Advantages:
Combines vertical and lateral lines of communication and authority
Stability and efficiency (of mechanistic structure) with flexibility and informality (of inorganic
structure)
Emphasizes that all project aims are all-important
Disadvantages:
Potential conflict between project leader and functional leader regarding resources
Project may be jeopardized if project members as well as leaders enter the conflict on opposite
sides
Does not tolerate diversification well
CENTRALIZATION AND DECENTRALIZATION
Centralization when all the power of decision making rests at a single point in the organization
ultimately in the hands of one person or group, the structure is centralized. If the power is dispersed
among many people/groups, it is known as decentralized or distributed.
Advantages:
Frees top management of routine everyday decisions to concentrate on strategic responsibilities
Decisions are more local, quicker, more responsive to clients
Increased awareness of cost effectiveness through the organization
Increased motivation and satisfaction by junior management
disadvantages:
Requires good communication and adequate control to and from the center
Need for center coordinate/integrate
Can lead to inequity in treatment of clients
Need individuals willing to take additional responsibilities
In general, large organizations leans towards:
Less centralization
More specialization
More rules and procedures to be followed
LEVELS OF THE ORGANIZATION
According to Drucker, organizations are layered into three main levels:
The technical level of the organization is concerned with specific operations and defined tasks,
with actual jobs to be done, and with performance of the technical function.
The managerial level (or organizational level) is concerned with the coordination and integration
of work, at the technical level, e.g. resource allocation, administration and control of the
operations of the technical function.
The community level (or institutional level) is concerned with the broad objectives and the work
of the organization as a whole. Decisions made at this level will include the selection of
operations, development of organizations in relation to external agencies and the wider social
environment.
MINTSBERG’S NINE DESIGN PARAMETERS
Design assumes discretion, an ability to alter the system. In the case of the organizational
structure, design means ‘turning those knobs’ that influence the division of labor and the coordinating
mechanisms thereby affecting how the organization functions. Consider the following questions, which
are the basic issues of structural design:
a. How many tasks should a given position in the organization contain, and how specialized should
each task be?
b. To what extent should the work content of each position be standardized?
c. What skills and knowledge should be required for each position?
d. On what basis should positions be group into units and units into larger units?
e. How large should each unit be; how many people should report to a given manager?
f. To what extent should the output of each position or unit be standardized?
g. What mechanisms should be stablished to facilitate mutual adjustment among positions and
units?
h. How much decision power should be delegated to the mangers of line units down the chain of
authority?
i. How much decision power should pass from the line managers to the staff specialists and
operators?
These nine design parameters are the basic components of organizational structure and they fall
into four broad groupings:
ORGANIZATIONAL RELATIONSHIPS
Work Design
Work can be combined in various forms. Decisions on the methods of groupings will consider:
The need for coordination
The identification of clearly defined divisions of work economy
The process of managing activities
Avoiding conflict, and
the design of work organization which takes account of the nature of staff employed, their
interests and job satisfaction
Formal
line vertical flow of authority
functional- between specialists in advisory positions and line management teams
staff- personal assistants to senior members
Span of Control- number of direct reports. Influencing Factors:
nature of organization, complexity of work, range of responsibilities
ability of personal qualities e.g. capacity of the manager
time available to spend with subordinates
ability and training subordinates
effectiveness of coordination, communication, control systems
physical location of subordinates
Classification of objectives
Tasks and element functions
Division of work and grouping of people
Centralization and decentralization
Principles of organization
Span of control and scalar chain
Formal organizational relationships
Maintain the balance of the socio-technical
Line and staff organization
system and e昀昀ec琀椀veness of the organiza琀椀on as a
Project teams and matrix organization
whole
have differences in the timings, weather conditions and does not match with the subsidiary operating in
another country which thus, becomes a crucial point at the time of selection of organizational structure
(Baumueller, 2007)
The internal factors like the size of the company have a great impact on choosing and selecting
the organizational structure. The size of the company can be defined by the geographic and product range
of the company. The company size can be defined as the area of operation that is the region covered by
the company.
The company’s product range and services also have a direct impact on the organizational
structure of the company. The company has to plan for various departments and units in order to carry out
the business operations in an appropriate manner and has to select the best organizational structure for
coordination and communication among the various branches (Moran, Harris & Moran, 2007)
Apart from these factors one of the factors that influence the selection of organizational structure
by multinational companies are their strategy. The strategy that the company is using should be an
indicator of which organizational structure to adopt since with each of the different strategies there is a
specific organizational structure that should be followed to accomplish the task with more efficiency.
There are different types of strategies that multinational companies can adopt while launching the product
in the new or the old market that includes the differentiation strategy, cost leadership strategy, focus
strategy etc.
REGULATION
Regulation is the administrative process of writing and passing laws that, to a certain extent,
restrain some fundamental rights of businesses. It can be distinguished from principal legislation by
elected legislative body. Regulation can take many forms: legal restrictions promulgated by a government
authority, self-regulation by an industry in which the type of business belongs such as through a trade
association, social regulation, and market regulation. One can consider regulation as actions of imposing
sanctions or penalties to the extent permitted by the law.
B. Economies of Scale. A government run economy would endeavor to replace a number of firms
with a single firm the whole economy. This makes the business the sole beneficiary on the advantage of
single market, arbitrary pricing, and unilateral product offering.
C. Inherently Protected. Government planned economy is not subject to major downside of market
economies and market-oriented mixed economies. A planned economy, theoretically, does not suffer from
business cycles; it does not experience crises of overproduction. From the modern perspective, it does not
result in assets bubbles and massive misallocations of resources such as the South-Sea bubble in Britain,
the dot-com bubble of the late 1990s or the housing bubble of mid-2000s.
D. Stability. When government is charge, long term venture can be made without fear of a market
downward spiral which can easily lead to abandonment of a project. This is especially important where
returns are risky, in some advance economies, one of the examples would be running a prison which
decisions vary and are dependent from one administration to another.
A. Inefficient Use of Resources. Critics of planned economies are pushing the idea that planners
cannot detect consumer preferences, shortages, and surpluses within the ideal level of accuracy and
therefore cannot efficiently coordinate production. From the modern viewpoint, production shortage or
surplus is proof of a mismatch between supply and demand, a clear and convincing evidence of wastage
in term of government resources.
B. Restrained of Democracy in Trade. Given that central planning overcame its built-n inhibitions of
incentives and innovation, it would nevertheless be unable to maximize economic democracy and self-
management, which some believes are concept that are more rationally consistent, reliable and just than
ordinary ideas of economic freedom.
Based on research the following are the identified and recurring legal and administrative barriers
to entrepreneurship common to ASEAN countries (Adopted from Administrative Barriers to
Entrepreneurship by Elena Suhir).
A. Disproportionate Licensing and Regulatory Requirements. The regulatory and licensing barriers
are perennial in today’s system whereby one must obtain approval from the authorities to embark on even
the smallest tasks. When entrepreneurs attempt to seek legal redress to register, they soon discover a
different level of hurdles: some choose to pay bribes, keep prices artificially low and force competitors
out of business. Some entrepreneurs lobby the government for redress, but governments rarely act against
the abuser(s). The weak rule-of-law mechanisms do not punish corruption, it helps propagate it and rather
only serve to reinforce the administrative barriers. The common pattern of conducting business by Small
and Midsize Enterprise(SMEs) in some Asian Countries and in the Philippines in particular, trivially
consists of three options for the entrepreneur: (1) enter the informal sector by paying bribes each step of
the way, (2) secure and utilize “connections” in government, and/or (3) obtain a government position and
abuse the system of authority to one’s benefit.
B. Excessive, Complex, and Arbitrary Taxation. The taxation system can sometimes be complex,
subject to abuse by government officials (and businesses) and appears to change frequently. The net effect
of an excessive, abusive, and arbitrary system of taxation is that SMEs find it virtually impossible to
conform to all the laws and tax regulations, making the informal initiative and creative legal deviations
the only chance to survive in the market. Tax sometimes is the major reason of the capital flight that hurts
the overall economy.
C. Inadequate Banking System and Poor Practices. Inadequate banking system can also impose
impossible demands on entrepreneurs. Issues involving timeframes, and terms credit for repayments are
sometimes prohibitive, collateral is difficult to provide, and finding a guarantor to help secure a loan is
very difficult. However, we cannot blame this banking practice considering that one of the underlying
reasons also for the poor banking practices is the high risk of delinquency or bad loans.
D. Lack of Government’s Commitment to Reduce Administrative Barriers. A good mass within the
business community and even those outside of business recognizes that the governments are doing little to
reduce administrative barriers impeding investment and trade. Some entrepreneurs are even silently
blaming the governments for having little and poor understanding of the importance of addressing these
problems.
The government has many business regulations in place to protect employees’ rights, protect the
environment and hold corporations accountable for the amount of power they have in this business-driven
society. Some of these regulations stand out more significantly than the others because of their relevance
to every employee, costumer, and society in general.
Advertising
Laws pertaining to marketing and advertising set in motion by the regulatory authority exist to
protect consumers and keep companies honest about their products. Advertising laws are made up of
dozens of tidbits under three main requirements: advertising must truthful and non-misleading; business
need to be able to back up claims made in advertisements at any time; and advertisements must be fair to
competitors and consumers.
Among the ever-changing regulations in business are employment laws. These laws pertain to
minimum wages, benefits, safety, and health compliance, working conditions, equal employment
opportunity, and privacy regulations cover the largest area of subjects of all business regulations. There
are also several required benefits, including unemployment insurance, workers’ compensation insurance
and employee social security assistance which is mandatory and applicable generally to all employees.
Environmental
Privacy
Sensitive information is usually collected from employees and costumers during hiring and
business transactions, and privacy laws prevent businesses from disclosing this information freely.
Information collected can include social security number, address, name, health conditions, credit card
and bank numbers and personal history. Not only do various laws exist to keep businesses from spreading
this information, but people can sue companies for disclosing sensitive information.
The safety and health laws ensures that employers provide safe and sanitary work environments
through frequent inspections and a grading scale. A company must meet specific standards in order to stay
in business. In accordance with legal provisions, employers must provide hazard-free workplaces,
avoiding employee physical harm and death, through incorporating these in procedures manual.
Regardless of how attractive the economic prospects of a particular country or regions are, doing
business there might prove to be financially devastating if the host government imposes heavy financial
consequential penalties on a company.
The political environment in which the firm operates will have a significant impact on a
company’s international operating activities. The greater the level of involvement of the company in a
foreign market, the greater the need to monitor the political climate of the countries where business is
conducted since this political climate will affect among others the marketability of the company’s
product, the inflow of investments and more importantly valuation of share price.
Changes in government more often result in changes in policy and attitudes towards foreign
business. Bearing in mind that a foreign company operates in a host country at the discretion of the
government concerned, the government can encourage foreign activities by offering attractive
opportunities and incentives for investment and trade, or discourage its activities by imposing
disincentives and restrictions such as unfriendly stricter regulations and import quotas, etc.
One of the primary concerns to an investor should be the stability of the target country’s political
environment. One of the surest indicators of political instability is a frequent change in regime. Although
a change in government need not to be accompanied violence, it is often precursor of change in policy
towards business, particularly international business.
Corporate social responsibility (CRS) can be defined as the “economic, legal ethical, and
discretionary expectations that society has of organizations at a given point in time” (Carroll and
Buchholtz 2003). The concept of corporate social responsibility means that organizations have moral,
ethical and philanthropic responsibilities in addition to their responsibilities earn a fair return for
investors. A traditional view of the corporation suggests that its primary, if not sole, responsibility is to its
owners, or stockholders. However, CSR requires organizations to adapt a broader view of its
responsibilities that includes not only stockholders, but many other constituencies as well, including
employees, suppliers, customers, the local community, local, and national governments, environmental
groups, and other special interest groups.
Corporate social responsibility is related to but not identical with business ethics. While CSR
encompasses the economic, legal, ethical, and discretionary responsibilities of organizations, business
ethics usually focuses on the moral judgements and behavior of individuals and groups within
organizations. Thus, the study of business ethics may be regarded as a component of the larger study of
corporate responsibility.
` Corporations deal with various social issues and problems both directly related to their operation
and not. It would not be possible to satisfactorily describe all the social issues faced by business. This
section will just briefly discuss three contemporary issues that are of major concern: the environment,
global issues, and technology issues.
Environmental Issues
Corporations have long been criticized and even lambasted by some pressure groups for their
negative effect on the natural environment in terms of wasting natural resources and contributing to
environmental problems such as pollution and global warming. Other issues related to the natural
environment include irresponsible disposal of waste, deforestation, and land degradation. It is likely that
corporate responsibilities in this area will increase in the coming years.
Global Issues
The globalization of business appears to be an irreversible trend, but there are many opponents to
it. Critics suggest that globalization leads to the exploitation of developing nations’ workers, destruction
of the environment, and increased human rights abuses. They also argue that globalization primarily
benefits the wealthy and widens the gap between the rich and the poor.
Whether one is an opponent or a proponent of globalization, it does not change the fact that
corporations operating globally face daunting social issues. Many corporations have been stung by
revelations that their plants around the world were “sweatshops” and/or employed very young children.
This problem is complex societal standards and expectations regarding working conditions and the
employment of children vary significantly around the world. Corporations must decide which one is the
good and responsible option; adopting the standards of the countries in which they are operating or
imposing a common standard world-wide.
Dumping is also another delicate issue in globalization. Secondary products or variants are sold to
foreign countries at the price chokingly low for the host country businessman to compete thereby killing
industry.
Technical Issues
Another contemporary social issue relates to technology and its effect on society. For example,
the internet has opened up many new avenues for marketing goods and services, but has also opened up
the possibility of abuse by corporations. Issues of privacy and the security of confidential information
must be addressed. The marriage of science and technology has a very serious implications, this union
must be given “blank check” otherwise it can do limitless things.
When we hear the word ethical, several ideas come to mind, most notably good versus bad and
the right versus wrong. These are the six foundation of trust upon which ethical business practice is built:
Character
Character drives what we do when no one is looking. We can build our character through the way
we live by thinking good thoughts and performing good acts.
Ethics
Ethics refer to the set rules that describes what is acceptable conduct in society. Ethics serve as a
guide to moral daily living and helps corporation judge whether such behavior can be justified.
Integrity
To have integrity is to honest and sincere. Integrity is defined as adhering to a moral code in daily
decision making. Put simply, when people and businessman possess integrity, it means that they can be
trusted.
Laws
The law is a series of rules and regulations designed to express the needs of the people. Laws
frequently provide us with a sense of right and wrong and guide our behavior.
Morals
Morals are a set of rules or mode of conduct on which society is based. Certain moral elements
are universal, such as laws forbidding homicide and the basic duties of doing good and furthering the
well-being of others.
Values
Values are defined as acts, customs, and institutions that a group of people regard in a favorable
way.
Some sectors have criticized that the government regulatory parameters on the economy is
restrictively futile on some extent considering that, often, it not only lacks teeth but also has some features
that obstructs the full capability of the enterprise in terms of maximizing wealth. At present, some of the
most continuing debates in economics are only actually focused on the role of government.
The importance of private ownership is perfectly consistent with what people believed about
personal freedom. People and the business sector believed in limiting the government’s authority over the
economic pursuits of individuals, including its role in the overall kingdom of economics.
In spite of this “leave us alone” attitude of business sector most people still want the government
to perform certain important tasks in the economy more importantly on regulation, and our legal system
provides a very sound fundamental structure which creates an atmosphere suited for this business
environment.
The private sector is the chief economic force of every country, but it needs government
regulation. The government’s role in business is as old as the county itself; the constitutions gives the
government the power to regulate some commerce. Though the government’s role has increased over
time, the business community still enjoys considerable freedom. However, the government still exercises
its authority several ways.
Consumer Protection
When a vendor fails to honor the guarantee, the purchaser has recourse in the law. Likewise,
when a product causes harm to an individual, the courts may hold the vendor or the manufacturer
responsible. Labeling is another requirement the government imposes on marketers. Many foods, for
example, must display nutritional content on the packaging. Other manifestations of this protection are as
follows:
a. Businesses need the court system for protecting property rights, enforcing contracts, and
resolving commercial disputes.
c. Government hears and corrects consumers’ complaint about business fraud and put into effect
recalls of substandard and dangerous products.
d. Government controls private companies’ actions to protect public health and safety.
Contract Enforcement
Businesses deal with other businesses. These contracts may be complex, such as mergers, or they
may be as simple as a warranty on supplies purchased. Companies bring one another to court just as
individuals do. An oral agreement can constitute a contract, but usually only a written agreement is
provable. If one party refuses to meet its obligation under a contract, a company will turn to the
government’s legal system for enforcement.
Employee Protection
Many agencies work to protect to protect the rights of employees. These rights cover the
following: regular employment, probationary employment, minimum employable age, prohibition against
stipulation of marriage, anti-sexual harassment law and many others.
Environmental Protection
When a marketing transaction impacts a third party besides the marketer and purchaser the effect
is called “externality”. The third party is often the environment. Thus, it is the government’s role to
regulate industry and thereby protect the public from environmental externalities. Whether the
government is effective in this role is a matter of much discussion.
Investor Protection
Government mandates that companies make financial information public, thereby protecting the
rights of investors and facilitating further investment. This is generally done through filings with the
Securities and Exchange Commission.
The government certainly has the hand on what it wants the country to be perceived in the outside
world. Textbooks would tell us that the following issues are the specifics a government needs to address
well if its country wants to be considered business as well as investor friendly.
Starting a Business
Licenses
Employing Workers
Getting Credit
Protecting Investors
Paying Taxes
Export Policy
Permission
The function of this registration is usually to define the financial stability the owners of the
company have. It limits their risk to the amount they have invested in that particular organization.
Registration also allows the government to monitor companies to execute its other functions in the
business world.
Taxation
Governments at all levels tax businesses, and the resulting revenue collected is an important part
of the government budgets. Some revenue is taxed at the corporate level, then taxed as personal income
when distributed as dividends. This is no way inappropriate, since it all balances the tax burden between
the company and individual and allows the government to tax more equitably.
PRESSURE GROUPS
A pressure group is an organized group that seeks to influence not only government policy but
also private enterprises’ operating policy.
The following are the types of pressure groups which can become variables to consider in laying
down platform of government not only in government but also in private enterprises.
These corporations need to ensure that their interest is protected since large government contract
are often at stake. The relative size and power of these companies can sometimes rival to that of the
government and therefore, bring massive influence on political and economic decisions which affects
variety of business activities. With size and power, there is this implication of lobbying certain laws and
regulations, putting pressure on their once political beneficiaries who are now in position and to certain
degree, do some maneuvers to outdo their competitor through the use of “special connections”.
Professional Organizations
This is a powerful group bound by the common interests of its members. The Philippine Institute
of Certified Public Accountants (PICPA), the Philippine Medical Association (PMA) and the Integrated
Bar of the Philippines (IBP) are prime examples.
Trade Associations
Association of business with common interest to protect to is the simplest description of a trade
association. The increase in government’s initiative and other progressive laws has prompted an increase
in business representation from this group.
Trade Unions
One of the things that greatly influence the corporate governance principles and government
policies in the Philippine setting is in the area of labor and management. In the Philippines we have
several clusters of unions that can have pressure on governmental policies and company’s philosophy and
governance, one of which is Partido ng Manggagawa (PM), Associated Labor Union-Trade Union
Congress of the Philippines (ALU-TUCP) is another and many others that are working for the protection
of the labor sector.
These are groups that represent a cluster of the public on certain issues. The public had turned to
pressure groups since they are visibly vocal to issues that pat the hearts of a certain individuals. These
individuals have the belief that these pressure groups might be triumphant in changing what they believe
unacceptable, the most obvious present issue would be environmental and climate change issues.
Sectoral pressure group refers to groups which work to protect and advance the interest of
specific social groups in a certain society. At times they are crossbreed of political groups. Typical
example, in the Philippine setting, is the Gabriela which is for women and children specifically on
promoting equal opportunity for women.
They are considered as one of the most powerful groups. They share universal beliefs and
objectives on one issue, and they believe that their major role, aside from endorsing a politician and
lobbying Congress, is to mobilize support in the country for what they believe in and to support for
political office those who share their beliefs.
The level of maturity of the system of administration and the development government agenda in
the last wo decades, and the enormity of the sums of money involved, has led to an expanded role being
played by the local government as administrative arms of the national government. This has led to a
greater degree of freedom and power for the Local Government Units (LGUs). This freedom gives rise to
the lobbying powers of the LGUs which sometimes left unbalance in favor of LGUs with stronger
connections.
Wealth distribution:
Rich
Middle Class
Poor
There are many causes of economic inequality; the following are some of them both from the
basic to global perspective and from the micro and macro standpoint:
In many countries, individuals belonging to certain racial and ethnic minorities like the natives
are more likely to be more than others. Attributed causes to this include cultural differences amongst
different races, educational achievement gap and racism, and some instances cultural values and
religiosity level.
Development
According to Simon Kuznets, levels of economic inequality are in large part the result of stages
of development. Kuznets points out that countries with low levels of development have relatively equal
distributions of wealth. As a country develops, it acquires more capital, which leads to the owner of the
capital having more wealth and income and introducing inequality. This inequality is obviously
attributable to the dominance of the wealthy faction.
Diversity of Choices
Education ▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪▪
Popula琀椀on
Education, especially in an area where there is a high demand for workers, creates high wages for
those with education. As a result, those who are unable to afford an education, or choose not o pursue
optional education, generally receive much lower wages. Many economists believe that a major reason
the world has experienced increasing levels of inequality is an increase in the demand for highly-skilled
workers in high tech industries. They believe that this has resulted in an increase in wages for those with
education but has not increased the wages of those without education leading to greater inequality.
Globalization
Globalization is a progression by which the worlds are unified into a single society and function.
It has been asserted that globalization supports productivity, cultural mix and cash flow into the
developing countries; however, there are some drawbacks of globalization that should not be overlooked:
unemployment, social degeneration and difficulty of competition.
Inflation
Some economists have theorized that high inflation, caused by a country’s monetary policy, can
contribute economic inequality. This theory argues that inflation of the money supply is a coercive
measure that favors those who already have an earning capacity, disfavoring those on fixed income or
with savings, thus aggravating inequality. They cite examples of correlation between inflation and
inequality and noted that inflation can be caused independently by “printing money”, suggesting
causation of inequality by inflation.
Labor Market
One of the major causes of economic inequality in modern market economies is the determination
of wages by the market. Inequality is rooted from the differences in the supply and demand for different
types of work. In an ideal world, worker’s wages will not be controlled by the labor and by the employer
but rather dictated by the market. The demand side of labor (employers) cannot afford to offer a price
below what the market is offering, otherwise it will be in danger of ongoing understaffed or worse will
have the lowest class of workforce in terms of quality.
Wealth Condensation
Wealth condensation is the theoretical process by which, under certain conditions, newly-created
wealth concentrates in the possession of already-wealthy individuals or entities. According to this theory,
those who already hold wealth have the means to invest in new sources of creating wealth or otherwise
leverage the accumulation of wealth, thus are the beneficiaries of the new wealth. Over time, wealth
condensation can significantly contribute to the persistence of inequality within society.
Name: Section/Block:
Identification:
1._______________ Refers to a progression by which the world is unified into a single society and
function.
2._______________ The economic, legal, ethical and discretionary expectations that the society has of
organizations at a given point in time.
3._______________ Series of rules and regulation designed to express the needs of the people.
5._______________ Refers to groups which work to protect and advance the interest of specific social
groups in a certain society.
6._______________ One of the contemporary social issues which talks about pollution, global warming,
fossil fuel, depletion of natural resources and the likes.
7._______________ These are pressure groups that represent a cluster of the public on certain issues.
9._______________ The act of adhering to the moral code in daily decision making.
10.______________ Refers to a set of rules that describes what is acceptable conduct in society.
Enumeration
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
True or False
1. The primary sources of managerial “cluelessness” are personality disorders and IQ.
2. The explosive technological and social changes of recent years have simplified our lives and our
understanding of the world.
3. Modern organizations rely too much on an artistic approach to management and too little on an
engineering approach.
4. Customers are so used to misleading advertising that it does not infuriate them.
6. An individual’s moral values and central, value-related attitudes clearly influence one’s business
behavior.
7. A personnel manager of a large company would probably agree that the more ethical the
company, the easier it is to attract good people.
8. Costumers can’t find out which firms are acting responsibly, and which are not.
9. During the early twentieth century, working conditions were deplorable by today’s standards.
10. Awareness of business’ social responsibilities has increased along with government involvement.
11. There are many more socially responsible businesses today than there were ten years ago.
12. In support of their position, proponents of the socioeconomic model argue that the businesses
should be allowed to ignore social issues.
13. One of the major reasons for improving product safety is the costumer’s demand for safe
products.
Multiple Choice
1. As a manager, you encountered and important problem that seems almost impossible to solve.
Top management would likely suggest that you
a. Hire a consultant who brings the right knowledge and expertise to the problem.
b. Stand out of the way and let someone else work with the issue.
c. Try using different lenses to analyze the problem and develop strategies.
d. Call a meeting of everyone who knows about the issue and make a group decision about what
to do.
2. It is argued that even the smartest managers take foolish actions in decision-making because they
c. Are driven by self-love and ego, which stifle their ability to understand a situation correctly.
d. Fall into the trap of personality foibles such as pride, haughtiness and unconscious need to
err.
3. As described, the actions of the successful manager as similar to a skilled carpenter using the
right tools for the job. Thus, a successful manager must
b. Possess a “diverse collection of high-quality implements (i.e. frames)” along with the
knowledge of when and how to use them.
c. “Measure twice but cut once” (i.e. not make hasty decisions).
a. Constructed objectively.
a. Allocation of responsibilities across different units and members as well as the integration of
these efforts in pursuit of common goals.
a. Its workplace
b. Goals
c. Emotional liability
d. Technology
b. Hierarchy of offices
d. Dominant father figure or a ruler with almost unlimited authority and power
8. When designing the structure of an organization, creating roles and units yields the benefits of
specialization but creates problem of
c. Formal authority
11. ________________ are becoming more prevalent is fast moving fields like biotechnology, where
knowledge is so complex and widely dispersed that organizations finds it impractical to exercise
initiatives alone.
a. Inter-organizational networks
b. Matrix structures
c. Task forces
12. When deciding how to coordinate work roles and units in an organization it is best to
13. If employees are unclear about what they are supposed to do, they often tailor their roles around
b. Personal preferences
c. Industry standards
d. Organizational goals
b. Clustering various functions into groupings and showing their relative size and clout in
response to different missions and external challenges.