Business Environment Course Overview

What is, and what should be, the role of

business in society?

How should businesses best manage all

of the stakeholder issues that impact them, and that they impact?
External stakeholders (customers, government, interest groups, etc.) Internal stakeholders (employees, owners)
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The Business and Society Relationship

Chapter

1
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Outline of Topics

Business and Society
Society as the Macroenvironment A Pluralistic Society A Special-Interest Society Business Criticism and Corporate Response Focus of the Book Structure of the Book

The Business and Society Relationship

Business scandals, incidents
Examples: Bernie Madoff (2008), Enron/Arthur Anderson (2001), Exxon Valdez (1989), Union Carbide - Bhopal (1984)

Business issues
Examples: downsizing retirement pensions, environmental pollution, product liability

Broad societal concerns

General feeling with much of public that business is not ethical and cannot be trusted (particularly since 2001)
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Business and Society

The collection of private, commercially oriented organizations A broad group of people and other organizations, interest groups, a community, a nation.

Business

Society

Course focuses on large businesses (visibility, power, widely recognized brands), but issues apply to small and medium-sized companies as well.
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Society as Macroenvironment
Segment Social Focus Demographics, lifestyles, social values Nature and direction of the economy in which business operates
Processes for passing of laws and election of officials. Interactions between firms, politics, and government Changes in technological advancements taking place in society
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Economic

Political

Technological

Pluralistic Society
Definition:
A society in which there is wide decentralization and diversity of power concentration.

Pluralistic Society
Strengths Prevents concentration of
power

Weaknesses Pursuit of self-interest Proliferates organizations

and groups with overlapping goals Forces conflicts to center stage Promotes inefficiency

Maximizes freedom of
expression and action

Disperses individual
allegiances and loyalties

Provides checks and

balances

Business and Stakeholder Relationships

Special-Interest Society
Society viewed as...
A whole Subgroups by geography
Nation, state, region, city/town, neighborhood

Subgroups by interest (Interest Groups)

Gender, race, profession, religion, etc. Other interests (environment, health, social equity, etc.)

Individuals
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Special-Interest Society
Special Interests groups

make life more complex for business and government huge number of groups/interests pursue their own focused agenda are more active, intense, diverse and focused attract a significant following often work at cross purposes, with no unified set of goals

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Factors in the Social Environment

Affluence and education Awareness through television and the Internet Revolution of rising expectations Entitlement mentality

Rights movement
Victimization philosophy

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Social Environment, Business Criticism, and Corporate Response

Affluence Education Awareness

Factors in the Social Environment Rising Expectations Rights Movement Victimization Philosophy

Entitlement Mentality

Business Criticism

Increased Concern for the Societal Environment

A Changed Social Contract

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Societys Expectations Versus Businesss Actual Social Performance

Societys Expectations of Business Performance

Social Performance: Expected and Actual

Social Problem

Social Problem

Businesss Actual Social Performance

1960s Time

2000s
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Business Criticism: Use & Abuse of Power

Business Power

The ability or capacity to produce an effect or to bring influence

Iron Law of Responsibility

In the long run, those who do not use power in a manner society considers responsible will tend to lose it

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Levels and Spheres of Corporate Power

Levels Spheres Economic Social/Cultural Individual Technological Environmental Political

Macro Level

Intermediate Level

Micro Level

Individual Level

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Elements in the Social Contract

Laws or Regulations: Rules of the Game
Business Society or Societal Stakeholder Groups

Two-Way Shared Understandings of Each Other

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Themes in Textbook: Managerial Approach

Managerial Approach

Business Ethics

Stakeholder Management

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Theme: Urgent vs. Enduring Issues

1. Short-Term:
Issues or crises arise on the spur of the moment and management must formulate quick responses.

2. Long-Term:
Issues or problems are a long-term concern and management must develop a thoughtful organizational response.
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Theme: Business Ethics

Ethics

Refers to issues of right, wrong, fairness, and justice.

Business Ethics

Focuses on ethical issues that arise in the commercial realm.

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Theme: Stakeholders

Individuals or groups with which business interacts who have a vested interest in the firm.

Stakeholders

External stakeholders Internal stakeholders

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Organization and Flow of Book

Business, Society, and Stakeholders
PART ONE

1. 2.
3.

The Business and Society Relationship Corporate Citizenship: Social Responsibility, Responsiveness and Performance The Stakeholder Approach to Business, Society, and Ethics

Corporate Governance and Strategic Management Issues

PART TWO 4. 5. 6. Corporate Governance: Foundational Issues Strategic management and Corporate Public Affairs Issues and Crisis Management

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Organization and Flow of Book

Business Ethics and Management
7. PART 8. THREE 9. 10. Business Ethics Fundamentals Personal and Organizational Ethics Business Ethics and Technology Ethical Issues in the Global Arena

External Stakeholder Issues

PART FOUR 11. 12. 13. 14. 15. 16. Business, Government and Regulation Businesss Influence on Government and Public Policy Consumer Stakeholders: Information Issues and Responses Consumer Stakeholders: Product and Service Issues The Natural Environment as Stakeholder Business and Community Stakeholders

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Organization and Flow of Book

Internal Stakeholder Issues
PART FIVE
17. 18. 19. Employee Stakeholders and Workplace Issues Employee Stakeholder: Privacy, Safety, and Health Employment Discrimination and Affirmative Action

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