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Lecture 1 Chapter 1 The Study of Business, Government and Society
Lecture 1 Chapter 1 The Study of Business, Government and Society
1
The Study of Business,
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Business
Business can be defined as actions undertaken by
individuals and/or institutions in their self-interest.
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Government
Government exists to serve the needs of the public.
It accomplishes this goal by providing clear
processes, procedures, institutions, and structures for
all aspects of executive management that direct
decisions and allocate resources.
Its role is to ensure that citizens’ rights are protected
and they are treated fairly based on the law.
It creates the enabling environment for businesses to
invest and stimulate economic activity. The World
Bank’s Doing Business 2019 Report ranks countries
according to the ease of doing business.
1-8
Government
Government’s responsibility is to ensure compliance
with the law based on legislation, procedures, rules,
and regulations. In other words, it regulates business
and society in the public’s interest.
Government is the final arbiter of social justice in
situations of competing interests. In short, it is
responsible for managing the economy and society
(e.g. in times of market failure involving companies
like CLICO; or social issues such as protecting
personal data from abuse by the largest tech giants
like Google and Facebook (2019).
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Society
What is society?
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Society
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Society
Institutions have specific purposes in society. The
function of business is to make a profit by providing
goods and services to consumers at attractive prices.
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Four Models (continued)
The control of the political government by a powerful
corporate elite is akin to state capture or the control of a
parasitic oligarchy.
The fear of transnational corporations is the most recent
manifestation of this phenomenon.
The notion of ‘too big to fail’ is associated with this model
because conglomerates are so large and powerful that
they are risks to government, economy and society (e.g.
Too Big to Fail ; Commission of Enquiry into The Global
Financial Crisis; Inside Job; Disaster Capitalism; Commission
of Inquiry into Failure of CLICO and Hindu Credit
Union,,Trinidad and Tobago).
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Four Models (continued)
The countervailing forces model depicts the BGS
relationship as the interplay of interactions among the
major elements of society.
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Four Models (continued)
The stakeholder model situates the corporation at
the center of mutual relationships with persons,
groups, and entities called stakeholders.
There are two sets of stakeholders – primary and
secondary.
Primary stakeholders comprise stockholders,
customers, employees, communities, and
governments, and depending on the corporation,
may include suppliers or creditors.
Secondary stakeholders comprise activist groups,
trade associations, and schools.
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Four Models (continued)
The stakeholder model changes the priorities of
management away from those in the market to the
welfare of each stakeholder based on an ethical theory
of management.
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Concluding Observations
The BGS field is multidimensional in nature and
scope. Thus, we focused our attention on the theory
and practice of the discipline, models and case
studies.
There is no single theory to integrate the field and so
we focused on describing how corporations interact
with stakeholders.
We also focused on the ethical duties of corporations
and managers as well as corporate social
performance and how it can be measured.
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