Kinh tế học - Chapter 1: The business and society relationship

© 2015 Cengage Learning1Chapter 1The Business and Society Relationship© 2015 Cengage Learning2Learning OutcomesCharacterize business and society and their interrelationships.Describe pluralism and identify its attributes, strengths, and weaknesses.Clarify how a pluralistic society becomes a special-interest society.Identify, discuss, and illustrate the factors leading up to business criticism.Pinpoint the major criticisms of business and characterize business’s general response.Describe the major themes of the book: managerial approach, ethics, sustainability and stakeholder management.© 2015 Cengage Learning3Chapter OutlineBusiness and SocietySociety as the MacroenvironmentA Pluralistic SocietyA Special-Interest SocietyBusiness Criticism and Corporate ResponseFocus of the BookStructure of the BookSummaryKey TermsDiscussion Questions© 2015 Cengage Learning4Business and SocietyBusiness - the collection of private, commercially oriented organizations ranging in size from one-person proprietorships to corporate giants.Society - a community, a nation, or a broad group of people with common traditions, values, institutions, and collective activities and interests. Macroenvironment -the total environment outside the firm, the comprehensive societal context in which the organization resides. Society is the macroenvironment in which businesses operate. © 2015 Cengage Learning5Conceptualizing the Macroenvironment© 2015 Cengage Learning6Segments of the Macroenvironment© 2015 Cengage Learning7A Pluralistic Society - Prevents power from being concentrated in the hands of a few. Maximizes freedom of expression and action, and strikes a balance between monism, on the one hand, and anarchy on the other.Creates a widely diversified set of loyalties to many organizations, and minimizes the danger that a leader of any one organization will be left uncontrolled.Provides a built-in set of checks and balances, in that groups can exert power over one another with no single organization (business or government) dominating and becoming overly influential. © 2015 Cengage Learning8Business and Stakeholder Relationships© 2015 Cengage Learning9Special Interest Groups - Make life more complex for business and government.Can number in the tens of thousands in some societies.Pursue their own focused agendas.Are active, intense, diverse and focused.Can attract a significant following.Often work at cross purposes, with no unified goals.A special-interest society is pluralism taken to the extreme. © 2015 Cengage Learning10Social Environment, Business Criticism and Corporate Response© 2015 Cengage Learning11Factors in the Social EnvironmentAffluenceEducationAwarenessRising ExpectationsRights MovementEntitlementMentalityVictimizationPhilosophyBusiness CriticismIncreased Concern for theSocietal Environment A Changed Social ContractFactors in the Social EnvironmentAffluence and Education -Create higher expectations of major institutions.Growing public awareness through television, movies, and the Internet.The Revolution of rising expectations - creates a social problem, a gap between societal expectations for social conditions and social realities. This can lead to:Entitlement mentalityRights movementVictimization philosophy© 2015 Cengage Learning12Society’s Expectations Versus Business’ Actual Social Performance© 2015 Cengage Learning13Society’s Expectations of Business PerformanceSocial Performance: Expected and Actual1960s 2010sTimeSocial ProblemBusiness’s Actual Social PerformanceSocial ProblemBusiness Criticism: Use and Abuse of PowerBusiness Power -the ability or capacity to produce an effect or to bring influence to bear on a situation or peopleIron Law of Responsibility -In the long run, those who do not use power in a manner society considers responsible will tend to lose it© 2015 Cengage Learning14Levels and Spheres of Corporate Power© 2015 Cengage Learning1515Macro LevelThe business systemIntermediate LevelSeveral firmsMicro LevelA single firmIndividual LevelA Single ExecutiveEconomicSocial/CulturalIndividualTechnologicalEnvironmentalPoliticalLevelsSpheresElements in the Social Contract© 2015 Cengage Learning16Laws or Regulations:“Rules of the Game”Two-Way Shared Understandings of Each OtherSociety orSocietalStakeholderGroupsBusinessFocus of the BookManagerial ApproachBusinessEthics Stakeholder ManagementSustainability© 2015 Cengage Learning17A Managerial ApproachManagers are practical, and have begun to deal with social and ethical concerns in ways similar to those they use to manage traditional business functions such as marketing, finance, operations, & risk management. As a result, managers have been able to convert seemingly unmanageable concerns into ones that can be dealt with in a balanced and impartial fashion.At the same time, managers have had to integrate traditional economic and financial considerations with ethical and social considerations. © 2015 Cengage Learning18Urgent versus Enduring IssuesShort-Term -Issues or crises arise on the spur of the moment and management must formulate quick responses.Long-Term -Issues or problems are a long-term concern and management must develop a thoughtful organizational response. © 2015 Cengage Learning19A Business Ethics ThemeEthical questions - inevitably and continually come into play during business operations. Ethics -refers to issues of right, wrong, fairness, and justice.Business Ethics -focuses on ethical issues that arise in the commercial realm.Ethical questions -permeate business’s activities as it attempts to interact with major stakeholder groups.© 2015 Cengage Learning20A Sustainability ThemeSustainability - Has become one of businesses’ most pressing mandates. Sustainable development - is a pattern of resource use that aims to meet current needs while preserving the environment for future generations. Sustainability embraces criteria which are: Environmental EconomicSocialSustainability concerns the ability of businesses to survive and thrive over the long term.© 2015 Cengage Learning21Stakeholder Management ThemeStakeholders - Individuals or groups with which business interacts and who have a vested interest in the firm.In this text, we consider: External stakeholders, such as government, consumers, the natural environment, community membersInternal stakeholders, such as employees, those involved in corporate governance, and others. © 2015 Cengage Learning22Structure of the Book (1 of 2)Part One: Business, Society, and Stakeholders The Business and Society Relationship Corporate Citizenship: Social Responsibility, Performance and Sustainability The Stakeholder Approach to Business, Society, and EthicsPart Two: Corporate Governance & Strategic Management Issues Corporate Governance: Foundational Issues Strategic Management and Corporate Public Policy Issue, Risk and Crisis Management© 2015 Cengage Learning23Structure of the Book (2 of 2)Part Three: Business Ethics and Management Business Ethics Fundamentals Personal and Organizational Ethics Business Ethics and Technology Ethical Issues in the Global ArenaPart Four: External Stakeholder Issues Business, Government, and Regulation Business Influence on Government and Public Policy Consumer Stakeholders: Information Issues and Responses Consumer Stakeholders: Product and Service Issues Sustainability and the Natural Environment Business and Community Stakeholders© 2015 Cengage Learning24Organization and Flow of the BookPart Five: Internal Stakeholder Issues Employee Stakeholders and Workplace Issues Employee Stakeholders: Privacy, Safety, and Health Employment Discrimination and Affirmative ActionCases© 2015 Cengage Learning25affluencebusinessbusiness ethicsbusiness powereconomic environmenteducationentitlement mentalityethics Iron Law of Responsibilitymacroenvironmentmanagerial approachpluralismpolitical environmentrevolution of rising expectationsrights movementsocial contractsocial environmentsocial problemsocietyspecial-interest societystakeholder managementstakeholderssustainabilitysustainable developmenttechnological environmentvictimization philosophy© 2015 Cengage Learning26Key Terms