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)

The Business and Society Relationship

Chapter

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

, a v r p f n i t l o c e h T s z g d t n y l a i c r e m o
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Course focuses on large businesses (visibility, power, widely recognized brands), but issues apply to small and medium-sized companies as well.

h t n l e f p u g d a o r b A p u e , s t z i n a g r o . a , y t i n u m o c

e n i s u B y t e i c o S

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 Disperses individual

balances

expression and action allegiances and loyalties

Provides checks and

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

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Affluence and education Awareness through television and the Internet Revolution of rising expectations Entitlement mentality Rights movement Victimization philosophy

Social Environment, Business Criticism, and Corporate Response

Affluence Education Awareness

Factors Factorsin inthe theSocial SocialEnvironment Environment Rising Expectations Entitlement Mentality Business BusinessCriticism Criticism Rights Movement Victimization Philosophy

Increased IncreasedConcern Concernfor forthe the Societal SocietalEnvironment Environment

A AChanged ChangedSocial SocialContract 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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d w s , u r g o l e h t n I d y t c s m a n i r e w o p r d t w l b i n o p s e

u d p c r o y t l i b a e h T a u l g i b r o t c f e n

Business Criticism: Use & Abuse of Power

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f w a L n o r I y t l b i n o p s e R

e n i s u B r e w o P

Levels and Spheres of Corporate Power

Levels Spheres

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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 Managerial Approach Approach

Business Business Ethics Ethics

Stakeholder Stakeholder Management 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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3. 4.

r l a i h t n e s u c o F . l a i r m o c e h t n

n w , h g u i o t s r f e R f . c t u j d , s e n r i a

Theme: Business Ethics

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e n i s u B E s c i h t

s c i h t E

c h t w p g r o s l a u v i d n I v o h w c a r t e n i s u b v . m f h r n i d t s e

d o h k s l a n r e t x E I d o h k s l a r e t n

Theme: Stakeholders

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s r d l o h e k a t S

Organization and Flow of Book

Business, Society, and Stakeholders
PART ONE 1. 1. The TheBusiness Businessand andSociety SocietyRelationship Relationship 2. 2. Corporate CorporateCitizenship: Citizenship:Social SocialResponsibility, Responsibility,Responsiveness Responsivenessand and Performance Performance 3. 3. The TheStakeholder StakeholderApproach Approachto toBusiness, Business,Society, Society,and andEthics Ethics

Corporate Governance and Strategic Management Issues

PART TWO 4. 4. Corporate CorporateGovernance: Governance: Foundational FoundationalIssues Issues 5. 5. Strategic Strategicmanagement managementand andCorporate CorporatePublic PublicAffairs Affairs 6. 6. Issues Issuesand andCrisis CrisisManagement Management

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Organization and Flow of Book

Business Ethics and Management
7. 7. Business BusinessEthics EthicsFundamentals Fundamentals PART 8. Personal and Organizational Ethics THREE 8. Personal and Organizational Ethics 9. 9. Business BusinessEthics Ethicsand andTechnology Technology 10. 10. Ethical EthicalIssues Issuesin inthe theGlobal GlobalArena Arena

External Stakeholder Issues

PART FOUR 11. 11. 12. 12. 13. 13. 14. 14. 15. 15. 16. 16. Business, Business,Government Governmentand andRegulation Regulation Businesss BusinesssInfluence Influenceon onGovernment Governmentand andPublic PublicPolicy Policy Consumer ConsumerStakeholders: Stakeholders:Information InformationIssues Issuesand andResponses Responses Consumer ConsumerStakeholders: Stakeholders: Product Productand andService ServiceIssues Issues The TheNatural NaturalEnvironment Environmentas asStakeholder Stakeholder Business Businessand andCommunity CommunityStakeholders Stakeholders

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Organization and Flow of Book

Internal Stakeholder Issues
PART FIVE 17. 17. Employee EmployeeStakeholders Stakeholdersand andWorkplace WorkplaceIssues Issues 18. 18. Employee EmployeeStakeholder: Stakeholder: Privacy, Privacy,Safety, Safety,and andHealth Health 19. 19. Employment EmploymentDiscrimination Discriminationand andAffirmative AffirmativeAction Action

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