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UNIVERSITY OF CALIFORNIA Course OutlineHaas School of Business Fall 2004

BA107:

THE SOCIAL AND POLITICAL ENVIRONMENT OF BUSINESS

Professor Michael Gerlache-mail: [email protected]

Telephone: 642-3676Office hours: Wednesday, 10-12Office location: Haas F599

This course focuses on the nonmarket environment of business, and the ways that managers can shape this environment to their corporation's strategic advantage. This environment includes the various political, legal, social, and historical forces that provide the "rules of the game" under which companies, industries, and national economies operate.

We begin with an overview of the nonmarket environment in the U.S., considering both historical and contemporary forces that have shaped the modern corporation and its strategies. We then consider the political environment of business in more detail, addressing issues such as regulation and deregulation, antitrust policy, and high technology policy, as well as evaluating strategies for dealing with this environment. (The 2004 national election will provide a useful backdrop for this analysis.)

We also consider the role played by corporate social responsibility, corporate governance, and business ethics in the business world. Finally, we consider the increasingly controversial issue of "globalization" by evaluating the social and political role played by multinational enterprises (MNEs) in host countries and in the "outsourcing" of domestic jobs to overseas workers.

Course Materials

Course materials include the following:

(1) Course readers for the first and second half of the course (available at Copy Central on Bancroft).

(2) In-class handouts. For those unable to attend lecture, these handouts will be available outside my office (F599) for one week after the assigned date. Selected portions will also be posted on the course web site.

(3) In-class videotapes. These are intended to complement other course materials, but their contents will not be included on exams.

Entering the course

A. Consistent with the procedures of the Haas Undergraduate Program, all students must gain admittance to the course through the Haas Undergraduate Office. The instructor and GSI have no control over this process.

B. Attendance in your assigned section in the first two weeks of the course is essential to remaining in the course. Students absent in the first two weeks will be dropped from class lists.

COURSE REQUIREMENTS

BA107 has four course requirements:

(1) Mid-term examination:20%(2) Final examination: 30%(3) Two short case write-ups (20% each):40%(4) Attendance and participation in sections: 10%

Mid-term and final exams. The course exams will be closed book and will include materials covered in both lecture and section. Questions will be similar to those reviewed in weekly section, with an emphasis on integrating materials in thoughtful ways. The final exam will be cumulative, although greater emphasis will be placed on materials covered in the second half of the course.

Case analyses. Students will be required to turn in short case analyses twice during the semester. These write-ups should be no more than four (4) double-spaced pages in length, and are due at the beginning of section in week 6 and week 14. Additional details will be provided in class.

Section attendance and participation. Sections are an integral part of this course, and students are expected to attend their assigned section on a regular basis. (Section changes are allowed only under exceptional circumstances and on a space-available basis.) Students are allowed to miss a maximum of two sections without prior notification of the Graduate Student Instructor. Absences above this number will lead to a failing grade for this portion of the course, while completion of this basic attendance requirement will result in a grade for this portion of no less than a "B". Grades above a "B" will require at least some degree of active participation in the discussion, with quality counting for more than quantity.

WEEKLY ITINERARY

PART ONE: INTRODUCTION

[8/30] WEEK 1. COURSE OVERVIEW

A. Lecture readings. Introduction.

[no readings]

B. Section readings. Getting acquainted and course overview.

[9/6] WEEK 2. THE NONMARKET ENVIRONMENT OF BUSINESS

A. Lecture readings. [No lecture -- Labor Day holiday]

[no readings]

B. Section readings. Discussion topic: the nonmarket environment and integrated strategy.

"Market and Nonmarket Environments." From David P. Baron, Business and Its Environment, chapter 1.

"Integrated Strategy." From David P. Baron, Business and Its

Environment, chapter 2.

[9/13] WEEK 3. THE RISE OF BIG BUSINESS AND BIG GOVERNMENT

A. Lecture readings.

"The origins of big business." From Heidi Vernon-Wortzel Business and Society, 5th edition, Irwin.

"The curse of bigness: America's regulatory capitalism." From Yergin and Stanislaw, The Commanding Heights, chapter 2.

B. Section readings. Discussion topic: implications for business of the increasing size of business and government.

[no readings]

[9/20] WEEK 4. POLITICAL THEORY AND INSTITUTIONS


"Political Theory and Government Institutions." From David P. Baron, Business and Its Environment, chapter 5.

"The delayed revolution: America's new balance." From Yergin and Stanislaw, The Commanding Heights, chapter 12.

"Circling the wagons." NYT, 6/5/04.

"Styles similar in Bush and Kerry duel on deficit numbers." NYT, 8/15/04.

B. Section readings. Discussion topic: implications of the national election for business.

Party platforms for the Democratic and Republican parties [to be provided later]

PART TWO: THE POLITICAL ENVIRONMENT OF BUSINESS

[9/27] WEEK 5. CORPORATE POLITICAL STRATEGIES


"Implementing Political Strategies." From David P. Baron, Business and Its Environment, chapter 8.

"For corporate donors, the restraints are off." NYT, 7/25/04.

"Businesses plan attack on Edwards." NYT, 8/24/04.

B. Section readings. Discussion topic: Enron's political strategies.

"Letters show Bush and Lay shared much." NYT, 2/16/02.

"Enron, preaching deregulation, worked the statehouse circuit." NYT, 2/9/02.

"Influence lost, ex-Enron chief faces Congress." NYT, 2/3/02.

[10/4] WEEK 6. REGULATION AND DEREGULATION


"Regulation: Law, Economics, and Politics." From David P. Baron, Business and Its Environment, chapter 10.

"Out of spotlight, Bush overhauls US regulations." NYT, 8/14/04.

"Exxon backs groups that question global warming." NYT, 5/28/04.

B. Section readings. Discussion topic: the politics of environmental regulation.

[readings TBA]

NOTE: CASE WRITE-UP #1 IS DUE [at beginning of section]

[10/11] WEEK 7. ANTITRUST AND INTELLECTUAL PROPERTY


"Antitrust: Economics, Law, and Politics." From David P. Baron, Business and Its Environment, chapter 11.

"Untangling e-conomics." Special survey on the New Economy in The Economist, 9/23/00.

B. Section readings. Discussion topic: intellectual property and digital music exchange.

"Download warning 101." SF Chronicle, 8/11/03.

"Berkeley, RealNetworks deal to curb illegal music downloads." The Daily Californian, 8/23/04.

"File-sharing sites found not liable for infringement." NYT, 8/20/04.

[10/18] WEEK 8. INDUSTRIAL AND TECHNOLOGY POLICY


"The global context for US technology policy." Graham Mitchell, US Department of Commerce.

"The tech lobby, calling again." NYT, 7/25/04.

B. Section readings. Discussion topic: Mid-term review.

[no readings]

[10/25] WEEK 9. MID-TERM EXAM

A. Lecture readings. Mid-term exam.

[no readings]

B. Section readings. [no section]

[no readings]

PART THREE: CORPORATE SOCIAL RESPONSIBILITY AND BUSINESS ETHICS

[11/1] WEEK 10. CORPORATE SOCIAL RESPONSIBILITY AND GOVERNANCE


"Corporate Social Responsibility." From David P. Baron, Business and Its Environment, chapter 18.

"The new accountability: Tracking the social costs." NYT, 3/24/02.

"Is a do-gooder company a good thing?" NYT, 5/2/04.

"Excerpts from 'owners's manual' included with offering." NYT, 4/30/04.

B. Section readings. Discussion topic: corporate governance and the WorldCom scandal.

"Designed by committee." The Economist, 6/15/02.

"A matter of choice." The Economist, 12/22/01.

"Ebbers and passive directors blamed for WorldCom woes." NYT, 6/10/03. Two articles:

"Board that made decisions in haste with no questioning." NYT, 6/10/03.

"WorldCom's practices enabled huge fraud, 2 investigations find." NYT, 6/10/03.

[11/8] WEEK 11.

A. Lecture readings. [No class -- instructor is out of town]

[no readings]

B. Section readings. Discussion topic: review of the recent election.

[no readings]

[11/15] WEEK 12. BUSINESS ETHICS #1


"Ethics Systems: Utilitarianism." From David P. Baron, Business and Its Environment, chapter 19.

"Ethics Systems: Rights and Justice." From David P. Baron, Business and Its Environment, chapter 19.

"Boot camps on ethics ask 'what ifs?'" NYT, 1/5/03.

"Ethics lacking in business school curriculum, students say in survey." NYT, 5/20/03.

B. Section readings. Discussion topic: ethical behavior and the McWane corporation.

"A family's fortune." NYT, 1/9/03.

[11/22] WEEK 13. BUSINESS ETHICS #2


"Implementing Ethics Systems." From David P. Baron, Business and Its Environment, chapter 20.

"Ethics Issues in International Business. From David P. Baron, Business and Its Environment, chapter 22.

B. Section readings. [No section -- Thanksgiving holiday]

[no readings]

PART FOUR: BROADENING THE COURSE SCOPE

[11/29] WEEK 14. INTERNATIONAL ISSUES


"The age of globalization: The battle for the world economy." From Yergin and Stanislaw, The Commanding Heights, chapter 13.

B. Section readings. Discussion topic: globalization and the

nonmarket environment of business.

"High-skill work is not immune to outsourcing, contracts show." NYT, 6/16/04.

"Financial firms hasten their move to outsourcing." NYT, 8/18/04.

NOTE: CASE WRITE-UP #2 IS DUE [at beginning of section]

[12/6] WEEK 15. FUTURE DIRECTIONS AND COURSE REVIEW


"The balance of confidence: the world after reform." From Yergin and Stanislaw, The Commanding Heights, chapter 14.

B. Section readings. Course review.

[no readings]

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