chapter 1

Chapter 1- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & BuchholtzCopyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

1

Chapter 1 THE BUSINESS and SOCIETY RELATIONSHIP

BUSINESS & SOCIETYEthics and Stakeholder Management

Carroll & Buchholtz 6ePrepared by Deborah BakerTexas Christian University


2

Chapter 1 Learning Outcomes

1. Characterize business, society, and their interrelationships.

2. Describe pluralism and identify its attributes, strengths, and weaknesses.

3. Clarify how our pluralistic society has become a special-interest society.

4. Identify, discuss, and illustrate the factors leading up to business criticism.

5. Single out the major criticisms of business and characterize business’s general response.

6. Categorize the major themes of the book: managerial approach, ethics, and stakeholder management.


3

Chapter 1 Outline

Business and Society

Society as the Macroenvironment

Our Pluralistic Society

Our Special-Interest Society

Business Criticism and Corporate Response

Focus of the Book

Structure of the Book

Summary


4

Business criticism and scandals

Issues, such as executive compensation, abuse of corporate power, and sexual harassment

Broad societal concerns, such as the “rights” movement, discrimination, loss of jobs to foreign countries, and workplace violence

The Business and Society Relationship


5

Business and society interrelate in a macroenvironment as stakeholders.

Business and Society

BusinessThe collection of private, profit-oriented organizations

SocietyA broad group of people and other organizations, interest groups, a community, a nation.


6

Society as the Macroenvironment

Social EconomicEconomic

PoliticalPolitical TechnologicalTechnological


7

Segments of the Macroenvironment

Social demographics, lifestyles, social values

Segment Focus

Politicalinteractions between firms, politics, and government

Economic nature and direction of the economy

Technological changes in technological advancements


8

Pluralistic Society

Strengths Weaknesses

Prevents concentration of power

Maximizes freedom of expression and action

Disperses individual allegiances

Creates diversified set of loyalties

Provides checks and balances

Pursuit of self-interest

Proliferates organizations and groups with overlapping goals

Forces conflicts to center stage

Promotes inefficiency


9

Business and Stakeholder Relationships

Business

Community Government

Employees

Consumer

Owner

Environmental groups

General publicLocalStateFederal

Corporate raiders

Private citizens

Institutional Investors Consumer activistsProduct liability threats

Unions

Older e

mplo

yees

Wom

en a

nd m

inorit

ies

Civil L

iberti

es a

ctivis

ts


10

Special-Interest Society

Special Interests groups…

make life more complex for business

number in the tens of thousands

pursue their own limited agenda

are more active, intense, diverse and focused

attract a significant following

often work at cross purposes, with no unified set of goals

http://www.goodmoney.com/directry_active.htm@


11

Social Environment, Business Criticism,

and Corporate Response

Factors in the Social Environment

Affluence Education Awareness

Rising Expectations Rights Movement

EntitlementMentality

VictimizationPhilosophy

Business CriticismBusiness Criticism

Increased concern for theSocietal Environment

Increased concern for theSocietal Environment A Changed Social ContractA Changed Social Contract


12

Factors in the Social Environment

Affluence and education

Awareness through television

Revolution of rising expectations

Entitlement mentality

Rights movement

Victimization philosophy


13

Society’s Expectations versusBusiness’s Actual Social

PerformanceSociety’s Expectations of Business Performance

So

cial

Per

form

ance

: E

xpec

ted

an

d A

ctu

al

1960s 1990sTime

Social Social ProblemProblem

Business’s Actual Social Performance

Social ProblemSocial Problem


14

Business Criticism: Power

Use and abuse of power

Business power refers to the ability or capacity to produce an effect or to bring an influence to bear on a situation or people

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


15

Levels and Spheres of Corporate Power

Macro Level

Intermediate Level

Micro Level

Individual Level

Economic

Social/Cultural

Individual

Technological

Environmental

Political

LevelsSpheres


16

Elements in the Social Contract

Laws or Regulations:“Rules of the Game

Two-Way Shared Understandings of

Each Other

Society orSocietal

StakeholderGroups

Business


17

Focus of the Book

Managerial Approach

Managerial Approach

Ethics Ethics Stakeholder Management

Stakeholder Management


18

1. The Business and Society Relationship2. Corporate Citizenship: Social Responsibility, Responsiveness and

Performance3. The Stakeholder Approach to Business, Society, and Ethics

1. The Business and Society Relationship2. Corporate Citizenship: Social Responsibility, Responsiveness and

Performance3. The Stakeholder Approach to Business, Society, and Ethics

PART ONE

BUSINESS, SOCIETY, AND STAKEHOLDERS

STRATEGIC MANAGEMENT FOR CORPORATE STAKEHOLDER PERFORMANCE

4. Strategic Management and Public Affairs5. Issues Management and Crisis Management

4. Strategic Management and Public Affairs5. Issues Management and Crisis Management

PARTTWO

Structure and Flow of Book


19

6. Business Ethics Fundamentals7. Personal and Organizational Ethics8. Business Ethics and Technology9. Ethical Issues in the Global Arena

6. Business Ethics Fundamentals7. Personal and Organizational Ethics8. Business Ethics and Technology9. Ethical Issues in the Global Arena

PART THREE

BUSINESS ETHICS AND MANAGEMENT

EXTERNAL STAKEHOLDER ISSUES

10. Business, Government and Regulation 11. Business’s Influence on Government and Public Policy12. Consumer Stakeholders: Information Issues and Responses13. Consumer Stakeholders: Product and Service Issues14. The Natural Environment as Stakeholder15. Business and Community Stakeholders

10. Business, Government and Regulation 11. Business’s Influence on Government and Public Policy12. Consumer Stakeholders: Information Issues and Responses13. Consumer Stakeholders: Product and Service Issues14. The Natural Environment as Stakeholder15. Business and Community Stakeholders

PARTFOUR



20

16. Employee Stakeholders and Workplace Issues17. Employee Stakeholder: Privacy, Safety, and Health18. Employment Discrimination and Affirmative Action19. Owner Stakeholders and Corporate Governance

16. Employee Stakeholders and Workplace Issues17. Employee Stakeholder: Privacy, Safety, and Health18. Employment Discrimination and Affirmative Action19. Owner Stakeholders and Corporate Governance

PART FIVE

INTERNAL STAKEHOLDER ISSUES

CASES



21

Selected Key Terms

affluencebusinessbusiness ethicsbusiness powereconomic environmenteducationentitlement mentalityethicsIron Law of Responsibilitymacroenvironmentpluralismpolitical environment

revolution of rising expectations

rights movementsocial contractsocial environmentsocial problemsocietyspecial-interest societystakeholderstechnological environmentvictimization philosophy

chapter 1

Documents