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Social Issues in Management New management tools needed... u What if... –US and Pacific Rim countries form a common market? –Human life expectancy is 100.

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Presentation on theme: "Social Issues in Management New management tools needed... u What if... –US and Pacific Rim countries form a common market? –Human life expectancy is 100."— Presentation transcript:

1 Social Issues in Management New management tools needed... u What if... –US and Pacific Rim countries form a common market? –Human life expectancy is 100 years? –Russia/China truly capitalize? –global warming continues? u What if... –the UN is replaced by UN-r-US? –the UN really has power to shape the world order? u What other “what if’s” do you you see?

2 Social Issues in Management core strategy What influences corporate strategy? Company behavior?

3 Social Issues in Management Macrosystems Model of Corporate Responsibility What are the forces/influences/dynamics? core strategy political environmental competitive social Economic System Competitive and Industry System Public Policy System Pressure Groups Ecological Environment Social Conditions (social system)

4 Social Issues in Management Macrosystems Model core strategy political environmental competitive social Economic system general env’t trends demand supply technology Competitive and Industry systems barriers to entry rivalry among competitors threat of substitutes power of suppliers power of buyers Public policy system laws, regulations judicial decisions legislative actions/policies Pressure groups media interest groups public opinion Social conditions community conditions education condition civil sector strength Ecological environment pollution, degradation state of awareness

5 Social Issues in Management Key Terms u Multi-national: clusters of affiliated firms in different countries sharing characteristics (common: ownership, resources, strategy) u MNC/MNE: multinational corporation/enterprise u International: horizontal integration-national borders u Transnational: globally integrated business u Global: worldwide business/industry activity u Home country: headquarters site u Host country: countries where facilities are located

6 Social Issues in Management SEPTEmber Environments The firm Social Environment Economic Environment Political Environment Ecological Environment Technological Environment

7 Social Issues in Management Defining the global environments u Social: –social trends, shifts in social organizations and civil society issues, culture, values, people, organizations u Economic: –conditions of production, distribution & exchange (e.g., labor conditions, human rights, major trends) u Political: –governance, law, policy, influence in different regions/countries, global standards, codes of conduct u Technological: –tools/methods of production, distribution, and knowledge enhancement, impact on people/society u Ecological (natural): –sustainability, conservation, pollution, degradation, aesthetic, life-sustenance

8 Social Issues in Management Stakeholders of the Firm Focal Firm Owners Employees Customers Suppliers Communities Governments Media CompetitorsReligious groups Financial analysts Secondary stakeholders Primary stakeholders Activists

9 Social Issues in Management Corporate Social Performance Model Legitimacy Public responsibility Managerial discretion Environmental scanning Stakeholder management Issues management Social impacts Social policies Social programs PRINCIPLES of social responsibility PROCESSES of social responsiveness OUTCOMES of corporate behavior

10 Social Issues in Management Institutional-Ideological Model Economic ideology Business institutions Technology Ecology Government institutions Public institutions Political ideology Social ideology

11 Social Issues in Management Institutional-Ideological Systems Economic ideology Business institutions Technology Ecology Government institutions Public institutions Political ideology Social ideology BUSINESS SYSTEM PUBLIC POLICY SYSTEM CIVIL SOCIETY SYSTEM

12 Social Issues in Management Ideological Continuums Free market capitalism Regulated capitalism MixedSocialism Utopian communism ECONOMIC IDEOLOGY POLITICAL IDEOLOGY SOCIAL IDEOLOGY Anarchy Negotiated consensus Simple democracy Republic democracy Social democracy Totalitarian- ianism IndividualismCollectivism

13 Social Issues in Management Influences on ethics of decisions Organization’s ethical climate Superiors, peers, subordinates Policies, programs Individual Business’s ethical climate Society’s ethical climate

14 Social Issues in Management Ethics, Ideology, Morality Morality: general approaches to resolving ethical conflicts Ideology: constellation of values that tell a story about ideals of society Values: judgments of good and bad, basis of ethics Experience Ethics: principles of right and wrong used to motivate and evaluate behaviors

15 Social Issues in Management Business Ethics u Starts with self-awareness... Why? u Ethics: activity of examining one’s or society’s moral standards –how do the standards apply to our lives? –are the standards reasonable or not? –are they supported by good or poor reasons? u Business Ethics: moral standards as they apply to business policies, institutions, and behaviors

16 Social Issues in Management Stages of Moral Development u Kohlberg’s six stages –PreConventional Stages F 1: punishment and obedience F 2: instrument and relativity –Conventional Stages F 3: interpersonal concordance F 4: law and order –Postconventional Stages F 5: social contract F 6: universal ethical principles u Gilligan’s ethic of care F relational ethics

17 Social Issues in Management Ethical principles in business u Rights –entitlement to something –legal or moral (human) F correlated with duties F autonomy and equality F actions and invoke protection/aid –Kant’s categorical imperative F universalizability F reversability –respect people as ends (not means) u Justice and fairness –comparative treatment of benefits and burdens –distributive justice (Rawls) u Utilitarianism –greatest good for the greatest number u Virtue (character) u Ethics of Care –responsibility for relationships

18 Social Issues in Management Corporate social performance u Corporate social responsibility (CSR 1) u Corporate social responsiveness (CSR 2) u Corporate social rectitude (CSR 3) u Corporate social regimes (CSR 4)

19 Social Issues in Management Ethical reasoning Gather data (facts) Develop alternatives Forecast outcomes Apply alternatives to outcomes Select behavior Evaluate behavior

20 Social Issues in Management Assessing the ethics of situations Moral standards: 1. maximize social utility 2. respect moral rights 3. distribute benefits and burdens justly 4. exercise caring Factual information: about policy, institution, or behavior under consideration Moral Judgment on rightness or wrongs of the policy, institution, or behavior

21 Social Issues in Management Resolving ethical conflicts Gather the facts How does this situation fit with ethical criteria: Utility: Does it optimize satisfactions of stakeholder? Rights: does it respect the rights of all stakeholders? Justice: Is it consistent with canons of justice NO (all criteria) NO (on or two criteria YES (all criteria) DATA GATHERING ANALYSIS DECISION NOT ETHICAL Overwhelming factors? Incapacitating factors? Double-effects test passed? ETHICAL DECISION NO YES

22 Social Issues in Management Ethical Conflicts: u Ethics: –principles of right and wrong that motivate individual behavior and under lie evaluation of behaviors u Ethical conflicts: –dissonance among principles of right (do good) or wrong (cause no harm) –Intensity, based on: F magnitude of consequences F degree of social consensus F probability of effect F temporal immediacy F social, cultural, psychological proximity u Ethical problem vs.... conflict

23 Social Issues in Management What is the public interest? Who decides? Who benefits? u What are “public goods”? u What are “externalities”? u Why do markets fail? u Why do regulations fail?

24 Social Issues in Management Principles of CSP u Legitimacy –Society grants legitimacy and power to business. Those who abuse power will tend to lose it. u Public Responsibility –Business are responsible for outcomes related to their primary and secondary areas of involvement with society F primary: from functional roles F secondary: not intrinsic, ripple from primary activities u Managerial Discretion –Managers are moral actors obliged to exercise discretion toward socially responsible outcomes

25 Social Issues in Management Managerial Discretion u Economic responsibilities –profit/wealth generation –distribution of goods/services u Legal responsibilities u Ethical responsibilities u Discretionary responsibilities –use resources for social betterment

26 Social Issues in Management Public Issue Life Cycle public attention -time- early late trigger event legislation activists involved opinion leaders media interest public concern diminished attention issue dies resolved re-emerges

27 Social Issues in Management Public Issue Life Cycle: Managerial Discretion public attention -time- early late legislation, voluntary resolution or abandonment managerial discretion framing shaping coping/adaptation institutionalization political activity (lobbying, trade assoc. advertising, media work) trigger event

28 Social Issues in Management Processes of CSP u Policy formulation: awareness generation u Learning: technical issue, increasing skills, barriers u Commitment: integration/ownership of issues

29 Social Issues in Management Boundary Spanning Processes u Public affairs u Public relations u Media relations u Community relations u Investor relations u Environmental scanning u Stakeholder relations u Issues management

30 Social Issues in Management Theories of the Firm u Neoclassical theory –rational, self-interested behavior of managers acting in the firm’s interests, purely economic –limitations: F doesn’t account for externalities F can’t accommodate individual or organizational values that aren’t economic or narrowly self-interested F oversimplicity in dealing with human/organizational relationships F short-term perspective: maximizing shareholder wealth F can’t protect the commons

31 Social Issues in Management Theories of the Firm u Behavioral Theory –people act from multiple interests and motives, with bounded rationality and personal interests that cause agency problems –“satisficing” not maximizing behavior –politics, personal limits, noneconomic influences

32 Social Issues in Management Theories of the Firm u Stakeholder Theory –businesses are in relationship with and need to satisfy multiple stakeholders –goal is to create a workable balance among competing interests –reciprocal relationships, conflict ridden F fulfill various stakeholders’ needs to survive F need to examine values and interests of stakeholders F structure and implement choice processes among stakeholders F trade-offs are necessary and help understand dynamics of real-world behaviors

33 Social Issues in Management Social Performance Cycle communicate findings to relevant stakeholders evaluate social objectives, actions, and outcomes communicate findings to key decision makers plan and execute new actions evaluate new actions and modify as needed

34 Social Issues in Management Corporate Social Performance Model Principles of social responsibility Processes of social responsiveness Outcomes of corporate behavior Related Management Tools and Processes Legitimacy Public responsibility Managerial discretion Environmental scanning Stakeholder management Issues management Social impacts Social policies Social programs Values assessment Ethical analysis Ethical reflection Codes of ethics Information gathering Community relations Philanthropy Public affairs Government relations Impact assessment Performance assessment Corporate social reporting

35 Social Issues in Management Stakeholder Relations u Formal (voting) power u Economic power u Political power u Primary: essential to survival –owners –employees –customers –suppliers –governments –competitors(?) u Secondary: not directly engaged but have influence over firm’s economic life u Global: crossnational membership and crossnational interests in business activities –e.g., environmental –political –terrorists –religious

36 Social Issues in Management Stakes u value to stakeholders –material –political –affiliative –informational –symbolic –spiritual

37 Social Issues in Management Stakeholder Mapping u Specifically identify stakeholders –individual, groups, names and subsets u What are their stakes? u What are the power bases? u What are stakeholder characteristics –values, types of actions likely, power u Relations among stakeholders u Changes in relationships over time

38 Social Issues in Management Types of Stakeholders definitive POWER LEGITI- MACY URGENCY dormant discretionary demanding dangerous dependent dominant

39 Social Issues in Management Issues Management u Process of –identifying, –evaluating and –responding... –to social and political issues that impact corporations u Process: managing responses (not issues u Significant Impact: salience/impact

40 Social Issues in Management Issues u Expectational gaps: –difference between what is and what “ought to be” –controversy: F stakeholders using “voice to confront relevant parties F stakeholders being willing/able to push concerns into broader public forum –impact (sine qua non) u Types of issues –Factual gap: what is/what is inconsistency –Conformance gap: what is/what ought to be gap –Ideals gap: what ought to be/ought to be

41 Social Issues in Management Multiple Bottom Lines Impacts EmployeesOwnersCustomersCommunity Social Economic Political Technology Ecological

42 Social Issues in Management Dialogue vs.... Discussion u Discussion –action –state conclusion –convergent thinking –argue, debate –take, hold, defend position –vertical thinking –“own” ideas, individual –ideas before conversation u Dialogue –creation (new) –disclose reasoning –divergent thinking –reflect for alternatives –make, test, improve discoveries –lateral thinking –collective ideas, group –ideas during conversation

43 Social Issues in Management Discuss using dialogue... u Do you want to live in a... –economy or a –society u What are the similarities and differences? u Does it matter? Why or why not?

44 Social Issues in Management Scenario Exercise u SEPTEmber groups split into cross- environment groups u Using book information and insight through SEPTEmber analysis develop and prepare to tell two stories about the future: F the dark ages of the corporation F the renaissance of the corporation u How do we cope successfully as people and as managers in these different worlds?


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