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The Business/Society Relationship

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Presentation on theme: "The Business/Society Relationship"— Presentation transcript:

1 The Business/Society Relationship
1 1 The Business/Society Relationship 1

2 Chapter One Objectives
2 Chapter One Objectives Characterize business, society, and their relationship to each other Describe pluralism and identify its strengths and weaknesses Clarify how our pluralistic society became a special-interest society Identify and discuss factors leading up to the criticism of business Identify the major criticisms of business and characterize business' response Identify the major themes of this book: managerial approach, ethics, and stakeholder management 2

3 Chapter One Outline Business and Society
Business Defined Society Defined The Macroenvironment Role of Pluralism Weaknesses and Strengths of Pluralism Business Versus Multiple Publics and Systems Our Special-Interest Society Business Criticism and Corporate Response Factors in the Social Environment Criticisms: Use and Abuse of Power Response: A Changing Social Environment and Social Contract Focus of the Book Managerial Approach Two Broad Classes of Social Issues The Ethics Theme Structure of the Book Summary Chapter One 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 Introduction to Chapter One
The Business and Society Relationship Specific incidents versus broad societal concerns Firestone tires versus discrimination Questions arise as to the behavior of the firm Is the firm’s behavior ethical? Is the firm’s behavior socially responsible? What is the firm’s correct response? What is the role of the firm in society?

5 Business and Society Relationship
Business is the collection of private, profit-oriented organizations. Society is a broad group of people and other organizations, interest groups, a community, a nation. Business and society interrelate in a macroenvironment as stakeholders. Business Community Consumers Owners Government Employees

6 Society as the Macroenvironment
The macroenvironment is the total societal context in which the firm resides and is composed of four segments: Social Economic Political Technological

7 Society as the Macroenvironment
Four segments of the Macroenvironment Social environment focuses on demographics, lifestyles and social values Economic environment focuses on the economy Political environment focuses on the legislative process, election process and the interaction between firms, politics and government Technological environment focuses on the changes in technological advancement

8 Pluralistic Society Diffusion of Power Strengths
Prevents concentration of power Maximizes freedom of expression Disperses individual allegiances Creates diversified set of loyalties Provides checks and balances Weaknesses Pursuit of self-interest Proliferates organizations and groups with overlapping goals Forces conflicts to center stage Promotes inefficiency

9 Business and Selected Stakeholder Relationships
Community Consumers Owners Government Employees Environmental Groups Local State General Public Federal Unions Corporate Raiders Older Employees Private Citizens Women Minorities Institutional Investors Civil Liberties Activists Consumer Activists Product Liability Threats

10 Special-Interest Society
Special interests make life more complex for business Special interest groups number in the tens of thousands Special interest groups each pursue their own limited agenda Special interest groups are more active, intense, diverse and focused Special interest groups attract a significant following increasing revenue and power

11 Social Environment, Criticism, and Corporate Response
A Changed Social Contract Increased Concern for Societal Environment Business Criticism Affluence Education Awareness Factors in the Social Environment Rights Movement Rising Expectations Entitlement Mentality Victimization Philosophy

12 Business Criticism 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 versus Actual Social Performance
Society’s Expectations of Business Performance Social Problem Social Performance: Expected and Actual Social Problem Business’s Actual Social Performance 1960s s Time

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 Social Responsibility In the long run, those who do not use power in a manner society considers responsible will tend to lose it

15 Business Criticism Levels and Spheres of Corporate Power
Macro Level Intermediate Level Micro Level Individual Level Economic Social/Cultural Individual Technological Environmental Political Levels Spheres

16 Business Criticism Response
Elements In the Social Contract Laws or Regulations: “Rules of the Game” Society or Societal Stakeholder Groups Business Two-Way Shared Understandings of Each Other Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning.  All rights reserved 1-16

17 Focus of Book Managerial approach Ethics theme
Stakeholder management theme

18 Structure and Flow of Book
Chapter 1 • The Business/Society Relationship Structure and Flow of Book BUSINESS, SOCIETY, AND STAKEHOLDERS The Business and Society Relationship Corporate Citizenship: Social Responsibility, Responsiveness and Performance The Stakeholder Approach to Business Part One STRATEGIC MANAGEMENT FOR CORPORATE STAKEHOLDER PERFORMANCE Strategic Management and Corporate Affairs Issues Management and Crisis Management Part Two Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning.  All rights reserved 1-18

19 Structure and Flow of Book
Chapter 1 • The Business/Society Relationship Structure and Flow of Book BUSINESS ETHICS AND MANAGEMENT Business Ethics Fundamentals Personal and Organizational Ethics Business Ethics and Technology Ethical Issues in the Global Arena Part Three EXTERNAL STAKEHOLDER ISSUES Business, Government and Regulation Business’s Influence on Government and Public Policy Consumer Stakeholders: Information Issues and Responses Consumer Stakeholders: Product and Service Issues The Natural Environment as Stakeholder Business and Community Stakeholders Part Four Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning.  All rights reserved 1-19

20 Structure and Flow of Book
Chapter 1 • The Business/Society Relationship Structure and Flow of Book INTERNAL STAKEHOLDER ISSUES Employee Stakeholders and Workplace Issues Employee Stakeholder: Privacy, Safety, and Health Employment Discrimination and Affirmative Action Owner Stakeholders and Corporate Governance Part Five Cases Business and Society: Ethics and Stakeholder Management, 5E • Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning.  All rights reserved 1-20

21 Selected Key Terms Affluence Business Business ethics Business power
Economic environment Education Entitlement mentality Ethics Iron Law of Responsibility Macroenvironment Pluralism Political environment Revolution of rising expectations Rights movement Social contract Social environment Social problem Society Special-interest society Stakeholders Technological environment


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