1. Emerging Issues in Management (Mgmt 440) Critics of Business (Chapter 4) Professor Charles H. Smith Summer 2011

2. Case Study – Mary “Mother” Jones Read this case study on pages 80-83 on your own before class and discuss the following questions with small groups in class –What were Mother Jones’ main points? –Did the fact that Mother Jones was a woman help or hinder her effectiveness? Why?

3. Introduction to and Origins of Critical Attitudes Toward Business Critics of business base their arguments on the following concepts –Businesspeople often place profit above values such as honesty, truth, justice, love, piety, aesthetics, tranquility, and respect for nature. –Economic development puts a strain on society. –Student examples of both.

4. Introduction to and Origins of Critical Attitudes Toward Business cont. Greeks and Romans – both were agrarian societies –Philosophers reasoned that profit-seeking was an inferior motive; commerce led to excess, corruption and misery. Plato – insatiable appetites exist in every person but could be controlled by acquiring inner values. Aristotle – believed in benign form of acquisition consisting of getting things needed for subsistence. Epictetus and Marcus Aurelius – truly rich person had inner peace rather than money or property.

5. Introduction to and Origins of Critical Attitudes Toward Business cont. Middle Ages – Roman Catholic Church was dominant –Roman Catholic theology opposed profit-seeking due to persecution of early Christians by wealthy Romans. –St. Augustine – material wealth had fixed supply so, to become rich, person would sin by accumulation violating natural equality of creation. –Love of material things pulled soul away from God (“no one can serve two masters”). –St. Thomas Aquinas – influenced by Aristotle Just price vs. market price. Condemnation of usury. Both ideals faded – “commercial activity proved stronger than fear of prison or hell.”

6. Introduction to and Origins of Critical Attitudes Toward Business cont. Modern World –Protestant ethic – work was way to serve God; earning great wealth through hard work showed God’s approval; helped remove traditional religious suspicion of and antagonism toward material wealth; possible predecessor to “prosperity” doctrine followed by some Christians today? –Capitalism – free market harnessed greed and protected people from abuses. –Industrial revolution – rapid changes in societies due to technological development; faster-paced, greater emphasis on material things, and abuse of people and nature.

7. American View Toward Business Colonial Era (pre-Revolution) –Colonists often portrayed as people seeking religious or political freedom. –In reality, colonists were sponsored by investors seeking valuable commodities such as gold, furs and timber products. –As colonists migrated in from coast, farming and land speculation started.

8. American View Toward Business cont. Young Nation (late 18 th Century) –Farmers and planters dominant since economy was 90% agricultural. –Alexander Hamilton – believed industrial growth would increase national power; sought to promote manufacturing and finance. –Thomas Jefferson – unsuccessfully opposed this trend; felt manufacturing was corrupt and God had placed “genuine virtue” on farmers.

9. American View Toward Business cont. 19 th Century Through the Civil War –Steady economic growth fueled by improved transportation systems (turnpikes, canals and railroads). –“Utopias” were reaction to increased prominence of capitalism (e.g., New Harmony) but capitalism survived and “utopias” did not.

10. American View Toward Business cont. Post-Civil War Era Through the 1920’s –Populism advocated government ownership of railroad, telegraph and telephone companies, direct election of U.S. Senators, and abandonment of the gold standard; considered to be radical. –Progressive movement more mainstream; wanted to cure social ills through government regulation; ended up achieving some of populist agenda (e.g., passage of 17 th Amendment requiring direct election of U.S. Senators). –Socialism wanted collective ownership of property in classless society; many early unions grounded in Socialist doctrine and rhetoric.

11. American View Toward Business cont. Great Depression –“Perpetual prosperity” belief shattered by economic disaster caused by corporate negligence and fraud. –Because of this, securities regulation laws passed by Congress. –Populist thought and rhetoric reemerged.

12. American View Toward Business cont. World War II –Support for business rebounded due to patriotism since most industries very involved in war effort. –Negated populist thinking since people were reluctant to criticize the “arsenal of democracy.”

13. American View Toward Business cont. The 1960’s –“The Collapse of Confidence” led by four strong social movements Civil rights. Consumer rights. The environment. Anti-Vietnam War. –These four movements maintained that business contributed to social ills such as racism, sexism, consumer fraud, and war profiteering. –Business started to make a comeback when President Reagan elected in 1980.

14. American View Toward Business cont. Late 20 th Century to the Present –New Progressives – maintained that business had too much power and inordinate legal rights, and was inherently immoral. –Ralph Nader – “Unsafe at Any Speed” (1965) and Presidential candidate (2000 and 2004). –See Figure 4.3 on page 101 for example of how the New Progressives work.

15. Case Study – KFC Read “A Campaign Against KFC Corporation” on pages 108-16 on your own before class and then discuss the questions on page 116 with small groups in class.