1. Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1-1 Chapter 1  THE BUSINESS and SOCIETY RELATIONSHIP BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e Prepared by Deborah Baker Texas Christian University

2. Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1-2  Business criticism, scrutiny & scandals!  Issues: executive compensation, abuse of corporate power, sexual harassment, product liability, toxic waste disposal, whistle blowing, political action committees  Businesses must deal with societal concerns: the “rights” movement, loss of jobs to foreign countries, & workplace safety  What is the role of business vs. the role of government in our society?  What must a co. do to be considered socially responsible? The Business & Society Relationship

3. Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1-3 Larger corporations are more visible, more powerful, more criticized, more impact on society Business & society interrelate in a macroenvironment Business & Society Business The collection of private,profit-oriented organizations. Society A broad group of people, interestgroups, a community, a nation.(shared interests & beliefs or common cause)

4. Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1-4 The Macroenvironment Social Demographics, lifestyles, social values SegmentFocus Political Government influence Economic Nature & direction of the economy Technological Technological advancements What kinds of ethical issues are we facing?

5. Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1-5 U.S. as a Pluralistic Society Power is diffused among society’s many groups & organizations StrengthsWeaknesses  Prevents domination  Maximizes freedom of expression  Individuals are loyal to many organizations or groups  Built-in checks & balances (B. exert power over one another)  Organizations & groups have overlapping goals causing confusion (who do we trust?)  Pursuit of self-interest promotes conflict & inefficiency

6. Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1-6 Stakeholders  What is a stakeholder?  Anyone impacted by the organization’s D/M  Who are they?  What makes an environment complex?  More SH means more uncertainty

7. Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1-7 Stakeholders Business CommunityGovernment Employees Consumer Owner Environmental groups General public Local State Federal Corporate raiders Private citizens Institutional Investors Consumer activists Product liability threats Unions Older employees Women and minorities Civil Liberties activists

8. Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1-8 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 & focused  attract a significant following (more $ and power)  often work at cross purposes, with no unified set of goals. http://www.goodmoney.com/directry_active.htm @

9. Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1-9 Factors in the Social Environment Creating Atmosphere of Criticism of Business?  Affluence and education  greater expectations & more criticism  Public awareness through television  Entitlement mentality  Rights movement  Victimization philosophy  Revolution of rising expectations (creating social problem)

10. Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1-10 Society’s Expectations versus Business’s Actual Social Performance Society’s Expectations of Business Performance Social Performance: Expected and Actual 1960s1990s Time Social Problem Business’s Actual Social Performance Social Problem

11. Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1-11 What is society’s #1 criticism of business? Abuse of power Examples- Examples..

12. Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1-12 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  When power gets out of balance, E. forces respond & pressure B. to be more responsible to bring it back into balance. »Enron & Arthur Anderson »Tobacco co. »Physicians & HMOs

13. Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1-13 The Social Contract Changing as expectations change, creating confusion Laws or Regulations: “Rules of the Game” Two-Way Shared Understandings of Each Other Society or Stakeholder Groups Business

14. Business and Society: Ethics and Stakeholder Management, 6e Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved Chapter 1-14 Focus of the Book Managerial Approach Business Ethics Right vs. wrong Business Ethics Right vs. wrong Stakeholder Management What is it? Stakeholder Management What is it?