Transcript Ethical Issues in the Global Arena

The Business/Society Relationship
1
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 specialinterest 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
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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
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
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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?
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.
Community
Government
Business
Owners
Employees
Consumers
Society as the Macroenvironment
The macroenvironment is the total
societal context in which the firm
resides and is composed of four
segments:
•Social
•Political
•Economic
•Technological
Society as the Macroenvironment
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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
Pluralistic Society
Diffusion of Power
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Strengths
Prevents concentration of
power
Maximizes freedom of
expression
Disperses individual
allegiances
Creates diversified set of
loyalties
Provides checks and
balances
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Weaknesses
Pursuit of self-interest
Proliferates organizations
and groups with
overlapping goals
Forces conflicts to center
stage
Promotes inefficiency
Business and Selected Stakeholder
Relationships
Environmental Groups
Local
State
General Public
Federal
Community
Unions
Corporate
Raiders
Private
Citizens
Government
Older
Employee
Business
Owners
Employees
Consumers
Institutional
Investors
Women
Minorities
Civil Liberties
Activists
Consumer Activists
Product Liability Threats
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
Social Environment, Criticism, and
Corporate Response
Affluence
Education
Awareness
Factors in the Social Environment
Rising Expectations
Entitlement Mentality
Rights Movement
Victimization Philosophy
Business Criticism
Increased Concern for
Societal Environment
A Changed Social
Contract
Business Criticism
Factors in the Social Environment
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Affluence and education
Awareness through television
Revolution of rising expectations
Entitlement mentality
Rights movement
Victimization philosophy
Society’s Expectations versus
Actual Social PerformanceSociety’s
Social Performance:
Expected and Actual
Expectations
of Business
Performance
Social
Problem
Social
Problem
Business’s
Actual Social
Performance
1960s
1990s
Time
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
Business Criticism
Levels and Spheres of Corporate
Power
Levels Macro Intermediate
Spheres
Economic
Social/Cultural
Individual
Technological
Environmental
Political
Level
Level
Micro Level Individual
Level
Business Criticism
Response
Elements In the Social Contract
Laws or Regulations:
“Rules of the Game”
Business
Two-Way Shared
Understandings of Each
Other
Society or
Societal
Stakeholder
Groups
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
Focus of Book
• Managerial approach
• Ethics theme
• Stakeholder management theme
Chapter 1 • The Business/Society Relationship
Structure and Flow of Book
BUSINESS, SOCIETY, AND STAKEHOLDERS
Part One
1.
2.
3.
The Business and Society Relationship
Corporate Citizenship: Social Responsibility, Responsiveness and
Performance
The Stakeholder Approach to Business
STRATEGIC MANAGEMENT FOR CORPORATE
STAKEHOLDER PERFORMANCE
Part Two
4.
5.
Strategic Management and Corporate Affairs
Issues Management and Crisis Management
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
Chapter 1 • The Business/Society Relationship
Structure and Flow of Book
Part Three
Part Four
6.
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9.
BUSINESS ETHICS AND MANAGEMENT
Business Ethics Fundamentals
Personal and Organizational Ethics
Business Ethics and Technology
Ethical Issues in the Global Arena
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15.
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
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
Chapter 1 • The Business/Society Relationship
Structure and Flow of Book
INTERNAL STAKEHOLDER ISSUES
Part Five
16.
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18.
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Employee Stakeholders and Workplace Issues
Employee Stakeholder: Privacy, Safety, and Health
Employment Discrimination and Affirmative Action
Owner Stakeholders and Corporate Governance
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
Selected Key Terms
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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