The Business and Society Relationship
Chapter 1
Prepared by Deborah Baker
Texas Christian University
1
Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz
Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved
Chapter 1 Learning Outcomes
1. Characterize business, society, and their
interrelationships.
2. Describe pluralism and identify its attributes,
strengths, and weaknesses.
3. Clarify how our pluralistic society has become a
special-interest society.
4. Identify, discuss, and illustrate the factors leading up
to business criticism.
5. Single out the major criticisms of business and
characterize business’s general response.
6. Categorize the major themes of the book: managerial
approach, ethics, and stakeholder management.
2
Chapter 1 Outline
Business and Society
Society as the Macroenvironment
A Pluralistic Society
A Special-Interest Society
Business Criticism and Corporate Response
Focus of the Book
Structure of the Book
Summary
Key Terms
Discussion Questions
3
Business and Society
The collection of private,
Business commercially oriented organizations
A broad group of people and other
Society organizations, interest groups,
a community, a nation.
Business and society interrelate in a
macroenvironment as stakeholders.
4
Segments of the Macroenvironment
Segment Focus
Social Demographics, lifestyles, social values
Nature and direction of the economy in
Economic
which business operates
Processes for passing of laws and election
Political of officials. Interactions between firms,
politics, and government
Changes in technological advancements
Technological
taking place in society
5
A Pluralistic Society
Strengths Weaknesses
Prevents concentration of Pursuit of self-interest
power Proliferates organizations
Maximizes freedom of and groups with overlapping
goals
expression and action
Forces conflicts to center
Disperses individual stage
allegiances
Promotes inefficiency
Creates diversified set of
loyalties
Provides checks and
balances
6
Pluralistic Society
7
Business and Stakeholder Relationships
Figure 1-2 8
Special-Interest Society
Special Interests groups…
make life more complex for business and government
number in the tens of thousands
pursue their own focused agenda
are more active, intense, diverse and focused
attract a significant following
often work at cross purposes, with no unified set of goals
9
Social Environment, Business
Criticism, and Corporate Response
Affluence Education Awareness
Factors
Factorsin
inthe
theSocial
SocialEnvironment
Environment
Rising Expectations Rights Movement
Entitlement Victimization
Mentality Philosophy
Business
BusinessCriticism
Criticism
Increased
IncreasedConcern
Concernfor
forthe
the AAChanged
ChangedSocial
SocialContract
Contract
Societal
SocietalEnvironment
Environment
Figure 1-3 10
Factors in the Social Environment
Affluence and education
Awareness through television and the Internet
Revolution of rising expectations
Entitlement mentality
Rights movement
Victimization philosophy
11
Society’s Expectations Versus
Business’s Actual Social Performance
Are we wrong to have rising expectations? Society’s
Name a few problems experienced at any Expectations
of Business
One time.
Performance
Expected and Actual
Social Performance:
Social Problem
Social Business’s Actual
Problem Social Performance
1960s 2000s
Time
Figure 1-4 12
Business Criticism: Use & Abuse of Power
Business The ability or capacity to produce
Power an effect or to bring influence
In the long run, those who do not use
Iron Law of
power in a manner society considers
Responsibility responsible will tend to lose it
13
Levels and Spheres of Corporate Power
Levels Macro Intermediate Micro Individual
Level Level Level Level
Spheres
Economic
Social/Cultural
Individual
Technological
Environmental
Political
Figure 1-5 14
Elements in the Social Contract
Laws or Regulations:
“Rules of the Game
Business Society or
Societal
Stakeholder
Groups
Two-Way Shared
Understandings of
Each Other
Figure 1-6 15
Focus of the Book
Managerial
Managerial
Approach
Approach
Business
Business Stakeholder
Stakeholder
Ethics
Ethics Management
Management
16
Urgent vs. Enduring Issues
1. Short-Term:
Issues or crises arise on the spur of the
moment and management must formulate
quick responses.
2. Long-Term:
Issues or problems are a long-term concern
and management must develop a
thoughtful organizational response.
17
Business Ethics
Refers to issues of right, wrong,
Ethics fairness, and justice.
Business Focuses on ethical issues that arise
Ethics in the commercial realm.
18
Stakeholders
Individuals or groups with which
business interacts who have a
vested interest in the firm.
Stakeholders External stakeholders
Internal stakeholders
19
Organization and Flow of Book
Business, Society, and Stakeholders
1.
1. The
TheBusiness
Businessand
andSociety
SocietyRelationship
Relationship
PART
2.
2. Corporate
CorporateCitizenship:
Citizenship:Social
SocialResponsibility,
Responsibility,Responsiveness
Responsivenessand
and
ONE
Performance
Performance
3.
3. The
TheStakeholder
StakeholderApproach
ApproachtotoBusiness,
Business,Society,
Society,and
andEthics
Ethics
Corporate Governance and Strategic Management Issues
4.
4. Corporate
CorporateGovernance:
Governance: Foundational
FoundationalIssues
Issues
PART
5.
5. Strategic
Strategicmanagement
managementand
andCorporate
CorporatePublic
PublicAffairs
Affairs
TWO
6.
6. Issues
Issuesand
andCrisis
CrisisManagement
Management
Figure 1-7 20
Organization and Flow of Book
Business Ethics and Management
7.
7. Business
BusinessEthics
EthicsFundamentals
Fundamentals
PART
8.
8. Personal
Personaland
andOrganizational
OrganizationalEthics
Ethics
THREE
9.
9. Business
BusinessEthics
Ethicsand
andTechnology
Technology
10.
10. Ethical
EthicalIssues
Issuesininthe
theGlobal
GlobalArena
Arena
External Stakeholder Issues
PART 11.
11. Business,
Business,Government
GovernmentandandRegulation
Regulation
FOUR 12.
12. Business’s
Business’sInfluence
Influenceon
onGovernment
GovernmentandandPublic
PublicPolicy
Policy
13.
13. Consumer
ConsumerStakeholders:
Stakeholders:Information
InformationIssues
Issuesand
andResponses
Responses
14.
14. Consumer
ConsumerStakeholders:
Stakeholders: Product
Productand
andService
ServiceIssues
Issues
15.
15. The
TheNatural
NaturalEnvironment
EnvironmentasasStakeholder
Stakeholder
16.
16. Business
Businessand
andCommunity
CommunityStakeholders
Stakeholders
Figure 1-7 21
Organization and Flow of Book
Internal Stakeholder Issues
17.
17. Employee
EmployeeStakeholders
Stakeholdersand
andWorkplace
WorkplaceIssues
Issues
PART
18.
18. Employee
EmployeeStakeholder:
Stakeholder: Privacy,
Privacy,Safety,
Safety,and
andHealth
Health
FIVE
19.
19. Employment
EmploymentDiscrimination
Discriminationand
andAffirmative
AffirmativeAction
Action
Assignment
Assignmentfor
forChapter
Chapter2:
2:
CASES
See
Seeififthe
thecompany
companyyou youwork
workforforPresent
Presentor
orpast
pasthas
hasaaCSR
CSR
policy.
[Link]
sowhat
whatisisit?
it? Bring
Bringititto
toclass.
class.
Be
Beprepared
preparedtototake
takeaaside.
side.
We
Wewill
willhave
haveaadebate
debateFOR FORor orAGAINST
AGAINSTCSR.
CSR.
Be
BeReady
Readytotochoose
chooseyouryourside..
side..
Figure 1-7 22
