Professional Documents
Culture Documents
• Business Perspective
• Stakeholders
• Business
Environment
2
Business perspective
• Traditional view
– Business as economic institution
– Business as socio-political institution
• System view
– Business as multipurpose institution
3
Traditional perspective
• Business as economic institution
Business as economic entity that interacts with
society only through transaction in the
marketplace
4
Business as an economic
institution
Business Firm
Quantity of Use of
output resources
5
Business as sociopolitical
institution
Changes in Increased Govt.
International Intervention:
Ideologies & • Statutory Law
Environment • Admnistrative Law
Values
Increased Influence
Upgrading of Business Firm of external or public
Ethical Standard Interest Group
6
System Perspective
Business as a living organization that interacts
with and affected by environment for
economic and social motive ( multipurpose
motive ) by using the limited resources
Key To Survival is
Capacity to adapt efficiently the changing
condition posed by the environment
7
Business as Multipurpose
Institution
Economic Response
Legal
Moral
Origins of the Stakeholder
Concept
What is a stakeholder?
Primary
Primary Secondary
14
Who Are Business
Stakeholders?
Government Employees
Business
Community Owners
Consumers
Primary Stakeholder
Employees
(union)
Skill
Wholesaler
Distribution Capital Shareholder
Retailer
Customer Supplier
16
Nature of Interest and Power
Interest Power
Shareholder - Return/Dividend - Exercising voting right
- Capital Gain - Exercising right to inspect
book and record
Employee - Stable employment - Strike
- Fair pay - Union bargaining power
- Safe and comfortable - Publicity
Creditor - Repayment of loan - Calling in loan
- Interest -Take over loan’s collateral
Supplier - Regular order - Refusing to meet order
- Paid promptly - Supplying to competitor
Distributor - Good product quality - Buying from competitor
- High reliable product - Boycotting company
Customer - Fair exchange - Purchasing from competitor
- Safe & reliable product - Boycotting company
Competitor - Be profitable -Forcing to”keep up”
- Gain a larger market - Charge lower price
17
Secondary Stakeholder
Local
Communities
18
Nature of Interest and Power
Interest Power
Local Com. - Employ local residents - Restricting operating licenses
- Environment is protected - Lobbying government for
- Local area is developed regulation of the company
Social - Ensure that company - Publicizing the negative issues
Activist conform to legal and - Lobbying government for
ethical standard regulation of the company
Media - Keep the public informed - Publicizing the negative issues
on all issues
- Monitor the company
Business - Provide services and - Assist company in business
Support information endeavor & dev. effort
Government - Taxes - Regulation, licenses,& permit
- Economic development - Boycotting company
Foreign Gov. - Economic development - Permit to do business
- Social improvement - Regulation
General - Social value Protected - Support activist
Public - Prosperity for society - Condemn or praise company
- Risk minimized - Press government to act
19
Business Environment
• External environment
– Societal ( macro ), influence the entire
businesses in the same way and magnitude
– Stakeholders, do not influence the business in
the same way and magnitude
• Internal environment
20
Internal Environment
Identify strength and weaknesses for
responding to the external environment
• Corporate Structure
– The way of the corporation is organized in term of
authority, work and information flow, communication
• Corporate Culture
– The collection of beliefs, expectation and value, shared
by its members
– Produce norms that shape the behavior of employees
• Corporate Value
– Explain the action taken with respect to an issue
• Corporate Resources
21
External Environment
Identify opportunities and threats for
survival and future success
• Political relationship, Economic • Interest rate
processes, changes • Unemployment
• Stability of Government • Inflation,GNP
• Regulation & Legal • Poverty Rate, etc
aspect
• Social Value, etc
Politic Business Social
Firm • Demographic
• Life style
• Product & Process • Population Growth
• Innovation • Age Distribution
• Scientific Discovery • Social Value, etc
• Etc
Technology
22
Business Interaction
Business
Firm
Government Society
23
Business Interaction
Market Non Market
Local Communities
Shareholder
Employee Central/Local Govt.
Distributor Media
Market
Monopoly
Oligopoly
Free Market
25
Free Market System
Business
Consumers
Firm
26
Consumer Bill of
Right
• Right to safety
• Right to be informed
• Right to choose
• Right to be heard
27
“The best consumer is the educated consumer.”
28
The Consumer Bill of Rights
29
John Kennedy, 1962
30
Consumer Bill of Right
• Right to safety
• Right to be informed
• Right to choose
• Right to be heard
31
The Right to Safety
Protection
against
dangerous goods
and services.
32
Safety Responsibilities
33
Let’s talk about it…
34
The Right to Choose
A selection of options
when purchasing
goods and services
35
Choice Responsibilities
36
Let’s talk about it…
37
The Right to Be Informed
Reliable sources of
information about
product or service
performance, quality
and price
38
Informed Responsibilities
Seek information
before purchasing
Use information to
make decisions about
where and what to
purchase
39
Let’s talk about it…
40
The Right to Be Heard
Voice complaints
about products,
services and business
practices
Expect to have your
concerns addressed
by business and
government
41
Being Heard Responsibilities
42
Let’s talk about it…
43
The United Nations
Guidelines for Consumer Protection
44
Consumer Bill of Right
Right to safety
Right to be informed
Right to choose
Right to be heard
45
The Right to Redress
Fair settlement of
legitimate disputes
46
Redress Responsibilities
47
Let’s talk about it…
48
The Right to a Healthy Environment
49
Environment Responsibilities
Become aware of
environmental
concerns
Speak out for the
environment
Reduce individual
waste and pollution
50
Let’s talk about it…
51
The Right to Service
Be treated with respect
Business responds appropriately to
consumer needs
52
Service Responsibilities
53
Let’s talk about it…
54
The Right to Consumer Education
Seek information
and skills needed
to make informed
decisions
Monitor new
rules and
regulations for the
marketplace
55
Consumer Education Responsibilities
56
Let’s talk about it…
57
Business and Community
58
Business and Government
Assure good and beneficial relations
between business ant its stakeholder
59
Basic Strategies to Cope with
Environmental Changes
• Inactive Strategy
– Do nothing
• Reactive Strategy
– Environment changes first ant then organization
responds to it
• Proactive Strategy
– Organization initiates changes and than
environment altered
• Interactive Strategy
– Organization and environment are changing
simultaneously in the same direction
60
Stakeholder “essentials”
Identify
Analyze
Engage
Manage
Need to know….
Who they are
What they think
What influence they have
How to engage them
How to inform
How to stay in touch
If things change
Social Responsibility
Way a company views its duty or obligation to
make decisions that protect, enhance, and
promote the welfare and well-being of
stakeholders and society as a whole
4-63
Approaches to Social Responsibility
Figure 4-6
4-64
The Reactive-Accommodative-
Proactive Scale
Rating Strategy Performance
Reactive Deny Doing less than
Responsibility required
Defensive Admit Doing the least that
responsibility, but is required
fight it
4-66
Approaches to Social Responsibility
4-67
Approaches to Social Responsibility
4-68
Approaches to Social Responsibility
Proactive approach –
Companies actively embrace socially
responsible behavior, going out of their way
to learn about the needs of different
stakeholder groups and utilizing
organizational resources to promote the
interests of all stakeholders
4-69
Think and keep on asking me questions