Emerging Issues in Management (Mgmt 440)

1. Emerging Issues in Management (Mgmt 440) Critics of Business (Chapter 4) Professor Charles H. Smith Fall 2010

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 18th 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. • 19th 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 17th 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 20th 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.