Chapter 1

1. THE BUSINESS and SOCIETY RELATIONSHIP Chapter 1 BUSINESS & SOCIETYEthics and Stakeholder Management Carroll & Buchholtz 6e Prepared by Deborah BakerTexas Christian University

2. Chapter 1 Learning Outcomes • Characterize business, society, and their interrelationships. • Describe pluralism and identify its attributes, strengths, and weaknesses. • Clarify how our pluralistic society has become a special-interest society. • Identify, discuss, and illustrate the factors leading up to business criticism. • Single out the major criticisms of business and characterize business’s general response. • Categorize the major themes of the book: managerial approach, ethics, and stakeholder management.

3. Chapter 1 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

4. The Business and Society Relationship • Business criticism and scandals • Issues, such as executive compensation, abuse of corporate power, and sexual harassment • Broad societal concerns, such as the “rights” movement, discrimination, loss of jobs to foreign countries, and workplace violence

5. The collection of private, profit-oriented organizations A broad group of people and other organizations, interest groups, a community, a nation. Business Society Business and Society Business and society interrelate in a macroenvironment as stakeholders.

6. Social Economic Political Technological Society as the Macroenvironment

7. Segment Focus Social demographics, lifestyles, social values Economic nature and direction of the economy Political interactions between firms, politics, and government Technological changes in technological advancements Segments of the Macroenvironment

8. Prevents concentration of power Maximizes freedom of expression and action Disperses individual allegiances Creates diversified set of loyalties Provides checks and balances Pursuit of self-interest Proliferates organizations and groups with overlapping goals Forces conflicts to center stage Promotes inefficiency Strengths Weaknesses Pluralistic Society

9. Local State Federal Environmental groupsGeneral public Community Government Business Owner Employees Unions Older employees Women and minorities Civil Liberties activists Corporate raiders Private citizens Institutional Investors Consumer Consumer activists Product liability threats Business and Stakeholder Relationships

10. Special Interests groups… http://www.goodmoney.com/directry_active.htm @ Special-Interest Society • make life more complex for business • number in the tens of thousands • pursue their own limited agenda • are more active, intense, diverse and focused • attract a significant following • often work at cross purposes, with no unified set of goals

11. Affluence Education Awareness Factors in the Social Environment Rising Expectations Rights Movement VictimizationPhilosophy EntitlementMentality Business Criticism Increased concern for theSocietal Environment A Changed Social Contract Social Environment, Business Criticism, and Corporate Response

12. Factors in the Social Environment • Affluence and education • Awareness through television • Revolution of rising expectations • Entitlement mentality • Rights movement • Victimization philosophy

13. Social Performance: Expected and Actual Social Problem 1960s 1990sTime Society’s Expectations versusBusiness’s Actual Social Performance Society’s Expectations of Business Performance Social Problem Business’s Actual Social Performance

14. 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 Responsibility • In the long run, those who do not use power in a manner society considers responsible will tend to lose it

15. Levels and Spheres of Corporate Power Levels Spheres

16. Laws or Regulations: “Rules of the Game Business Society orSocietal StakeholderGroups Two-Way Shared Understandings of Each Other Elements in the Social Contract

17. Managerial Approach Ethics Stakeholder Management Focus of the Book

18. Structure and Flow of Book BUSINESS, SOCIETY, AND STAKEHOLDERS • The Business and Society Relationship • Corporate Citizenship: Social Responsibility, Responsiveness and Performance • The Stakeholder Approach to Business, Society, and Ethics PART ONE STRATEGIC MANAGEMENT FOR CORPORATE STAKEHOLDER PERFORMANCE • Strategic Management and Public Affairs • Issues Management and Crisis Management PARTTWO

19. Structure and Flow of Book BUSINESS ETHICS AND MANAGEMENT • Business Ethics Fundamentals • Personal and Organizational Ethics • Business Ethics and Technology • Ethical Issues in the Global Arena PART THREE 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 PARTFOUR

20. INTERNAL STAKEHOLDER ISSUES • Employee Stakeholders and Workplace Issues • Employee Stakeholder: Privacy, Safety, and Health • Employment Discrimination and Affirmative Action • Owner Stakeholders and Corporate Governance PART FIVE CASES Structure and Flow of Book

21. 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 victimization philosophy Selected Key Terms