Chapter 2 Organizations: Their Political, Structural and Economic Environment By: Arnica Trazo
Topics Political Environment of Business Corporate Social Responsibility and Organizations Contemporary Social Issues Ethical Behavior in the Enterprise Role of the State and Its Impact on Business Organizations
Objectives: Review the definition of economic system Discuss the impact of political environment to a company’s operating system Define Corporate Social Responsibility (CSR) Elaborate contemporary Social Issues Enumerate the six foundation of trust upon which ethical practice is built
Economic System - consists of the production, distribution or trade, and consumption of limited goods and services by different agents in a given geographical location. The economic agents can be individuals, businesses, organizations, or governments. Transactions occur when two parties agree to the value or price of the transacted good or service, commonly expressed in a certain currency.
Political Environment of Business Political environment impacts company’s international operating activities. Political climate affects marketability of the product, inflow of investment and valuation of share price The political environment includes all laws, government agencies, and lobbying groups that influence or restrict individuals or organizations in the society.
Political Environment Philosophy of political parties Nature of bureaucracy The foreign policy The political stability Ideology of the party in power Political Environment
Corporate Social Responsibility and Organizations (CSR) According to Carroll and Buchholtz, 2003. CSR is defined as the economic, legal, ethical and discretionary expectations that society has of organizations at a given point in time.
Economic Responsibilities – refer to society’s expectation that organizations will produce goods and services that are needed and desired by customers and sell those goods and services at a reasonable price. Organizations are expected to be efficient, profitable and to keep shareholder interests in mind. Legal Responsibilities – relate to the expectation that organizations will comply with the laws set down by society to govern competition in the marketplace. Legal responsibilities include consumer and product laws, environmental laws and employment laws.
Ethical Responsibilities – concern societal expectations that go beyond the law Discretionary Expectations
Ethical Responsibility Ecological Responsibility Economical Responsibility Ethical Responsibility Ecological Responsibility
Contemporary Social Issues - Corporations deal with various social issues and problems both directly related to their operation or not. Three Contemporary Social Issues that are of major concern: Environmental Global Technological
Ethical Behavior in the Enterprise Six Foundation of Trust upon which ethical business practice is built: Character Ethics Integrity Laws Morals Values
Role of Government in Business Private sector is the chief economic force of every country. Constitution gives the government the power to regulate some commerce. Consumer Protection Contract Enforcement Employee Protection Environmental Protection Investor Protection Permission Taxation
Role of Government in Business
Role of Government in Business
Role of Government in Business
Role of Government in Business
Role of Government in Business
Role of Government in Business
Role of Government in Business
Role of Government in Business