1 Business Environment Course Overview  What is, and what should be, the role of business in society?  How should businesses best manage all of the stakeholder issues that impact them, and that they impact? External stakeholders (customers, government, interest groups, etc.) Internal stakeholders (employees, owners)

2 The Business and Society Relationship Chapter 1

3 Outline of Topics  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

4  Business scandals, incidents Examples: Bernie Madoff (2008), Enron/Arthur Anderson (2001), Exxon Valdez (1989), Union Carbide - Bhopal (1984)  Business issues Examples: downsizing retirement pensions, environmental pollution, product liability  Broad societal concerns General feeling with much of public that business is not ethical and cannot be trusted (particularly since 2001) The Business and Society Relationship

5 Course focuses on large businesses (visibility, power, widely recognized brands), but issues apply to small and medium-sized companies as well. Business and Society Business The collection of private,commercially oriented organizations Society A broad group of people and otherorganizations, interest groups,a community, a nation.

6 Society as Macroenvironment SegmentFocus SocialDemographics, lifestyles, social values Political Processes for passing of laws and election of officials. Interactions between firms, politics, and government Economic Nature and direction of the economy in which business operates Technological Changes in technological advancements taking place in society

7 Pluralistic Society  Definition: A society in which there is wide decentralization and diversity of power concentration.

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

9 Business and Stakeholder Relationships

10 Special-Interest Society  Society viewed as... A whole Subgroups by geography Nation, state, region, city/town, neighborhood Subgroups by interest (Interest Groups) Gender, race, profession, religion, etc. Other interests (environment, health, social equity, etc.) Individuals

11 Special-Interest Society Special Interests groups…  make life more complex for business and government  huge number of groups/interests  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

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

13 Social Environment, Business Criticism, and Corporate Response Factors in the Social Environment AffluenceEducationAwareness Rising ExpectationsRights Movement Entitlement Mentality Victimization Philosophy Business Criticism Increased Concern for the Societal Environment A Changed Social Contract

14 Society’s Expectations Versus Business’s Actual Social Performance Society’s Expectations of Business Performance Social Performance: Expected and Actual 1960s2000s Time Social Problem Business’s Actual Social Performance Social Problem

15 Business Power The ability or capacity to producean effect or to bring influence Iron Law of Responsibility In the long run, those who do not usepower in a manner society considersresponsible will tend to lose it Business Criticism: Use & Abuse of Power

16 Levels and Spheres of Corporate Power Macro Level Intermediate Level Micro Level Individual Level Economic Social/Cultural Individual Technological Environmental Political Levels Spheres

17 Elements in the Social Contract Laws or Regulations: “Rules of the Game” Two-Way Shared Understandings of Each Other Society or Societal Stakeholder Groups Business

18 Themes in Textbook: Managerial Approach Managerial Approach Business Ethics Stakeholder Management

19 Theme: 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.

20 Ethics Refers to issues of right, wrong,fairness, and justice. Business Ethics Focuses on ethical issues that arisein the commercial realm. Theme: Business Ethics

21 Stakeholders Individuals or groups with whichbusiness interacts who have avested interest in the firm.  External stakeholders  Internal stakeholders Theme: Stakeholders

22 1.The Business and Society Relationship 2.Corporate Citizenship: Social Responsibility, Responsiveness and Performance 3.The Stakeholder Approach to Business, Society, and Ethics 1.The Business and Society Relationship 2.Corporate Citizenship: Social Responsibility, Responsiveness and Performance 3.The Stakeholder Approach to Business, Society, and Ethics PART ONE Business, Society, and Stakeholders Corporate Governance and Strategic Management Issues 4.Corporate Governance: Foundational Issues 5.Strategic management and Corporate Public Affairs 6.Issues and Crisis Management 4.Corporate Governance: Foundational Issues 5.Strategic management and Corporate Public Affairs 6.Issues and Crisis Management PART TWO Organization and Flow of Book

23 7.Business Ethics Fundamentals 8.Personal and Organizational Ethics 9.Business Ethics and Technology 10.Ethical Issues in the Global Arena 7.Business Ethics Fundamentals 8.Personal and Organizational Ethics 9.Business Ethics and Technology 10.Ethical Issues in the Global Arena PART THREE Business Ethics and Management External Stakeholder Issues 11.Business, Government and Regulation 12.Business’s Influence on Government and Public Policy 13.Consumer Stakeholders: Information Issues and Responses 14.Consumer Stakeholders: Product and Service Issues 15.The Natural Environment as Stakeholder 16.Business and Community Stakeholders 11.Business, Government and Regulation 12.Business’s Influence on Government and Public Policy 13.Consumer Stakeholders: Information Issues and Responses 14.Consumer Stakeholders: Product and Service Issues 15.The Natural Environment as Stakeholder 16.Business and Community Stakeholders PART FOUR Organization and Flow of Book

24 17.Employee Stakeholders and Workplace Issues 18.Employee Stakeholder: Privacy, Safety, and Health 19.Employment Discrimination and Affirmative Action 17.Employee Stakeholders and Workplace Issues 18.Employee Stakeholder: Privacy, Safety, and Health 19.Employment Discrimination and Affirmative Action PART FIVE Internal Stakeholder Issues Organization and Flow of Book