What’s a Business Environment (and why do we have to take this class)? BA 385: What’s a Business Environment (and why do we have to take this class)? Chapter One: The Business and Society Relationship

Business is the collection of private, profit-oriented organizations. Society is a broad group of people and other organizations, interest groups, a community, a nation. Business and society interrelate in a macroenvironment as stakeholders. Business Community Consumers Owners Government Employees From text

The Business and Society Relationship Specific incidents versus broad societal concerns Pinto Cars versus discrimination Questions arise as to the behavior of the firm Is the firm’s behavior ethical? Is the firm’s behavior socially responsible? What is the firm’s correct response? What is the role of the firm in society?

Society as the Macroenvironment The macroenvironment is the total societal context in which the firm resides and is composed of four segments: Social Economic Political Technological

Four Segments of the Macroenvironment Social environment focuses on demographics, lifestyles and social values Economic environment focuses on the economy Political environment focuses on the legislative process, election process and the interaction between firms, politics and government Technological environment focuses on the changes in technological advancement

Pluralistic Society: Diffusion of Power among society’s many groups and organizations. Strengths Prevents concentration of power (decentralization) Maximizes freedom of expression Disperses individual allegiances Creates diversified set of loyalties Provides checks and balances Weaknesses Pursuit of self-interest Proliferates organizations and groups with overlapping goals Forces conflicts to center stage Promotes inefficiency

Business and Selected Stakeholder Relationships Business Community Consumers Owners Government Employees General Public Environmental Groups Local State Federal Corporate Raiders Private Citizens Institutional Investors Consumer ActivistsProduct Liability Threats Unions Older Employees Women Minorities Civil Liberties Activists From text

Special-Interest Society  Special interests make life more complex for business  Special interest groups number in the tens of thousands  Special interest groups each pursue their own limited agenda  Special interest groups are more active, intense, diverse and focused  Special interest groups attract a significant following increasing revenue and power

Social Environment, Criticism, and Corporate Response A Changed Social Contract Increased Concern for Societal Environment Business Criticism AffluenceEducationAwareness Factors in the Social Environment Rising Expectations Entitlement MentalityVictimization Philosophy Rights Movement

Business Criticism: Factors in the Social Environment  Affluence and education  Awareness through television (Nielsen report, 1950: 4.5 hrs., 2001: >7.5 hrs. 2006, FCC reports 4.5 per ind., 8 hrs. per household))  Revolution of rising expectations  Entitlement mentality  Rights movement  Victimization philosophy

Society’s Expectations versus Actual Social Performance Society’s Expectations of Business Performance Social Performance: Expected and Actual 1960s1990s Time Social Problem Business’s Actual Social Performance Social Problem

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

Business Criticism: Response Elements In the Social Contract Business Society or Societal Stakeholder Groups Laws or Regulations: “Rules of the Game” Two-Way Shared Understandings of Each Other (“fairness”)

Structure and Flow of Book 1.The Business and Society Relationship 2.Corporate Citizenship: Social Responsibility, Responsiveness and Performance 3.The Stakeholder Approach to Business Part One BUSINESS, SOCIETY, AND STAKEHOLDERS STRATEGIC MANAGEMENT FOR CORPORATE STAKEHOLDER PERFORMANCE 4.Strategic Management and Corporate Affairs 5.Issues Management and Crisis Management Part Two

6.Business Ethics Fundamentals 7.Personal and Organizational Ethics 8.Business Ethics and Technology 9.Ethical Issues in the Global Arena 10.Business, Government and Regulation 11.Business’s Influence on Government and Public Policy 12.Consumer Stakeholders: Information Issues and Responses 13.Consumer Stakeholders: Product and Service Issues 14.The Natural Environment as Stakeholder 15.Business and Community Stakeholders EXTERNAL STAKEHOLDER ISSUES Part Three Part Four BUSINESS ETHICS AND MANAGEMENT

INTERNAL STAKEHOLDER ISSUES 16.Employee Stakeholders and Workplace Issues 17.Employee Stakeholder: Privacy, Safety, and Health 18.Employment Discrimination and Affirmative Action 19.Owner Stakeholders and Corporate Governance Part Five Chapter 1 The Business/Society Relationship

Syllabus Review Contact information Textbook and Reading Material Assignments and Grading Readings Personal Info Form How to Succeed in This Class (next slide)

Four Habits of Highly Successful Students 1.) Good psychological research continuously demonstrates that attitudes often follow behaviors. If you simply force yourself to act like a great student (engage in the BEHAVIORS) you'll find that the ATTITUDES will follow. 2. ) Write multiple drafts of any assignment. If you write a first draft and let it sit for a day or two, you will allow time to rethink and rework the assignment. When you sit down to revise it, you'll have a fresh perspective and better ideas. You'll also catch mistakes. 3. ) USE your peers. Two, three, or four heads are better than one. Be brave and invite someone you don't know to a study group. 4.) Be kind to your instructor. Wait a minute. That's actually not necessarily related to success in this class….