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 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

3  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

4 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.

5 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

6 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

7 Business and Stakeholder Relationships

8 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

9 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

10 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

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

12 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

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

14 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.

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

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

17 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