The Business and Society Relationship 1 The Business and Society Relationship 1 Search the Web Interested in socially responsible investing? Visit Good Money’s web site at: www.goodmoney.com/directry_codes.htm.

Chapter One Objectives 2 Chapter One Objectives Characterize the relationship of business and society Describe the strengths and weaknesses of pluralism Clarify how our pluralistic society has become a special-interest society Identify and discuss the factors leading up to business criticism Identify the major criticisms of business and characterize business’s general response Identify the major themes of the book: managerial approach, ethics, and stakeholder management

Chapter One Outline Business and Society Business Defined Society Defined The Macroenvironment Role of Pluralism Weaknesses and Strengths of Pluralism Business Versus Multiple Publics and Systems Our Special-Interest Society Business Criticism and Corporate Response Factors in the Social Environment Criticisms: Use and Abuse of Power Response: A Changing Social Environment and Social Contract Focus of the Book Managerial Approach Two Broad Classes of Social Issues The Ethics Theme Structure of the Book Summary Chapter One Outline Business and Society Society as the Macroenvironment Our Pluralistic Society Our Special-Interest Society Criticism and Corporate Response Focus of the Book Structure of the Book Summary

Introduction to Chapter One The Business and Society Relationship Specific incidents versus societal concerns Firestone and discrimination Major Firestone issues: Ethical behaviour Social responsibility Corporate role and responsibility

Business and Society Relationship Business is the collection of private, commercially oriented (profit-oriented) organizations. Society is a numerous interest groups, more or less formalized organizations, and a variety of institutions. Business Community Consumers Owners Government Employees

Society as the Macroenvironment The macroenvironment is the total societal/business context and composed of four segments: Social Economic Political Technology

Society as the Macroenvironment Four segments of the Macroenvironment Social environment Economic environment Political environment Technological environment

Pluralistic Society Diffusion of Power Strengths Prevents concentration of power Maximizes freedom Disperses individual allegiances Creates diversified loyalties Provides safeguards Weaknesses Pursuit of self-interest Proliferates organizations with similar goals Forces conflicts Promotes inefficiency

The Stakeholder Relationship Business Community Consumers Owners Government Employees Environmental Groups Local Provincial General Public Federal Unions Corporate Raiders Older Employees Private Citizens Women Minorities Institutional Investors Civil Activists Consumer Activists Liability Threats

Special-Interest Society Makes life more complex for business Pursue their own agenda Are both focused and diverse Generate power and money

Criticism and Response The New Social Contract Environmental Concerns Business Criticism Affluence Education Awareness Factors in the Social Environment Rights Movement Rising Expectations Entitlement Victimization

Business Criticism Social Environment Factors Affluence and education Awareness through the media Revolution of Rising expectations Entitlement mentality Rights movement

Expectations versus Social Performance Society’s Expectations of Business Performance Social Problem Social Performance: Expected and Actual Social Problem Business’ Actual Social Performance 1960s 2000s

Business Criticism Power Use and abuse of power The ability to produce a desired effect Iron Law of Social Responsibility The use of power or its inevitable loss

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

Business Criticism Response Elements In the Social Contract Laws or Regulations: “Rules of the Game” Business Stakeholder Groups Shared Understanding

Focus of the Book The managerial approach The ethics theme The stakeholder management theme

Structure BUSINESS, SOCIETY, AND STAKEHOLDERS 1. 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 Corporate Public Affairs Issues Management and Crisis Management PART TWO

BUSINESS ETHICS AND MANAGEMENT Structure 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 Consumer Stakeholders: Information Issues and Responses Consumer Stakeholders: Product and Service Issues The Natural Environment as Stakeholder Business and Community Stakeholders PART FOUR

Structure INTERNAL STAKEHOLDER ISSUES 15. Employee Stakeholders and Workplace Issues 16. Employee Stakeholder: Privacy, Safety, and Health 17. Employment Discrimination and Employment Equity 18. Owner Stakeholders and Corporate Governance PART FIVE CASES

Selected Key Terms 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