Business & Society Ethics, Sustainability, and Stakeholder

Management Eighth Edition

Archie B. Carroll Ann K. Buchholtz

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Chapter 1 The Business

and Society Relationship

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Learning Outcomes 1. Characterize business, society, and their interrelationships. 2. Describe pluralism and identify its attributes, strengths,

and weaknesses. 3. Clarify how our pluralistic society has become a special-

interest society. 4. Identify, discuss, and illustrate the factors leading up to

business criticism. 5. Single out the major criticisms of business and

characterize businesss general response. 6. Explain the major themes of the book: managerial

approach, ethics, sustainability and stakeholder management.

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Chapter Outline 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 Summary Key Terms Discussion Questions

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Business and Society Business The collection of private,

commercially oriented organizations ranging in size from sole proprietorships to corporate giants.

Society A community, a nation, or a broad group of people

with common traditions, values, institutions, and collective activities and interests.

Business and society interrelate in a macroenvironment as stakeholders. A macroenvironment is the complete societal

context in which the organization resides.

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Conceptualizing the Macroenvironment

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Segments of the Macroenvironment

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Pluralism

Pluralism A diffusion of power among a societys

many groups. Involves decentralization and diversity of

power concentration.

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Special Interest Groups

Make life more complex for business and government

Can number in the tens of thousands in some societies

Pursue their own focused agendas Are active, intense, diverse and focused Can attract a significant following Often work at cross purposes, with no

unified goals A special-interest society is pluralism taken

to the extreme

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Factors in the Social Environment

Affluence and education Create higher expectations of major

institutions. Growing public awareness through

television, movies, and the Internet. Revolution of rising expectations

Creates a social problem, a gap between societal expectations for social conditions and social realities.

Entitlement mentality Rights movement Victimization philosophy

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Business Criticism: Use and Abuse of Power

Business Power The ability or capacity to produce

an effect or to bring influence to bear on a situation or people.

Iron Law of Responsibility In the long run, those who do not use

power in a manner society considers responsible will tend to lose it.

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Elements in the Social Contract

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Laws or Regulations: Rules of the Game

Shared Understandings of Each Other

Society or Societal

Stakeholder Groups

Business

Focus of the Book

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Managerial Approach

Business Ethics

Stakeholder Management Sustainability

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Managerial Approach What changes are occurring or will occur in societys

expectations of business that mandate businesss taking the initiative with respect to particular societal or ethical problems?

Did business, in general, or our firm, in particular, have a role in creating these problems?

Can we reduce broad social problems to a size that can be effectively addressed from a managerial point of view?

What are the specific problems, alternatives for solving these problems, and implications for managements approach to dealing with social issues?

How can we best plan and organize for responsiveness to socially related business problems?

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Urgent versus Enduring Issues

Short-Term Issues or crises arise on the spur of the

moment and management must formulate quick responses.

Long-Term Issues or problems are a long-term concern

and management must develop a thoughtful organizational response.

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Business Ethics

Ethics Refers to issues of right, wrong,

fairness, and justice.

Business Ethics Focuses on ethical issues that arise

in the commercial realm.

Ethics questions permeate businesss activities as it attempts to interact with major stakeholder groups.

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Sustainability Sustainable development meets the needs

of the present without compromising the ability of future generations to meet their own needs.

Has become one of businesses most pressing mandates.

Includes the following criteria: Environmental Economic Social

Concerns businesses abilities to survive and thrive over the long term.

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Stakeholders

Stakeholders Individuals or groups with which business

interacts and who have a vested interest in the firm.

External stakeholders Internal stakeholders

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Key Terms Affluence Business Business ethics Business power Society Economic environment Education Entitlement mentality Ethics Iron Law of

Responsibility Macroenvironment Managerial approach Pluralism Political environment

Revolution of rising expectations

Rights movement Social contract Social environment Social problem Society Special-interest society Stakeholder

management Stakeholders Sustainability Technological

environment Victimization

philosophy

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Business & SocietyEthics, Sustainability, and Stakeholder ManagementEighth EditionChapter 1The Business and Society RelationshipLearning OutcomesChapter OutlineBusiness and SocietyConceptualizing the MacroenvironmentSegments of the MacroenvironmentPluralismSpecial Interest GroupsFactors in the Social EnvironmentBusiness Criticism: Use and Abuse of PowerElements in the Social ContractFocus of the BookManagerial ApproachUrgent versus Enduring IssuesBusiness EthicsSustainabilityStakeholdersKey Terms