Textbook Notes
Chapter 1
Business may be defined as the collection of private, commercially oriented
(profit-oriented)
Organizations
Society may be thought of as a community, a nation, or a broad grouping of
people with
common traditions, values, institutions, and collective activities and interests.
At its broadest level, the societal environment might be thought of as a
macroenvironment
that includes the total environment outside the firm. The macroenvironment is
the comprehensive
societal context in which organizations reside: social, economic, political, and
technological.
The social environment focuses on demographics, lifestyles, culture, and social
values
of the society.
The economic environment addresses the nature and direction of
the economy in which business operates
political environment focuses on the processes by which laws get passed and
officials get elected and all other aspects of the interaction between firms,
political practices,
and government.
technological environment represents the total set of technology-based
advancements taking place in society and the world
Pluralism refers to a diffusion of power among society’s many groups and
organizations. A long-standing definition of a pluralistic society is helpful: “A
pluralistic society is one in which there is wide decentralization and diversity of
power concentration.”19 The key terms in this definition are decentralization
and diversity
A pluralistic society …
• Prevents power from being concentrated in the hands of a few
• Maximizes freedom of expression and action and strikes a balance between
monism (social
,organization into one institution), on the one hand, and anarchy (social
organization into an infinite
number of persons), on the othera
• Is one in which the allegiance of individuals to groups is dispersed
• Creates a widely diversified set of loyalties to many organizations and
minimizes the danger that
a leader of any one organization will be left uncontrolledb
• Provides a built-in set of checks and balances, in that groups can exert power
over one another
with no single organization (business or government) dominating and
becoming overly
influential
A pluralistic society often becomes a special-interest society. As pluralism
expands, a
society develops that is characterized by tens of thousands of special-interest
groups,
each pursuing its own specific agenda.
nongovernmental organizations (NGOs). They are citizens’ groups that may be
organized
on a local, national, or international level. Today, many NGOs are long-lived,
robust, and ever active watchdogs and actors in the business and society
relationship.20
positive responses on the part of business have been (1) an increased
awareness and concern for the social environment in which it operates and (2)
a changed
social contract (relationship) between business and society.
Factors in the Social Environment
Affluence and Education (Affluence refers to the level of wealth, disposable
income, and standard of living of the society.)
Awareness through Television, Movies, Internet, and Social Media
Revolution of Rising Expectations-- This is a belief or an outlook
that each succeeding generation ought to have a standard of living higher than
that of its
predecessor.
social problem is that it is a gap between society’s
expectations of social conditions and the current social realities
, entitlement mentality --The entitlement mentality is the general belief that
someone
is owed something (e.g., a job, an education, a living wage, or health care) just
because
she or he is a member of society.
Rights movement
Victimization Philosophy.
Business power refers to the capacity or ability to produce an effect, have
impact, or to bring influence to bear on a situation or people
Levels of Power: 1 .macrolevel refers to the entire corporate system 2.
intermediate level of business power refers to groups of corporations acting in
concert in an effort to produce a desired effect 3. microlevel of business power
is the level of the individual firm. 4. individual level. This refers to the individual
corporate leader exerting power
Spheres of power: social and cultural power, power over the individual,
technological power, and environmental power, political
Iron Law of Responsibility is a concept that addresses this: “In the long run,
those who do not use power in a manner which society considers responsible
will tend to lose it.”60 Stated another way, whenever power and
responsibility become substantially out of balance, forces will be generated to
bring them into closer balance.
social contract. The social contract is a set of reciprocal understandings
and expectations that characterize the relationship between major
institutions—in our case, business and society. It also is seen as understood
and tacit
agreements that guide behavior in relationships among members of a
community or
group.
The social contract between business and society, as illustrated in Figure 1-6, is
articulated
or expressed primarily in two main ways:
1. Laws and regulations that society has established as the framework within
which
business must operate in its relationships with stakeholders, and
Chapter 1
Business may be defined as the collection of private, commercially oriented
(profit-oriented)
Organizations
Society may be thought of as a community, a nation, or a broad grouping of
people with
common traditions, values, institutions, and collective activities and interests.
At its broadest level, the societal environment might be thought of as a
macroenvironment
that includes the total environment outside the firm. The macroenvironment is
the comprehensive
societal context in which organizations reside: social, economic, political, and
technological.
The social environment focuses on demographics, lifestyles, culture, and social
values
of the society.
The economic environment addresses the nature and direction of
the economy in which business operates
political environment focuses on the processes by which laws get passed and
officials get elected and all other aspects of the interaction between firms,
political practices,
and government.
technological environment represents the total set of technology-based
advancements taking place in society and the world
Pluralism refers to a diffusion of power among society’s many groups and
organizations. A long-standing definition of a pluralistic society is helpful: “A
pluralistic society is one in which there is wide decentralization and diversity of
power concentration.”19 The key terms in this definition are decentralization
and diversity
A pluralistic society …
• Prevents power from being concentrated in the hands of a few
• Maximizes freedom of expression and action and strikes a balance between
monism (social
,organization into one institution), on the one hand, and anarchy (social
organization into an infinite
number of persons), on the othera
• Is one in which the allegiance of individuals to groups is dispersed
• Creates a widely diversified set of loyalties to many organizations and
minimizes the danger that
a leader of any one organization will be left uncontrolledb
• Provides a built-in set of checks and balances, in that groups can exert power
over one another
with no single organization (business or government) dominating and
becoming overly
influential
A pluralistic society often becomes a special-interest society. As pluralism
expands, a
society develops that is characterized by tens of thousands of special-interest
groups,
each pursuing its own specific agenda.
nongovernmental organizations (NGOs). They are citizens’ groups that may be
organized
on a local, national, or international level. Today, many NGOs are long-lived,
robust, and ever active watchdogs and actors in the business and society
relationship.20
positive responses on the part of business have been (1) an increased
awareness and concern for the social environment in which it operates and (2)
a changed
social contract (relationship) between business and society.
Factors in the Social Environment
Affluence and Education (Affluence refers to the level of wealth, disposable
income, and standard of living of the society.)
Awareness through Television, Movies, Internet, and Social Media
Revolution of Rising Expectations-- This is a belief or an outlook
that each succeeding generation ought to have a standard of living higher than
that of its
predecessor.
social problem is that it is a gap between society’s
expectations of social conditions and the current social realities
, entitlement mentality --The entitlement mentality is the general belief that
someone
is owed something (e.g., a job, an education, a living wage, or health care) just
because
she or he is a member of society.
Rights movement
Victimization Philosophy.
Business power refers to the capacity or ability to produce an effect, have
impact, or to bring influence to bear on a situation or people
Levels of Power: 1 .macrolevel refers to the entire corporate system 2.
intermediate level of business power refers to groups of corporations acting in
concert in an effort to produce a desired effect 3. microlevel of business power
is the level of the individual firm. 4. individual level. This refers to the individual
corporate leader exerting power
Spheres of power: social and cultural power, power over the individual,
technological power, and environmental power, political
Iron Law of Responsibility is a concept that addresses this: “In the long run,
those who do not use power in a manner which society considers responsible
will tend to lose it.”60 Stated another way, whenever power and
responsibility become substantially out of balance, forces will be generated to
bring them into closer balance.
social contract. The social contract is a set of reciprocal understandings
and expectations that characterize the relationship between major
institutions—in our case, business and society. It also is seen as understood
and tacit
agreements that guide behavior in relationships among members of a
community or
group.
The social contract between business and society, as illustrated in Figure 1-6, is
articulated
or expressed primarily in two main ways:
1. Laws and regulations that society has established as the framework within
which
business must operate in its relationships with stakeholders, and
