MANAGEMENT OF CSR 314
Chapter 1: The business and Society Relationship:
• Value lies in the eye of the beholder
• If we want to be seen as businesses that add value, we need to find out what value is
to our customers
BUSINESS AND SOCIETY:
• Business
- the collection of private, commercially oriented organizations ranging in size
from one-family proprietorships to multinational corporations.
- In a collective sense, all businesses sizes are included
- When talking about “business and society”, it may refer to business and the local
community, business and the United States as a whole, global business or
business and a specific group of people.
- When discussing ‘business and the total society’, society is composed of
numerous interest groups, more or less formalized organisations, and a wide
variety of institutions.
- Some industries are also more conducive in the creation of visible social
problems eg manufacturing firms and pollution, automakers and popularity of
their products
- Some industries are visible because of the advertising-intensive nature, others
because of their effects on health (cigarettes)
- Attention = large, well known industries but can apply to small and medium
businesses
• Society
- a community, nation, or broad grouping of people with common traditions,
values, institutions, and collective activities and interests.
- Can represent local community, country, global business or business with a
specific group of stakeholders
- Total society = numerous interest groups, more or less formalized organizations,
and a wide variety of institutions. People are grouped together because they
represent a common cause/ beliefs
• Macroenvironment
- the total environment outside the firm, the comprehensive societal context in
which the organization resides.
- Another way of thinking society as a whole
• Society
- is the macroenvironment in which businesses operate.
,SOCIETY AS THE MACROENVIRONMENT:
• Four identifiable but interrelated segments
- Social environment focuses on demographics, lifestyles, culture, and social
values of the society. Interested in the way shifts in these factors affect the
organization and its functioning. For example, the influx of undocumented
workers and immigrants over the past decade has brought changes to the
demographic profile of countries.
- Economic environment addresses the nature and direction of the economy in
which business operates. Includes indices such as gross national product,
inflation, interest rates, unemployment rates, foreign exchange fluctuations,
national debt, global trade, balance of payments etc.
o Global competitiveness is a huge issue for business. Underwhelming business
growth = problem.
o Recovery from the recession has been weaker and the middle class has felt it
the most
o Enduring levels of high unemployment, underemployment and use of part-
time workers have been problematic economic issues.
- 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. Of particular interest to business in this
segment are taxation, the regulatory process, and the changes that occur over
time in business regulation of various industries, products, and different issues.
- Technological environment represents the total set of technology-based
advancements taking place in society and the world. This rapidly changing
segment includes new products, processes, materials, and means of
communication (e.g., social networking), as well as the status of knowledge and
scientific advancement.
o The rate of invention, innovation and diffusion seems to be more dynamic
every year
A PLURALISTIC SOCIETY:
• Pluralism = diffusion of power among society’s many groups and organizations.
, • Pluralistic society = one in which there is wide decentralization and diversity of
power concentration.
• Virtues of 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, on the one hand, and anarchy on the other.
- 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 uncontrolled.
- 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.
- Provides a greater balance of power among groups in society
• Strengths
- Prevents power from being concentrated in the hands of a few.
- Maximizes freedom of expression and action.
- Provides a built-in set of checks and balances so that no single group dominates.
• Weaknesses:
- It creates an environment in which diverse institutions pursue their own self-
interests with the result that there is no unified direction to bring together
individual pursuits.
- Groups and institutions proliferate to the extent that their goals start to overlap,
thus causing confusion as to which organizations best serve which functions.
- Forces conflict, or differences in opinions, onto center stage because of its
emphasis on autonomous groups, each pursuing its own objectives.
Business and Stakeholder Relationships:
• References to business and society relationships may refer either to particular
segments or subgroups of society (consumers, women, minorities,
environmentalists, millennials, senior citizens) or to business and some system in our
society (politics, law, custom, religion, economics). These groups of people or
systems also may be referred to in an institutional form (business and the courts,
business and labour unions, business and the church, business and the Federal Trade
Commission etc).
, - Points of interface between business and some of the multiple publics, systems
or stakeholders with which business interacts (can be further divided Ch 3)
SPECIAL-INTEREST SOCIETY:
• 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.
• NGOs (nongovernmental organisations) = interest groups representing all sectors of
society
• Special-interest groups have become increasingly activist, intense and focused on
single issues. They are strongly committed to their causes and strive to bring
pressure to bear on businesses to meet their needs and on governments to
accommodate their agendas.
• Consequences:
- Each group has been able to attract a significant following dedicated to the
group’s goals.
- This means increased revenues and a sharper focus as each group has
aggressively sought its specific purposes.
- The likelihood of these groups working at cross-purposes and with no unified set
of goals has made life more complex for business and government.
• A special-interest society is pluralism taken to the extreme.
BUSINESS CRITICISM AND CORPORATE RESPONSE:
• How the process of business criticism has shaped the emergence of the business and
society relationship today
Chapter 1: The business and Society Relationship:
• Value lies in the eye of the beholder
• If we want to be seen as businesses that add value, we need to find out what value is
to our customers
BUSINESS AND SOCIETY:
• Business
- the collection of private, commercially oriented organizations ranging in size
from one-family proprietorships to multinational corporations.
- In a collective sense, all businesses sizes are included
- When talking about “business and society”, it may refer to business and the local
community, business and the United States as a whole, global business or
business and a specific group of people.
- When discussing ‘business and the total society’, society is composed of
numerous interest groups, more or less formalized organisations, and a wide
variety of institutions.
- Some industries are also more conducive in the creation of visible social
problems eg manufacturing firms and pollution, automakers and popularity of
their products
- Some industries are visible because of the advertising-intensive nature, others
because of their effects on health (cigarettes)
- Attention = large, well known industries but can apply to small and medium
businesses
• Society
- a community, nation, or broad grouping of people with common traditions,
values, institutions, and collective activities and interests.
- Can represent local community, country, global business or business with a
specific group of stakeholders
- Total society = numerous interest groups, more or less formalized organizations,
and a wide variety of institutions. People are grouped together because they
represent a common cause/ beliefs
• Macroenvironment
- the total environment outside the firm, the comprehensive societal context in
which the organization resides.
- Another way of thinking society as a whole
• Society
- is the macroenvironment in which businesses operate.
,SOCIETY AS THE MACROENVIRONMENT:
• Four identifiable but interrelated segments
- Social environment focuses on demographics, lifestyles, culture, and social
values of the society. Interested in the way shifts in these factors affect the
organization and its functioning. For example, the influx of undocumented
workers and immigrants over the past decade has brought changes to the
demographic profile of countries.
- Economic environment addresses the nature and direction of the economy in
which business operates. Includes indices such as gross national product,
inflation, interest rates, unemployment rates, foreign exchange fluctuations,
national debt, global trade, balance of payments etc.
o Global competitiveness is a huge issue for business. Underwhelming business
growth = problem.
o Recovery from the recession has been weaker and the middle class has felt it
the most
o Enduring levels of high unemployment, underemployment and use of part-
time workers have been problematic economic issues.
- 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. Of particular interest to business in this
segment are taxation, the regulatory process, and the changes that occur over
time in business regulation of various industries, products, and different issues.
- Technological environment represents the total set of technology-based
advancements taking place in society and the world. This rapidly changing
segment includes new products, processes, materials, and means of
communication (e.g., social networking), as well as the status of knowledge and
scientific advancement.
o The rate of invention, innovation and diffusion seems to be more dynamic
every year
A PLURALISTIC SOCIETY:
• Pluralism = diffusion of power among society’s many groups and organizations.
, • Pluralistic society = one in which there is wide decentralization and diversity of
power concentration.
• Virtues of 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, on the one hand, and anarchy on the other.
- 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 uncontrolled.
- 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.
- Provides a greater balance of power among groups in society
• Strengths
- Prevents power from being concentrated in the hands of a few.
- Maximizes freedom of expression and action.
- Provides a built-in set of checks and balances so that no single group dominates.
• Weaknesses:
- It creates an environment in which diverse institutions pursue their own self-
interests with the result that there is no unified direction to bring together
individual pursuits.
- Groups and institutions proliferate to the extent that their goals start to overlap,
thus causing confusion as to which organizations best serve which functions.
- Forces conflict, or differences in opinions, onto center stage because of its
emphasis on autonomous groups, each pursuing its own objectives.
Business and Stakeholder Relationships:
• References to business and society relationships may refer either to particular
segments or subgroups of society (consumers, women, minorities,
environmentalists, millennials, senior citizens) or to business and some system in our
society (politics, law, custom, religion, economics). These groups of people or
systems also may be referred to in an institutional form (business and the courts,
business and labour unions, business and the church, business and the Federal Trade
Commission etc).
, - Points of interface between business and some of the multiple publics, systems
or stakeholders with which business interacts (can be further divided Ch 3)
SPECIAL-INTEREST SOCIETY:
• 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.
• NGOs (nongovernmental organisations) = interest groups representing all sectors of
society
• Special-interest groups have become increasingly activist, intense and focused on
single issues. They are strongly committed to their causes and strive to bring
pressure to bear on businesses to meet their needs and on governments to
accommodate their agendas.
• Consequences:
- Each group has been able to attract a significant following dedicated to the
group’s goals.
- This means increased revenues and a sharper focus as each group has
aggressively sought its specific purposes.
- The likelihood of these groups working at cross-purposes and with no unified set
of goals has made life more complex for business and government.
• A special-interest society is pluralism taken to the extreme.
BUSINESS CRITICISM AND CORPORATE RESPONSE:
• How the process of business criticism has shaped the emergence of the business and
society relationship today
