Corporate Citizenship: Social Responsibility, Responsiveness and Performance

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- More paper pushing

- Less innovation

- Hard on small business

Downsides of regulation

Ethical lag- technology moves so fast that we don’t know how to control it

Examples- UK is set to approve techniques to create babies from 3 people-DNA of 3 ppl can prevent the inheritance of genetic defects.

Technology determinism- thinking carefully if new technology are needed, if the benefit of the technology are greater than the costs

• Genetically modified foods / organisms

• Stem cell research

• Cloning

• Internet privacy

– Some goals cannot be achieved through free-market mechanisms (market failures) – Generally, free-market mechanisms are preferred. Government intervention should be a last resort

The Business and Society Relationship (Chapter 1)

Pluralism

• Different groups (stakeholders) want different things / have different interests

• Power is decentralized

• A consequence of democracy

• A challenge for managers

Refers to a diffusion of power among society’s many groups and organizations. The following definition of a pluralistic society is helpful: “A pluralistic society is one in which there is wide decentralization and diversity of power concentration.” In other words, power is dispersed among many groups and people. Power is not in the hands of any single institution (such as business, government, labor, or the military) or a small number of groups.

Social expectations of the public are always above the business performance. The business performance it’s better but social expectations have gotten worse because the social gap problem it’s getting bigger.

FACTORS IN THE SOCIAL ENVIRONMENT

Affluence refers to the level of wealth, disposable income, and standard of living of the society.

Revolution of Rising Expectations-In addition to affluence, formal education, and awareness through television and the Internet, other societal trends have fostered the climate in which business criticism has occurred. Growing out of these factors has been a revolution of rising expectations held by many. This is defined as a belief or an attitude that each succeeding generation ought to have a standard of living higher than that of its predecessor

A social problem has been described as a gap between society’s expectations of social conditions and the current social realities.

Entitlement Mentality-People feel that they are entitled to certain things. Common practice.

Rights Movement- asking for more and more rights .In addition to these generalized rights, there has been activism for rights for particular groups in U.S. society

Victimization Philosophy-In such a society of victims, feelings rather than reason prevail, and people start perceiving that they are being unfairly “hurt” by society’s institutions— government, business, and education.

Business- Social Contract-Shared understanding between business and society that they have certain responsibilities towards each other. Expectations that citizens have from business. As we start being more depended on businesses and give them more trust we have higher expectations (ex. eating out, we expect good food)

The 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.”34 Stated another way, whenever power and responsibility become substantially out of balance, forces will be generated to bring them into closer balance

The Stakeholder Approach to Ethics (Chapter 3)

Stakeholder - Any individual or group who can affect or is affected by the actions, decisions, policies, practices, or goals of the organization.

Stakeholder Management Capability

- Rational Level -–know your stakeholders -identifying who their stakeholders are and what their stakes happen to be. Management operating at Level 1 is seeking to become familiar with their stakeholders and to develop a comprehensive assessment as to their identification and stakes

- Process Level - accommodate your stakeholders needs -develop and implement approaches, procedures, policies, and practices by which the firm may scan the environment and receive relevant information about stakeholders, which is then used for decision-making purposes. Management does focus on planning processes for stakeholders and integrating a consideration for stakeholders into organizational decision making

- Transactional Level - what have you actually done (ex. nike started having audits, giving students tours of their factories) -the extent to which managers actually engage in transactions (relationships) with stakeholders. Management must take the initiative in meeting stakeholders face to-face and attempting to be responsive to their needs

Stakeholder Management Capability The stakeholder management capability becomes more important as the • Size (and therefore impact) of the organization increases • Number of stakeholders involved increases, especially where external stakeholders are involved

It follows, then, that a stakeholder is an individual or a group that has one or more of the various kinds of stakes in the organization. Just as stakeholders may be affected by the actions, decisions, policies, or practices of the business firm, these stakeholders also may affect the organization’s actions, decisions, policies, or practices.

Power-ability to make people to do what you want the to do, control you

Stake-interest and rights

A right has to be enforced by somebody

Distinguished of primarily stakeholders and secondary stakeholders-