VUCA World: Volatile, Uncertain, Complex, Ambiguous business environment.
krs-02 / j
Missing something?
j
A quick reference guide covering key concepts in Business and Society, including ethics, capitalism, stakeholder management, and corporate social responsibility.
Foundations & Ethics
Business and Society Relationship
|
|
|
The Good Company: Encompasses Good Management, Good Organization, and Good Citizenship. |
|
Society: Community with shared traditions, values, and history. Often pluralistic. |
|
Business: Private, commercial enterprises focused on value creation (profit, benefit, cooperative models). |
|
Social Contract: Mutual expectations of behavior between business and society. |
|
Social License: Privilege of operating with public trust, beyond formal restrictions. |
Business Ethics
|
Business Ethics: Guidelines for morally right behavior and truthfulness in business. |
Ethical Relativism: Ethical standards vary based on reference point. No universal standards exist. |
|
Level 1 Ethical Assessment: Awareness of Moral/Ethical Implications. |
Level 2 Ethical Assessment: Assessed on Individual, Organizational, Economic, Governmental, and Societal Influences. |
|
Level 3 Ethical Assessment: Assessed using Ethical Principles (Systematic Analysis of Outcomes and Benefits vs. Harms to Stakeholders). |
Influences on Ethical Behaviour: Government/Legal System, Economic Efficiency, Organizational, Social factors. |
|
Ethics: Philosophy of human behavior regarding moral judgments. |
Moral: Personal standards of acceptable behaviors/beliefs. |
|
Ethical Decision-Making: Choosing good goals or right ways to achieve them. |
|
Ethical Theories
|
Personal Virtue Ethic: Actions are right if a virtuous person would do them. Strive for virtue. |
|
Ethical Egoism (Self-Interested Ethics): Act according to your own self-interest. |
|
Enlightened Self-Interest: Moderate self-interest, public interest eventually serves individual interest. |
|
Ethic of Caring: Build community through care, reduce harm/suffering of others. |
Ethics and Capitalism
Fundamentals of Capitalism
|
Capitalism: Market-based system, efficient and responsive due to innovation. |
|
Right of Private Property: Legal right to own/use economic goods. Ethical Implication: Can lead to wealth inequality. |
|
Individualism and Economic Freedom: Individual is decision-maker. Ethical Implication: Can lead to selfishness/greed. |
|
Division of Labour: Specialization contributes to goods/services. Ethical Implication: Need holistic views. |
|
Equality of Opportunity: All individuals have an even chance. Ethical Implication: Challenging to achieve in capitalism, leading to inequality. |
Capitalism Elements & Ethics
|
Competition: Forces efficiency and innovation. Ethical Implication: Intense rivalry, short-term focus. |
Profits: Reward for risk/efficiency. Ethical Implication: Exploitation, irresponsible behavior if maximized at all costs. |
|
Work Ethic: Value of hard work. Ethical Implication: Exploitation, neglect of work-life balance. |
Consumer Sovereignty: Consumers determine goods/services. Ethical Implication: Restricted by business practices/regulations. |
|
Role of Government: Provides infrastructure, protects vulnerable. Ethical Implication: Over-involvement hinders efficiency. |
Challenges to Capitalism: Criticisms include exploitation, inequality, environmental degradation, focus on materialism. |
Stakeholder & Issues Management
Stakeholder Concepts
|
Stakeholder: An individual or group who can influence and/or is influenced by the achievement of an organization’s purpose. |
|
Rights Holder: An individual, group, or ecosystem that holds legal or inherent rights. |
|
Stakeholder Management: Identifying and responding to stakeholders’ actions, interests, and rights. |
|
Core Questions: Who are stakeholders? What are their stakes/issues? What responsibilities does the firm have? What opportunities/challenges exist? What strategies should be taken? |
Stakeholder Categories
|
Primary Stakeholders: Direct stake (employees, shareholders, customers). |
Secondary Stakeholders: Indirect stake (communities, governments, media). |
|
External Stakeholders: Stakeholders around the organization. |
Internal Stakeholders: Stakeholders within the organization. |
|
Normative Stakeholders: Organization has an obligation to them (financiers, employees). |
Derivative Stakeholders: Hold power, can influence beneficially or harmfully (NGOs, competitors). |
Issues Management
|
Issues Management Steps: Identification, Analysis, Ranking, Response Formulation, Implementation, Monitoring/Evaluating. |
Corporate Social Responsibility (CSR)
CSR Definition
|
Corporate Social Responsibility (CSR): Duty an organization has toward itself and society; balancing economic, social, and environmental responsibilities to address shareholder and other stakeholder expectations beyond legal requirements. AKA: Corporate responsibility, accountability, ethics, citizenship, sustainability, stewardship, triple-E bottom line, ESG. |
Four Concepts of CSR
|
Duty: Moral imperative to act responsibly. |
Responsibility: Accountability for actions and their consequences. |
|
Business: Recognizing the role of the organization in society. |
Moral Agency: Viewing the business as capable of ethical decision-making. |
Views on CSR
|
Shareholder View of CSR: Profit maximization is primary purpose; businesses are responsible to owners. Managers have fiduciary duty to shareholders. |
|
Stakeholder View of CSR: Businesses are responsible to a broader group of stakeholders beyond just shareholders. |
CSR Responses
|
Reactionary: Protecting conventional business, minimizing costs. CSR activities are additions, defensive. |
|
Reputational: How business is portrayed; impressions management, public relations, brand value. |
|
Responsible: Striving for business performance excellence measured by economic, environmental, and social indicators. |
|
Collaborative/Synergistic: Going beyond managing stakeholders to dialoguing and partnering for mutual benefit. |
|
Civil: Corporations act as global citizens, taking on governance functions in areas where governments are absent or ineffective. |
CSR Activities
|
Corporate Giving and Volunteerism: Donations and volunteer efforts, often tied to economic gains. |
|
Sponsorship and Cause-Related Marketing: Engagement forms raising questions of charitable support vs. marketing. |
|
Community Investment: Comprehensive approach to CSR in local, national, or international operations. |