homework 1

3. Compare and contrast the relationships a firm may have with market and non-market stakeholders.

3. A company can have similar relationships between market and nonmarket stakeholder relationships. It could be similar in a way that it must hear out and conform to their needs. A nonmarket stakeholder could be the government and the company must conform to the regulations it has created for them in order to stay in business. A market stakeholder such as an employee could request more benefits and if the company chooses not to hear them out the employees could leave putting the company out of business.

4. Discuss why a manager should, or should not, be considered a stakeholder.

4. A manager should be a stakeholder in the company to make sure they act in a way that is best for the company. If the manager has no stake in a company they could end up doing what's best for them financially instead of the company. On the other hand if they have a large stake in the company then a majority of their pay would be based on how the business performs making them do what's best for the company always.

6. What is a stakeholder map? Why is it a useful tool?

6. A stakeholder map graphs all of the stakeholders based on position on an issue versus their salience. This is useful because it enables managers to see quickly how stakeholders feel about an issue and whether salient stakeholders tend to be in favor or opposed.

7. Describe and give examples of the external forces that shape the relationship between business and society.

7. There are 6 major external forces that constantly affect the relationship between business and society. Changing societal expectations is the first concept; it has to do with how society's expectations for businesses to produce higher quality goods and services are always changing. Next is growing emphasis on ethical reasoning and actions, meaning businesses need to be ethical and managers need to apply good values to their companies. Globalization, our world is being connected in more ways internationally and our goods and services can be transferred overseas easier now. Evolving government regulations and business response, the government is always creating new policies constraining businesses in different ways. Dynamic natural environment, this has to do with how businesses operate with the environment using its limited resources and not ruining it. Lastly the explosion of new technology and innovation, there is constantly new technology that allow us to be more efficient and produce more at lower prices.

Describe how general systems theory can be applied to a business

Some examples of general systems theory being applied to a business would be government regulations. Businesses constantly are conforming to new regulations made by the government while adapting to old changing regulations that may allow them to expand. Businesses interact constantly with the community they are in. They always have feedback and criticism from the community whether it be in the public or on the internet via social media.

5. Explain the process called stakeholder analysis. Include a description of its four key questions.

Stakeholder analysis is when a manager identifies relevant stakeholders and understands their interests and the power they have to assert their interests. Who are the relevant stakeholders? Management creates a map of relevant stakeholders and how they connect with one another and the company What are the interests of each stakeholder? The nature of each group's stake within the company, like what they want from their relationship with the firm. What is the power of each stakeholder? This is the ability to use resources to make an event happen or to secure a desired outcome. There are five different types of power: voting power, economic power, political power, legal power, and informational power. How are coalitions likely to form? When stakeholders share a common interest, they form temporary partnerships to pursue their common interests.

Supporters of the stakeholder theory of the firm make three core arguments for their position. Define and provide examples of each

The descriptive argument: the stakeholder view is simply a more realistic description of how companies really work. An example of this is corporation managers must pay attention to the stock price and financial performance of the company and try to raise the value of the stock and attract more investors. The instrumental argument: the stakeholder management is more effective as a corporate strategy. An example of this would be when the management of a corporation builds a strong relationship with the stakeholders and pay attention to their concerns. By doing this the management would keep the investors happy and loyal investors. The normative argument: stakeholder management is simply the right thing to do. This argument says to treat all employees as stakeholders and act in their best interest because they all contribute to the company. Examples of this would be hearing out employee concerns along with the actual stakeholders in order to keep a good relationship with everyone and help the company grow