BUS 101 Terms
Fiduciary
A person that exercises power on behalf of another - acts as the others agent i.e. managers
Business Survival
Ability to adapt effectively to changing conditions
Stakeholder Power
Ability to use resources to make an event happen or to secure a desired outcome; voting, economics, politics, legality
Proxy
Absentee ballot
General Systems Theory
All organisms are open to, and interact with, their external environment
Stakeholder
All those that affect or are affected by the actions of the firm
Business
Any organization that is engaged in making a product or providing a service for a profit
Nonmarket Stakeholders
Communites, Governments, Non-govermental organizations, Media, Business Support Groups, General Public
Stakeholder Theory
Corporations serve a broad public purpose to create value for society and all of its stakeholders
Market Stakeholders
Employees, Stockholders, Creditors, Suppliers, Customers, Distributors
Legitimacy
Extent to which a stakeholder's actions are seen as proper or appropriate by the broader society
Securities and Exchange Commission
Government regulatory agency that protects stockholders rights by making sure stock markets are run fairly and that investment info is fully disclosed
Stakeholder Map
Graphical representation of the relationship of stakeholder salience to a particular issue; horizontal axis: against for, vertical axis: how salient
Board of Directors
Group of individuals who have legal duty to establish corporate objectives, develop broad policies, and select top level personnel to carry out these objectives and policies.
Nonmarket Stakeholders
Groups who don't engage in economic transactions but are still affected by or can affect the actions of the company
Systems Theory
Help managers conceptualize the relationship between their companies and their external environments. Helps us understand business and society taken together form an interactive social system
Society
Human beings and the social structures they collectively create, segments of humankind such as members of a particular community, nation, or interest group
Stakeholder Analysis
Identifying the relevant stakeholders and understand both their interests and the power they may have to assert these interests
Stockholder
Individuals or organizations that own shares of a company's stock
Boundary Spanning Departments
Offices within an organization that reach across the dividing line that separates the company from groups and people in society
Executive Compensation
One of the most important functions of the board of directors, owners no longer managed it on a day to day basis
Institutions
Own stock; pensions, mutual funds, insurance companies, university endowments
Individual Stockholder
People who directly own shares of stock issued by companies usually purchased through a stockbroker
Clawback
Process by which executives of failed firms would have to pay back some of their earnings
Corporate Governance
Process by which the company is controlled or governed
Owners Theory
Purpose of the firm is to maximize profit and make the most money it can for its shareholders who own stock
Audit Committee
Required by U.S. law to be composed entirely of outside directors and to be financially literate, it reviews the company's financial reports, recommends the appointment of outside auditors and oversees the integrity of internal financial controls
Instrumental Argument
States that stakeholder management is more efficient as a corporate strategy
Normative Argument
States that stakeholder management is simply the right thing to do
Descriptive Argument
States that the stakeholder theory is simply a more realistic view of how companies really work
Stakeholder Coalition
Temporary alliance to pursue common interest
Market Stakeholders
Those who engage in economic transactions with the company as it carries out its primary purpose of providing society with goods and services
Social Investment
Use of stock ownership as a strategy for promoting social objectives through selecting stocks according to various social criteria and by using the corporate governance process to raise issues of concern
Insider Trading
When a person gains access to confidential info about a company's financial condition and then uses that info, before it becomes public knowledge, to buy or sell the company's stock. illegal under SEC
Salience
When something stands out from the background and is seen as important or draws attention; power, legitimacy, urgency