Chapter 1 ethics

major criticisms of business

Use and abuse of power

society

a community, a nation, or a group of people with common traditions, values, institutions, and collective activities and interests.

Factors leading to business criticism

a. Affluence and Education i. Create higher expectations of major institutions. b. Growing public awareness i. through television, movies, and the Internet. c. The Revolution of rising expectations - creates a social problem, a gap between societal expectations for social conditions and social realities. This can lead to: i. Entitlement mentality ii. Rights movement iii. Victimization philosophy iv. WORSE: Marxist overthrow (highly unlikely)

How pluralistic society becomes a special-interest society

a. As the concept of pluralism is pursued to an extreme, a society is created that is characterized by tens of thousands of special-interest groups, each pursuing its own focused agenda b. Religious ethics and virtues cannot survive long term in a democratic capitalist society. c. The religious ethic will have to be replaced by something d. all historical norms will be challenged. e. This ushers in a denominational effect, where cultural groups will continue to be pulled apart by diverging needs and wants. f. The rise of the special interest group will continue to proliferate the landscape. g. These special interest groups will have a major impact on business by pursuing their own agendas.

Business and society interrelationships

a. Focus of attention tends to be on large businesses in particular industries b. Relationship may be between business and a local community, business and the US as a whole (global business), or business and a specific group of stakeholders

Business and stakeholder relationship

a. Individuals or groups with which business interacts and who have a vested interest in the firm. b. In this text, we consider: i. External stakeholders, such as government, consumers, the natural environment, community members ii. Internal stakeholders, such as employees, those involved in corporate governance, and others.

Pluralism Definition

a. a diffusion of power among society's many groups and organizations, a society in which there is wide decentralization and diversity of power concentration b. Make for business and society relationships that are complex and dynamic

Pluralism weaknesses

i. 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 ii. Groups and institutions proliferate to the extent that their goals start to overlap, thus causing confusion as to which organizations best serve which functions iii. Forces conflict onto the center stage because of its emphasis on autonomous groups, each pursuing its own objectives

Pluralism Vices

i. Has the potential to erode cultural heritage and absolute ideas. ii. Can be used to destroy cultural identities of the past.

corporate response to criticism

i. Increased concern for societal environment ii. A changed social contract

Pluralism strengths

i. Prevents power from being concentrated in the hands of a few ii. Maximizes freedom of expression and action iii. Provides for a built-in set of checks and balances so that no single group dominates

Pluralism Virtues

i. Prevents power from being concentrated in the hands of a few. ii. Maximizes freedom of expression and action, and strikes a balance between monism, on the one hand, and anarchy on the other. iii. 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. iv. 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.

business

the collection of private, commercially oriented organizations ranging in size from one-person proprietorships to corporate giants.

macroenvironment

the total environment outside the firm, the comprehensive societal context in which the organization resides. All societies and businesses interacting together in socio-economic ways. (social, economic, political, technological)