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BUAD 4000 Midterm

Business, Government, and Society: A Managerial Perspective

A broad term encompassing a range of actions and institutions. Business
Refers to structures and processes in a society that authoritatively make and apply policies and rules. Government
a network of human relations that includes three interacting elements: Material things, Values and Ideologies, and Institutions Society
What are the Four BGS Models 1. Market Capitalism 2. Dominance 3. Countervailing Forces 4. Stakeholder
The market acts as a buffer between business and nonmarket forces Market Capitalism
Government interference in economic life is slight (laissez-faire)is a key assumption of what model? Market Capitalism
Individuals can own private property and freely risk investments is a key assumption of what model? Market Capitalism
Consumers are informed about products and prices and make rational decisions is a key assumption of what model? Market Capitalism
Moral restraint accompanies the self-interested behavior of business is a key assumption of what model? Market Capitalism
Basic institutions such as banking and laws exist to ease commerce is a key assumption of what model? Market Capitalism
There are many producers and consumers in competitive markets is a key assumption of what model? Market Capitalism
What are the two main ideas behind Market Capitalism Little government interference and less regulation
Government regulation should be limited is a BGS relationship according to what model? Market Capitalism
Markets discipline private economic activity to promote social welfare is a BGS relationship according to what model? Market Capitalism
The proper measure of corporate performance is profit is a BGS relationship according to what model? Market Capitalism
The ethical duty of management is to promote the interests of shareholders Market Capitalism
Increased prosperity comes at the cost of increased inequity is a critique of what BGS model? Market Capitalism
Results in base values being energized and virtue being eroded is a critique of what BGS model? Market Capitalism
Disparity of wealth is a basic source of political conflict within and between nations. Inequality
What did the Industrial Revolution generate? Inequality. Enormous wealth but exacerbated its uneven distribution
What does the Gini index do? Measures Global income inequality.
What two things does the Gini Index tell us? 1. Economic growth does not itself increase income inequality within nations. 2. If capitalism is harnessed to create economic growth, the poor will benefit
Business and government dominate and enrich a few at the expense of many Dominance Model
Success of business depends on its ability to adjust to multiple social, political, and economic forces. Countervailing Forces
What are the four forces that effect the Countervailing Forces Model? Environmental Catalyst, The Public, Corporations, Government
Stakeholders are those whom the corporation benefits or burdens by its actions and those who benefit or burden the firm with their actions Stakeholder Model
What are five primary Stakeholders? Stockholders, Customers, Employees, communities, Governments
Debate about how to identify who or what is a stakeholder is a critique for what BGS model? Stakeholder
Not a realistic assessment of the power relationships between the corporation and other entities is a critique for what BGS model? Stakeholder
there is no single, clear, and objective measure to evaluate a firm's combined ethical/economic performance is a critique for what BGS model? Stakeholder
A corporation that embraces many different stakeholders perform better. Stakeholder
It is an ethical way to manage because stakeholders have moral rights that apply to way powerful corporations out to affect them Stakeholder
What are the 9 Historical Forces Great Leaders, Chance, Industrial Revolution, Inequality, Population Growth, Technology, Globalization, Nation States, Dominant Ideologies
Society-level shifts that influence the daily experiences of people and institutions. Historical Forces
Great Leaders, Chance, Industrial Revolution, Inequality, Population Growth, Technology, Globalization, Nation States, Dominant Ideologies are what? Historical Forces
Where did the Industrial Revolution start? Britan
What did the Industrial Revolution do? Shifted from a agrarian society to an industrial society. Reinforced values; drives growth and wealth.
What represents the gap between the rich and the poor? Inequality
What rises with wealth, and is reinforced by social institutions? Inequality
The poor still get richer, just not as fast as the rich is an example of Inequality
Widening wealth gap between high and low income countries is an implication of what? Population Growth
Growing strain on Earths eco system is an implication of what? Population Growth
Demographic decline is an implication of what? Population Growth
What Fuels Commerce and Reshapes Societies? Technology
What is the integration of worldwide economies, societies, and cultures? Glibalization
The collapse of the Berlin Wall is an example of what? Globalization
Netscape (internet access for all)is an example of what? Globalization
Workflow software(machines communicate with machines) is an example of what? Globalization
Uploading is an example of what? Globalization
Outsourcing is an example of what? Globalization
Offshoring is an example of what? Globalization
Supply Chaining is an example of what? Globalization
Insourcing is an example of what? Globalization
Informing (search engines) is an example of what? Globalization
The Steroids (smart phones) is an example of what? Globalization
___________ are characterized by a ruling authority, citizens, and fixed geographic borders Nation-States
________ Is important because they are the unit at which many regulations of business reside Nation-States
What are the Dominant Ideologies that contributed to the Industrial Revolution Social Darwinism and Protestant Work Ethic
_________ Argues that ideas are susceptible to selective pressures, as when capitalism marginalized socialism. Social Darwinism
_________ is the belief that hard work, saving, thrift, and honesty are necessary for salvation. Protestant Work Ethic
________ have brought both beneficial and disastrous changes to societies and businesses. Leaders
What are two views of historic leaders? Leaders simply ride the wave of history. Leaders themselves change history.
____ simply ride the wave of history Leaders
____ themselves change history Leaders
Proximal social contexts that influence business behavior. External Environments
What are the six External Environments? 1. Nature 2. Government 3. Technology 4. Economoy 5. Law 6. Culture
Where are the External Environments located in the circle? And what does it do? The Middle, The External Environments are Reactive and Adaptive
________ consists of forces that influence market operations Economic Environment
_________ _________ concists of tech that influences and utilized by businesses Technological Environment
Nanotechnology is an example of what External Environment? Technology
_______ Environment consists of a society's shared knowledge, values, norms, and customs Cultural
What can mitigate Cultural Environment? Postmaterialist values (Global movement, values based on assumtpions of security, rid the world of racism, sexism, authoritarianism, promote concern for environment.)
_________ Environment consists of the laws and regulations imposed by nation-states Government
What are the two important long-term global trends in government environment? Government activity has greatly expanded. More governments are becoming open and democratic.
____ Environment consists of legislation, regulation, and litigation. Legal
What is one word for Legal Environment? Restrictive
What was the take away from T.J. Hooper? He had no radio and the tug owners were found negligent because they had not adopted a cutting-edge technology.
________ Environment consists of the ecological systems that influence and are influenced by a business's activity. Natural
Anything to Affect Nature is an example of what Environment force? Natural
_______ Environment is with the corporation Internal
What does Internal Environment include? Employees, managers, the board of directors, and owners.
What is power? The ability to exert influence and control over oneself and others.
What are the 5 bases of individual power? Legitimate(position), Reward(control over), Coercive(control over), Expert(expertise of knowledge), Referent(others have desire to identify).
Tie Clep Technology, Individuals, Environment, Cultural, Legal, Economic, Political.
What are seven Realms of Business Power? TIE CLEP Technology, Individuals, Environment, Cultural, Legal, Economic, Political
_________ rightful use of power in line with the social contract Legitimate business power
_____________ Implicit agreement to cooperate for social benefit Social Contract
Business provide huge and critical contributions to society is an example of? Social Contract
What are the two competing perspectives on business power? Dominance theory and Pluralist theory.
The Pluralist theory is an example of what BGS model? Countervailing Forces (Environmental catalysts, the public, business, government)
_____ The view that business is the most powerful institution in society, because of its control of wealth. Dominance theory
Power is inadequalty checked and therefore, excessive is a belief of what theory? Dominance theory
Elite dominance - small number of wealthy and powerful who control the nation is a belief of what theory? Dominance theory
The idea that a small group of people controls the economy, government, and military. Power Elite
_________ the view that business power is exercised in society where other institutions also have great power. Pluralist theory
It is counterbalanced and restricted and therefore, not excessive Pluralist theory
What is the basic idea behind the Pluralist theory? Business power is held in check by other powers.
Where did distrust in business begin? with the Greek and Romans
T/F: Philosophers reasoned that profit seeking was an inferior motive and that commercial activity led to excess, corruption, and misery. True
What was the prevailing theology in the Middle Ages? Intolerant of profit seeking.
______ is the belief that hard work and adherence to a set of virtues such as thrift, saving, and sobriety would bring wealth and God's approval Embrace of capitalism. The Pie is growing. Protestant Ethic
American economy began with _______, but ______ grew quickly. agriculture, industry
_________ believed that industrial growth would increase national power and designed a grand scheme to promote manufacturing and finance. Alexander Hamilton
_____________ believed than an agrarian economy of landowning farmers was the ideal social order. Thomas Jefferson
Populist (1870 - 1890s) wasn't what? Popular
__________ Refined the logic and lexicon for attacking business. Populists (Lead way for Labor Unions)
In 1900 - 1918 _________ became a mainstream political doctrine. Progressives
Progressives were more successful than Populists because? They were United.
__________ a term for voluntary, nonprofit organizations that are not affiliated with governments. Nongovernmental Organizations (NGO)
At their core, ______ represent social change and organize like-minded people across the globe. NGOs
________ exist to further the social and political goals of its members or funders NOGs
______ is ofted sponsored by NGOs and their members Activism
Four ways Activists attack corporations. 1. consumer boycotts 2. shareholder attacks 3. harassment, ridicule, and shaming 4. corporate campaign
________, for the most part, brings changes that represent progress, a condition of improvement for humanity. Capitalism
The Study of the Ends Consequentialism/Utilitarianism
The ends, the consequences, the good example of? Consequentialism/Utilitarianism
The study of duty or obligation Deontology
the means, the standards, the right Deaontology
Its all about how you arrive there. Deaontology
________ is the Greatest Good for the Greatest Number Utilitarian also called consequentialism
Who are the primary proponents of Utilitarianism? Jeremy Bentham and John Stuart Mill
_______ Argues that the ethical significance of an action is determined by the consequences of the other words - the ends justify the means. Utilitarianism
What are some advantages of Utilitarianism? Maximizes good, provides a metric for social policy and moral conflicts
What are some challenges of Utilitarianism? Can be difficult to measure, are there no universal rights?
______ also called formalism and absolutism. Deaontological
Who is the primary proponent of Deontology? Immanual Kant
Immanual Kant believed? Duty is the only pure and morale motive
What were the two imperatives? Categorical and Practical
______ act only according to principles that would succeed if everyone always adhered to them. Categorical
__________ never use people as a means to an end. Practical
Standards of behavior: duty, obligations, commitments, and responsibilities is for what Ideology? Deaontology
________ Believes individual rights should not be sacrificed for collective good. Deaontology
What are the Advantages of Deontology Protects individual rights, morally appealing (more noble than utilitarianism)
Disadvantages or Deontology Requires prioritization, requires interpretation, inflexible.
The ____________ says that we should do unto others what we would have them do to us. Golden Rule
______ Ethic, Basic premise: each person has protections and entitlements that others have a duty to respect. The Rights Ethic
right to life, liberty, pursuit of happiness is an example of? The Rights Ethic
Each person should act fairly towards others in order to maintain the bonds of community. Act for the common good of society. This is an example of what theory? The theory of Justice
What are the three conceptualizations of Justice? Equity, Equality, Need
________ Ethic, be loyal to the organization. Organization Ethic
__________ Tests an ethical decision by asking how you feel explaining what you did to the entire world. The Disclosure Rule
_________ what is good is simply understood. People intuitively know the difference between right and wrong. The intuition ethic
____________ Ethic is Classic Utilitarianism - Unprincipled/deceitful/immoral means may and even out to be used to achieve desirable moral ends. Ends-Mean Ethic
Business is its own game, so anything legal is ethical. Is what Ethic? Conventionalist Ethic
_________, Weigh the good and evil effect of your decisions. If good outweighs the bad and the intention is to achieve the good, then the act is ethical. Proportionality
What is the first suggestion for making Ethical Decisions 1. Pay attention to your ethical intuition
What is the second suggestion for making Ethical Decisions 2. Consider some simple decision-making tactics to illuminate alternatives (pros and cons analysis)
What is the third suggestion for making Ethical Decisions use the critical questions approach. - are my actions legal? - am i being fair and honest? - can I explain my actions to the person I admire most?
What is the fourth suggestion for making Ethical Decisions Be publicly committed on ethical issues.
What is the fifth suggestion for making Ethical Decisions Have the courage to follow through with your ethical reasoning
What is the sixth suggestion for making Ethical Decisions Cultivate sympathy and charity towards others.
What is the seventh suggestion for making Ethical Decisions Take your time when confronting an ethical dilemma
What is the eigth suggestion for making Ethical Decisions Sort out ethical priorities early
Takeaways from Toby Groves Most of us are capable of behaving in profoundly unethical ways, and we do it without even realizing it. Bounded ethicality - we often don't see the ethical big picture.
________ The study of good and evil, right and wrong, and just and unjust actions in business. Business Ethics
______________ The degree to which a person sees him or herself as a "moral person." Moral Idenity
Our ethics swing on the ______ pendulum effect. Moral
_______ theory: business actions are judged by the general ethical standards of society, not by special set of permissive standards moral unity
_________ theory: the belief that business should be conducted without reference to the full range of ethical standards, restraints, and ideals in society. amorality
Where do our ethical frameworks come from? Philosophy, religion, culture, law
__________: the primary foundation of most ethical frameworks. Philosophy
What framework? Religious literature provide lessons for ethical behavior distilled through a modern lens? Religion, the Golden Rule
_______ A system of shared values, rules, and norms transmitted across generations Culture
The emergence of _________ economies brought a need for cooperation and coordinated effort. Agricultural
_________ economies produced new norms for materialism and consumption Industrial
_________ argues that humans are basically the same and should adhere to similar ethical rules. Ethical Universalism
______________ argues that ethical values emerge from cultures, and that universal standards cannot pass judgement on their legitimacy. Ethical Relativism
________ formalize ethical expectations Laws
___________________: payments awarded to redress actual, concrete losses suffered by injured parties. Compensatory damages
______________: payments in excess of a wronged party's actual losses to deter similar actions and punish a corporation that exhibited reprehensible conduct. Punitive damages
What four forces help shape a companies Ethical decision-making? Leader's Example, Strategies/Policies, Organization Culture, Individual Charactersistics
What are the two components of Ethical Leadership? Moral Person and Moral Manager
Does ethical leadership matter? Yes
What does the Honesty and Integrity model show? Honesty starts at the top, sets the bar, it water falls.
___________ set ethical norms and build corporate cultures Leaders
__________ set norms, values, rituals and rules within the company Corporate cultures
_________________ afford and constrain ethical actions Strategies and policies
Ultimately, the ______________ of the individual employee will play an important role. Characteristics
How do Corporations manage Ethics? Checks and Balances
What are three ways corporations mange ethics? Ethics and compliance programs, a compliance approach, an ethical approach.
What does every company need to be ethical? Codes of conduct
What is necessary but insufficient in creating an ethical culture? Codes of conduct
Often a short statement of guidelines at a high level of abstraction. Codes of conduct
__________________ The duty of a corporation to create wealth in ways that avoid harm to, protect, or enhance societal assets. Corporate Social Responsibility (CSR)
____________ The fundamental idea is that corporations have duties that go beyond lawful execution of their economic function. Corporate social responsibility CSR
What is not the sole duty of a corporation? To go beyond lawful execution of their economic function.
What are seven activities of CSR? 1. Leadership, vision, and values 2. The marketplace 3. the workforce 4. supply chain activities 5. stakeholder engagement 6. the community 7. the environment
What are some expectations of CSR? Corporations are economic institutions run for profit. All firms must follow the law.
Corporations have a duty to correct adverse social impacts they cause, is an expectation of what? CSR
Corporate behavior must comply with an underlying social contract, is an expectation of what? CSR
Corporations should be transparent and accountable is an expectation of what? CSR
What are the three basic arguments for CSR Justification? 1. It is an ethical duty to promote social justice 2. social responsibility is practical (motivates employees) 3. it is necessary because other forces do not force full responsibility on corporations.
Is CSR proven to work and motivate employees and customers? yes
What is the argument from the left against CSR Radical progressives argue that CSR only masks the fundamentally evil nature of business. (The solution is tougher laws and regulations.)
What is the argument from the right against CSR? Free Market conservatives argue that CSR constrains the fundamentally good nature of business, which can create more value by focusing on profit. (the solution is fewer laws and regulations.)
CSR first started with who? Individuals because it was considered theft.
What are the three concentric circles of responsibility? inner circle, intermediate circle, outer circle.
__________ efficient economic function to produce products, jobs, and economic growth. inner circle
____________- sensitivity to societal values and priorities (e.g. diversity in hiring) intermediate circle
___________ direct improvements to society that are not related to business itself (e.g. charitable donations) outer circle
What are three Motives of CSR Market actions, External Mandates, Voluntary actions.
__________ doing good as a side effect of earning money. Market actions (does the most good)
_______________ doing good because the government requires it. External Mandates
_________ exceeding the law to adhere to company-level codes of conduct. Voluntary Actions (usually forced)
Formal statements of aspirations, principles, guidelines, and rules for corporate behavior. Codes of Conduct
What needs to be internalized? Codes of Conduct
What is the problem with CSR? Reporting
What is the triple bottom line? Economic, social, and environmental
The practice of a corporation publishing information about economic, social, and environmental performance. Sustainability Reporting
What are the problems of sustainability reporting? Defining and measuring social performance is difficult. Reports are not comparable from company to company.
T/F: The idea of corporate social responsibility has continuously expanded in meaning, changing ways because of how people see them. True
The duty of a corporation to create wealth in ways that avoid harm to, protect, or enhance societal assets. Corporate social responsibility.
_________ is the idea is that corporations have duties that go beyond lawful execution of their economic function. CSR
What are the two types of business models? Traditional and progressive
__________ model creates value by meeting market demands while complying with the law. traditional business
__________ model integrates solutions to social problems into its core strategy. progressive business
What question do we ask to figure out what business model we should use? How are we going to make profit?
What are the four phases of that Social responsibility is implemented? CSR Review, CSR Strategy, Implementation, Reporting and Verification
____________ are continuous, and may be initiated by new internal or external pressures. CSR Reviews
T/F : most of the time CSR Reviews are External? True
During a CSR Review companies consider core _________ and __________ mission, values
Did companies who had a mission statement perform better than companies who did not have one? Yes
A ________ is a basic approach, method, or plan for achieving an objective. strategy
What is the first step to implement a CSR strategy? Is to build a formal organizational structure.
After the organizational structure is in place, an _____________ should be developed. Action Plan
The ____________ brings a strategy into fruition by proposing specific, obtainable tasks. Action Plan
What should be made after the Action play is developed? Performance goals, and timelines.
How does a company manage its Reporting and Verification? Social Audits, Triple Bottom Line
What is the Triple Bottom Line? accounting of a firm's economic, social, and environmental performance.
_________ is commonplace - this is when a company donates to charity after a product is purchased. Cause Marketing
Created by: 634620974



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