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OBS214 > Chapter 1 > Flashcards

Chapter 1 Flashcards

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1
Q

Business?

A

An organisation that is engaged in making a product or providing a service for a profit

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2
Q

Society?

A

Refers to human beings and to the social structures they collectively create specifically refers to segments of humankind such as members of a community, nation or interest group

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3
Q

How does business and society relate?

A

Businesses drive economic growth, create jobs, and influence social well-being while governments, consumers and stakeholders business operations through regulations, expectations and market demands
effective management requires balancing these influences for sustainable success

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4
Q

How to manage the interdependency of business and society?

A

Managers need an understanding of their companies key relationships and how the social and economic system influences, and is influenced by their decisions

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5
Q

Systems perspective
General system theory ?

A

Refers to human beings and social structures they collectively create, specifically refers to segments of humankind such as members of a community ,nation or interest group
Eg . Hospital functions as a system where doctors nurses and patients and interact each part works together, showing how human and social structures create interconnected systems

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6
Q

Interactive social system ?
Global impact ?
Adaptability ?
Business society relationship ?

A

Interactive social system: Closely intertwined relationships between business and society
Global impact : increasing connectivity strengthens business society interactions
Adaptability : businesses must evolve like organisms to survive in changing conditions
BSR : companies engage with customers, governments, competitors, and communities

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7
Q

The stakeholder theory of the firm ?
Purpose of a Stakeholder ?

A

The purpose of the firm is to create value for society
St theory of the firm businesses should consider the interest of all stakeholders not just the shareholders ensuring ethical and sustainable value creation

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8
Q

The stakeholder theory
Shareholder/ownership ?

A

The purpose of the firm is to maximise its long-term market value

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9
Q

Three core arguments of the stakeholder theory of the firm
Descriptive ? (3) DIN

A

descriptive argument
Describe how businesses operate by acknowledging that managers must balance multiple stakeholder interests (customers, employees, regulators) alongside financial performance

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10
Q

Core argument
instrumental (3) DIN

A

instrumental argument
Managing stakeholder relationships lead to long-term financial success . Companies that act responsibly towards stakeholder perform better financially due to stronger relationship relationships with employees, customers and communities.

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11
Q

Core argument
Normative (3) DIN

A

Businesses have an ethical duty to consider all stakeholders since they contribute value to the firm
Every group that invests effort or takes risk for a company has a moral right to share and its benefits

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12
Q

Stakeholders?
Fiduciary?

A

A person or group that affects or is affected by a corporations decisions ,policies and operations

Fiduciary: a person who exercise with power on behalf of another (acts as others agent ) eg . Managers are fs of owners and run business on their interests

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13
Q

Market stakeholder?

A

Engages in economic transactions with a company

  • investor , owner , creditor , employee , suppliers
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14
Q

Internal stakeholder?

A

Employed by the firm such as employees and managers

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15
Q

Non-market stakeholder?

A

Does not engage in direct economic exchange with a company, but is affected by or can affect its actions
- Government, community and environmental groups

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16
Q

External stakeholder?

A

Individuals or groups that may have important transactions with the firm but are not directly employed by the firm such as customers or suppliers
But they still have an influence and are influenced by the firm

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17
Q

Stakeholder concept
Stakeholder analysis?

Study These Flashcards
A

An analytic process (gain insights) used by managers that identifies the relevant stakeholders in a situation and seek to understand their interests, power and likely coalition

18
Q

Stakeholder interest and power?

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A

Interest : level of concern a stakeholder has in what the organisation does (high = directly affected, low = indirectly affected)

Power : The ability of one or more stakeholders to make an event happen or to secure a desired outcome in their interactions with the company

19
Q

Types of stakeholder power? (5)

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A
  1. Voting power (influence company decisions by voting on key issues based on ownership stake)
  2. Economic power ( influence company financially by withholding resources refusing to buy products or striking~ unions)
  3. Political power (Governments and stakeholders influence business through laws regulations and activism, can lobby for New policies)
  4. Legal power (Companies with damages caused by defective products, workplace injuries)
  5. Informational power (staled his influence business by sharing critical data, facts or perspectives with the public and decision makers)
20
Q

Coalitions and salience?

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A

Coalition are alliances among company stakeholders to pursue a common interest

Salience is ability to stand out from the background or to be seen as important or draw attention to themselves (usually possess power legitimacy and urgency)

21
Q

Four key questions of a stakeholder analysis?

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A
  • Who are the relevant stakeholders?
  • what are the interests of these stakeholders? ( * the nature of each group stake what are their concerns and what do they want from their relationship with the firm* )
  • what is the power of each stakeholder?
  • what are coalition is likely to form?
22
Q

Types of market stakeholders?

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A
  • employees
  • shareholders
  • Customers
  • suppliers
23
Q

Types of non-market stakeholders?

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A
  • communities
  • non-governmental organisations (charity)
  • Government
  • The public
24
Q

Market stakeholders
Employees , nature of interest and nature of power?

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A

nature of interest
- maintain stable employment in firm
- Receive fair pay for paperwork and mandated benefits
- Work in a safe and comfortable environment

nature of power
- Union bargaining power
- Work actions or strikes
- Publicity

25
Market stakeholders **Shareholders**, nature of interest and nature of power
**Nature of interest** - receive satisfactory return on investment - Realise appreciation in stock value overtime **nature of power** - Exercise voting rights based on share ownership - Exercise rights to inspect company books and records
26
Market shareholders **Customers,** nature of interest and nature of power ?
**nature of interest** - receive fair exchange, receive safe, reliable products, receive accurate information - Be able to voice concerns **nature of power** - purchasing goods from competitors - Boycotting companies whose products are **unsatisfactory or whose policies are unacceptable**
27
Market shareholders **suppliers** nature of interest and nature of power?
**nature of interest** - Receive regular orders for goods and be paid promptly - Use capacity efficiently - Build stable relationships and be treated ethically **nature of power** - Refusing to meet orders of conditions of contract or breached - Supplying to competitors
28
Non-market stakeholders **communities** nature of interest and nature of power?
**nature of interest** - Employ residents in the company - Ensure the local environment is protected - Ensure the local area is developed **nature of power** - Refusing to extend additional credit - Issuing or restricting operating licenses and permits - Lobbying government for regulation of the companies policies or methods of land use and waste disposal
29
Non-market stakeholders **non-governmental organisations** nature of interest and nature power?
**nature of interest** - Monitor company actions and policies to ensure that they conform to legal and ethical standards - Promote social economic development **Nature of power** - gaining broad public support through publicising the issue - lobbying government for regulation of the company
30
Non-market stakeholders **Government** nature of interest in nature of power?
**nature of interest** - promote economic development - Encourage social improvements and raise revenues through taxes **Nature of power** - Adopting regulations and laws - Issuing licenses and permits - Allowing or allowing commercial activity
31
Non-market stakeholders **the public** nature of interest and nature of power?
**Nature of interest** - Protect social values and minimise risks - Achieve prosperity for society - Receive fair and honest communication **nature of power** - networking with other stakeholders - Pressing government to act - Condemning or praising individual companies
32
The dynamic environment of business? (6)
1st - changing societal expectations 2nd - globalisation 3rd - growing emphasis on ethical reasoning and actions 4th - involving government regulations and business response 5th - dynamic natural environment 6th - explosion of new technology innovation
33
Dynamic environment of business 1st - changing societal expectations?
- people expect business to be more responsible - Believe company should pay less attention to social issues and act as good citizens and society - Business must balance and social ,legal and economic obligations to meet stakeholder expectations
34
2nd - globalisation?
- The economy is nationally integrated - Anything in one country can have a negative impact in another
35
3rd - growing emphasis on ethical reasoning and actions?
- businesses are expected to apply **ethical principles** in decision-making - ethical concerns include fair employment, consumer safety and community welfare - **Human rights protection** has become a **priority** for businesses worldwide - Companies implement ethics programs to ensure employees **follow ethical standards**
36
4th- evolving government regulations and business response?
- governments around the world have enacted a myriad (a lot) of new policies on how business can operate - regulation periodically advances and retreats
37
5th - dynamic natural environment?
- All transactions between business and society occur within a finite natural ecosystem - Renewal versus non-renewal sources - Climate change - Demands of humanity
38
6th- explosion of new technology innovation?
- most dramatic and powerful forces affecting business and society - Let the world to appear smaller and more connected - New innovations harness the human imagination to create **new machines, processes and software that address the needs, problems and concerns of modern society** - Businesses face challenges like privacy, security, and intellectual property
39
Mendelows matrix ?
**Can help determine the importance of a stakeholder to a business** PowerLow | low prio, Keepinformed High| keep satisfied,key player Low. High Interest
40
Stakeholder map?
Visual representation of the relationship among stakeholder interest, power and correlation with respect to particular issue - Also represents stakeholder salience(which firm needs more attention) - enables managers to see how a stakeholder coalition is likely to form
41
Corporations boundary spanning departments?
Are departments or offices within an organisation that reach across the dividing line that separates a company from groups and people in society?
42
Creating value in a dynamic environment?
Business is most economic, social and environmental objectives to be successful - The focus should not only be on profit but also value creation for all stakeholders - **Business success is measured by the impact on society** -Relationship between business and society is constantly in evolving requiring them to adapt - New challenges arise pushing managers to come up with innovative solutions

OBS214 (7 decks)

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