Flashcards in Mid Term Deck (78)
Business is the most _________ ___________ in the world.
Any organization that is engaged in making a product or providing a service for profit.
Business and society are highly ___________.
Human beings & the social structures they collectively create.
Define stakeholder theory
Corporations serve a broad public purpose. To create value for society.
What theory states "corporations have multiple obligations & all stakeholders' interest must be taken into account".
Ownership Theory is also called...
Property or Finance Theory
Define ownership theory
The firm is seen as property of its owners and the owners interest is paramount. It takes precedence over others' interests.
The 3 core arguments for the stakeholder theory are:
Descriptive, instrumental, and normative.
More realistic description of how companies really work.
More effective corporate strategy.
Stakeholder management is the right thing to do.
What is a stakeholder?
Persons or groups that affect or are affected by an organization's decisions, policies, and operations.
What is a stake?
An interest in - or claim on - a business enterprise.
Define market stakeholder.
Those that engage in economic transactions with the company as it carries out its purpose of providing society with goods/services.
Define non-market stakeholder.
People or groups who - although they do not engage in direct economic exchange with the firm - are nonetheless affected by or can affect its actions.
Define internal stakeholders.
Employees and managers that are "inside" the firm. They contribute effort and skill usually at a company worksite.
Give some examples of internal stakeholders.
Define external stakeholders.
Those who - although they may have important transactions with the firm - are not directly employed by it.
Give some examples of external stakeholders.
Stockholders, Customers, Creditors, Suppliers, Wholesalers/Retailers.
Stands out from the background, seen as important, draws attention.
3 factors of salience.
Power, Legitimacy, Urgency
Define General Systems Theory.
It's biology. It argues that all organisms are open, and interact with their external environments. Although most organisms have clear boundaries, they can not be understood in isolation, but only in relationship to their surroundings.
Examples of Market stakeholders:
Employees, Managers, stockholders, customers, creditors, suppliers, Wholesalers/retailers.
Examples of Non-market stakeholders:
Government, communities, non-governmental organizations, business support groups, media, competitors.
Define public issue.
Any issue that is of mutual concern to an organization and one or more of its stakeholders.
What is a mixture of people's' opinions, attitudes, & beliefs about what constitutes reasonable business behavior?
Performance Expectation Gap
The gap between what the firm wants to do or is doing and what the stakeholders expect.
The method managers use to gather information about external issues and trends, so they can develop an organizational strategy that minimizes threats & takes advantage of new opportunities.