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Bgs chapter 1

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The document discusses the study of business, government, and society. It defines business and explains different models of the relationship between business, government, and society, including the market capitalism model, dominance model, countervailing forces model, and stakeholders model. It also discusses the importance of studying business, government, and society for managers, provides a global and historical perspective, and outlines key stakeholders and criticisms of the stakeholder model.

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THE STUDY OF BUSINESS GOVERNMENT & SOCIETY Chapter 1 7/9/2014 1 BGSIT,presenter Kiran.S
INTRODUCTION 7/9/2014 2 BGSIT,presenter Kiran.S
BUSINESS • Definitions of business: “Business is profit , can be more the main objective of a business than betting is the main of making profit and acquiring wealth through the satisfaction of human wants” -R.Urvick • “Business comprises all profit seeking activities and enterprises that provide goods and services necessary to an economic system. It is the economic system. It is the economic pulse of a nation, striving to increase society’s standard of living. Profits are primary mechanize for motivating these activities.”- Boone louis.E 7/9/2014 3 BGSIT,presenter Kiran.S
GOVERNMENT • A group of people that governs a community or unit. • It sets and administers public policy and exercise executive, political and sovereign power through customs,institutions, and laws within a state. • Types- democracy,republic,monarchy,aristocracy Ex: Tata nano shifting of singur plant from Westbengal to gujarath 7/9/2014 4 BGSIT,presenter Kiran.S
SOCIETY • In common words the term society refers to members of specific groups. • Definitions-Society is a system of usages and procedures, authority and mutual aid, of many groupings and divisions, of human behaviour and of liberties.-Macler and page 7/9/2014 5 BGSIT,presenter Kiran.S
Importance of BGS to managers • T o understand the role of business in society. • To understand the business power in society. • It becomes criteria for managerial decisions. • To understand the extent of corporate social responsibility. • To know the ethical duties of managers and need for regulations. • To succeed in meeting the objectives of business. • To excel in managerial performance. • To monitor the non economic environment by taking stock of the situation before anything happens. 7/9/2014 6 BGSIT,presenter Kiran.S
Models of BGS relationships • Market Capitalism Model • Dominance Model • Countervailing Forces Model • The stakeholders model 7/9/2014 7 BGSIT,presenter Kiran.S
Market Capitalism Model • Business operates within a market environment • Primarily responding to economic forces. • Sheltered from direct impact of social and political forces. • Business is substantially sheltered from the direct impact of socio political forces and focuses on the primary economic forces. • Classic capitalism most economic activity is carried on by private firms in competitive markets. • It is based on the assumption of laissez faire(the government should let us alone) 7/9/2014 8 BGSIT,presenter Kiran.S
7/9/2014 9 BGSIT,presenter Kiran.S
Model assumptions • Government interference is slight or “Laissez fire”. • Government, not business should correct social problems • Managers focus on profit and efficiency • Individuals can own property and freely risk investments • Markets convert selfish competition into broad social benefits • Informed consumers making rational decisions • Moral restraint of business • Many producers and consumers 7/9/2014 10 BGSIT,presenter Kiran.S
Model critics: • Creates prosperity only at the cost of rising inequality • Markets erode virtue • Greed • Ruthlessness • Profit motive encourages plundering of the earth 7/9/2014 11 BGSIT,presenter Kiran.S
THE DOMINANCE MODEL • Implications: Began in 1970’s Business and government dominate the great mass of people ,which result in the enrichment of a few at the expense of many. Proper measure of corporate performance is profit Ethical duty of management is to promote the interests of shareholders 7/9/2014 12 BGSIT,presenter Kiran.S
7/9/2014 13 BGSIT,presenter Kiran.S
Perspectives of dominance model • The view that business is the most powerful institution in society, because of its control of wealth. • A merger wave between 1895 and 1904 concentrated economic growth • The public viewed these huge firms as colossal monuments to greed. 7/9/2014 14 BGSIT,presenter Kiran.S
Model critics • Creates prosperity only at the cost of rising inequality • Markets erode virtue • Greed • Ruthlessness • Profit motive encourages plundering of the earth 7/9/2014 15 BGSIT,presenter Kiran.S
The countervailing Forces Model Environment catalysts: • Economic conditions • Markets • Geopolitics • Ideologies • Technology • Nature • Culture • Change 7/9/2014 16 BGSIT,presenter Kiran.S
7/9/2014 17 BGSIT,presenter Kiran.S
The Public: • Values • Opinions • Demands • Supports • Non governmental organizations 7/9/2014 18 BGSIT,presenter Kiran.S
Corporations: • Market operations • Influence efforts • Lobbying • Leadership 7/9/2014 19 BGSIT,presenter Kiran.S
Government: • Statutes • Regulations • Political leadership • Partisan behaviour 7/9/2014 20 BGSIT,presenter Kiran.S
Countervailing forces model conclusions ▫ Business is deeply integrated into an open society and must respond to many forces, both economic and noneconomic. ▫ Business is a major initiator of change in society through its interaction with government, its production and marketing activities, and its use of new technologies. ▫ Broad public support of business depends on its adjustment to multiple social, political, and economic forces. ▫ BGS relationships continuously evolve as changes take place in the main ideas, institutions, and processes of society. 7/9/2014 21 BGSIT,presenter Kiran.S
The stakeholder Model • Stake holders are those whom the corporation benefits or burdens by its actions and those who benefit or burden the firm with their actions: • The below people are the primary stake holders 1. Suppliers 2. Society 3. Government 4. Creditors 5. Shareholders 6. customers 7/9/2014 22 BGSIT,presenter Kiran.S
7/9/2014BGSIT,presenter Kiran.S 23
• The secondary stake holders are: Educational institutions The poor Future generations Earth’s atmosphere Religious groups Political parties Unions Political interest groups Trade associations Suppliers Competitors media 7/9/2014 24 BGSIT,presenter Kiran.S
Criticism of the stakeholder model • It is not a realistic assessment of the power relationships between the corporation and other entities. • There is no single, clear and objective measure to evaluate the combined ethical/economic performance of a firm. 7/9/2014 25 BGSIT,presenter Kiran.S
Advocacy for the stakeholder model • A corporation that embraces stakeholders performs better. • It is the ethical way to manage because stakeholders have moral rights that grow from the way powerful corporations affect them. 7/9/2014 26 BGSIT,presenter Kiran.S
Global perspective of BGS • A global perspective is far more than an understanding of worldwide business and international career opportunities. • It takes more critical view of experience ,knowledge and learning 7/9/2014 27 BGSIT,presenter Kiran.S
• To adopt a global perspective, we need to enhance our understanding of the social, political and environmental forces that shape our existence. • Thus developing a global perspective means that we aim to : • Enable people to understand the links between their own lives and those of people throughout the world. 7/9/2014 28 BGSIT,presenter Kiran.S
• Increase understanding of economic, social and political forces which shapes life. • Develop skills, attitudes and values to enable people working together to bring about change for common good and to take control of their own lives. The four main pillars under global perspectives. • Concentrate on sustainable development. • Internationalization • Global issues • Global process • Each pillar contributes to the development of global citizens 7/9/2014 29 BGSIT,presenter Kiran.S
Historical perspective of BGS • The BGS relationship is a stream of events, of which only one part exists today.bgs relationship is not like that of other eras; that current ideas and institutions are not the only alternative; 7/9/2014 30 BGSIT,presenter Kiran.S

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Bgs chapter 1

  • 1. THE STUDY OF BUSINESS GOVERNMENT & SOCIETY Chapter 1 7/9/2014 1 BGSIT,presenter Kiran.S
  • 3. BUSINESS • Definitions of business: “Business is profit , can be more the main objective of a business than betting is the main of making profit and acquiring wealth through the satisfaction of human wants” -R.Urvick • “Business comprises all profit seeking activities and enterprises that provide goods and services necessary to an economic system. It is the economic system. It is the economic pulse of a nation, striving to increase society’s standard of living. Profits are primary mechanize for motivating these activities.”- Boone louis.E 7/9/2014 3 BGSIT,presenter Kiran.S
  • 4. GOVERNMENT • A group of people that governs a community or unit. • It sets and administers public policy and exercise executive, political and sovereign power through customs,institutions, and laws within a state. • Types- democracy,republic,monarchy,aristocracy Ex: Tata nano shifting of singur plant from Westbengal to gujarath 7/9/2014 4 BGSIT,presenter Kiran.S
  • 5. SOCIETY • In common words the term society refers to members of specific groups. • Definitions-Society is a system of usages and procedures, authority and mutual aid, of many groupings and divisions, of human behaviour and of liberties.-Macler and page 7/9/2014 5 BGSIT,presenter Kiran.S
  • 6. Importance of BGS to managers • T o understand the role of business in society. • To understand the business power in society. • It becomes criteria for managerial decisions. • To understand the extent of corporate social responsibility. • To know the ethical duties of managers and need for regulations. • To succeed in meeting the objectives of business. • To excel in managerial performance. • To monitor the non economic environment by taking stock of the situation before anything happens. 7/9/2014 6 BGSIT,presenter Kiran.S
  • 7. Models of BGS relationships • Market Capitalism Model • Dominance Model • Countervailing Forces Model • The stakeholders model 7/9/2014 7 BGSIT,presenter Kiran.S
  • 8. Market Capitalism Model • Business operates within a market environment • Primarily responding to economic forces. • Sheltered from direct impact of social and political forces. • Business is substantially sheltered from the direct impact of socio political forces and focuses on the primary economic forces. • Classic capitalism most economic activity is carried on by private firms in competitive markets. • It is based on the assumption of laissez faire(the government should let us alone) 7/9/2014 8 BGSIT,presenter Kiran.S
  • 10. Model assumptions • Government interference is slight or “Laissez fire”. • Government, not business should correct social problems • Managers focus on profit and efficiency • Individuals can own property and freely risk investments • Markets convert selfish competition into broad social benefits • Informed consumers making rational decisions • Moral restraint of business • Many producers and consumers 7/9/2014 10 BGSIT,presenter Kiran.S
  • 11. Model critics: • Creates prosperity only at the cost of rising inequality • Markets erode virtue • Greed • Ruthlessness • Profit motive encourages plundering of the earth 7/9/2014 11 BGSIT,presenter Kiran.S
  • 12. THE DOMINANCE MODEL • Implications: Began in 1970’s Business and government dominate the great mass of people ,which result in the enrichment of a few at the expense of many. Proper measure of corporate performance is profit Ethical duty of management is to promote the interests of shareholders 7/9/2014 12 BGSIT,presenter Kiran.S
  • 14. Perspectives of dominance model • The view that business is the most powerful institution in society, because of its control of wealth. • A merger wave between 1895 and 1904 concentrated economic growth • The public viewed these huge firms as colossal monuments to greed. 7/9/2014 14 BGSIT,presenter Kiran.S
  • 15. Model critics • Creates prosperity only at the cost of rising inequality • Markets erode virtue • Greed • Ruthlessness • Profit motive encourages plundering of the earth 7/9/2014 15 BGSIT,presenter Kiran.S
  • 16. The countervailing Forces Model Environment catalysts: • Economic conditions • Markets • Geopolitics • Ideologies • Technology • Nature • Culture • Change 7/9/2014 16 BGSIT,presenter Kiran.S
  • 18. The Public: • Values • Opinions • Demands • Supports • Non governmental organizations 7/9/2014 18 BGSIT,presenter Kiran.S
  • 19. Corporations: • Market operations • Influence efforts • Lobbying • Leadership 7/9/2014 19 BGSIT,presenter Kiran.S
  • 20. Government: • Statutes • Regulations • Political leadership • Partisan behaviour 7/9/2014 20 BGSIT,presenter Kiran.S
  • 21. Countervailing forces model conclusions ▫ Business is deeply integrated into an open society and must respond to many forces, both economic and noneconomic. ▫ Business is a major initiator of change in society through its interaction with government, its production and marketing activities, and its use of new technologies. ▫ Broad public support of business depends on its adjustment to multiple social, political, and economic forces. ▫ BGS relationships continuously evolve as changes take place in the main ideas, institutions, and processes of society. 7/9/2014 21 BGSIT,presenter Kiran.S
  • 22. The stakeholder Model • Stake holders are those whom the corporation benefits or burdens by its actions and those who benefit or burden the firm with their actions: • The below people are the primary stake holders 1. Suppliers 2. Society 3. Government 4. Creditors 5. Shareholders 6. customers 7/9/2014 22 BGSIT,presenter Kiran.S
  • 24. • The secondary stake holders are: Educational institutions The poor Future generations Earth’s atmosphere Religious groups Political parties Unions Political interest groups Trade associations Suppliers Competitors media 7/9/2014 24 BGSIT,presenter Kiran.S
  • 25. Criticism of the stakeholder model • It is not a realistic assessment of the power relationships between the corporation and other entities. • There is no single, clear and objective measure to evaluate the combined ethical/economic performance of a firm. 7/9/2014 25 BGSIT,presenter Kiran.S
  • 26. Advocacy for the stakeholder model • A corporation that embraces stakeholders performs better. • It is the ethical way to manage because stakeholders have moral rights that grow from the way powerful corporations affect them. 7/9/2014 26 BGSIT,presenter Kiran.S
  • 27. Global perspective of BGS • A global perspective is far more than an understanding of worldwide business and international career opportunities. • It takes more critical view of experience ,knowledge and learning 7/9/2014 27 BGSIT,presenter Kiran.S
  • 28. • To adopt a global perspective, we need to enhance our understanding of the social, political and environmental forces that shape our existence. • Thus developing a global perspective means that we aim to : • Enable people to understand the links between their own lives and those of people throughout the world. 7/9/2014 28 BGSIT,presenter Kiran.S
  • 29. • Increase understanding of economic, social and political forces which shapes life. • Develop skills, attitudes and values to enable people working together to bring about change for common good and to take control of their own lives. The four main pillars under global perspectives. • Concentrate on sustainable development. • Internationalization • Global issues • Global process • Each pillar contributes to the development of global citizens 7/9/2014 29 BGSIT,presenter Kiran.S
  • 30. Historical perspective of BGS • The BGS relationship is a stream of events, of which only one part exists today.bgs relationship is not like that of other eras; that current ideas and institutions are not the only alternative; 7/9/2014 30 BGSIT,presenter Kiran.S