New management tools needed...
 What
if...
– US and Pacific Rim
countries form a
common market?
– Human life expectancy
is 100 years?
– Russia/China truly
capitalize?
– global warming
continues?
Social Issues in Management
 What
if...
– the UN is replaced by
UN-r-US?
– the UN really has
power to shape the
world order?
other “what if’s”
do you you see?
 What
What influences corporate strategy?
Company behavior?
core
strategy
Social Issues in Management
Macrosystems Model of Corporate Responsibility
What are the forces/influences/dynamics?
Public Policy System
Economic System
political
Pressure Groups
competitive
core
strategy
social
Social Conditions
(social system)
environmental
Competitive and
Industry System
Social Issues in Management
Ecological Environment
Macrosystems Model
Public policy system
Economic
system
general env’t
trends
demand
supply
technology
laws, regulations
judicial decisions
legislative actions/policies
political
Pressure groups
competitive
Competitive and
Industry systems
barriers to entry
rivalry among competitors
threat of substitutes
power of suppliers
power of buyers
Social Issues in Management
core
strategy
social
environmental
media
interest groups
public opinion
Social conditions
community conditions
education condition
civil sector strength
Ecological environment
pollution, degradation
state of awareness
Key Terms
 Multi-national:
clusters of affiliated firms in different
countries sharing characteristics (common: ownership,
resources, strategy)
 MNC/MNE: multinational corporation/enterprise
 International: horizontal integration-national borders
 Transnational: globally integrated business
 Global: worldwide business/industry activity
 Home country: headquarters site
 Host country: countries where facilities are located
Social Issues in Management
SEPTEmber Environments
Social
Environment
Economic
Environment
Ecological
Environment
The firm
Political
Environment
Technological
Environment
Social Issues in Management
Defining the global environments
 Political:
 Social:
– social trends, shifts in
social organizations and
civil society issues,
culture, values, people,
organizations
 Economic:
– governance, law, policy,
influence in different
regions/countries, global
standards, codes of conduct
 Technological:
– tools/methods of
production, distribution, and
knowledge enhancement,
impact on people/society
– conditions of production,
distribution & exchange
(e.g., labor conditions,
 Ecological (natural):
human rights, major
– sustainability, conservation,
trends)
pollution, degradation,
aesthetic, life-sustenance
Social Issues in Management
Stakeholders of the Firm
Governments
Financial
analysts
Media
Owners
Customers
Religious
groups
Employees
Activists
Focal Firm
Suppliers
Communities
Competitors
Primary stakeholders
Social Issues in Management
Secondary stakeholders
Corporate Social Performance Model
Legitimacy
Public
responsibility
Managerial
discretion
Environmental
scanning
Stakeholder
management
Issues
management
PRINCIPLES
of social
responsibility
PROCESSES
of social
responsiveness
Social Issues in Management
Social impacts
Social
policies
Social
programs
OUTCOMES
of corporate
behavior
Institutional-Ideological Model
Economic
ideology
Business
institutions
Technology
Ecology
Government
institutions
Political
ideology
Social Issues in Management
Public
institutions
Social
ideology
Institutional-Ideological Systems
Economic
ideology
BUSINESS
SYSTEM
Business
institutions
Technology
PUBLIC
POLICY
SYSTEM
Ecology
Government
institutions
Political
ideology
Social Issues in Management
Public
institutions
CIVIL
SOCIETY
SYSTEM
Social
ideology
Ideological Continuums
Free market Regulated
capitalism
capitalism Mixed
Socialism
Utopian
communism
ECONOMIC IDEOLOGY
Negotiated Simple
Republic Social
TotalitarianAnarchy consensus democracy democracy democracy ianism
POLITICAL IDEOLOGY
Individualism
Collectivism
SOCIAL IDEOLOGY
Social Issues in Management
Influences on ethics of
decisions
Society’s ethical climate
Business’s ethical climate
Organization’s ethical
climate
Superiors, peers,
subordinates
Individual
Social Issues in Management
Policies,
programs
Ethics, Ideology, Morality
Morality: general
approaches to resolving
ethical conflicts
Ideology: constellation
of values that tell a
story about ideals of
society
Values: judgments of
good and bad, basis of
ethics
Social Issues in Management
Experience
Ethics:
principles of
right and wrong
used to motivate
and evaluate
behaviors
Business Ethics
 Starts
with self-awareness... Why?
 Ethics: activity of examining one’s or
society’s moral standards
– how do the standards apply to our lives?
– are the standards reasonable or not?
– are they supported by good or poor reasons?
 Business
Ethics: moral standards as they
apply to business policies, institutions, and
behaviors
Social Issues in Management
Stages of Moral Development
 Kohlberg’s
six stages
– PreConventional Stages
1: punishment and obedience
 2: instrument and relativity

– Conventional Stages
3: interpersonal concordance
 4: law and order

– Postconventional Stages
5: social contract
 6: universal ethical principles

 Gilligan’s ethic of
 relational ethics
Social Issues in Management
care
Ethical principles in business
 Rights
 Justice
– entitlement to something
– legal or moral (human)
correlated with duties
 autonomy and equality
 actions and invoke
protection/aid
– comparative treatment of
benefits and burdens
– distributive justice (Rawls)

 Utilitarianism
– Kant’s categorical imperative
universalizability
 reversability

– respect people as ends (not
means)
Social Issues in Management
and fairness
– greatest good for the greatest
number
 Virtue
(character)
 Ethics of Care
– responsibility for
relationships
Corporate social performance
 Corporate
social responsibility (CSR 1)
 Corporate social responsiveness (CSR 2)
 Corporate social rectitude (CSR 3)
 Corporate social regimes (CSR 4)
Social Issues in Management
Ethical
reasoning
Gather data (facts)
Develop alternatives
Forecast outcomes
Apply alternatives to outcomes
Select behavior
Evaluate behavior
Social Issues in Management
Assessing the ethics of
situations
Moral standards:
1. maximize social
utility
2. respect moral
rights
3. distribute benefits
and burdens justly
4. exercise caring
Social Issues in Management
Factual
information:
about policy,
institution, or
behavior under
consideration
Moral Judgment
on rightness or
wrongs of the
policy, institution,
or behavior
Resolving ethical conflicts
Gather the facts
DATA
GATHERING
How does this situation fit with ethical criteria:
Utility: Does it optimize satisfactions of stakeholder?
ANALYSIS Rights: does it respect the rights of all stakeholders?
Justice: Is it consistent with canons of justice
NO
(all
criteria)
NO
DECISION
NOT
ETHICAL
Social Issues in Management
NO
(on or two
criteria
Overwhelming factors?
Incapacitating factors?
Double-effects test passed?
YES
(all
criteria)
YES
ETHICAL
DECISION
Ethical
Conflicts:

Ethics:
– principles of right and wrong that
motivate individual behavior and under
lie evaluation of behaviors
 Ethical
conflicts:
– dissonance among principles of right
(do good) or wrong (cause no harm)
– Intensity, based on:
magnitude of consequences
 degree of social consensus
 probability of effect
 temporal immediacy
 social, cultural, psychological proximity


Social Issues in Management
Ethical problem vs.... conflict
What is the public interest?
Who decides?
Who benefits?
 What
are “public goods”?
 What are “externalities”?
 Why do markets fail?
 Why do regulations fail?
Social Issues in Management
Principles of CSP
 Legitimacy
– Society grants legitimacy and power to business. Those
who abuse power will tend to lose it.
 Public
Responsibility
– Business are responsible for outcomes related to their
primary and secondary areas of involvement with society
 primary: from functional roles
 secondary: not intrinsic, ripple from primary activities
 Managerial
Discretion
– Managers are moral actors obliged to exercise discretion
toward socially responsible outcomes
Social Issues in Management
Managerial Discretion
 Economic
responsibilities
– profit/wealth generation
– distribution of goods/services
 Legal
responsibilities
 Ethical responsibilities
 Discretionary responsibilities
– use resources for social
betterment
Social Issues in Management
Public Issue Life Cycle
legislation
public
attention
trigger event
re-emerges
public
concern
media interest
activists involved
opinion leaders
early
Social Issues in Management
-time-
resolved
diminished
attention
issue dies
late
Public Issue Life Cycle:
Managerial Discretion
managerial
discretion
legislation, voluntary
resolution or abandonment
framing
shaping
political
activity
(lobbying,
trade assoc.
advertising,
trigger
media work)
event
public
attention
early
Social Issues in Management
-time-
institutionalization
coping/adaptation
late
Processes of CSP
 Policy
formulation: awareness generation
 Learning: technical issue, increasing skills,
barriers
 Commitment: integration/ownership of issues
Social Issues in Management
Boundary Spanning Processes
 Public
affairs
 Public relations
 Media relations
 Community relations
 Investor relations
 Environmental
scanning
 Stakeholder relations
 Issues management
Social Issues in Management
Theories of the Firm
 Neoclassical
theory
– rational, self-interested behavior of managers
acting in the firm’s interests, purely economic
– limitations:
 doesn’t
account for externalities
 can’t accommodate individual or organizational values
that aren’t economic or narrowly self-interested
 oversimplicity in dealing with human/organizational
relationships
 short-term perspective: maximizing shareholder wealth
 can’t protect the commons
Social Issues in Management
Theories of the Firm
 Behavioral Theory
– people act from multiple interests and motives,
with bounded rationality and personal interests
that cause agency problems
– “satisficing” not maximizing behavior
– politics, personal limits, noneconomic influences
Social Issues in Management
Theories of the Firm
 Stakeholder Theory
– businesses are in relationship with and need to
satisfy multiple stakeholders
– goal is to create a workable balance among
competing interests
– reciprocal relationships, conflict ridden
 fulfill
various stakeholders’ needs to survive
 need to examine values and interests of stakeholders
 structure and implement choice processes among
stakeholders
 trade-offs are necessary and help understand
dynamics of real-world behaviors
Social Issues in Management
Social Performance Cycle
communicate
findings to
relevant
stakeholders
evaluate new
actions and
modify as needed
Social Issues in Management
plan and
execute new
actions
evaluate social
objectives,
actions, and
outcomes
communicate
findings to key
decision makers
Corporate Social Performance Model
Principles of
social
responsibility
Legitimacy
Public responsibility
Managerial discretion
Processes of
social
responsiveness
Environmental scanning
Stakeholder management
Issues management
Outcomes of
corporate
behavior
Social impacts
Social policies
Social programs
Related Management Tools and Processes
Values assessment
Ethical analysis
Ethical reflection
Codes of ethics
Social Issues in Management
Information gathering
Community relations
Philanthropy
Public affairs
Government relations
Impact assessment
Performance
assessment
Corporate social
reporting
Stakeholder Relations
 Formal
(voting) power
 Economic power
 Political power
 Primary: essential to
survival
–
–
–
–
–
–
owners
employees
customers
suppliers
governments
competitors(?)
Social Issues in Management
 Secondary:
not directly
engaged but have influence
over firm’s economic life
 Global: crossnational
membership and crossnational
interests in business activities
–
–
–
–
e.g., environmental
political
terrorists
religious
Stakes
 value
–
–
–
–
–
–
Social Issues in Management
to stakeholders
material
political
affiliative
informational
symbolic
spiritual
Stakeholder Mapping
 Specifically
identify stakeholders
– individual, groups, names and subsets
 What
are their stakes?
 What are the power bases?
 What are stakeholder characteristics
– values, types of actions likely, power
 Relations
among stakeholders
 Changes in relationships over time
Social Issues in Management
Types of Stakeholders
dormant
dominant
discretionary
POWER
definitive
dangerous
Social Issues in Management
URGENCY
demanding
LEGITIMACY
dependent
Issues Management
 Process
–
–
–
–
of
identifying,
evaluating and
responding ...
to social and political issues that impact corporations
 Process:
managing responses (not issues
 Significant Impact: salience/impact
Social Issues in Management
Issues
 Expectational
gaps:
– difference between what is and what “ought to
be”
– controversy:
stakeholders using “voice to confront relevant parties
 stakeholders being willing/able to push concerns into
broader public forum

– impact (sine qua non)
 Types
of issues
– Factual gap: what is/what is inconsistency
– Conformance gap: what is/what ought to be gap
– Ideals gap: what ought to be/ought to be
Social Issues in Management
Multiple Bottom Lines
Impacts
Employees
Social
Economic
Political
Technology
Ecological
Social Issues in Management
Owners
Customers
Community
Dialogue vs.... Discussion
 Discussion
–
–
–
–
–
action
state conclusion
convergent thinking
argue, debate
take, hold, defend
position
– vertical thinking
– “own” ideas, individual
– ideas before conversation
Social Issues in Management
 Dialogue
–
–
–
–
–
creation (new)
disclose reasoning
divergent thinking
reflect for alternatives
make, test, improve
discoveries
– lateral thinking
– collective ideas, group
– ideas during
conversation
Discuss using dialogue...
 Do
you want to live in a...
– economy or a
– society
 What
are the similarities and differences?
 Does it matter? Why or why not?
Social Issues in Management
Scenario Exercise
 SEPTEmber
groups split into crossenvironment groups
 Using book information and insight
through SEPTEmber analysis develop
and prepare to tell two stories about
the future:
the dark ages of the corporation
 the renaissance of the corporation

How
do we cope successfully as people
and as managers in these different worlds?
Social Issues in Management