ADM 1301 Study Guide - Fall 2018, Comprehensive Midterm Notes - Ford Focus, Civil Society, Canada
12 Oct 2018
School
Department
Course
Professor
ADM 1301
MIDTERM EXAM
STUDY GUIDE
Fall 2018
Relationship Between Business and Society
● Issues
○ Society is evolving = will be very different years from today
■ Eg technology's huge influence shaping society
■ Managers (executives) must understand this shaping of our environment
■ People are more informed
■ More choices with their money
■ More responsive to negative effects in society
■ Eg social media (United Airlines incident)
■ More reactive and proactive
■ Also misinformed though!
■ Big social media companies are investigated because their impact on people's ideas of
what's right and wrong
■ What's considered socially responsible today will be very different in 10/15/20 years
■ Eg Sherwin Williams using lead based paint
■ In the early 20th century, this was not a problem
■ Illegal now
■ Recent issue: should they be retroactively sued? Held responsible for practices
that they did 50 years ago, back when it was legal?
○ Significance of business in its social context
■ Understanding how businesses impact and are impacted = important
■ Organizations are now undergoing revolutionary changes
○ Businesses = whenever they see change, they see opportunity
■ In Ottawa, it was legal to use chemical based weed killer on lawn
■ 10 years ago it was outlawed
■ A year later, an iron based solution came out
■ When one was banned, it created an opportunity for someone else!!
● Different types of organizations
○ Corporations
■ Tend to be limited liability (shareholders cannot be sued)
■ Eg if you owned part of IBM, they get sued, and lose their lawsuit, you as a shareholder will not have to
pay for that loss
○ Partnerships
○ Proprietorships
■ More of a tight integration between the owner and organization
● Three levels of government
○ Federal
■ Postal system, military
○ Provincial
■ Focus on healthcare and education
○ Municipal
○ Different responsibilities = must be able to understand all three
● Civil society segment
○ Stakeholders! They're impacted by the organization
○ Organized and unorganized social networks
■ Communities
■ Charities (the way they get funding is different)
■ NGOs
■ Volunteers
■ Significant part of the overall economy
■ Philanthropic efforts
■ Social donating, sponsorships
■ Passionate members of society spend time and effort supporting it
find more resources at oneclass.com
find more resources at oneclass.com
○ Have influence and capability
● Must understand how these three interact
● Government creates regulatory environments regarding what is acceptable, and those who stray outside of that are punished
(through fines for example)
○ Eg in US, lots of instruction around banking industry
■ Billions of dollars in fines are paid by banks to government bc of violations of regulations
○ Government sets the environment, business operates in it, but civil society influence, for example, the government
■ Eg the trans mountain pipeline in BC
■ Courts have agreed with citizens saying gov hasn't listened to citizens properly and they won't continue
unless the questions are addressed
■ Citizens influence the other two (gov and business)
● Sorting mechanism
○ Businesses have a sorting mechanism
■ Supply and demand
○ Government = redistribution of wealth, potential possibilities, creating a structure that business operates under (w/
punishments and deterrents for companies that stray outside of that)
■ Eg a company pollutes the river, gov makes sure that the regulations are followed
● Boundaries between the three parties aren't super solid (there's an overlap)
○ Businesses donate to charities (CSR programs)
■ Eg RBC supports youth initiatives
■ Doing things that you'd expect government or citizens to do
○ Canada Post runs a profit
■ Government is getting money, some of that is business
○ Citizens
■ Some individually buy and sell things (eg Amazon, eBay)
● Business has such an impact on society that it can't just be about making profit
○ For example, companies dumping pollutants in water isn’t feasible anymore
● Canada’s macroenvironment: the business-government-society connection
○ The modified “boulding triangle” depicts the three segments of the domestic macro environment: BUSINESS,
GOVERNMENT AND SOCIETY
○ At the top appears B, G AND S in its purest form
■ Pure reciprocity (civil society)
■ Act of exchanging things for mutual benefit
■ Pure exchange (business)
■ Pure coercion (government)
■ All inner territory represents organizations embodying different mixtures of
the three: a variety of socioeconomic and governance relationships
○ Rules, or sorting mechanisms of coordination for each segment, are based on different principles:
■ Business: supply and demand forces
■ Government: redistribution and coercion
■ Civil society: cooperation, reciprocity and solidarity
○ Note that the boundaries between BS AND G are not well defined because they are not rigid frontiers; they are
wavering and continually evolving, overlapping, interacting and developing interdependence
○ Survey reveals that in Canada, each of these three segments occupies approximately one third of the
organizational/institutional territory denoted by the surface of the Boulding Triangle
○ Business is more than simply making profit! Business’s relation with society is increasingly complex
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Society is evolving = will be very different years from today. Managers (executives) must understand this shaping of our environment. More responsive to negative effects in society. Big social media companies are investigated because their impact on people"s ideas of what"s right and wrong. What"s considered socially responsible today will be very different in 10/15/20 years. Eg sherwin williams using lead based paint. In the early 20th century, this was not a problem. Significance of business in its social context. Understanding how businesses impact and are impacted = important. Businesses = whenever they see change, they see opportunity. In ottawa, it was legal to use chemical based weed killer on lawn. A year later, an iron based solution came out. When one was banned, it created an opportunity for someone else! Tend to be limited liability (shareholders cannot be sued)
