BUSS1000 Lecture Notes - Lecture 2: Creating Shared Value, Ozone Depletion, Social Enterprise
23 Jun 2018
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Defining some key terms:
-Stakeholders
-Vision, mission, and values.
Role of business in society:
-Profit Maximisation
-CSR
-CSV
-SE
Definitions:
-Organisation: “a group of people who work together in an organized way for a shared
purpose” -> does not have to be a business/ company
-Company: “an organization that sells goods or services in order to make money”
-Corporation: “a large company or group of companies that is controlled together as a
single organization” eg Coca Cola
-Business: “a particular company that buys and sells goods and services”
STAKEHOLDERS:
Stakeholder: an organization or “a person such as an employee, customer, or citizen who is
involved with an organization, society, etc. and therefore has responsibilities
towards it and an interest in its success.” -> invested interest
Types:
- owners (e.g. investors, shareholders, agents, analysts, and ratings agencies)
- customers (e.g. direct customers, indirect customers, and advocates)
- employees (e.g. current employees, potential employees, retirees, representatives, and
dependents)
- industry (e.g. suppliers, competitors, industry associations, industry opinion leaders, and
media)
- community (e.g. residents near company facilities, chambers of commerce, resident
associations, schools, community organisations, and special interest groups)
- environment (e.g. nature, nonhuman species, future generations, scientists, ecologists,
spiritual communities, advocates, and NGOs)
- government (e.g. public authorities, and local policymakers; regulators; and opinion
leaders)
- Industry -> operating to gain market share
- Eg rockmelon crisis = one farm disruptive them all
- Interested in other competitors impact on the industry
- civil society organisations (e.g. NGOs, faith-based organisations, and labor unions)
- Different layers of stakeholders within groups eg students first time vs student
repeat
- Representing stakeholders -> who are they representing? Does it matter?
- Are competitors stakeholders? -> usually yes eg video console industry
- One company impacts the other
find more resources at oneclass.com
find more resources at oneclass.com
Stockholder: “a person who owns shares in a company and therefore gets part of the company's
profits and the right to vote on how the company is controlled.”
Important: Stakeholders and stockholders are different -> So all stockholders are stakeholders,
but not all stakeholders are stockholders.
VISION, MISSION and VALUES:
- They engage in explaining what the organisation does
- An understanding of what the leaders want the organisation to become
- Describes an inspiring new reality
- Often serve to aid in decision making
- Provides context for all decisions within the organisation
- Guiding the development of strategy and organization
- Essence of the business eg low price/ quality/ service
Mission Statement: “a short written description of the aims of a business, charity, government
department, or public organization”
Vision Statement: “a statement of what a company or an organization would like to achieve in
the future”
Values: “the principles that help you to decide what is right and wrong, and how to act in various
situations:”
- These impact organisational culture- > often inform decision making of the organisation
- Businesses need to embody these statements/ adhere to the values
Organisational culture: “the types of attitudes and agreed ways of working shared by the
employees of a company or organization”
ROLE OF BUSINESS IN SOCIETY:
Many people have very different ideas about what the purpose of business should be. This is a
very philosophical discussion, and often a very personal one. These perspectives often have a
lot to do with: -> what they can/ can’t do
- What we believe is important eg money
- How we believe the world works
- How we believe the world should work
Four perspectives of businesses role in society:
1. Profit Maximisation
- According to Friedman (1970) “There is one and only one social responsibility of
business–to use it resources and engage in activities designed to increase its profits so
long as it stays within the rules of the game, which is to say, engages in open and free
competition without deception or fraud.”
- ‘Classical Economics’
- Perspective was prominent for millennia rather than now
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Organisation: a group of people who work together in an organized way for a shared purpose -> does not have to be a business/ company. Company: an organization that sells goods or services in order to make money . Corporation: a large company or group of companies that is controlled together as a single organization eg coca cola. Business: a particular company that buys and sells goods and services . Stakeholder: an organization or a person such as an employee, customer, or citizen who is involved with an organization, society, etc. and therefore has responsibilities towards it and an interest in its success. -> invested interest. Eg rockmelon crisis = one farm disruptive them all. Interested in other competitors impact on the industry civil society organisations (e. g. ngos, faith-based organisations, and labor unions) Different layers of stakeholders within groups eg students first time vs student repeat.
