Business Ethics and Society reflection assignment
MNGT 3711 FINAL PROJECT Part A: Stakeholders and Interrelationships 1. Describe how the activities influenced your awareness and understanding of the interrelationship between business and society. Use examples from your activities in each of the modules to support this answer. Business, government, and society interact and influence each other’s' specific objectives and goals. In this lesson, you will learn the three different models that can impact how they influence each other. Let's make sure that you have an understanding of each term. Society is a group of individuals who reside in communities that have shared values and laws. In addition, society is made up of different religions, cultures, interests, attitudes, and lifestyles. Business consists of organizations that participate in consumer, industrial, or economic activities for a purpose, such as profit or non-profit means. Government refers to the governing body of a nation, state, or local community. There’s a need to examine the objectives of business, government, and society to see how they intersect in order to understand their symbiotic relationship. I will use N&N Chocolates, a manufacturer of candy bars, as our example company. Our society will be the surrounding area of N&N Chocolates' customer base. N&N Chocolates' main business objectives are to keep their costs low, increase sales, and maximize their profits. Society's objectives focus around survival, clean environment, access to food, health care, education, shelter, and opportunity to succeed. Lastly, government's objectives are to provide regulation to instill a fair, safe use of resources and to protect citizens against things like unethical business. Each of the objectives is interrelated. For example, society wants food, and N&N wants society to choose their products as their food objective. The government has to ensure that N&N operates ethically to not harm the environment or the consumers. There are three different models that can explain how business, society, and government's objectives interact. The first model is called market capitalism and is found in democratic societies. The definition is based on an economy that is focused on supply and demand, where the prices of goods and services are set through an open free market system. For example, N&N would love to sell their chocolate bars for $20.00 each. Unfortunately, society's demand for chocolates is high, and consumers are not willing to pay such a high price, especially since society can eat many other options to fulfill their food objective. They could order two pizzas for $20.00 instead or purchase a competitor's chocolate bar for only $1.00. In market capitalism, the objectives for businesses are determined by society's demand, as well as government's added costs, such as taxes. Stakeholders are the people and organizations whose attitudes and actions have an impact on the success of your project or your company. Your stakeholders include employees, labor unions, suppliers, customers, business partners, investors and shareholders, the local community, government authorities and regulators. Different stakeholders have different interests, attitudes and priorities. Effective communication ensures that they receive information that is relevant to their needs and builds positive attitudes to your company or project. Communication with stakeholders builds dialogue. By setting up forums or inviting other forms of feedback, you can gain a better understanding of your stakeholders’ interests and attitudes so that you can fine tune your communications. Using forums or other social media to communicate enables you to respond to critical comments or correct any misunderstandings. Communicating through social media can also spread your message further as stakeholders share attitudes with others. Communication program must focus on the stakeholders who have the greatest influence on your success. If government agencies or industry regulators are considering legislation that could cause problems for your business, for example, concentrating your communications on those groups ensures that they take your point of view into account. Communicating regularly with stakeholders and creating a positive understanding can help you build effective long-term relationships with key groups. A strong relationship brings a range of benefits. Communicating with customers can put you in a strong position when customers are making purchasing decisions. Supplier communications can help you to build a supply chain that is aligned with your needs. Shareholder communications can give you easier access to funds. Clearly a part of society. Business, therefore, is inextricable linked to society. The dynamic environment of business One core argument is that the external environment of business is dynamic and ever changing. Businesses and their stakeholders do not interact in vacuum. On the contrary, most companies operate in a swirl of social, Ethical, global, political, ecological, and technological change that produces both opportunities and threats. Changing societal expectations Everywhere around the world, society’s expectations of business are changing. People increasingly expect business to be more responsible, believing companies should pay close attention to social issues and act as good citizens in society. New public issues constantly arise that require action. Increasingly, business is faced with the daunting task of balancing its social, legal, and economic obligations, seeking to meet its commitments to multiple stakeholders. Growing emphasis on ethics The public also expects business to be ethical and wants corporate managers to apply ethical principles or values in other words, guidelines about what is right and wrong, fair and unfair, and morally correct when they make business decisions. Fair employment practices, concern for consumer safety, contribution to the welfare of the community, and human rights protection around the world have become more prominent and important. Business has created ethics programs to help ensure that employees are aware of these issues and actin accordance with ethical standards. Globalization People live in an increasingly integrated world economy, characterized by the unceasing movement of goods, services, and capital across national boundaries. Large transnational corporations do business in hundreds of countries. Products and services people buy every day in the United States or Germany may have come from China, India, Indonesia, Haiti, or Mexico. Today, economic forces truly play out on a global stage. A financial crisis on Wall Street can quickly impact economies around the world. Societal issues, such as the race to find a cure for HIV/AIDS, the movement for women’s equality, or the demands of citizens everywhere for full access to the Internet, also cut across national boundaries. Environmental issues, such as ozone depletion and species extinction, affect all communities. Globalization challenges make it an imperative necessity for businesses to integrate their financial, social, and environmental strategies for the best competitive edges. Creating value in a dynamic environment These powerful and dynamic forces are fast - paced changes in societal and ethical expectations, the global economy, government policies, the natural environment, and new technology establish the context in which businesses interact with their many market and nonmarket stakeholders. This means that the relationship between business and society is continuously changing in new and often unpredictable ways. Environments, people, and organizations change; inevitably, new issues will arise and challenge managers to develop new solutions. To be effective, corporations must meet the reasonable expectations of stakeholders and society in general. A successful business must meet all of its economic, social, and environmental objectives. Business and society, thus, form an interactive social system. Each needs the other, and each influences the other. They are entwined so completely that any action taken by one will surely affect the other. They are both separate and connected. Business is part of society, and society penetrates far and often into business decisions. In a world where global communication is rapidly expanding, the connections are closer than ever before. 2. Using examples from your activities, describe the challenges of dealing with the conflicts and/or confluence of stakeholder needs, wants, expectations, and perspectives. Identify whose perspective you are representing in each of your examples. List examples of some of the ramifications of ignoring or improperly addressing stakeholder interests. A stakeholder is a party that has an interest in the company and can either affect or affected by the business. There are two type of stakeholder Primary Stakeholder: These are the individuals or groups in society with which the organization has direct relationships in order to perform its major mission. Primary stakeholders are critical to an organization’s existence and activities. It includes 1. Employees, 2. Customers, 3. Suppliers, 4. Distributors, 5. Creditors, 6. Shareholders. For a business, primary stakeholders are the market stakeholders, the businesses, organizations and individuals that “engage in economic transactions with the company as it carries out its purpose of providing society with goods and services”(Lawrence & Weber, 2014, p. 8). Secondary stakeholders are the people or group of people from society affected directly and indirectly by organization activities. These stakeholders have own interests and needs which an organization has to fulfill them. For example, the unpaid interns which are considered as employee of the company for short duration are forced for insulting work that are not even a part of work. Employers are desperate for cheap work and hold them because they are seldom considered as asset of company as compared to fulltime worker and it