Business Government and Society - Unit 3 Lecture 1

Unit 3: Lecture 1 - The Study of Business, Government, and Society

• The objectives of the lesson include defining basic terms, discussing the field's importance to managers, and introducing the four basic models of the business-government-society relationship.
• The recommended textbook for this section is "Business, Government, and Society" by John F. Steiner and George A. Steiner. The 12th edition is referenced.
• Definitions of key terms related to the Business-Government-Society (BGS) field:
  • Business: Profit-making activity providing products and services to satisfy human needs.
  • Government: Structures and processes that authoritatively create and enforce policies and rules.
  • Society: A network of human relations characterized by ideas, institutions, and material things.
  • Idea: An intangible object of thought.
  • Value: An enduring belief about correct life choices.
  • Ideology: A bundle of values forming unique worldviews.
  • Institution: A formal relationship structure to achieve a shared goal.
  • Material Things: Tangible artifacts shaped by ideas and institutions.
• Importance of BGS to managers:
  • Understanding the role of business in society
  • Awareness of business power within society
  • Utilizing BGS considerations for managerial decisions
  • Evaluating the extent of corporate social responsibility
  • Understanding ethical duties of managers
  • Recognizing the need for regulations in this field
  • Successfully achieving business objectives
  • Excelling in managerial performance
• Institutions support markets in ways shown in diagram
• The Social Contract emphasizes basic agreement between business and various social groups
• The duties described in this contract can be ambiguous
• Four models for business-government society relationships are:
  • Market Capitalism Model
  • Dominance Model
  • Countervailing Forces Model
  • Stakeholder Model

Market Capitalism Model

• Depicts business as operating within a market, responsive to economic forces
• The market acts as a buffer between business and non-market forces
• Crucial to understanding the market itself for perspective on this model
  • Adam Smith, "The Wealth of Nations"
  • Concepts of Capitalism and managerial capitalism
• Key elements for market interaction include buyers, sellers, and the price mechanism
• In market capitalism, the proper measure of corporate performance is profit
• The ethical responsibility of managers should be directed toward shareholders
• Criticized as supposing perfect competition, causing increased inequality, posing a threat to ethics, failing to produce public goods, potentially leading to environmental damage, and encouraging push towards government regulation
• Underlying assumptions include market regulation, individual private property rights, consumer rationality, moral restraint, and the existence of basic institutions for commerce
• A corporation in this model disciplines private economic activity with emphasis on social welfare

The Dominance Model

• Business and government are dominant forces affecting society
• This model portrays businesses and powerful elites controlling a system that benefits the few at the expense of the many
• Focuses on deficiencies and inefficiencies in capitalism
• Corporations are insulated from pressures that would hold them accountable
• Weak government regulation

The Countervailing Forces Model

• Highlights exchanges of power among societal elements, acknowledging no enduring dominance
• A model of multiple forces in interplay
• A constant interplay among societal forces
• Power of individual elements might fluctuate based on the issue at hand
• Recognizes the power of opposing forces
• Business is deeply integrated into an open society, responding to economic and non-economic forces
• Business initiates changes via its use of technology, government interaction, and market activity
• Business must adapt and respond to societal forces to get public support

The Stakeholder Model

• Ethical management considering the welfare of stakeholders as an ultimate aim
• Stakeholders are entities impacted or capable of impacting the corporation either directly or indirectly.
• Primary and secondary stakeholder categories are defined
• This model debates how to identify who/what is a stakeholder
• Model's critics express that it lacks clear assessment of relationships and objective measurement for evaluating ethical and economic performance.

Explore the key concepts of the business-government-society relationship in this quiz. Learn essential definitions, the importance of this field for managers, and the four basic models. This material is based on the 12th edition of 'Business, Government, and Society' by John F. Steiner and George A. Steiner.