Chapter 1: Business and Context

Question 1

What is a business

Answer 1

It is a contextual phenomenon that involves multiple stakeholders with the purpose of pursuing commercial aims such as trade in goods and services for money

Question 2

What is the invisible hand

Answer 2

Keeps the system in balance. This is when commercial operations are regulated by the market forces of supply and demand or by the state

Question 3

What is demand

Answer 3

The amount of goods and services that buyers are willing to purchase over a period.

Question 4

Name an important premise of demand

Answer 4

It is that there is a clear intention to purchase something and that the means to make the purchase are available

Question 5

Define supply

Answer 5

It is the amount of goods and services that a producer or retailer is willing to sell of available products over a period of time

Question 6

Both demand and supply will determine ___

Answer 6

What kind of goods will be sold

Question 7

What is the ethical issue in the free market

Answer 7

It is that it may seem that

> free market capitalism does not address the huge divide between the rich and poor.

> it is morally questionable to purchase expensive accessories while others do not have their most basic needs for food and shelter met

Question 8

What does the philosopher Adam Smith believe in

Answer 8

• self-interest or self-love as a basic human motivation, this means that the individual should take responsibility for his own happiness
• sympathy, emphasises our natural ability to place ourselves in someone else’s shoes. It is the cognitive and psychological process that connects people.
• context, this means that the motivation to care for personal well-being and social responsibility are dependent on a particular situation, the people involved and the specific events that require contemplation (for example, a person determined to cure cancer out of self interest benefits but so does society. However if self-interest becomes excessive such as corruption, it is a detriment to society)

Question 9

What does it mean to be an impartial spectator

Answer 9

It is an imaginary construction of possible experiences of others. Sympathy and the impartial spectator therefore link us to others and help us to act with ethical justification

Question 10

What are the focuses of a contextual approach

Answer 10

• most cases focus on the synchronic aspect - this means that the focus is on the situation within a particular historical period.
• a focus on the diachronic aspect of context, understanding the historical development of values etc.

Question 11

What does the philosopher Maurice Merleau-Ponty believe in

Answer 11

Reality is an interpretive construct. That interpretation takes place in the world and is embodied (perceiving subject is not isolated from the world).

We perceive reality with others and others have an influence on the way we understand life and who we are.

Question 12

What is an implication of embodiment

Answer 12

It is that the nature of interpretation underlines accountability, in that we do not function in isolation and therefore our deeds have an impact on others to whom we must account.

Question 13

What is accountability

Answer 13

It is based on relationship and recognition. It incorporates awareness of the potential damage that our perception and deeds may have on other people and the world.

That objectivity and neutral assumptions can no longer be used as an excuse for decisions that harm others

Question 14

What is a contextual approach to business

Answer 14

It underscores that organisations are located in a particular space and time and that - influences the way the aim, purpose and operations of an organisation are understood.

Question 15

What are the assumptions that inform the contextual approach

Answer 15

• business is not a uniform phenomenon that can be defined according to a singular perspective
• businesses are informed by contextual factors like culture, history and other person of use
• understanding is not a means in itself that is homogeneous and stable (change is part of the process because time is an important factor in understanding)
• understanding must coexist with a healthy, critical stance that requires reflection on the way business is understood
• understanding is a process of mutual engagement and dialogue with views that differ from our own
• organisations are socially located, this means that a business is part of a society and has a role to play in society and is also influenced by social factors
• understanding the contextual nature of an organisation can assist with problem-solving

Question 16

What are the four analytical aspects of a contextual approach

Answer 16

• geographical location (where organisational operations take place)
• time/history (the study and understanding of history as a dynamic interface of space and time. History is not neutral facts but is an interpretational activity based on diverse views)
• culture (culture influences our view of reality and our behaviour, traditions and practices. It is therefore a process of searching for meaning)
• values (determines what behaviour is good and beneficial or bad and harmful)

Question 17

What is cultural relativism

Answer 17

A person’s practices, behaviors and beliefs are based on the culture of that person and should not be evaluated based on the culture of another person (normative not universal)

Question 18

What role do values play in organizations

Answer 18

• values can be an informal expectation of the way an organization operates in relation to culture, religion and traditional practices
• the value system of a society may be formulated in a formal manner by regulations and laws that require compliance

Question 19

Values are linked to ___

Answer 19

Legacy issues and history

Question 20

Explain corporate citizenship

Answer 20

Focuses on the role and sensitivity with which business deals with these inequalities and how sensitive the business is to racial factors in their engagement with society and other stakeholders through the administration of rights

Question 21

What are the strengths of a contextual approach

Answer 21

• social sensitivity: social dynamics of a situation (for example, the hierarchical relationship between a manager and a worker in terms of authority) social sensitivity highlights that such a position of authority should not be misused for self interest
• cultural sensitivity: has a direct impact on understanding different cultural views when dealing with problems
• historical sensitivity: it tells a story that provides background for the current socio economic problems
• tolerance: an important value in a democratic society because it means we understand and allow people to have a different opinion and ways of behaving
• respect: respect doesn’t start with how we engage with others, it starts with self respect
• communication: dialogue is not a communication technique to solve problems, but rather to avoid problems. Open communication can help us face problems within society
• reputation: corporate scandals mean that the reputation of a business is damaged

Question 22

What are the limitations of the contextual approach

Answer 22

• subjective: it is based on an interpretive approach that is subjective (does not allow for cross referencing)
• cost of the process: requires lots of information gathering to cover all aspects which can be costly
• time consuming: requires a lot more qualitative research than what is done in other quantitative business and economic approaches which can be time consuming
• technical experience: experts with the necessary technical expertise are not always available and maybe expensive