Quiz 3 Flashcards
Stakeholders
Parties affected by the business and its actions who have a interest in the business
Stakeholders - Core Questions
- Who are our stakeholders?
- What are their stakes, interests, or issues?
- What responsibilities does our firm have to its takeholders
- What opportunities and challenges are presented to our firm
- What strategies/actions should our firm take to deal with stakeholder challenges and opportunities
Primary Stakeholders
Employees (unions), shareholders, creditors, suppliers, customers
Secondary Stakeholders
Local communities, governments, social activist groups, media, business support groups, general public
External Stakeholders
Owners, associates, employee associations, the public, directors
Internal Stakeholders
Chief executive officers, line managers, operators, analysts of the technostructure, support staff, ideology
Externality
The effect of a market exchange on a third party who is outside or “external” to the exchange
Issue
a point in question or a matter that is in dispute where different views are held of what is or what ought to be within the purview or purpose of business, performance-based management, or stakeholder expectations
Issue Life Cycle
T1 - keep an eye out for emergent issues
T2 - Awareness increases
T3 - Issue cannot be ignored
T4 - Issue peaks; potentially a crisis
T5 - May not be a source of relief, because issue awareness may not decline
Identifying issues
- Researching existing / emergent trends using industry publications, media
- Surveys of internal/external stakeholders
- Roundtables/online forums
- Collaborating with stakeholders
Ranking Issues
- Priority issue for management
- Next priorities for management
- Of little importance to stakeholders/management
Wicked problems
Issues that are particularly complex and interconnected
Issues Management
A systematic process by which a organization can identify, evaluate, and respond to economic, social, and environmental issues that may impact significantly upon it
Issues management process
- Identification of issues
- Analysis of issues
- Ranking or prioritizing issues
- Formulating issue responses
- Implementing issue response
- Monitoring and evaluating issue response
Purpose of issues management
- Minimize surprises
- Helps managers anticipate change with foresight
- Tries to assess, coordinate, and integrate issues across the organization
Benefits
- helps maintain competitive advantage
- organizational behavior aligns with societal expectations
Corporate Social Responsibility
- organizational responsibility
- understood as the duty an organization has towards itself and society
An umbrella concept imposing a duty on organizations to balance economic, social, and environmental responsibilities in their operations to address shareholders and other stakeholder expectations
- corporate responsibility, corporate accountability, corporate ethics, corporate citizenship, tripe-E bottom line
Four concepts - CSR
- duty
-responsibility - business
- moral agency
Moral Minimum
Duty of one individual toward another
- primary duty to cause no harm before preventing harm, removing harm and doing good
- compliance with the law is often insufficient for conducting an ethically responsible business
Moral Responsibility
We are accountable for the wrongful acts we perform and for those injurious effects we bring about when this was done knowingly and freely
- diminished by uncertainty, difficulty, degree of involvement, non-seriousness of the wrongdoing
- excused by ignorance, inability
Organizational Responsibility
Commit: personally do something
Omit: Personally neglect to prevent something from occurring
Co-operate: provide the resources to someone else for something to occur or prevent something from occurring
Induce: Promote a certain behavior through incentives and other means
Shareholder view of CSR
Profit maximization as the primary purpose of business by law
- business corporations are responsible to owners
- managers have a fiduciary duty to principals
- businesses have no authority to operate in the social area
Stakeholder view of CSR
Capitalism: Theoretically capitalism leads to overall economic prosperity, but
- is capitalism operating perfectly according to theory?
- What about market failures?
- is the distribution of wealth leading to societal prosperity for all?
Moral Agency: Business does not have moral responsibility,; only people do, but…
- What about the power and responsibility relationship?
Social Policy: Governments elected by the people and work for best interests of constituents, but
- Do governments really protect their people?
- Who can step up in the absence of those responsible for protecting the vulnerable
Classic CSR Pyramid
Top
Philanthropic - promote society’s welfare by contributing resources to the community
Ethical - do what is right, fair, and just, while avoiding harm
Legal - Obey the law in operating jurisdictions
Economic - Make a profit
Bottom
Moral CSR Pyramid
Social value - corporate community integration creates shared social value between business and society
Ethical Responsibility - at the center of the Moral CSR pyramid
Global Citizenship - Firms need to respect ethical local laws and international standards
Organizational Purpose - includes all different types of organizational forms including co-operatives and for-benefit business, as well as for-profits
Triple-E (economic, ethical, and environmental) bottom line
Evaluates a corporation’s performance according to a summary economic, social, and environmental value the corporation adds or destroys
Risk of not practicing CSR
- Damaged reputation
- Increased spending to remedy past damage
- Suspended operating permits
Rights holder
individual, group, or ecosystem that holds legal or inherent rights of protection, respect, and remedy
Issue materiality
question or matter that is very important to warrant managements attention
an aspect that will reflect the organizations significant economic, environmental, or social impacts; or substantively influence the assessments and decisions of stakeholders
Salience
degree to which managers give priority to competing stakeholder claims
Power
exercising a relationship among social actors in which one social actor, A, can get social actor, B, to do something that B would not otherwise do
Legitimacy
the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, and beliefs
Urgency
degree to which stakeholder’s claim or relationship calls for immediate action
Categories of stakeholders
problematic
antagonistic
low priority
support
Anatomy of a crisis
Prodromal crisis
Acute crisis
Chronic Crisis
Crisis resolution
