MAN4701 Business and Society Exam 2 Spring 2016 Study Hints Instructions The exam consists of 25 multiple choice questions and it is worth 50 points Choose the best response for each question Chapter 7 Stages of corporate citizenship o A developmental change process involving new attitudes routines policies programs and relationships o Mirvis and Googins of the Center for Global Citizenship proposed a 5 stage model of global corporate citizenship Social audit a systematic evaluation of an organization s social ethical and o environmental performance imposed standards o Company s performance is evaluated relative to a set of externally o The results of the audit are used to improve the firm s performance and to communicate with stakeholders and the public o 6 benefits of social audits Simon Zadek 1 Help businesses know what is happening within their firm 2 Understand what stakeholders think about and want from the business 3 Tell stakeholders what the business has achieved 4 Strengthen the loyalty and commitment of the stakeholders 5 Enhance the organization s decision making 6 Improve the business s overall performance o Auditing process Companies have several choices in carrying out an audit 1 Internal audit company hires and trains its own staff of auditors whose job is to inspect factories either its own or those operated by contractors to determine whether or not they are in compliance External or 3rd party audit company hires another organization to carry out the audit and report bac to the company Crowd sourcing audit company gathers information directly from workers using their mobile phones o Social and environmental reporting Corporate social reporting when a company decides to publicize information collected in a social audit Transparency company clearly and openly report their performance financial social and environmental to their various stakeholders Transparency quality of complete clarity Chapter 8 Role of government o Government cooperates with business for mutually beneficial goals through collaborative partnerships Influenced by nation s values and customs therefor differs by country o Government s goals and business s objectives are in conflict Adversarial relationship where business and government works at arm s length o Companies operating globally may find governments whose legitimacy or right to be in power is questioned May be faced with dilemma or continuing to do business when could be supporting the illegitimate power May choose to become politically active or refuse to conduct business until legitimate government is in place Public policy a plan of action undertaken by government officials to achieve some broad purpose affecting a substantial segment of a nation s citizens o Public policy inputs shape a government s policy decisions and strategies to address problems serving o Public policy goals can be broad and high minded or narrow and self o Governments use public policy tools involving combinations of incentives and penalties to prompt citizens to act in ways that achieve policy goals o Public policy effects are the outcomes arising from government regulation o Types of public policies Economic policies policies that concern the economy Social assistance policies policies that concern social services for citizens such as health care and education 2 Advanced industrial nations have developed elaborate systems of social services for their citizens Developing economies have improved key areas of social assistance health care education Economic policies policies that concern the economy o Fiscal policy patterns of government taxing and spending that are intended to stimulate or support the economy o Monetary policy policies that affect the supply demand and value of a o Taxation policy raising or lowering taxes on business or individuals o Industrial policy directing economic resources toward the development nation s currency of specific industries o Trade policy encouraging or discouraging trade with other countries Natural monopolies o Once the first company has established a natural monopoly it would be inefficient for a second company to build its own system along the first o The first company could raise prices as much as it wishes because there is no competition o So the government often comes in and regulates prices and access o Ex Electric utility industry Others cable TV broadband Internet service software railroads Chapter 9 Shaping public policies who o o Many business executives and managers see their role in the political process as vital to the progress and possibly survival of their company o 2011 Harris poll showed concern about business influence 88 of public polled felt business had too much political power 87 felt political action committees a favorable business political tactic were too powerful At the same time only 5 of respondents felt small business had too much power in the political environment o Various stakeholder groups representing many varied concerns and populations have a voice in politics and the public policy process o Labor unions have a longstanding role in US politics 3 o AFL CIO a federation of unions and the Teamster Union have performed political action committees to influence electoral races and legislation o Ad hoc coalitions diverse business organizations and interest groups band together in support or opposition to a specific legislative or regulatory initiative Corporate political strategy involves the activities taken by organizations to acquire develop and use power to obtain an advantage o 3 types information financial incentives and constituency building Information strategy businesses seek to provide government policymakers with information to influence their actions o lobbying lobbyists communicate with and try to persuade other to support an organization s interest or stake as they consider a particular law policy or regulation revolving door when businesses hire former government officials as lobbyists and political advisors o direct communication businesses invite officials to participate in activities that will improve government officials understanding of management and employee concerns o expert witness testimony businesses provide facts anecdotes or data to educate or influence government leaders at public forums like congressional hearings Financial incentive strategy businesses provide incentives to influence government policymakers to act in a certain way o Political contributions