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Management and Society-Class

The document discusses the interplay between management and society, emphasizing the importance of understanding the external, technological, ecological, and social environments in business. It highlights corporate social responsibility and social responsiveness, as well as arguments for and against business involvement in social issues. Additionally, it covers ethical theories and the institutionalization of ethics within organizations, including the establishment of a code of ethics and the role of ethics committees.

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Simhadri Sevitha
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21 views20 pages

Management and Society-Class

The document discusses the interplay between management and society, emphasizing the importance of understanding the external, technological, ecological, and social environments in business. It highlights corporate social responsibility and social responsiveness, as well as arguments for and against business involvement in social issues. Additionally, it covers ethical theories and the institutionalization of ethics within organizations, including the establishment of a code of ethics and the role of ethics committees.

Uploaded by

Simhadri Sevitha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Management and Society

External Environment
• Pluralistic Society – A Society where many organized groups represent various interests.
• Each group impacts other groups, but no one group exerts an inordinate amount of power.
• There are many stakeholders or claimants in the organization, and they have divergent goals. It
is the task of the manager to integrate their aims. Working within a pluralistic society has
several implications for business.
• First, various groups, such as environmental groups, balance business power.
• Second, business interests can be expressed by joining groups such as the Chamber of
Commerce.
• Third, businesses can participate in projects with other responsible groups for the purpose of
bettering society; an example is working toward the renewal of inner cities.
• Fourth, in a pluralistic society, there can be conflict and agreement among groups. Finally, in
such a society, one group is quite aware of what other groups are doing.
Technological Environment - The total knowledge we have of ways to do things.

• It includes inventions and techniques and a vast store of organized knowledge about

everything from aerodynamics to zoology.

• But its main influence is on ways of doing things, on how we design, produce, distribute,

and sell goods and services.


Ecological Environment – The relationship between people and other living things and their
environment
• Managers must take into account environmental factors in their decision-making. By ecology,
we mean the relationship of people and other living things with their environment, such as soil,
water, and air.
• Land, water, and air pollution are of great concern to all people. Land may be polluted by
industrial waste such as packaging.
• Water pollution may be caused, for example, by hazardous waste and sewage. Various sources,
such as acid rain, vehicle exhaust fumes, and carcinogens from manufacturing processes, can
cause air pollution.
• Various legislation has been passed dealing with solid waste, water, and air pollution. Managers
must be keenly aware of these laws and regulations and incorporate ecological concerns into
their decision-making.
The Social Responsibility of Managers
• Corporate Social Responsibility – seriously considering the
impact of the company’s action on society.

• Social Responsiveness – the ability of a corporation to relate


its operations and policies to the social environment in ways
that are mutually beneficial to the company and to society.
Social Responsiveness at Infosys

Sudha Murthy, the wife of the former Chairman and CEO of


Infosys, Narayana Murthy, is known for her philanthropic
work through the Infosys Foundation. For example, she
initiated the government school in Karnataka d library
facilities and computers. She also teaches computer science
and is a fiction writer. For her social work, she received the
Raja-Lakshmi Award. She was also the first woman engineer
at Telco, now Tata Motors.
In the meantime, more Indian women are accepted in the
workplace.
Arguments for Social Involvement of Business
• Public needs have changed, leading to changed expectations. Business, it is suggested,
received its charter from society and consequently has to respond to the needs of society.

• The creation of a better social environment benefits both society and business. Society gains
through better neighborhoods and employment opportunities; business benefits from a
better community since the community is the source of its workforce and the consumer of its
products and services.

• Social involvement discourages government regulation and intervention. The result is greater
freedom and more flexibility in decision-making in the business.

• The business has a great deal of power that, it is reasoned, should be accompanied by an
equal amount of responsibility.
• The business has a great deal of power that, it is reasoned, should be accompanied by an equal
amount of responsibility.
• Social involvement may be in the interests of stockholders.
• Problems can become profits. Items that may once have been considered waste (e.g., empty soft-
drink cans) can be profitably used again.
• Social involvement creates a favorable public image. As a result, the firm may attract customers,
employees, and investors.
• Businesses should try to solve problems other institutions have been unable to solve. After all, the
business has a history of developing novel ideas.
• The business has the resources. Specifically, the business should use the talents of its managers and
specialists and its capital resources to solve some of society’s problems.
• It is better to prevent social problems through business involvement than to cure them. It may be
easier to help the hard-core unemployed than to cope with social unrest.
Arguments against Social Involvement of Business
1. The primary task of a business is to maximize profit by focusing strictly on economic
activities. Social involvement could reduce economic efficiency.

2. In the final analysis, society must pay for the social involvement of businesses
through higher prices. Social involvement would create excessive costs for businesses,
which cannot commit their resources to social action.`

3. Social involvement can create a weakened international balance-of-payment


situation. The cost of social programs, the reasoning goes, would have to be added to
the price of the product. Thus, socially involved companies selling in international
markets would be at a disadvantage when competing with companies from other
countries that do not have these social costs to bear.
4. Business has enough power, and additional social involvement would further
increase its power and influence.
5. Businesspeople lack the social skills to deal with society’s problems. Their training
and experience are with economic matters, and their skills may not be pertinent to
social issues.
6. There needs to be more accountability of business to society. The business should
only get involved if accountability can be established.
7. There needs to be full support for involvement in social actions. Consequently,
disagreements among groups with different viewpoints will cause friction.
Role of government
• There are many instances where social changes can be implemented
only by enacting legislation.
• However, many managers in business and elsewhere have found it
to their advantage to do something about pressing social problems.
• For example, many businesses have profited by filtering smokestack
pollutants and selling or utilizing these recovered wastes
Ethics in Managing

• Webster's Dictionary – Ethics is defined as “ the discipline dealing with


what is good and bad and with moral duty and obligation”

• Business Ethics is concerned with truth and justice and has a variety of
aspects such as the expectations of society
Ethical Theories
• Three basic types of moral theories in the field of normative ethics have been
developed
1. Utilitarian Theory: They argued that the right action is the one that maximizes the
good for the most significant number of people.

• Utilitarianism is a form of consequentialism, which contrasts with other ethical


theories that focus on rights, duties, or virtues.
• Utilitarianism faces some challenges, such as how to measure
and compare happiness, how to deal with justice and rights,
and how to predict the long-term effects of actions.
• In business contexts, utilitarianism implies an obligation for businesses to do what
they can to act in a way that maximizes happiness and minimizes suffering. So,
utilitarianism provides a basis for criticizing business behaviors that cause harm to
anyone at all.
2. Theory based on rights: the theory based on rights holds that all people have
fundamental rights.
Examples are the rights to freedom of conscience, free speech, and due process. All
people have fundamental rights.
A number of those rights can be found in the Bill of Rights in the Constitution of the
United States.
3. Theory of justice demands that decision-makers be guided by fairness, equity, and
impartiality.
The theory of justice demands that decision-makers be guided by fairness, equity, and
impartiality.
Institutionalizing Ethics
Theodore Purcell and James Weber
• By establishing an appropriate company policy or a code of
ethics
• By using a formally appointed ethics committee
• By teaching ethics in management development programs
Code of Ethics and its implementation
• A code is a statement of policies, principles or rules that guides
behaviour
Functions of a Formal Committee
1. Holding regular meeting
2. Dealing with gray area
3. Communicating the code
4. Checking for possible violations of the code
5. Enforcing the code
6. Rewarding compliance and punishing
violations
7. Reviewing and updating the code
8. Reporting activities of the committee to the
board of directors
Ethics
• In Marketing – products
• In advertising – false claims
• In Finance – Insider trading
Ethical marketing

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