Business and Society: Stakeholders, Ethics, Public Policy, Seventeenth Edition
Anne T. Lawrence, James Weber, Vanessa D. Hill and David M. Wasieleski
Contents
PART ONE
BUSINESS IN SOCIETY 1
CHAPTER 1
The Corporation and Its Stakeholders 2
Business and Society 4
A Systems Perspective 5
The Stakeholder Theory of the Firm 6
The Stakeholder Concept 8
Different Kinds of Stakeholders 9
Stakeholder Analysis 11
Stakeholder Interests 12
Stakeholder Power 13
Stakeholder Coalitions 15
Stakeholder Mapping 16
The Corporation’s Boundary-Spanning Departments 19
The Dynamic Environment of Business 20
Creating Value in a Dynamic Environment 22
Summary 22
Key Terms 23
Internet Resources 23
Discussion Case: Tipping Point at Union Square Hospitality Group 23
CHAPTER 2
Managing Public Issues and Stakeholder Relationships 26
Public Issues 27
Environmental Analysis 30
Competitive Intelligence 32
Stakeholder Materiality 33
The Issue Management Process 35
Identify Issue 35
Analyze Issue 36
Generate Options 36
Take Action 37
Evaluate Results 37
Organizing for Effective Issue Management 38
Stakeholder Engagement 39
Stages in the Business–Stakeholder Relationship 39
Drivers of Stakeholder Engagement 40
The Role of Social Media in Stakeholder Engagement 42
Stakeholder Dialogue 42
Stakeholder Networks 43
The Benefits of Engagement 43
Summary 44
Key Terms 45
Internet Resources 45
Discussion Case: Robinhood: The Challenges of Keeping Pace with
Innovation 45
CHAPTER 3
Corporate Social Responsibility and Global Citizenship 48
Corporate Power and Responsibility 50
Corporate Social Responsibility and Citizenship 52
The Origins of Corporate Social Responsibility 53
Balancing Social, Economic, and Legal Responsibilities 54
The Corporate Social Responsibility Question 55
Support for Corporate Social Responsibility 56
Concerns about Corporate Social Responsibility 59
Social Entrepreneurs and B Corporations 62
Management Systems for Corporate Social Responsibility and Citizenship 63
Stages of Corporate Citizenship 65
Assessing and Reporting Social Performance 67
Social Audit Standards 68
Summary 70
Key Terms 71
Internet Resources 71
Discussion Case: Corporate Social Responsibility at Gravity Payments 71
CHAPTER 4
Business in a Globalized World 74
The Process of Globalization 75
Major Multinational Enterprises 76
International Financial and Trade Institutions 78
The Benefits and Costs of Globalization 81
Benefits of Globalization 81
Costs of Globalization 82
Doing Business in a Diverse World 84
Comparative Political and Economic Systems 84
Global Inequality and the Bottom of the Pyramid 87
Collaborative Partnerships for Global Problem Solving 89
A Three-Sector World 89
Summary 91
Key Terms 92
Internet Resources 92
Discussion Case: Intel and the Responsible Minerals Initiative 92
PART TWO
BUSINESS AND ETHICS 95
CHAPTER 5
Ethics and Ethical Reasoning 96
The Meaning of Ethics 97
What Is Business Ethics? 98
Why Should Business Be Ethical? 99
Why Ethical Problems Occur in Business 103
Personal Gain and Selfish Interest 103
Competitive Pressures on Profits 104
Conflicts of Interest 104
Cross-Cultural Contradictions 104
The Core Elements of Ethical Character 105
Managers’ Values 105
Spirituality in the Workplace 106
Managers’ Moral Development 107
Analyzing Ethical Problems in Business 109
Virtue Ethics: Pursuing a “Good” Life 109
Utility: Comparing Benefits and Costs 110
Rights: Determining and Protecting Entitlements 112
Justice: Is It Fair? 112
Applying Ethical Reasoning to Business Activities 113
The Moral Intensity of an Ethical Issue 113
Summary 114
Key Terms 115
Internet Resources 115
Discussion Case: 3M and N95 Respirators for Americans 115
CHAPTER 6
Organizational Ethics 118
Corporate Ethical Climates 119
Business Ethics Across Organizational Functions 121
Accounting Ethics 121
Financial Ethics 123
Marketing Ethics 123
Information Technology Ethics 124
Supply Chain Ethics 125
Making Ethics Work in Corporations 126
Building Ethical Safeguards into the Company 127
Ethics in a Global Economy 132
Efforts to Curtail Unethical Practices 134
Summary 135
Key Terms 135
Internet Resources 136
Discussion Case: The Vale Mining Company Dam Collapse 136
PART THREE
BUSINESS AND PUBLIC POLICY 139
CHAPTER 7
Business–Government Relations 140
How Business and Government Relate 142
Seeking a Collaborative Partnership 142
Working in Opposition to Government 142
Legitimacy Issues 143
Government’s Public Policy Role 144
Elements of Public Policy 144
Types of Public Policy 147
Government Regulation of Business 149
Market Failure 150
Negative Externalities 150
Natural Monopolies 151
Ethical Arguments 151
Types of Regulation 151
The Effects of Regulation 155
Regulation in a Global Context 158
Summary 159
Key Terms 160
Internet Resources 160
Discussion Case: Government’s Response to the Coronavirus Pandemic in
the United States and the European Union 160
CHAPTER 8
Influencing the Political Environment 163
Participants in the Political Environment 165
Business as a Political Participant 165
Influencing the Business–Government Relationship 166
Corporate Political Strategy 166
Political Action Tactics 167
Promoting an Information Strategy 168
Promoting a Financial-Incentive Strategy 171
Promoting a Constituency-Building Strategy 177
Levels of Political Involvement 180
Managing the Political Environment 181
Business Political Action: A Global Challenge 182
Summary 183
Key Terms 184
Internet Resources 184
Discussion Case: Political Action by the U.S. Steel Industry, 2015–2020 184
PART FOUR
BUSINESS AND THE NATURAL ENVIRONMENT 189
CHAPTER 9
Sustainable Development and Global Business 190
Business and Society in the Natural Environment 192
Sustainable Development 193
Sustainable Development Goals 194
Planetary Boundaries 195
The Great Acceleration 196
Socio-Economic Trends 197
Population Growth 197
Urbanization 197
Energy Use 198
GDP Growth 199
Earth System Trends 200
Climate Change 200
Stratospheric Ozone 202
Land and Water Resources 202
Threats to Marine Ecosystems 204
Decline of Biodiversity 205
Response of the International Business Community 206
Circular Economy 207
Summary 209
Key Terms 209
Internet Resources 209
Discussion Case: Clean Cooking 210
CHAPTER 10
Managing for Sustainability 213
Role of Government 215
Major Areas of Environmental Regulation 215
Alternative Policy Approaches 220
Costs and Benefits of Environmental Regulation 223
Managing for Sustainability 225
Leading Change for Sustainability 225
Sustainability Management in Practice 226
Environmental Auditing and Reporting 228
Environmental Partnerships 228
Sustainability Management as a Competitive Advantage 229
Cost Savings 229
Brand Differentiation 230
Technological Innovation 231
Reduction of Regulatory, Liability, and Climate Change Risk 231
Strategic Planning 231
Summary 233
Key Terms 234
Internet Resources 234
Discussion Case: General Motors’ Drive for Carbon Neutrality 234
PART FIVE
BUSINESS AND TECHNOLOGY 237
CHAPTER 11
The Role of Technology 238
Technology Defined 240
Phases of Technology in Society 240
The Role of Technology in Our Daily Lives 241
The Presence of the Internet 241
Unwanted Technology Threats 244
Big Data 244
Public Access to and Use of Technology 245
The Digital Divide in the United States and Worldwide 245
Mobile Telephones 247
Cryptocurrency 247
Social Networking 248
Ethical Challenges Involving Technology 249
The Loss of Privacy 250
Free Speech Issues 251
Government Censorship of Free Speech 252
The Impact of Scientific Breakthroughs 253
Genetically Engineered Foods 253
Sequencing of the Human Genome 254
Biotechnology and Stem Cell Research 255
Medical Breakthroughs 256
Summary 257
Key Terms 257
Internet Resources 258
Discussion Case: China’s Social Credit System 258
CHAPTER 12
Regulating and Managing Technology 260
Government Regulation of Technology 262
The Role of Technology in Business 263
Access to Stakeholders’ Personal Information 264
E-Business 265
Artificial Intelligence in the Workplace and their Challenges 266
The Use of Artificial Intelligence at Work 267
Robotics in the Workplace 268
The Emergence of Drones in Business 269
The Chief Information, Security, Technology Officer 270
Cybercrime: A Threat to Organizations and the Public 271
Exploring Why Hackers Hack 271
Costs of Cybercrime 273
Business Responses to Invasions of Information Security 275
Government Efforts to Combat Cybercrime 276
Summary 277
Key Terms 278
Internet Resources 278
Discussion Case: The Arrival of Autonomous Cars—Bright Future or
Looming Threat? 278
PART SIX
BUSINESS AND ITS STAKEHOLDERS 281
CHAPTER 13
Shareholder Rights and Corporate Governance 282
Shareholders Around the World 284
Who Are Shareholders? 284
Objectives of Stock Ownership 285
Shareholders’ Legal Rights and Safeguards 286
Corporate Governance 287
The Board of Directors 287
Principles of Good Governance 289
Special Issue: Executive Compensation 291
Shareholder Activism 295
The Rise of Institutional Investors 295
Social Investment 296
Shareholder Lawsuits 298
Government Protection of Shareholder Interests 299
Securities and Exchange Commission 299
Information Transparency and Disclosure 299
Insider Trading 299
Shareholders and the Corporation 301
Summary 302
Key Terms 302
Internet Resources 302
Discussion Case: Corporate Governance and Executive Misconduct at
Wynn Resorts 303
CHAPTER 14
Consumer Protection 305
The Rights of Consumers 307
Self-Advocacy for Consumer Interests 308
How Government Protects Consumers 309
Goals of Consumer Laws 309
Major Consumer Protection Agencies 310
Consumer Privacy in the Digital Age 313
Using the Courts and Product Liability Laws 316
Strict Liability 316
Product Liability Reform and Alternative Dispute Resolution 318
Positive Business Responses to Consumerism 319
Managing for Quality 319
Voluntary Industry Codes of Conduct 320
Consumer Affairs Departments 321
Product Recalls 322
Consumerism’s Achievements 322
Summary 323
Key Terms 323
Internet Resources 323
Discussion Case: Volkswagen’s “Clean Diesel” Campaign 324
CHAPTER 15
Employees and the Corporation 326
The Employment Relationship 328
Workplace Rights 329
The Right to Organize and Bargain Collectively 329
The Right to a Safe and Healthy Workplace 332
Job Security and the Right to Due Process 334
Fair Wages and Income Inequality 336
The Right to Privacy in the Workplace 339
Electronic Monitoring 339
Romance in the Workplace 341
Employee Drug Use and Testing 341
Alcohol Abuse at Work 343
Employee Theft and Honesty Testing 343
The Right to Blow the Whistle and Free Speech in the Workplace 344
Summary 346
Key Terms 346
Internet Resources 346
Discussion Case: Do it Without Dues 347
CHAPTER 16
Managing a Diverse Workforce 349
The Changing Face of the Workforce 350
Gender and Race in the Workplace 352
Women and Minorities at Work 352
The Gender and Racial Pay Gap 353
Where Women and Persons of Color Manage 356
Breaking the Glass Ceiling 356
Women and Minority Business Ownership 359
Government’s Role in Securing Equal Employment Opportunity 359
Equal Employment Opportunity 360
Affirmative Action 361
Sexual and Racial Harassment 361
What Business Can Do: Diversity and Inclusion Policies and Practices 364
Balancing Work and Life 367
Child Care and Elder Care 367
Work Flexibility 369
Summary 370
Key Terms 371
Internet Resources 371
Discussion Case: Hello, My Name Is … 371
CHAPTER 17
Business and Its Suppliers 374
Suppliers 376
Social, Ethical, and Environmental Issues in Global Supply Chains 379
Social Issues 379
Ethical Issues 380
Environmental Issues 382
Supply Chain Risk 383
Private Regulation of the Business–Supplier Relationship 384
Supply Chain Auditing 386
Supplier Development and Capability Building 388
Summary 391
Key Terms 392
Internet Resources 392
Discussion Case: IKEA’s Sustainable Cotton Supply Chain 392
CHAPTER 18
The Community and the Corporation 395
The Business–Community Relationship 397
The Business Case for Community Involvement 399
Community Relations 400
Economic Development 401
Housing 401
Aid to Minority, Women, and Disabled Veteran-Owned Enterprises 401
Disaster, Terrorism, and War Relief 402
Corporate Giving 403
Forms of Corporate Giving 406
Priorities in Corporate Giving 409
Corporate Giving in a Strategic Context 409
Measuring the Return on Social Investment 411
Building Collaborative Partnerships 412
Summary 414
Key Terms 414
Internet Resources 414
Discussion Case: Salesforce’s 1+1+1 Integrated Philanthropy Model 415
CHAPTER 19
Managing the Public and the Corporate Reputation 417
The General Public 418
What is Reputation? 419
Why Does Reputation Matter? 420
The Public Relations Department 421
Public Relations in the Internet and Social Media Age 422
Brand Management 424
Crisis Management 425
Engaging Key Stakeholders with Specific Tactics 428
Executive Visibility 430
User-Generated Content 431
Paid Content 432
Event Sponsorship 433
Image Advertisements 434
Summary 435
Key Terms 436
Internet Resources 436
Discussion Case: United Airlines—Navigating a Social Media Storm 436
CASES IN BUSINESS AND SOCIETY 439
Failure by Design: Boeing and the 737 Max 440
Profiting from Pain: Business and the U.S. Opioid Epidemic 451
Banning American Parts in Chinese Mobile Phones:
Economic Sanctions, Political Influence, and Trump’s
Trade War 462
BP Blowout: The Aftermath of the Gulf Oil Disaster 470
Wells Fargo’s Unauthorized Customer Accounts 479
The Upper Big Branch Mine Disaster 488
Starbucks at the Airport: Discrimination in Public Spaces 498
Nestlé and Child Labor in the Cocoa Supply Chain 508
The Boycott of Stoli Vodka 519
Glossary 527
Bibliography 538
Indexes
Name 543
Subject 547