Emerging Issues in Management (Mgmt 440)

1. Emerging Issues in Management (Mgmt 440) Professor Charles H. Smith Course Introduction/The Study of Business, Government and Society (Chapter 1) Spring 2010

2. Course Introduction • Introduction/call roll. • Adds. • Review syllabus. • My e-mail – chsmith@fullerton.edu • My website – http://faculty.fullerton.edu/chsmith • Warning! A course that deals with ethical and legal issues often involves some kind of wrongful conduct (illegal, immoral or both); due to this wrongful conduct, cases and examples presented in class may contain offensive material; presented for educational value, not “shock” value.

3. Law vs. Ethics • “Law” – rules created by society’s ruler(s) which must be followed by everyone in society. • “Ethics” – your own rules, such as personal beliefs, religious doctrine, moral code, cultural traditions, etc.; may result in waiver of legal right or violation of law.

4. Law vs. Ethics cont. • Examples of ethics becoming law • Religious doctrine like rules about killing another person now found in homicide laws. • “Regulatory” laws such as insider trading statutes passed after stock market abuses in 1920’s lead to crash of 1929. • Federal Arbitration Act enacted due to policy of encouraging out-of-court dispute resolution. • Student examples.

5. Law vs. Ethics cont. • Examples of following law without being ethical • MLB team changes name from Anaheim Angels to Los Angeles Angels of Anaheim – breach of contract? • Using racial or religious slur – free speech? • Hiring friend who meets minimum job qualifications instead of better-qualified stranger – discrimination? • Student examples.

6. Law vs. Ethics cont. • Examples of how ethics can result in waiver of legal rights by refusing to • Get a tattoo. • Have your body pierced. • Wear a hat indoors (men only). • Student examples.

7. Law vs. Ethics cont. • Examples of how ethics can result in violation of law • Using illegal substances such as marijuana. • Violence as revenge for being wronged. • Using false name or other false information to get job (and get paid for doing it). • Student examples.

8. Introduction to Business, Government and Society • Definitions on pages 4-7 • Business – profit-generating activity; e.g., big business like Microsoft, small business like liquor store, student examples. • Government – regulates business through laws and institutions; e.g., insider trading statutes enforced by SEC, student examples.

9. Introduction to BGS cont. • Definitions on pages 4-7 cont. • Society – network of human relations comprised of ideas, institutions and material things • Idea – intangible thought or basis for action; e.g., thinking of burning an American flag, student examples. • Value – enduring belief or ethic; e.g., sexual celibacy or monogamy, student examples. • Material things – tangible goods; e.g., equipment in this room, student examples.

10. Introduction to BGS cont. • Definitions on pages 4-7 cont. • Ideology – values creating world view; e.g., democracy, student examples. • Institution – formal relationship; e.g., your workplace, student examples. • Social contract – underlying agreement between business and society or basic obligation of business to society; e.g., business provides jobs to people even during recession; student examples.

11. How Institutions Support Markets

12. How Institutions Support Markets cont. • Concentrate on the following • Judicial • Substantive law – determines rights and responsibilities. • Procedural law – provides dispute resolution processes. • Student examples of both. • Cultural • Family institutions. • Religious institutions. • Educational institutions. • Student examples of all three.

13. Market Capitalism Model

14. Market Capitalism Model cont. • Market acts as buffer between business and nonmarket (social and political) forces. • Market economy – production moves beyond subsistence level to trade level. • Capitalism • Means of production is privately owned. • Business motivated by desire for profit. • Limited government interference.

15. Dominance Model

16. Dominance Model cont. • Popular with critics of business. • Corporations and other large business interests control system that enriches elite at expense of masses. • Populism – popular in late 19th Century • Reaction to dominance model. • Oppressed/disadvantaged people sought to take power from elite; e.g., Sherman Antitrust Act of 1890. • Discuss later in greater detail.

17. Countervailing Forces Model

18. Countervailing Forces Model cont. • Features flow of interactions among main elements of society. • Look at “The Public” – all factors can influence spending decisions; student examples. • “Overarching conclusions” on page 15.

19. Stakeholder Model

20. Primary Stakeholders • Stockholders (owners). • Customers. • Employees. • Communities. • Governments.

21. Secondary Stakeholders • Media. • Competitors. • Suppliers (vendors). • Trade associations. • Political interest groups. • Creditors. • Unions.

22. Secondary Stakeholders cont. • Political parties. • Religious groups. • Earth’s biosphere. • Future generations. • The poor. • Educational institutions.

23. Who are the Stakeholders? • Start with the lists on the previous slides – one of the big issues with this model is identifying stakeholders. • Which stakeholders on these lists are more important to you generally? To the majority generally? Why? • Should any stakeholders on these lists be disregarded? Why?

24. Stakeholder Model Case Studies • To be reviewed with small groups during next class – who/what are the stakeholders as to the following • Exxon Mobil case study at pages 1-4. • Same-sex marriage issue. • Class cutbacks at Cal State Fullerton.