Bus Govt Society Exam #1

Boundary-spanning department

Departments/offices within an organization that reach across dividing line seperating company groups and people in socety

Boundary spanning departments help

Build positive and mutually beneficial relationships alongside corporate departments that typically work with engaging partners (public)

Business

Aany organization that is engaged in makign a product or providing a service for profit

Society

human beings and to social structures they collectively create (segments of human kind, e.g. members of a particular community, nation, or interst group)

Internal stakeholders

Employees and managers employed by the firm

External stakeholders

although may have important transactions WITH the firm, are not EMPLOYED by firm

Classification of government as a non market stakeholder

Because they don’t normally conudct any direct market exchanges with businesses (buy/sell)

Nonmarket stakeholders

People and groups that don’t engage in direct economic exchange with firm, but are AFFECTED or CAN AFFECT its actions

Nonmarket stakeholders examples

community, various levels of government, nongovernmental organizations, business support groups, competitors, general public

Market stakeholders

Engage in economic transactions with the company (goods and services)

Stakeholder analysis

identify relevant stakeholders and to understand their interests and power they may have to assert these interests

Focal organization

Organization from whose perspective the analysis is conducted from

Stakeholder interests

Nature of each group’s stakes

Interactive social system

each needs the

shareholder theory of the firm

(ownership theory) — firm is seen as property of its owner.

shareholder theory of the firm — POV of purpose

firm must maximize its long term market value to make the MOST amount of money for shareholders who own stock

shareholder theory of the firm — managers & board of directors

agents of shareholders; NO obligations to others

stakeholder theory of the firm

corporations service a broad public purpose: CREATE value for society

stakeholder theory of the firm — POV of firm

corporations must make profit for owners and other value types (professional development for employees, innovative new products for customers)

stakeholder theory THREE core arguments

Descriptive

Instrumental

Normative

Descriptive argument

stakeholder view is more realistic description of how companies work

• Must be mindful of producing high quality/innovative products

• services for customers

• attractive/retaining talent

Instrumental argument

stakeholder management is more effective as a corporate strategy (behave responsibly towards multiple stakeholder groups perform better financially)

Normative argument

simply the right thing to do with their great power & resourcesst

stakeholders

person or groups that affect or are affected by an organization’s decisions, policies, oprations

Stakeholder coalitions

groups that are highly inovlved with a country

stakeholder salience

Degree of stakeholders impact (power, legitimacy, urgency)

stakeholder interests

nature of each group’s stake (what are their concerns, what do they want)

stakeholder power

ability to use resources to make an event happen or to secure a desired outcome

5 types of stakeholder power

Voting Power

Economic Power

Political Power

Legal Power

Informational Power

Voting power

stakeholder has a legitimate right to cast a vote V

Voting power example

shareholder typically have voting power proportionate to stock ownership

will vote on major decisions (mergers, acquisitions, board of directors)

Economic power

suppliers, customers, and employees

Economic power of suppliers

withhold or refuse to fill orders

Economic power of customers

refuse to buy a company’s products or services (boycott)

Economic power of employees

refuse to work under certain conditions (strike/slowdonw)

Political power

Governments , citizens, stakeholder groups

Political power of governments

done through legislation, regulations, or lawsuits

Political power of governments

Political power of citizens

urge government to pass new laws/regulations

vote for candidates that support their views

Political power of stakeholder groups

may act directly, as when social, environmental, or community activists organization protest against specific corporate action

Legal power

sue a company for damages

Legal power example CUSTOMERS

damages from defective products

Legal power example EMPLOYEES

workplae injury

Legal power example ENVIRONMENTALISTS

damages caused by pollution or harm to species/habitat

informational pwoer

access to valuable data, facts, or details and can bring their own information to attention of the public or key decision makers