Business, Government, and Society: A Managerial Perspective, Text and Cases PDF
Preview Business, Government, and Society: A Managerial Perspective, Text and Cases
Business, Government, and Society A Managerial Perspective, Thirteenth Edition Text and Cases John F. Steiner Professor of Management, Emeritus California State University, Los Angeles George A. Steiner Harry and Elsa Kunin Professor of Business and Society and Professor of Management, Emeritus, UCLA BUSINESS, GOVERNMENT, AND SOCIETY: A MANAGERIAL PERSPECTIVE, TEXT AND CASES Published by McGraw-Hill/Irwin, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY, 10020. Copyright © 2012, 2009, 2006, 2003, 2000, 1997, 1994, 1991, 1988, 1985, 1980 by The McGraw-Hill Companies, Inc. All rights reserved. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 DOC/DOC 1 0 9 8 7 6 5 4 3 2 1 ISBN 978-0-07-811267-6 MHID 0-07-811267-2 Vice president and editor-in-chief: B rent Gordon Editorial director: P aul Ducham Executive director of development: A nn Torbert Managing development editor: Laura Hurst Spell Editorial coordinator: Jonathan Thornton Vice president and director of marketing: Robin J. Zwettler Marketing director: A mee Mosley Market development specialist: Jaime Halteman Vice president of editing, design, and production: S esha Bolisetty Lead project manager: Christine A. Vaughan Buyer II: D ebra R. Sylvester Design coordinator: Joanne Mennemeier Senior photo research coordinator: K eri Johnson Media project manager: Suresh Babu, Hurix Systems Pvt. Ltd. Cover images: © Ingram Publishing; © Skip Nall/Getty Images; © Royalty-Free/CORBIS; © Hisham F. Ibrahim/Getty Images; © Getty Images/Digital Vision; © U.S. Navy photo by Mass Communication Specialist 1st Class Demetrius Kennon Typeface: 10/12 Palatino Compositor: Aptara®, Inc. Printer: R. R. Donnelley Library of Congress Cataloging-in-Publication Data Steiner, John F. Business, government, and society : a managerial perspective: text and cases / John F. Steiner, George A. Steiner.—13th ed. p. cm. Includes index. ISBN-13: 978-0-07-811267-6 (alk. paper) ISBN-10: 0-07-811267-2 (alk. paper) 1. Industries—Social aspects—United States. 2. Industrial policy—United States. 3. Social responsibility of business—United States. I. Steiner, George Albert, 1912- II. Title. HD60.5.U5S8 2012 658.4—dc22 2011007905 www.mhhe.com We dedicate this book to the memory of Jean Wood Steiner. Brief Table of Contents Preface xi PART FIVE Multinational Corporations and Globalization PART ONE A Framework for Studying 11 Multinational Corporations 352 Business, Government, and 12 Globalization, Trade, and Society Corruption 395 1 The Study of Business, PART SIX Corporations and the Government, and Society 1 Natural Environment 2 The Dynamic Environment 22 13 Industrial Pollution and 3 Business Power 55 Environmental Regulation 436 4 Critics of Business 83 14 Managing Environmental PART TWO Quality 476 The Nature and Management of Corporate PART SEVEN Consumerism Responsibility 15 Consumerism 512 5 Corporate Social PART EIGHT Responsibility 121 Human Resources 6 Implementing Corporate Social 16 The Changing Workplace 549 Responsibility 157 17 Civil Rights, Women, and PART THREE Diversity 585 Managing Ethics 7 Business Ethics 194 PART NINE Corporate Governance 8 Making Ethical Decisions in 18 Corporate Governance 630 Business 238 PART FOUR Business and Government 9 Business in Politics 271 10 Regulating Business 316 iv Table of Contents Preface xi Dominant Ideologies 34 Great Leadership 35 PART ONE Chance 35 A Framework for Studying Business, Six External Environments of Business 36 Government, and Society The Economic Environment 36 The Technological Environment 38 The Cultural Environment 39 Chapter 1 The Government Environment 41 The Study of Business, Government, The Legal Environment 42 and Society 1 The Natural Environment 43 The Internal Environment 44 ExxonMobil Corporation 1 Concluding Observations 45 What Is the Business–Government–Society Case Study: The American Fur Company 47 Field? 4 Why Is the BGS Field Important to Chapter 3 Managers? 7 Four Models of the BGS Relationship 8 Business Power 55 The Market Capitalism Model 9 James B. Duke and The American Tobacco The Dominance Model 12 Company 55 The Countervailing Forces Model 15 The Nature of Business Power 58 The Stakeholder Model 16 What Is Power? 58 Our Approach to the Subject Matter 20 Levels and Spheres of Corporate Power 59 Comprehensive Scope 20 The Story of the Railroads 61 Interdisciplinary Approach with a Management Two Perspectives on Business Power 64 Focus 20 The Dominance Theory 65 Use of Theory, Description, and Case Studies 20 Pluralist Theory 71 Global Perspective 21 Concluding Observations 75 Historical Perspective 21 Case Study: John D. Rockefeller and the Standard Oil Trust 75 Chapter 2 The Dynamic Environment 22 Chapter 4 Royal Dutch Shell PLC 22 Critics of Business 83 Deep Historical Forces at Work 24 The Industrial Revolution 25 Mary “Mother” Jones 83 Inequality 25 Origins of Critical Attitudes Toward Population Growth 28 Business 86 Technology 30 The Greeks and Romans 86 Globalization 32 The Medieval World 88 Nation-States 33 The Modern World 88 v vi Table of Contents The American Critique of Business 89 Global Corporate Responsibility 138 The Colonial Era 89 Development of Norms and Principles 138 The Young Nation 90 Codes of Conduct 140 1800–1865 91 Reporting and Verification Standards 142 Populists and Progressives 93 Certification and Labeling Schemes 142 Socialists 95 Management Standards 143 The Great Depression and World Social Investment and Lending 144 War II 99 Government Actions 144 The Collapse of Confidence 100 Civil Society Vigilance 145 The New Progressives 102 Assessing the Evolving Global CSR Global Critics 103 System 146 The Story of Liberalism 104 Concluding Observations 146 The Rise of Neoliberalism 105 Case Study: Jack Welch at General Agenda of the Global Justice Electric 147 Movement 106 Global Activism 108 Chapter 6 Concluding Observations 110 Implementing Corporate Social Case Study: A Campaign against KFC Responsibility 157 Corporation 112 The Bill & Melinda Gates Foundation 157 Managing the Responsive Corporation 160 PART TWO Leadership and Business Models 160 The Nature and Management of A Model of CSR Implementation 162 Corporate Responsibility CSR Review 163 CSR Strategy 167 Implementation of CSR Strategy 168 Chapter 5 Reporting and Verification 171 Corporate Social Responsibility 121 How Effectively Is CSR Implemented? 174 Merck & Co., Inc. 121 Corporate Philanthropy 175 The Evolving Idea of Corporate Social Patterns of Corporate Giving 175 Responsibility 123 Strategic Philanthropy 177 Cause Marketing 179 Social Responsibility in Classical Economic New Forms of Philanthropy 181 Theory 125 Concluding Observations 183 The Early Charitable Impulse 125 Case Study: Marc Kasky versus Social Responsibility in the Late Nineteenth and Nike 183 Early Twentieth Centuries 127 1950 to the Present 129 PART THREE Basic Elements of Social Responsibility 131 Managing Ethics General Principles 133 Are Social and Financial Performance Related? 134 Chapter 7 Corporate Social Responsibility in a Global Business Ethics 194 Context 135 The Problem of Cross-Border Corporate Bernard Ebbers 194 Power 136 What Are Business Ethics? 197 The Rise of New Global Values 137 Two Theories of Business Ethics 198 Table of Contents vii Major Sources of Ethical Values in Practical Suggestions for Making Ethical Business 200 Decisions 257 Religion 201 Concluding Observations 259 Philosophy 202 Case Studies: Short Incidents for Ethical Cultural Experience 204 Reasoning 260 Law 206 Tangled Webs 264 Factors That Influence Managerial Ethics 212 PART FOUR Leadership 212 Business and Government Strategies and Policies 214 Corporate Culture 215 Chapter 9 Individual Characteristics 218 Business in Politics 271 How Corporations Manage Ethics 220 Paul Magliocchetti and Associates 271 Ethics and Compliance Programs: An The Open Structure of American Assessment 227 Government 275 Concluding Observations 228 A History of Political Dominance by Case Study: The Trial of Martha Business 277 Stewart 229 Laying the Groundwork 277 Ascendance, Corruption, and Reform 278 Chapter 8 Business Falls Back under the New Deal 280 Making Ethical Decisions in Postwar Politics and Winds of Change 281 Business 238 The Rise of Antagonistic Groups 282 Diffusion of Power in Government 283 David Geffen 238 The Universe of Organized Business Principles of Ethical Conduct 241 Interests 284 The Categorical Imperative 241 Lobbying 287 The Conventionalist Ethic 242 Lobbying Methods 288 The Disclosure Rule 243 Power and Limits 290 The Doctrine of the Mean 244 Regulation of Lobbyists 291 The Ends–Means Ethic 244 The Corporate Role in Elections 293 The Golden Rule 245 Efforts to Limit Corporate Influence 294 The Intuition Ethic 246 The Federal Election Campaign Act 295 The Might-Equals-Right Ethic 246 Political Action Committees 296 The Organization Ethic 247 Soft Money and Issue Advertising 298 The Principle of Equal Freedom 248 Reform Legislation in 2002 299 The Proportionality Ethic 248 How Business Dollars Enter The Rights Ethic 249 Elections 301 The Theory of Justice 249 Concluding Observations 303 The Utilitarian Ethic 251 Case Study: Citizens United v. Federal Reasoning with Principles 251 Election Commission 304 Character Development 253 The Neural Basis of Ethical Chapter 10 Decisions 253 Regulating Business 316 Probing Ethical Decisions 254 Emotions and Intuition 256 The Federal Aviation Administration 316 viii Table of Contents Why Government Regulates Business 319 The United Nations Global Compact 375 Flaws in the Market 319 Criticism of the Global Compact 378 Social and Political Reasons for Regulation 320 The Alien Tort Claims Act 379 Waves of Growth 320 The Drummond Company on Trial 381 Wave 1: The Young Nation 321 Concluding Observations 383 Wave 2: Confronting Railroads and Trusts 322 Case Study: Union Carbide Corporation and Wave 3: The New Deal 323 Bhopal 384 Wave 4: Administering the Social Revolution 324 Chapter 12 Wave 5: Terrorism and Financial Crisis 325 Globalization, Trade, and War Blips 327 Corruption 395 How Regulations Are Made 327 McDonald's Corporation 395 Regulatory Statutes 327 Globalization 397 Rulemaking 329 Presidential Oversight 332 Ascent and Inertia 400 Trade 402 Congressional Oversight 334 Challenges in the Courts 335 The Rise and Fall of Trade 402 Costs and Benefits of Regulation 337 A New Postwar Order 404 Success and Evolution 404 The Regulatory Burden 337 The World Trade Organization 406 Benefits of Regulations 339 Regulation in Other Nations 340 Regional Trade Agreements 409 Concluding Observations 342 Free Trade versus Protectionism 411 Case Study: Good and Evil on the Why Free Trade? 411 Rails 342 Why Protectionism? 412 The Politics of Protectionism 413 Free Trade Responses to Protectionism 415 PART FIVE U.S. Deviation from Free Trade Policy 416 Multinational Corporations and Tariff Barriers in Other Countries 416 Globalization Corruption 417 A Spectrum of Corruption 418 The Fight Against Corruption 420 Chapter 11 The Foreign Corrupt Practices Act 422 Multinational Corporations 352 Corporate Actions to Fight Corruption 425 The Coca-Cola Company 352 Concluding Observations 426 Case Study: David and Goliath at the The Multinational Corporation 354 WTO 427 A Statistical Perspective 356 How Transnational Is a Corporation? 358 PART SIX Breaking the Bonds of Country: Weatherford International 359 Corporations and the Natural Foreign Direct Investment 362 Environment FDI in Developing Economies 364 International Codes of Conduct 367 Chapter 13 The OECD Guidelines for Multinational Industrial Pollution and Enterprises 369 Environmental Regulation 436 How the OECD Guidelines Work 369 Vedanta Resources 371 The Majestic Hudson River 436 Table of Contents ix Pollution 438 Consumerism 515 Human Health 439 Consumerism as an Ideology 515 The Biosphere 440 Consumerism Rises in America 516 Industrial Activity and Sustainability 442 Consumerism in Perspective 518 Ideas Shape Attitudes Toward the The Global Rise of Consumerism 522 Environment 444 In Defense of Consumerism 523 New Ideas Challenge the Old 445 Consumerism as a Protective Movement 524 Environmental Regulation in the The Consumer’s Protective Shield 525 United States 447 The Food and Drug Administration (FDA) 526 The Environmental Protection Agency 447 The Federal Trade Commission (FTC) 527 Principal Areas of Environmental Policy 448 The Consumer Product Safety Commission Air 448 (CPSC) 529 Water 458 The National Highway Traffic Safety Administration Land 459 (NHTSA) 530 Concluding Observations 463 Consumer Protection by Other Agencies 532 Case Study: A World Melting Away 464 Product Liability 534 Negligence 534 Chapter 14 Warranty 535 Managing Environmental Strict Liability 536 Quality 476 Costs and Benefits of the Tort System 537 Concluding Observations 538 The Commerce Railyards 476 Case Study: Alcohol Advertising 538 Regulating Environmental Risk 479 Analyzing Human Health Risks 479 PART EIGHT Risk Assessment 480 Human Resources Risk Management 486 Cost–Benefit Analysis 487 Chapter 16 Advantages 488 The Changing Workplace 549 Criticisms 489 Control Options 491 Ford Motor Company 549 Command-and-Control Regulation 491 External Forces Shaping the Workplace 552 Market Incentive Regulation 492 Demographic Change 553 Voluntary Regulation 498 Technological Change 555 Managing Environmental Quality 499 Structural Change 556 Environmental Management Systems 500 Competitive Pressures 558 A Range of Actions 501 Reorganization of Work 560 Concluding Observations 503 Government Intervention 562 Case Study: Harvesting Risk 503 Development of Labor Regulation in the United States 562 PART SEVEN Work and Worker Protection in Japan and Consumerism Europe 569 Japan 569 Chapter 15 Europe 570 Labor Regulation in Perspective 572 Consumerism 512 Concluding Observations 572 Harvey W. Wiley 512 Case Study: A Tale of Two Raids 575 x Table of Contents Chapter 17 PART NINE Civil Rights, Women, and Corporate Governance Diversity 585 The Employment Non-Discrimination Act 585 Chapter 18 A Short History of Workplace Civil Corporate Governance 630 Rights 587 Mark Hurd 630 The Colonial Era 588 What Is Corporate Governance? 633 Civil War and Reconstruction 589 The Corporate Charter 634 Other Groups Face Employment Power in Corporate Governance: Theory and Discrimination 590 Reality 636 The Civil Rights Cases 591 Stockholders 636 Plessy v. Ferguson 592 Shareholder Resolutions 638 Long Years of Discrimination 593 Assessing Shareholder Influence 639 The Civil Rights Act of 1964 594 Federal Regulation of Governance 639 Disparate Treatment and Disparate Impact 595 Enron Corp. 640 The Griggs Case 596 Other Failures of Governance 644 Affirmative Action 597 The Sarbanes-Oxley Act 645 Executive Order 11246 598 Lehman Brothers 646 The Supreme Court Changes Title VII 599 The Dodd-Frank Act 650 The Affirmative Action Debate 601 Boards of Directors 651 Women at Work 602 Duties of Directors 652 Gender Attitudes at Work 604 Board Composition 652 Subtle Discrimination 605 Board Dynamics 653 Sexual Harassment 607 Executive Compensation 655 Occupational Segregation 610 Components of Executive Compensation 655 Compensation 612 Problems with CEO Compensation 659 Diversity 614 Concluding Observations 663 Elements of Diversity Programs 616 Case Study: High Noon at Hewlett- Concluding Observations 618 Case Study: Adarand v. Peña 619 Packard 664
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