A Framework for Studying Business, Government, and Society
Chapter 1 The Study of Business, Government, and Society 1
ExxonMobil Corporation 1 What Is the Business–Government–Society Field? 4 Why Is the BGS Field Important to Managers? 7 Four Models of the BGS Relationship 8
The Market Capitalism Model 9 The Dominance Model 12 The Countervailing Forces Model 15 The Stakeholder Model 16
Our Approach to the Subject Matter 20 Comprehensive Scope 20 Interdisciplinary Approach with a Management Focus 20 Use of Theory, Description, and Case Studies 20 Global Perspective 21 Historical Perspective 21
Chapter 2 The Dynamic Environment 22
Royal Dutch Shell PLC 22 Deep Historical Forces at Work 24
The Industrial Revolution 25 Inequality 25 Population Growth 28 Technology 30 Globalization 32 Nation-States 33
Dominant Ideologies 34 Great Leadership 35 Chance 35
Six External Environments of Business 36 The Economic Environment 36 The Technological Environment 38 The Cultural Environment 39 The Government Environment 41 The Legal Environment 42 The Natural Environment 43 The Internal Environment 44
Concluding Observations 45 Case Study: The American Fur Company 47
Chapter 3 Business Power 55
James B. Duke and The American Tobacco Company 55 The Nature of Business Power 58 What Is Power? 58 Levels and Spheres of Corporate Power 59 The Story of the Railroads 61 Two Perspectives on Business Power 64
The Dominance Theory 65 Pluralist Theory 71
Concluding Observations 75 Case Study: John D. Rockefeller and the Standard Oil Trust 75
Chapter 4 Critics of Business 83
Mary “Mother” Jones 83 Origins of Critical Attitudes Toward Business 86
The Greeks and Romans 86 The Medieval World 88 The Modern World 88
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vi Table of Contents
The American Critique of Business 89 The Colonial Era 89 The Young Nation 90 1800–1865 91 Populists and Progressives 93 Socialists 95 The Great Depression and World War II 99 The Collapse of Confidence 100 The New Progressives 102
Global Critics 103 The Story of Liberalism 104 The Rise of Neoliberalism 105 Agenda of the Global Justice Movement 106 Global Activism 108
Concluding Observations 110 Case Study: A Campaign against KFC Corporation 112
PART TWO The Nature and Management of Corporate Responsibility
Chapter 5 Corporate Social Responsibility 121
Merck & Co., Inc. 121 The Evolving Idea of Corporate Social Responsibility 123
Social Responsibility in Classical Economic Theory 125 The Early Charitable Impulse 125 Social Responsibility in the Late Nineteenth and Early Twentieth Centuries 127 1950 to the Present 129
Basic Elements of Social Responsibility 131 General Principles 133 Are Social and Financial Performance Related? 134 Corporate Social Responsibility in a Global Context 135 The Problem of Cross-Border Corporate Power 136 The Rise of New Global Values 137
Global Corporate Responsibility 138 Development of Norms and Principles 138 Codes of Conduct 140 Reporting and Verification Standards 142 Certification and Labeling Schemes 142 Management Standards 143 Social Investment and Lending 144 Government Actions 144 Civil Society Vigilance 145
Assessing the Evolving Global CSR System 146 Concluding Observations 146 Case Study: Jack Welch at General Electric 147