GSB 02, Introduction

1/16/12
Government, Society, and Business
Md. Tarikul Islam

Jahangirnagar University, Bangladesh
Islam, M.T. http://sites.google.com/site/kjatbd/
Recapping
q Recapping
In the last class we have seen
What to study? How to study? Evaluation method (s) etc.
Any question so far?
Islam, M.T.
http://sites.google.com/site/kjatbd/
The Course: Topics

No Topics
01 Govt., Society, and Business 02 Business Environment 03 Business Power 04 Critics of Business 05 Corporate Social Responsibility and Ethics 06 Globalization and media 07 Race, ethnicity, and migration 08 Religion 09 Politics, govt., and terrorism 10 Multinational corporations 11 Sustainability, pollution, and environment 12 Consumerism Islam, M.T. http://sites.google.com/site/kjatbd/
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Topics Details
q Government, Society, and Business
o Government, Society, and Business-GSB Introducing the concept of GSB Business environment Business power Critics of business
A group assignment would be the evaluation criteria
Islam, M.T.
your opinion?
o What is Government? Business? Society?
Islam, M.T.
Government Dened
q Government Defined
o Government Government refers to the structures and processes through which public policies, rules, and programs are authoritatively made for society. It also includes a wide range of institutions at various levels either to design or to implement policies on be half of government
Therefore gover nment is a system without any personification and personalization
Islam, M.T.
1/16/12
Business Dened
q Business Defined
o Business Business is a broad term encompassing a range of actions and institutions which includes but not limited to manufacturing, finance, trade, service etc.
Common feature of business After processing input one gets output, quality of which depends on quality of inputs and proper functioning and management of process So key issues are inputs, outputs, and process What is process?
Business Process
Remember GIGO: Garbage In Garbage Out!!
Islam, M.T.
How to do business?
q How to do business?
o There are many ways of doing business; but mainly through organizations
What is an organization?
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.organization
o Organizations? An organization is a social arrangement which pursues collective goals, which controls its own performance, and which has a boundary separating it from its environment
Dont people do business without any organization?
Islam, M.T.
Society Dened
q Society Defined
o Society Society is a network of human relations with three partsideas, institutions, and material things
Ideas are intangible objects comprising of values, beliefs, and ideologies Institutions are formal pattern of relations that link people together to accomplish a goal Material things include natural resources, land, and manufactured products
Islam, M.T.
Any question on these three?
Islam, M.T.
1/16/12
Main Theme of the Course!

o Main theme Study of the relationship in between three, but mostly of business with the other two o Because To survive in the market a business must be responsive to these elements These elements both affect and be affected by business
Most importantly consumers come from society and government is also a part of the total social system. Therefore, business needs to be successful in relating these elements at an appropriate ratio
Islam, M.T.
Models: BGS Relationship

q Models: BGS Relationship
o Models There are four models The market capitalism model The dominance model The dynamic forces model The stakeholder model
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The market capitalism model: 1/2

With the following assumptions in place
Economy would be laissez-faire; no/zero intervention from government Every individual would have maximum freedom where with the reasoning and motivation they will maximize their own interest Individuals can own private property and are free to risk business investment. It has an impact on competition and quality of products in the market
Islam, M.T.
1/16/12
The market capitalism model: 2/2
The market capitalism model says

Business exists within a market environment and market is a buffer in between business units and non market factors It is influenced by economic and business activities rather than political factors and other non market forces Competition and competitive forces can settle the market and market price Social welfare should be in the agenda of government rather than business, and if government performs inline market performance would be the social performance eventually
The Dominance Model

q The Dominance Model
o The model says that Business and government dominate the great mass of people
Through business and with the help of government, a small elite group develops a system which increase the wealth of them at the expense of many Government regulations and market forces are not adequate to make the proper ethical judgment
o This is the source of common critics of business that business take care of wealthy people only
Islam, M.T.
The Dynamic Forces Model

q The Dynamic Forces Model
o Model The model says that business exists within an environment where there are public and government and all the entities are affected by each other o Model features Business remains in an open society where it has to be responsible for many economic and noneconomic factors In the open system the business is neither isolated not its dominant
Business is the major initiator of changes in society through its innovation or adaptation with innovation with the use of technology and interaction with varied parts of the society
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The Dynamic Forces Model: Features
o Model features contd
Public support for business is a function of the business s adjustment to multiple social, political, and economic forces. Failure to adjustment leads to total failure The relationship evolves/develops gradually because of the changes in ideas, institutions, and processes of society over time
Islam, M.T.
The Stakeholder Model

q The Stakeholder Model
Putting the business in center the model portrays a mutual or both way relationship of business with its stakeholders It says both entities are affected by each other
What is stakeholder?
Islam, M.T.
Stakeholders: 1/2
o Stakeholders Stakeholders are those factors that affect or being affected by the operations of a business; mainly of two types-primary and secondary
Primary stakeholders are those who have an immediate, continuous, and powerful impact on firm. For example, owners and employees of the firm Secondary stakeholders are those who have less power to affect or influence the firm s activities. But they affect or are affected by firm s operations. Example includes media, environmentalists, universities, trade associations etc.
o Having stake is the key!
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Stakeholders: 2/2
o In an organization there are two types of people normallyinternal and external
Internal People inside the organization like board of directors, managers, employees etc. External people People outside of the organization like consumers, pressure groups, others from PEST
What is PEST? PESTE?
Islam, M.T.
Stakeholders: List
q Stakeholders: List
o A common list that does not include all stakeholders is Board of Directors, management, owners Business partners Current and retired employees, and their families Suppliers Lenders Customers Government Communities where business operates and sells Regions, Nations, Cities The Globe (Some environmental issues are global)
Islam, M.T.
Ethics in the Stakeholder Model

q Ethics takes place
o Unlike market capitalism model in this model business is owned by varied investors and business is dependent on lots of other like suppliers o As the model focuses more on stakeholders and relationship with stakeholders, the issues of ethics pop up
What is ethics?
Islam, M.T.
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Ethics
o There are various definitions. However one common way to measure whether your action is ethical or not Touch your soul and ask yourself
o By the way, how the model might look like?
Islam, M.T.
Stakeholders View
Islam, M.T.
Stakeholders View
Islam, M.T.
1/16/12
Stakeholders View
Islam, M.T.
Assignment
q Assignment
o Think about a university in Seattle in USA. The university has undergraduate, graduate, and post graduate programs. In total there are 12000 students, 600 teachers, and 700 staffs. Discuss the primary and secondary stakeholders of this university
Are you a stakeholder for the university? What kind of stakeholder are you? How? Explain
o Consider the same questions in respect to Jahangirnagar University and explain your position? o Submit before the next class-within 12 PM. Late delivery is never honored! o This is a group assignment
Managing stakeholders
o Given the pictures, dont you think that its very difficult for a firm to handle all the stakeholders?
How many will you satisfy? How will you do that?
Islam, M.T.
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Polonskys Suggestions: 1/2
o Polonsky said that Identify the relevant stakeholder groups Developing a stakeholders map with their relevance Why they are relevant and how?
Determine the stake and importance of each stakeholder group Very difficult task because stakeholders have stake in between themselves too! Can be done with the direct communication with the stakeholders With time stakeholder and their relevant importance might change
Islam, M.T.
Polonskys Suggestions: 2/2

Determine how effectively the needs or expectations of each group is being met How the current organizational policy meet the stakeholders interest right now? Where is the deviations, if any? Modify corporate policies and priorities to take into consideration stakeholder interests New policy if required is designed to meet the expectations along with the contingency plan The major aim is the reduction of deviations Which stakeholders to attain first?
Islam, M.T.
Stakeholders Mapping
Stakeholders mapping is a process of creating a picture of the stakeholders of an organization in terms of their power possessions, interests, supporting or constraining behavior etc. There are varied methods of stakeholders mapping like Internal/external stakeholders analysis primary/secondary stakeholders analysis Forced field analysis SWOT analysis Actor influence diagram etc. You shall study almost all in course of time in the program However lets see some other methods
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Power/Dynamism Matrix: 1/3

This stakeholder map classifies stakeholders in relation to the power they hold and the dynamism of their stance This map can be used to determine where political efforts should be focused during the development of the new strategies
Islam, M.T.

The stakeholders in group A and B are the easiest to deal with The stakeholders in group C are important, because they are powerful. But as their dynamism is low their behavior can be predicted and their expectations can often be met in an easy manner
Islam, M.T.

q S t a k e h o l d e r s i n g r o u p D
requires the most management attention, because they are powerful and their stance is difficult to predict. They can sometimes be dealt with by testing out the new strategies with them before the final decisions are made
Islam, M.T.
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1/16/12
Power/interest matrix: 1/3

o This stakeholder map classifies stakeholders in relation to the power they hold and the extent to which they are likely to show interest in the strategies of an organization o This matrix helps in determining the relationship that a firm should have with a group of stakeholder
Islam, M.T.

The stakeholders in group A require only minimal efforts and monitoring The stakeholders in group B can be important to influence the more powerful stakeholders and therefore they should be kept informed
Islam, M.T.

Stakeholders in group C are power ful, but keep less interest in the organizational policies. However they might emerge as role players in certain events; keep satisfied Stakeholders in group D is both powerful and interested in organizational policies. Their acceptance matter in the new policy acceptance in a firm
Islam, M.T.
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1/16/12
Power, legitimacy, and urgency Model

o A more recent stakeholder mapping model maps stakeholder behavior into seven types, depending on the combination of three characteristics power of the stakeholder to influence the organization Legitimacy of the relationship and actions of the stakeholder with the organization in terms of desirability, properness or appropriateness Urgency of the requirements being set for the organization by a stakeholder in terms of critically and time-sensitivity for the stakeholder
Islam, M.T.
Islam, M.T.

The stakeholders who show only one of the three characteristics (1, 2, and 3) are defined as latent stakeholders. They are sub-classified further as dormant, discretionary or demanding stakeholder
Islam, M.T.
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1/16/12

q The stakeholder who show two of
three characteristics (4, 5, and 6) are defined as expectant stakeholders. They are subclassified further as dominant, dangerous or dependent stakeholders
q The stakeholders showing all three
characteristics are called definitive stakeholders
Islam, M.T.
Assignment
o Select any company in Bangladesh Identify the key stakeholders of the company Describe the key demands of the stakeholders Are there any conflict of the company strategy and the demands of stakeholders? Please describe
Islam, M.T.
q Thank You!
q Any Question?!
Islam, M.T.
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GSB 02, Introduction

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GSB 02, Introduction

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Format Tersedia

1/16/12

Government, Society, and Business

Md. Tarikul Islam

Any question so far?

The Course: Topics

A group assignment would be the evaluation criteria

o What is Government? Business? Society?

Therefore gover nment is a system without any personification and personalization

Remember GIGO: Garbage In Garbage Out!!

Dont people do business without any organization?

Any question on these three?

Main Theme of the Course!

Models: BGS Relationship

The market capitalism model: 1/2

The market capitalism model: 2/2

The market capitalism model says

The Dominance Model

The Dynamic Forces Model

The Dynamic Forces Model: Features

o Model features contd

The Stakeholder Model

What is PEST? PESTE?

Ethics in the Stakeholder Model

o By the way, how the model might look like?

How many will you satisfy? How will you do that?

Polonskys Suggestions: 1/2

Polonskys Suggestions: 2/2

Power/Dynamism Matrix: 1/3

Power/Dynamism Matrix: 2/3

Power/Dynamism Matrix: 3/3

Power/interest matrix: 1/3

Power/interest matrix: 2/3

Power/interest matrix: 3/3

Power, legitimacy, and urgency Model

Power, legitimacy, and urgency Model

Power, legitimacy, and urgency Model

Power, legitimacy, and urgency Model

q The stakeholders showing all three

characteristics are called definitive stakeholders

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