Canadian Business and

Society:
Ethics, Responsibilities &
Sustainability
Chapter
One

The Relationship Between

Business and Society
Prepared by Dr. Peter Constantinou, York University

Copyright 2014 McGraw-Hill Ryerson Ltd.

Chapter Outline
LO 1.1 Complexity of Business & Society: Objectives
LO 1.2 Integrity in Business: Key Terminology
LO 1.3 Three Approaches to Ethical Thinking
LO 1.4 Canadian Business System: Key Terminology
LO 1.5 Corporations: The Main Economic Institutions
LO 1.6 The People Who Run Canadian Business
LO 1.7 Factors Influencing Attitudes Toward Business
LO 1.8 The Consent of Society
LO 1.9 Academic Integrity
LO 1.10 Integration of Business and Society
Copyright 2014 McGraw-Hill Ryerson Ltd.

Complexity of Business &

Society: Objectives

Increase awareness of the Canadian

business system
Identify businesss response to its role in
society
Learn how business corporations have
responded to environmental challenges
Focus on the perspective of the manager or
owner of a corporation

LO 1.1

Copyright 2014 McGraw-Hill Ryerson Ltd.

Integrity in Business: Key

Terminology

LO 1.2

Ethics of business?
Stakeholder?
Corporate social responsibility (CSR)?
Corporate sustainability?
Triple bottom line (economic, ethical, and
environmental)?
Corporate citizenship?

Copyright 2014 McGraw-Hill Ryerson Ltd.

Three Approaches to
Ethical Thinking

LO 1.3

Deontological or rule-based theories

Teleological or consequential theories
Virtue ethics

Copyright 2014 McGraw-Hill Ryerson Ltd.

Canadian Business System:

Key Terminology

Economic system
Capitalism
Free enterprise system
Laissez-faire capitalism
Responsible enterprise system
Stakeholder capitalism
Clean capitalism

LO 1.4

Copyright 2014 McGraw-Hill Ryerson Ltd.

Corporations: The Main

Economic Institutions

The Canadian business system comprises

business enterprises varying from sole or
single proprietorships to partnerships and
incorporated entities.
Doctrine of Incorporation:

LO 1.5

Freedom of association: The association of

individuals coming together for some purpose is
fundamental to forming a corporation.
When a business incorporates, a separate legal
entity is created.
Copyright 2014 McGraw-Hill Ryerson Ltd.

The People Who Run

Canadian Business

Owners

Boards of Directors

Direct ownership (e.g., shareholders); or

Indirect ownership (e.g., mutual fund holders)
Elected by shareholders
Must fulfill legal and fiduciary obligations

Managers

LO 1.6

Top Managers are hired by boards of directors

Oversee operations of corporation
Copyright 2014 McGraw-Hill Ryerson Ltd.

Factors Influencing
Attitudes Toward Business

Standard of living
Decentralized decision making
Allocation of resources
Self-interest
Inequities in society

LO 1.7

Copyright 2014 McGraw-Hill Ryerson Ltd.

Factors Influencing
Attitudes Toward Business

Business cycle
Business wrongdoing
Globalization
Unemployment
Innovation
The Media
Government

LO 1.7

Copyright 2014 McGraw-Hill Ryerson Ltd.

10

The Consent of Society

Legitimacy: belief in the rightness of an

institution, in this case the appropriateness of
our business system to supply the goods and
services wanted by Canadian society.
Social licence: is the privilege of operating in
society with minimal formalized restrictions
based on maintaining public trust by doing
what is acceptable to stakeholders in the
business and society relationship.

LO 1.8

Copyright 2014 McGraw-Hill Ryerson Ltd.

11

Academic Integrity

What percent of students cheat?

53 percent of students admit to cheating in written

assignments (Macleans, 2007)
56 percent of business students admit to cheating
(Macleans, 2007)

Will the lack of academic integrity have an

influence on business integrity?

LO 1.9

Copyright 2014 McGraw-Hill Ryerson Ltd.

12

Integration of Business and

Society

Must be a shared value in which both

business and society benefit
Goal is to reduce friction between society and
business and to increase the benefits for both
Integration is the focus of the textbook/course

LO
1.10

Copyright 2014 McGraw-Hill Ryerson Ltd.

13

Chapter Summary

To understand the relationship between

business and society, it is necessary to be
knowledgeable of the business systems.
Businesses need to be responsive to
societys expectations of its social and
economic responsibilities.

Copyright 2014 McGraw-Hill Ryerson Ltd.

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