Lecture Notes For Business, Government, And Society: A Managerial Perspective, 13th Edition

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1Instructor’s Resource Manualto accompanyBusiness, Government,and Society:A Managerial PerspectiveThirteenth EditionJohn F. SteinerProfessor of Management, EmeritusCalifornia State University, Los AngelesGeorge A. SteinerHarry and Elsa Kunin Professor of Business and Societyand Professor of Management, EmeritusUniversity of California, Los AngelesCLASS NOTES

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2TABLE OF CONTENTSPREFACE4PART 1TEACHING THE BUSINESS, GOVERNMENT, AND SOCIETY COURSEINTRODUCTION TO THE TENTH EDITION OFBUSINESS,GOVERNMENT, AND SOCIETY: A MANAGERIAL PERSPECTIVE8OBJECTIVES OF A BUSINESS, GOVERNMENT, AND SOCIETY COURSE10SAMPLE COURSE OUTLINES11USING THE CASES15ALTERNATIVE USES OF CASE STUDIES BY MAJOR TOPIC16TERM PAPER AND PRESENTATION TOPICS18PART 2CHAPTER OBJECTIVES, SUMMARIZING OUTLINES, AND CASE NOTESCHAPTER 1THE STUDY OF BUSINESS, GOVERNMENT, AND SOCIETY27CHAPTER 2THE DYNAMIC ENVIRONMENT33CASE NOTETHE AMERICAN FUR COMPANY37CHAPTER 3BUSINESS POWER44CASE NOTEJOHN D. ROCKEFELLER AND THE STANDARD OIL TRUST47CHAPTER 4CRITICS OF BUSINESS53CASE NOTEA CAMPAIGNAGAINST KFC CORPORATION58CHAPTER 5CORPORATE SOCIAL RESPONSIBILITY63CASE NOTEJACK WELCH AT GENERAL ELECTRIC69CHAPTER 6IMPLEMENTING CORPORATE SOCIAL RESPONSIBILITY74CASE NOTEMARC KASKY VERSUS NIKE78CHAPTER 7BUSINESS ETHICS83CASE NOTETHE TRIAL OF MARTHA STEWART87CHAPTER 8MAKING ETHICAL DECISIONS IN BUSINESS93CASE NOTESHORT INCIDENTS FOR ETHICAL REASONING97CASE NOTETANGLED WEBS104CHAPTER 9BUSINESS IN POLITICS108CASE NOTECITIZENS UNITED V. FEDERAL ELECTION COMMISSION112CHAPTER 10REGULATING BUSINESS117CASE NOTEGOOD AND EVIL ON THE RAILS121CHAPTER 11MULTINATIONAL CORPORATIONS124CASE NOTEUNION CARBIDE CORPORATION AND BHOPAL127

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3CHAPTER 12GLOBALIZATION, TRADE, AND CORRUPTION135CASE NOTEDAVID AND GOLIATH AT THE WTO140CHAPTER 13INDUSTRIAL POLLUTION AND ENVIRONMENTAL REGULATION145CASE NOTEA WORLD MELTING AWAY149CHAPTER 14MANAGING ENVIRONMENTAL QUALITY155CASE NOTEHARVESTING RISK160CHAPTER 15CONSUMERISM163CASE NOTEALCOHOL ADVERTISING168CHAPTER 16THE CHANGING WORKPLACE175CASE NOTEA TALE OF TWO RAIDS180CHAPTER 17CIVIL RIGHTS, WOMEN, AND DIVERSITY IN THE WORKPLACE185CASE NOTEADARAND V. PEÑA192CHAPTER 18CORPORATE GOVERNANCE198CASE NOTEHIGH NOON AT HEWLETT-PACKARD204PREFACEThisInstructor’s Resource Manualis designed for instructors using the thirteenth edition ofBusiness,Government, and Society: A Managerial Perspective. It contains a variety of teaching materials.Instructors with a wide range of teaching philosophies and styles will find information to supplement theirknowledge, save their time, and enhance their classroom effectiveness.John F. Steiner

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4PART1TEACHING THE BUSINESS,GOVERNMENT, AND SOCIETYCOURSEAN INTRODUCTION TO THE THIRTEENTH EDITION OFBUSINESS,GOVERNMENT, AND SOCIETY: A MANAGERIAL PERSPECTIVEThis edition retains the basic structure of previous editions. Eighteen chapters cover basic topics. Each chapterhas three parts. They begin with a brief story to illustrate the central theme. Text follows. At the end a casestudy raises issues related to the chapter’s subject (except in the introductory Chapter 1).Our approach to the field emphasizes corporate social responsibility, ethics, government regulation, globalinfluences, and historical background. The central focus connecting these themes is a managementperspective.The new edition is extensively revised and updated. Five new chapter-beginning stories and five new chapter-ending case studies appear. Many new sections and discussions are added. Here is an overview of both whathas changed and what remains the same from the last edition.Chapter 1 continues to introduce the field using four models of the business-government-society relationship.Chapter 2, on the business environment, is revised and updated to reflect recent events andthe progress of trends. It retains its basic structure as a discussion of deep historical forcesand current trends.Chapter 3, on business power is, except for updated references and statistics, unchanged.Chapter 4, on critics of business, continues as a capsule survey of business criticism fromancient times to the present. More attention is paid to the Chicago School and the rise ofneoliberalism.Chapter 5, on corporate social responsibility, is unchanged except for a revised discussion ofthe evolving global CSR system.Chapter 6, is updated with new stories about CSR implementation. Its outline is unchanged.Chapter 7, introducing business ethics, has a revised discussion of criminal prosecution ofcorporations and a revised discussion of traits that influence individual ethical behavior.

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5Chapter 8, on making ethical decisions, begins with a new story about David Geffen. Itcontains a new section about brain research on ethical decision making. It also includes anew case study on Ashley Madison, a social networking site for married men and womenseeking to have affairs. The case raises issues related to secrets, lies, and deceptions.Chapter 9, on business and politics, begins with a new story about Paul Magliocchetti, aWashington lobbyist. Because of the Supreme Court’sCitizens United v. Federal ElectionCommissiondecision the discussion of election law is revised. The case study is now aboutCitizens United.Chapter 10, on regulation, begins with a new story about how the Federal AviationAdministration regulates commercial rockets. A new fifth wave of regulation is added to thesection on waves of regulatory growth because of the recent surge in national security andfinancial regulation. A new case study invites discussion of the benefit-cost ratio of themajor rule requiring positive train controls that came out of the tragic 2008 Metrolink traincollision near Los Angeles.Chapter11, on multinational corporations, is little changed, but it includes a new story abouthow OECD Guidelines for Multinational Enterprises were applied to pressure a miningcorporation in India into greater responsibility toward an indigenous people.Chapter12, on globalization, trade, and corruption, is extensively revised. Material onglobalization is condensed and more space is devoted to discussion of global corruption andenforcement of the Foreign Corrupt Practices Act. A new discussion about the rise of thecurrent global trading system and creation of the World Trade Organization appears.Chapter 13, on pollution from industrial activity, is revised to update national and globalregulatory activity. A new case study examines the polar bear as an endangered species.Global warming threatens its survival and the case invites discussion of what can be done tosave it.Chapter 14, on managing environmental risk, is updated but remains substantially as in thelast edition.Chapter 15, on consumerism, retains its basic discussion of consumerism as both an ideologyand a protective movement. It includes a new discussion of Henry David Thoreau, a newsection on the defense of materialism, and a new description of the Federal TradeCommission.Chapter 16, on the changing workplace, is unchanged except for updating events andstatistics. A new case study tells the story of two workplace raids to remove unauthorizedworkers. It raises issues about how federal and state immigration policies affect corporations,employees, and migrants.Chapter 17, on the civil rights, women, and diversity in the workplace, has an expandeddiscussion of diversity management efforts in companies.

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6Chapter 18, on corporate governance, is rewritten. A new introductory story tells how theHewlett-Packard board fired CEO Marc Hurd for integrity lapses. The chapter text now hasnew discussions of federal regulation of governance, the powers of stockholders, thegovernance failure at Lehman Brothers, the Dodd-Frank Act of 2010, board of directordynamics, and major problems with executive compensation.OBJECTIVES OF A BUSINESS, GOVERNMENT, AND SOCIETYCOURSEObjectives for a course in whichBusiness, Government, and Society: A Managerial Perspective, thirteenthedition, is the primary text could be set forth as the following.To clarify the evolving meaning and nature of corporate social responsibility.To understand the ethical duties of business.To explain the power of corporations and industries, past and present, to shape our world.To learn how forces in and outsideof businessfirms are changing the management task,altering business operations, and modifying stakeholder expectations.To explain that many of these environmental forces are global in nature.To develop an understanding of how influential ideas in the business environment shape thebusiness-government-society relationship.To appreciate the importance of law and government regulation as forces guiding businessbehavior.To study historical patterns in the business-government-society relationship, learning howthe past shaped the present, and learning how present trends are shaping the future.To develop in students an ethical and philosophical basis for making business decisions.To incorporate the knowledge of many fields through an interdisciplinary approach.To expose students to analytical methods appropriate for studying major issues in thebusiness-government-society relationship.To develop a tolerance for ambiguities in discussing issues about which knowledgeableobservers differ and to develop an understanding that there are no clear solutions to someproblems.To conduct a stimulating course having long-lasting value to students in their managementcareers.

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7SAMPLE COURSE OUTLINESHere are three alternative outlines for courses offering a broad overview of business-government-societyrelationships. They are designed for (1) a sixteen-week semester course using lectures and case studies, (2) aneleven-week quarter course with a lecture orientation, and (3) an eleven-week quarter course oriented towardstudent research and case study presentations.OUTLINE 1A SIXTEEN WEEK SEMESTER COURSEThis course is a broad survey of the business-government-society relationship. Students are assignedchapters in sequence. Case studies are also assigned in order. To liven the class instructors might addstudent presentations and debates based on term paper and presentation topics listed in the last section ofthis part of the manual.WEEKTOPICS AND CASE STUDIESCHAPTER1Introduction to the Study of Business, Government, and Society12The Dynamic Business EnvironmentCase: The American Fur Company23Business Power and Business CriticsCases: John D. Rockefeller and the Standard Oil TrustA Campaign against KFC Corporation3,44Corporate Social ResponsibilityCases: Jack Welch at General ElectricMarc Kasky versus Nike5,65Business EthicsCase: The Trial of Martha Stewart76Making Ethical Decisions in BusinessCases: Short Incidents for Ethical ReasoningTangled Webs87Business in PoliticsCase:Citizens United v. Federal Election Commission98Midterm Exam9Regulating BusinessCase: Good and Evil on the Rails1010Multinational Corporations, Globalization, and TradeCases: Union Carbide Corporation and Bhopal11,12

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8David and Goliath at the WTO11Environmental Management and RegulationCases: A World Melting AwayHarvesting Risk13,1412ConsumerismCase: Alcohol Advertising1513Global Forces Changing the WorkplaceCase: A Tale of Two Raids1614Civil Rights, Women, and Diversity in the WorkplaceCase:Adarandv.Peña1715Corporate GovernanceCase: High Noon at Hewlett-Packard1816Final Exam

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9OUTLINE 2AN ELEVEN WEEK QUARTER COURSE (LECTURE ORIENTATION)This course is a broad survey of business-government-society relationships. Students read chapters insequence. Case studies are discussed sequentially with the instructor acting as discussion leader. Casediscussions are used to vary pedagogy in class. Students may be asked to write term papers on the casestudies or on additional topics.WEEKTOPICS AND CASESCHAPTERS1Introduction to the Study of Business, Government, and Societyand to the Dynamic Business EnvironmentCase: The American Fur Company1,22Business Power and Business CriticsCases: John D. Rockefeller and the Standard Oil TrustA Campaign against KFC Corporation3,43Corporate Social ResponsibilityCases: Jack Welch at General ElectricMarc Kasky versus Nike5,64Business EthicsCases: The Trial of Martha StewartTangled WebsShort Incidents for Ethical Reasoning7,85Midterm ExamBusiness in PoliticsCase:Citizens United v. Federal Election Commission96Regulating BusinessCase: Good and Evil on the Rails107Multinational Corporations, Globalization, and TradeCases: Union Carbide Corporation and BhopalDavid and Goliath at the WTO11,128Environmental Management and RegulationCases: A World Melting AwayHarvesting Risk13,149Consumerism and Global Forces Changing the WorkplaceCases: Alcohol AdvertisingA Tale of Two Raids15,1610Civil Rights, Women, and Diversity/Corporate GovernanceCases:Adarandv.Peña17,18

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10High Noon at Hewlett-Packard11Final ExamOUTLINE 3AN ELEVEN WEEK QUARTER COURSE (STUDENT RESEARCH ORIENTATION)This course is also a survey of basic business-government-society relationships, and students readchapters in sequence. However, unlike Outline 2, this outline defers case discussions until the second halfof the quarter (except the short ethical incidents for class discussion in the fourth week). This delay givesstudents time to do research.During the first five weeks the instructor can lecture on core areas of the subject matter, such asstakeholder theory, forces in the business environment, charges of business critics, principles of corporatesocial responsibility, and ethical principles. Students will pick up useful ideas for case analysis.Cases appropriate to class topics are selected for weeks 6 through 10. The instructor can reduce the number ofcases depending on class size, the number of students assigned to each case, and time available.WEEKTOPICS AND CASESCHAPTERS1Introduction to the Study of Business, Government, and Societyand to the Dynamic Business Environment1,22Business Power and Business Critics3,43Corporate Social Responsibility5,64Business EthicsCase: Short Incidents for Ethical Reasoning7,85Midterm Exam/Business in Politics6The Government-Business RelationshipCases: The American Fur CompanyJohn D. Rockefeller and the Standard Oil TrustGood and Evil on the RailsCitizens United v. Federal Election CommissionThe Trial of Martha Stewart9,107Multinational Corporations, Globalization, and TradeCases: Jack Welch at General ElectricMarc Kasky versus NikeUnion Carbide Corporation and BhopalDavid and Goliath at the WTO11,128Environmental Management and RegulationCases: A World Melting Away13,14

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11Harvesting Risk9Consumerism/The Changing the WorkplaceCases: Alcohol AdvertisingA Campaign against KFC CorporationA Tale of Two Raids15,1610Civil Rights, Women, and Diversity/Corporate GovernanceCases:Adarandv.PeñaHigh Noon at Hewlett-Packard17,1811Final ExamUSING THE CASESThere are seventeen end-of-chapter cases, all about real companies or situations. In addition, there is a set ofshort incidents raising ethical issues following Chapter 8. These cases and incidents are designed to stimulateclass discussion by raising questions and emphasizing multiple or opposing perspectives on issues. There arethree basic ways to use them.First, they can be assigned as readings. The case studies are of moderate length and reading them addsadditional insight to subjects in the chapters. If cases are used as readings students can be tested on themusing questions from the book’s test bank.Second, they can be used for class discussion. This manual has teaching notes for each case to highlight majorissues, provide background information, and suggest answers to end-of-case questions. There are many waysto start discussions.The instructor can lead the discussion.One student can be to present a viewpoint to the class or act as a discussion leader.Two students, or two teams, can be assigned to debate pro and con positions on major issuesin the case. This is an effective way to encourage lively discussion. All cases are written togenerate pro and con debate on main issues.

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12Students can be assigned to play roles. For example, in the case “Marc Kasky versus Nike,Inc.,” students could role-play a company executive, a factory worker, and Marc Kasky.Most cases lend themselves to role playing because they focus on issues where there arebroad differences of opinion and values.The class can be divided into small groups. The instructor can then give each group aquestion to discuss, asking the group to select a member to present its response.Third, the cases can be assigned for further research.All cases are appropriate for assignment as researchprojects. They all contain complex issues. Each case is unique, but there are similar basic research tasks.Students can seek background information on issues raised in the case.Students can update cases. Most cases focus on current issues. Students should beencouraged to find out what has happened since the case was written.Students can apply principles and ideas from chapter text to the cases. For example, inwriting an analysis of the case “The Jack Welch Era at General Electric,” applying criteriafor corporate responsibility set forth in Chapter 5 is appropriate. Application of ideas in thetext also encourages students to make a connection between worldly events in the cases andthe theoretical material in the chapters.ALTERNATIVE USES OF CASE STUDIES BY MAJOR TOPICEach end-of-chapter case raises issues related to the chapter subject. However, most also raise other issues.The table on the next page shows alternative uses for cases by topic. The topics are these.Advertising/marketingCapitalismCivil rightsConsumersCritics of businessEmployees/laborEthicsNatural environmentGlobalizationGovernanceHistorical eventsLawMultinational corporationsPoliticsRegulationSocial responsibilityStrategyTechnology

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13TOPICSCHAPTERCASE STUDYAdvertising/marketingCapitalismCivil rightsConsumersCritics of businessEmployees/laborEthicsEnvironmentGlobalizationGovernanceHistoricalLawMNCsPoliticsRegulationSocial responsibilityStrategyTechnology2The American FurCompany3John D. Rockefeller andthe Standard Oil Trust4A Campaign against KFCCorporation5Jack Welch at GeneralElectric6Marc Kasky versus Nike7The Trial of MarthaStewart8Short Incidents forEthical Reasoning8Tangled Webs9Citizens United v.Federal ElectionCommission10Good and Evil on theRails11Union CarbideCorporation and Bhopal12David and Goliath at theWTO13A World Melting Away14Harvesting Risk15Alcohol Advertising16A Tale of Two Raids17Adarand v. Peña18High Noon at Hewlett-Packard

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14TERM PAPER AND PRESENTATION TOPICSIn this section we suggest more than 100 topics, including some for each chapter. Most are suitable forstudents in an introductory course and require research outside the text. Some are more challenging thanothers, but most are suitable for either term paper topics or in-class presentations and debates byindividuals or teams.CHAPTER 1THE STUDY OF BUSINESS, GOVERNMENT, AND SOCIETYA Description and Analysis of the Business, Government, and Society Relationships of(Any Large Corporation)A Comparison of Business-Government-Society Relationships in the United States andEuropeCapitalism: Its Strengths and Weaknesses AssessedThe Stakeholder Idea: Its Strengths and Weaknesses AssessedCHAPTER 2THE DYNAMIC ENVIRONMENTThe Changing Global Environment of Royal Dutch/Shell.How the Natural Environment Has Been Changed by Human Activity Since theIndustrial RevolutionHow Postmaterialist Values Change the Business EnvironmentHow Advertising Reflects Changing Social ValuesTen Events of the Last Decade that Most Changed the Business EnvironmentCHAPTER 3BUSINESS POWERHow Economic Growth between 1860 and 1929 Changed American SocietyA History of the Dow Jones Industrial AverageEconomic Concentration in American Industry: Is It Too Great for the Public Interest?The Life of J. P. Morgan and His Impact on American Industry and SocietyThe Life of John D. Rockefeller and the Rise of the Oil IndustryTheories of Economic Elites in the United States: An Evaluation

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15CHAPTER 4CRITICS OF BUSINESSThe Life and Times of Huey Long (or Mary Lease) and His (Her) Populist MessageNestlé’s Marketing of Infant Formula: A Case Study of Criticism and CorporateResponseThe Story of the Anti-Apartheid Movement: Its Impact on American CorporationsThe Marxist Critique of CapitalismThe Use of Social Responsibility Shareholder Proposals to Challenge Corporate PowerRalph Nader’s Life and Views about CorporationsThe Rise and Importance of Nongovernmental OrganizationsCHAPTER 5CORPORATE SOCIAL RESPONSIBILITYA Description and Analysis of the Social Programs of (Any Large Corporation)The Contrasting Views of Milton Friedman and Ralph Nader on Corporate SocialResponsibilityThe Rise of Civil Regulation as a Method for Advancing Global CSRThe Story of the Kimberly Process Certification SchemeAre Socially Responsible Corporations More Profitable?CHAPTER 6IMPLEMENTING CORPORATE SOCIAL RESPONSIBILITYHow (One Large Corporation) Implements Social PerformanceThe Tylenol Crisis and the Role of Johnson & Johnson’s CredoAn Assessment of PhilanthrocapitalismAn Assessment of the Bill and Melinda Gates FoundationA Description and Evaluation of the Global Reporting InitiativeIs Cause-Related Marketing an Ethically Compromised Form of Philanthropy?
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