Business, Government, and Society: A Managerial Perspective, Text and Cases

712 Pages·2011·32.84 MB·English

by  John F. Steiner, George A. Steiner

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