Bgs chapter 1

THE STUDY OF BUSINESS
GOVERNMENT & SOCIETY
Chapter 1 7/9/2014
1
BGSIT,presenter
Kiran.S

INTRODUCTION
7/9/2014
2
BGSIT,presenter Kiran.S

BUSINESS
• Definitions of business: “Business is profit , can be
more the main objective of a business than betting is
the main of making profit and acquiring wealth
through the satisfaction of human wants” -R.Urvick
• “Business comprises all profit seeking activities and
enterprises that provide goods and services
necessary to an economic system. It is the economic
system. It is the economic pulse of a nation, striving
to increase society’s standard of living. Profits are
primary mechanize for motivating these activities.”-
Boone louis.E
7/9/2014
3

GOVERNMENT
• A group of people that governs a community or
unit.
• It sets and administers public policy and
exercise executive, political and sovereign power
through customs,institutions, and laws within a
state.
• Types-
democracy,republic,monarchy,aristocracy
Ex: Tata nano shifting of singur plant from
Westbengal to gujarath
7/9/2014
4

SOCIETY
• In common words the term society refers to
members of specific groups.
• Definitions-Society is a system of usages and
procedures, authority and mutual aid, of many
groupings and divisions, of human behaviour
and of liberties.-Macler and page
7/9/2014
5

Importance of BGS to managers
• T o understand the role of business in society.
• To understand the business power in society.
• It becomes criteria for managerial decisions.
• To understand the extent of corporate social
responsibility.
• To know the ethical duties of managers and need for
regulations.
• To succeed in meeting the objectives of business.
• To excel in managerial performance.
• To monitor the non economic environment by
taking stock of the situation before anything
happens.
7/9/2014
6

Models of BGS relationships
• Market Capitalism Model
• Dominance Model
• Countervailing Forces Model
• The stakeholders model
7/9/2014
7

Market Capitalism Model
• Business operates within a market environment
• Primarily responding to economic forces.
• Sheltered from direct impact of social and political
forces.
• Business is substantially sheltered from the direct
impact of socio political forces and focuses on the
primary economic forces.
• Classic capitalism most economic activity is carried
on by private firms in competitive markets.
• It is based on the assumption of laissez faire(the
government should let us alone)
7/9/2014
8

7/9/2014
9

Model assumptions
• Government interference is slight or “Laissez fire”.
• Government, not business should correct social
problems
• Managers focus on profit and efficiency
• Individuals can own property and freely risk
investments
• Markets convert selfish competition into broad
social benefits
• Informed consumers making rational decisions
• Moral restraint of business
• Many producers and consumers
7/9/2014
10

Model critics:
• Creates prosperity only at the cost of rising
inequality
• Markets erode virtue
• Greed
• Ruthlessness
• Profit motive encourages plundering of the earth
7/9/2014
11

THE DOMINANCE MODEL
• Implications:
Began in 1970’s
Business and government dominate the great
mass of people ,which result in the enrichment
of a few at the expense of many.
Proper measure of corporate performance is profit
Ethical duty of management is to promote the
interests of shareholders
7/9/2014
12

7/9/2014
13

Perspectives of dominance model
• The view that business is the most powerful
institution in society, because of its control of
wealth.
• A merger wave between 1895 and 1904
concentrated economic growth
• The public viewed these huge firms as colossal
monuments to greed.
7/9/2014
14

Model critics
• Creates prosperity only at the cost of rising
inequality
• Markets erode virtue
• Greed
• Ruthlessness
• Profit motive encourages plundering of the earth
7/9/2014
15

The countervailing Forces Model
Environment catalysts:
• Economic conditions
• Markets
• Geopolitics
• Ideologies
• Technology
• Nature
• Culture
• Change
7/9/2014
16

7/9/2014
17

The Public:
• Values
• Opinions
• Demands
• Supports
• Non governmental organizations
7/9/2014
18

Corporations:
• Market operations
• Influence efforts
• Lobbying
• Leadership
7/9/2014
19

Government:
• Statutes
• Regulations
• Political leadership
• Partisan behaviour
7/9/2014
20

Countervailing forces model
conclusions
▫ Business is deeply integrated into an open society and must
respond to many forces, both economic and noneconomic.
▫ Business is a major initiator of change in society through
its interaction with government, its production and
marketing activities, and its use of new technologies.
▫ Broad public support of business depends on its
adjustment to multiple social, political, and economic
forces.
▫ BGS relationships continuously evolve as changes take
place in the main ideas, institutions, and processes of
society.
7/9/2014
21

The stakeholder Model
• Stake holders are those whom the corporation
benefits or burdens by its actions and those who
benefit or burden the firm with their actions:
• The below people are the primary stake holders
1. Suppliers
2. Society
3. Government
4. Creditors
5. Shareholders
6. customers
7/9/2014
22

7/9/2014BGSIT,presenter Kiran.S
23

• The secondary stake holders are:
Educational institutions
The poor
Future generations
Earth’s atmosphere
Religious groups
Political parties
Unions
Political interest groups
Trade associations
Suppliers
Competitors
media
7/9/2014
24

Criticism of the stakeholder model
• It is not a realistic assessment of the power
relationships between the corporation and other
entities.
• There is no single, clear and objective measure
to evaluate the combined ethical/economic
performance of a firm.
7/9/2014
25

Advocacy for the stakeholder model
• A corporation that embraces stakeholders
performs better.
• It is the ethical way to manage because
stakeholders have moral rights that grow from
the way powerful corporations affect them.
7/9/2014
26

Global perspective of BGS
• A global perspective is far more than an
understanding of worldwide business and
international career opportunities.
• It takes more critical view of experience
,knowledge and learning
7/9/2014
27

• To adopt a global perspective, we need to
enhance our understanding of the social,
political and environmental forces that shape
our existence.
• Thus developing a global perspective means that
we aim to :
• Enable people to understand the links between
their own lives and those of people throughout
the world.
7/9/2014
28

• Increase understanding of economic, social and
political forces which shapes life.
• Develop skills, attitudes and values to enable people
working together to bring about change for common
good and to take control of their own lives.
The four main pillars under global perspectives.
• Concentrate on sustainable development.
• Internationalization
• Global issues
• Global process
• Each pillar contributes to the development of global
citizens
7/9/2014
29

Historical perspective of BGS
• The BGS relationship is a stream of events, of
which only one part exists today.bgs relationship
is not like that of other eras; that current ideas
and institutions are not the only alternative;
7/9/2014
30

Bgs chapter 1

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to Bgs chapter 1

Similar to Bgs chapter 1 (20)

More from Kiran Shetty

More from Kiran Shetty (8)

Recently uploaded

Recently uploaded (18)

Bgs chapter 1