PA 315
GOVERNMENT BUSINESS RELATIONS
CHAPTER 3
California State University San Bernardino
College of Business & Public Administration
Professor Sharon Pierce
*
HISTORICAL BACKGROUND ON GOVERNMENT
*
THE EVOLUTION OF GOVERNMENT’S ROLESAs American society has changed, so too have the expectations of government.Examples of social changes include:Need for big defense The creation of big businessThe desire for less risk and more stabilityThe demand for social architecture – k-12 schools to community colleges and state universitiesCatastrophic Events: Johnstown Flood of 1889 and Hurricane Andrew in 1992Hurricane Harvey - TexasHurricane Irma – FloridaHurricane Jose - Hurricane Katia - Hurricane Maria
Our founding fathers wanted a limited government as they felt more government led to corruption
*
EXPECTATIONS IN JOHNSTOWN FLOOD, 1889Federal assistance was not expectedPresident Benjamin Harrison organizes a fundraiser
*
QUESTIONThe provision of disaster relief has increasingly become a federal responsibility in the last century.
True
False
*
*
HISTORICAL DEVELOPMENT OF GOVERNMENTAnti-Central Government (1781-1787)Small Government (1787-1887)Moderate-Sized Government (1887-1933)Big Government (1933-1970s)Rightsizing Government (1970s-present)
*
Now let’s look at the evolution of government in a slightly different line.
The Anti-Central Government Era coincided with the Articles of Confederation and was relatively short-lived, stretching from 1781 to 1787.
The Small Government Era lasted from 1787 to 1887, during which time the country grew from 13 small colonies to 38 states spanning the continent. During the Small Government Era, the population grew to be 15 times the size it had been; the percentage that was urban versus rural grew from just 3.35 percent to 30 percent in that century.
The Moderate-Sized Government Era is defined as the period from 1887 to 1933, a time during which the economic GDP expanded greatly and which included the “age of invention.”
The Big Government Era, from 1933 to the 1970s, was ushered in by the Great Depression (1929-1939), followed closely by the vast and expensive Second World War, but also included a quarter-century post-war boom.
The Rightsizing Government Era began in the 1970s and presently continues, as the limits of government – to provide the level of services, the number of problems, and degree of governmental protection –began to exceed the expectations that had accumulated and the resources it was likely to get. During this period, GDP growth has slowed, real wages are often stagnant, and tough choices have to be made about addressing old problems, all while envisioning and implementing an ideal for the largely post-industrial society we are becoming.
Anti-Central Government, 1781—1787Provider of monetary and fiscal structureMinimal
Mint money, request proportional taxes from the individual states, attempted to pay off debt Provider of infrastructureModestCities wou ...
Info graphic great depression poster assignmentWayne Williams
Poster Assignment- "The Great Depression: Laissez Fair or Mixed Economy? What were the causes and effects of the Great Depression. Was John Maynard Keynes correct...can federal government intervention programs help or hurt an economy that is mired in a Great Depression?
InfoGraphic Poster Assignment: The Federal Government Deals with the Great De...Wayne Williams
Students will work together, in groups of 2, 3 or 4 only, to create an infographic poster with 21 illustrated terms and events from the Great Depression. The objective of this activity is for students to assimilate ideas that they have already studied, related to federal government interventions into agriculture, industry and the overall American economy.
Info graphic great depression poster assignmentWayne Williams
Poster Assignment- "The Great Depression: Laissez Fair or Mixed Economy? What were the causes and effects of the Great Depression. Was John Maynard Keynes correct...can federal government intervention programs help or hurt an economy that is mired in a Great Depression?
InfoGraphic Poster Assignment: The Federal Government Deals with the Great De...Wayne Williams
Students will work together, in groups of 2, 3 or 4 only, to create an infographic poster with 21 illustrated terms and events from the Great Depression. The objective of this activity is for students to assimilate ideas that they have already studied, related to federal government interventions into agriculture, industry and the overall American economy.
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PA 315GOVERNMENT BUSINESS RELATIONSCHAPTER 3Cali.docx
1. PA 315
GOVERNMENT BUSINESS RELATIONS
CHAPTER 3
California State University San Bernardino
College of Business & Public Administration
Professor Sharon Pierce
*
HISTORICAL BACKGROUND ON GOVERNMENT
*
THE EVOLUTION OF GOVERNMENT’S ROLESAs American
society has changed, so too have the expectations of
government.Examples of social changes include:Need for big
defense The creation of big businessThe desire for less risk and
more stabilityThe demand for social architecture – k-12 schools
to community colleges and state universitiesCatastrophic
Events: Johnstown Flood of 1889 and Hurricane Andrew in
1992Hurricane Harvey - TexasHurricane Irma –
FloridaHurricane Jose - Hurricane Katia - Hurricane Maria
2. Our founding fathers wanted a limited government as they felt
more government led to corruption
*
EXPECTATIONS IN JOHNSTOWN FLOOD, 1889Federal
assistance was not expectedPresident Benjamin Harrison
organizes a fundraiser
*
QUESTIONThe provision of disaster relief has increasingly
become a federal responsibility in the last century.
True
False
*
*
HISTORICAL DEVELOPMENT OF GOVERNMENTAnti-
Central Government (1781-1787)Small Government (1787-
1887)Moderate-Sized Government (1887-1933)Big Government
(1933-1970s)Rightsizing Government (1970s-present)
*
Now let’s look at the evolution of government in a slightly
different line.
The Anti-Central Government Era coincided with the Articles of
3. Confederation and was relatively short-lived, stretching from
1781 to 1787.
The Small Government Era lasted from 1787 to 1887, during
which time the country grew from 13 small colonies to 38 states
spanning the continent. During the Small Government Era, the
population grew to be 15 times the size it had been; the
percentage that was urban versus rural grew from just 3.35
percent to 30 percent in that century.
The Moderate-Sized Government Era is defined as the period
from 1887 to 1933, a time during which the economic GDP
expanded greatly and which included the “age of invention.”
The Big Government Era, from 1933 to the 1970s, was ushered
in by the Great Depression (1929-1939), followed closely by the
vast and expensive Second World War, but also included a
quarter-century post-war boom.
The Rightsizing Government Era began in the 1970s and
presently continues, as the limits of government – to provide the
level of services, the number of problems, and degree of
governmental protection –began to exceed the expectations that
had accumulated and the resources it was likely to get. During
this period, GDP growth has slowed, real wages are often
stagnant, and tough choices have to be made about addressing
old problems, all while envisioning and implementing an ideal
for the largely post-industrial society we are becoming.
Anti-Central Government, 1781—1787Provider of monetary and
fiscal structureMinimal
Mint money, request proportional taxes from the individual
states, attempted to pay off debt Provider of
infrastructureModestCities would maintain
streetsPurchaserModestCities would purchase some
suppliesRegulator of BusinessVirtually noneBy states only
(criminal laws)Social architectVirtually noneBy states only
(some education)Service providerVirtually noneBy states
4. onlySafeguard against (individual) risk Virtually noneRaise an
army for a common cause; Request states to use state militias
for a common causePromoter of businessVirtually noneAppoint
ambassadors
*
QUESTIONWhich of the following is true about the Anti-
Central government era in the US?
The federal government could only impose tariffs, not income
taxes.
The federal government maintained a navy but not an army
The federal government was allowed to pay off the national debt
None of the above
*
Small Government, 1787—1887Provider of monetary and fiscal
structureModestRaise money through tariffs, mint money,
Treasury Department, National Bank (1791-1836)Provider of
infrastructureSubstantial Created a postal system and
accompanying roads, transcontinental railroads
States and local: most roads, harbor improvements, support of
bridges, drinking water in large citiesPurchaserModest
Transportation services, military suppliesRegulator of
BusinessVirtually
noneSocial architectModest Morrill Land Grant College Act of
1862 (funds for higher education), set-asides of “federal” land
for educational purposes
State and local: primary and secondary educationService
5. providerModest Postal service (communications)
State and local: county hospitals, public librariesSafeguard
against riskVirtually
nonePromoter of businessSubstantialPresident Jefferson’s
Louisiana Purchase – doubled the size of the United States
President Monroe 1823 - Monroe Doctrine foreign policy for the
United States
Florida purchase, annexation of Texas, Mexican-American War,
California, Alaska
Prior to the MORRILL LAND GRANT College - men in upper
class
*
THE SMALL GOVERNMENT ERA (1787-1887)Provider of
infrastructure
Promoter of
business
*
THE SMALL GOVERNMENT ERA (1787-1887)Monetary and
fiscal structure
Purchaser
Service provider
Social architect: democratizing higher education
Regulator of business, safeguard against risk
6. *
QUESTIONWhich of the following was true in the Small
Government era?
It spanned from approximately 1787 to 1887
If the expansion of the country is considered promotion of
business, it did a great deal
Service provision was modest by all governments
All of the above
None of the above
*
Moderate-Sized Government (1887-1933)Provider of monetary
and fiscal structureSubstantialFederal Reserve, federal income
tax (Sixteenth Amendment - 1913)
(1861 – Revenue Act but was brief as it was repealed by 1871)
(1894 – Congress enacted a flat rate income tax but was ruled
unconstitutional the following year)Provider of
infrastructureGreatFederal: postal airports
State and local: streets, public transportation, sidewalks, streets,
sewage, water and electricity in all urban
areasPurchaserModestTransportation services, military supplies
Regulator of BusinessSubstantialInterstate Commerce Act of
1887 – to regulate business activities of railroads
Sherman Act (1890) – anti trust laws to regulate monopolie
Clayton Anti-Trust and Federal Trade Commission Act (1914) –
strengthened Sherman Act and criminalized unfair trace
practices (price fixing)
7. Food and Drug Act (1906) public outrage over unsanitary meat
packaging
State and local: stronger zoning, comprehensive planningSocial
architectSubstantialGrowth of 1-12 education, normal
schoolsService providerSubstantial Expansion of drinking
water, irrigation water for rural areas, other utilities,
rudimentary welfare systemsSafeguard against riskMinimal One
time legislation to assist after disasters by state legislatures or
CongressPromoter of businessSubstantialSpanish-American
War, give away of Western lands (e.g., land rushes in
Oklahoma), Hawaii, Panama Canal
*
THE MODERATE-SIZED GOVERNMENT ERA (1887-
1933)Regulator of business
*
Monetary and fiscal
infrastructure
Infrastructure
8. Social architect
The Moderate-Sized Government Era (1887-1933)
*
The Moderate-Sized Government Era (1887-1933)Service
providerPromoter of business
Safeguard against risk
Purchaser
*
QUESTIONWith the rapid expansion of large corporations after
the Civil War, the US federal government responded with anti-
monopoly efforts such as the Interstate Commerce Act and the
Sherman Anti-Trust Act before the turn of the century.
True
False
*
Big Government, 1933 to 1970sProvider of monetary and fiscal
structureGreatRequired taxes to support insurance to
9. counterbalance recessions and depressions—Social Security,
Medicare, Glass-Steagall (protect deposits)Provider of
infrastructureGreatFederal Highways Act, bailout of Penn
Central, continued expansion of all transportation
systemsPurchaserSubstantialLarge and technologically advanced
military, materiel for civilian employees and servicesRegulator
of BusinessSubstantialSecurities and Exchange Commission in
response to the Crash of 1929
National Labor Relations Act – granted workers the right to
form unions/collective bargaining
Fair Labor Standards Act – set work week to 44 hours (reduced
to 40 in 1950)
Age Discrimination Act – prohibited age bias
Occupational Safety and Health Act (OSHA) assured safe and
healthful working condition
consumer protection laws (1960s to 1980s)
EPA – protects human health and the environment Social
architectGreatNational Parks, Work Progress Administration
during Great Depression provided massive aid
mortgage support (Fannie Mae and Freddie Mac) – expand
homeownershipService providerSubstantial Rural
electrification, flood prevention, garbage and other “specialty”
servicesSafeguard against riskSubstantialSocial Security,
unemployment insurance, Medicare, Medicaid, FEMA
predecessor agenciesPromoter of businessSubstantialTariff war
at beginning of Great Depression, informal leader of world
economy via international finance institutions; creation of
economic development agencies
*
THE BIG GOVERNMENT ERA (1933-1970S)Social architect
Social Security 1935, Medicare 1965; Public parks, Works
10. Progress Administration (peak: 3 million); Fannie Mae for
mortgages
Monetary and fiscal infrastructure
Infrastructure
*
THE BIG GOVERNMENT ERA (1933-1970S)Regulator of
business Service provider
Promoter of businessSafeguard against risk
Purchaser
*
QUESTIONIn the era of Big Government, the federal
government moved its attention from legislation regarding
monopolies to focus on regulating Wall Street, labor, consumer
and employee safety, among others.
True
False
*
Rightsized Government, 1970s to the presentProvider of
monetary and fiscal structureGreat but shiftingUse of interest
rates by Fed; repeal of Glass-Steagall but addition of new
11. regulations in 2010 (Dodd-Frank); bailouts of Wall Street
(banks and AIG) and main street (automakers)Provider of
infrastructureReducedPurchaserSubstantial Military and basic
materialRegulator of BusinessReduced and shiftingDeregulation
of transportation, airlines, banking, finances
Regulation of some banking and finance; Sarbanes Oxley
2002Social architectReduced and shiftingReform of welfare
(limitations); defunding of public higher education as well as K-
12Service providerReduced and shiftingExpansion of
privatization in some areas, but expansion in healthcare ; postal
reorganizationSafeguard against riskSubstantial Affordable Care
Act (2010), occasional extensions of unemployment insurance
from 26 week basePromoter of businessSubstantial but
shiftingCA makes it more difficult to have local economic
development agencies
*
THE RIGHTSIZING GOVERNMENT ERA (1970S-
PRESENT)Regulator of business
Social architect
Infrastructure
Service provider
*
Monetary and fiscal infrastructure
12. Promoter of businessSafeguard against risk
Purchaser
THE RIGHTSIZING GOVERNMENT ERA (1970S-PRESENT)
*
QUESTIONAs a promoter of business, California is seen as a
supporter of economic development agencies?
True
False
*
*
SUMMARY OF GOVERNMENT’S ROLES INTERACTING
WITH AND SUPPORTING BUSINESS
*
In summary, historically despite the reference for small
government, the US government have gradually adopted many
roles that interact and support business.
13. QUESTION Despite the historical preference for small
government, American governments’ roles and responsibilities
are constantly expanding. Why did this happen? What are the
factors that lead to government expansion? What do you think
are the effective ways of rightsizing or shrinking government?
The roles and responsibilities change over time including
expanding and decreasing because of people, culture, and time.
As America expands the roles and regulations of the
government must expand as well.
Factors that lead to expansion was war, western expansion,
industrial revolution
Effective ways to address the dilemmas are through regulation
and privatization
*
*
*
Our founding fathers wanted a limited government as they felt
more government led to corruption
*
*
*
*
Now let’s look at the evolution of government in a slightly
different line.
The Anti-Central Government Era coincided with the Articles of
14. Confederation and was relatively short-lived, stretching from
1781 to 1787.
The Small Government Era lasted from 1787 to 1887, during
which time the country grew from 13 small colonies to 38 states
spanning the continent. During the Small Government Era, the
population grew to be 15 times the size it had been; the
percentage that was urban versus rural grew from just 3.35
percent to 30 percent in that century.
The Moderate-Sized Government Era is defined as the period
from 1887 to 1933, a time during which the economic GDP
expanded greatly and which included the “age of invention.”
The Big Government Era, from 1933 to the 1970s, was ushered
in by the Great Depression (1929-1939), followed closely by the
vast and expensive Second World War, but also included a
quarter-century post-war boom.
The Rightsizing Government Era began in the 1970s and
presently continues, as the limits of government – to provide the
level of services, the number of problems, and degree of
governmental protection –began to exceed the expectations that
had accumulated and the resources it was likely to get. During
this period, GDP growth has slowed, real wages are often
stagnant, and tough choices have to be made about addressing
old problems, all while envisioning and implementing an ideal
for the largely post-industrial society we are becoming.
*
*
Prior to the MORRILL LAND GRANT College - men in upper
class
*
*
*
15. *
*
*
*
*
*
*
*
*
*
*
*
*
*
*
In summary, historically despite the reference for small
government, the US government have gradually adopted many
roles that interact and support business.
The roles and responsibilities change over time including
expanding and decreasing because of people, culture, and time.
As America expands the roles and regulations of the
government must expand as well.
16. Factors that lead to expansion was war, western expansion,
industrial revolution
Effective ways to address the dilemmas are through regulation
and privatization
*
Anti-Central
Government,
1781—1787
Small
Government,
1787—1887
Moderate-Sized
Government,
1887—1933
Big
Government,
1933—1970s
Rightsizing
Government,
1970s—present
Provider of
monetary and
fiscal structure
Minimal
Modest Substantial Great Great but shifting
Provider of
infrastructure
Modest Substantial Great Great Reduced
Purchaser
Modest Modest Modest Substantial Substantial
Regulator of
Business
Virtually none Virtually
none
17. Substantial Substantial Reduced and
shifting
Social architect
Virtually none Modest Substantial Great Reduced and
shifting
Service
provider
Virtually none Modest Substantial Substantial Reduced and
shifting
Safeguard
against risk
Virtually none Virtually
none
Minimal Substantial Substantial
Promoter of
business
Virtually none Substantial Substantial Substantial Substantial
but
shifting
GANTT Assignment RubricReview Overview of PMO Functions
GANTT by IPP from 7-Eleven - write a 1000 word essay that
covers: (OOC-90)1. What processes were implemented in Phase
I and why do you think these processes were done first?2. What
sub-processes were documented in phase II?3. What do you
think was the difference between a process and a procedure?4.
Why would Phase III be listed as one of the more important
PhasesRubric for Assignment Unit 9 - GANTT ReviewMaxYour
Points1. What sub-processes were implemented in Phase I and
why do you think these sub-processes were done first?202.
What sub-processes were documented in phase II?203. What do
you think was the difference between a process and a
procedure?204. Why would Phase III be listed as one of the
more important Phases151000 words15Grammar - Organization
- Spelling10 Total 1000
18. Sheet1
Sheet2
Sheet3
PA 315
GOVERNMENT BUSINESS RELATIONS
CHAPTER 2
California State University San Bernardino
College of Business & Public Administration
Professor Sharon Pierce
*
CHAPTER REVIEW 1Which of the following are generally
thought to put pressure on society for the growth of
government?
Wars
Special interests seeking special assistance
The complexity of society
All of the above
None of the above
CHAPTER 1 REVIEWThe two oldest roles of government,
according to the text, are transportation and education.
19. TrueFalse
CHAPTER 1 REVIEW When governments provide public
education, the text calls that role:
Safeguard against risk
Purchaser
Social architect
Service provider
CHAPTER 1 REVIEW One of the areas which is commonly
thought of as a strength (dubbed ‘the good”) of government is:
Requiring taxes
Creating monopolies
Providing economic stability
Preventing the collusion of power (manipulation by powerful
interests)
CHAPTER 1 REVIEW Altogether, the U.S. has approximately
how many governments? 5143537,00089,000.25 million
CHAPTER 1 REVIEW Government-business relations are
largely defined by the:
Complementary roles
Cooperative roles
20. Conflicting roles
All of the above
None of the above
BIG GOVERNMENT
VS.
SMALL GOVERNMENT –
WHICH IS IDEAL FOR THE UNITED STATES?
WHAT DO YOU BELIEVE IS THE IDEAL ROLE OF
GOVERNMENT?
Chart1Less GovernmentModerate GovernmentMore
GovernmentNot sure
Class Poll
Class Poll Spring 2019
38
7
10
4
Sheet1Class PollLess Government38Moderate
Government7More Government10Not sure4
WHAT DO YOU BELIEVE IS THE IDEAL ROLE OF
GOVERNMENT?
21. Chart1Less GovernmentModerate GovernmentMore
GovernmentNot sure
Class Poll
Class Poll Winter 2019
61
21
10
8
Sheet1Class PollLess Government61Moderate
Government21More Government10Not sure8
FALL 2018
*
Chart1Less GovernmentModerate GovernmentMore
GovernmentNot sure
Class Poll
Class Poll Fall 2018
52
28
16
4
Sheet1Class PollLess Government52Moderate
Government28More Government16Not sure4
SPRING 2018
22. *
Chart1Less GovernmentModerate GovernmentMore
GovernmentNo Idea…
Class Poll
Class Poll
40
41
14
5
Sheet1Class PollLess Government40Moderate
Government41More Government14No Idea…5
WINTER 2018
*
Chart1Less GovernmentModerate GovernmentMore Government
Class Poll
24
54
22
Sheet1Class PollLess Government24Moderate
Government54More Government22
FALL 2017
*
23. Chart1Less GovernmentModerate GovernmentMore Government
Class Poll
19
62
19
Sheet1Class PollLess Government19Moderate
Government62More Government19
LESS GOVERNMENT “I believe the government should have
less power as it is getting to the point where you almost have to
ask permission to leave your house.” “People should have more
power than they have now.”“Small government means the
system is more flexible.”“Although big government has
benefits, it can get annoying paying more and more taxes for
programs you will most likely never use.”“We can’t be a ‘free’
country if we are going to restrict our freedoms or taken them
away.”“People should have more control…government
sometimes interferes too much in the public life domestically
but also internationally.”“I want the power to make decisions
for my family.”
MODERATE GOVERNMENT “Too little government would
make society chaotic. The rules and regulations that the
government implements helps stabilize society as a whole.”
“When it comes to a crisis, natural and unnatural, we need the
government to help us out. But, in the case of owning a gun,
weed, and things like that, I don’t think government should ever
play that big of a role in it.”“Things like natural disaster
aftermath benefits from large government funding for example
but things like checks and balances from small government
24. could come together for form a successful moderate
government.”“Government should be neither big or small –
small government is great because it is more efficient and
flexible but big government is helpful after natural disasters.”I
think social programs are needed but there should be more
controls in place so people don’t abuse the system. We should
find another way to get social programs funded, everything
should not be the government’s responsibility, however, that
may mean that citizens should step up.”“I believe the
government is just right.”
*
MORE
GOVERNMENT “Larger government could be more beneficial
in the long run…an earthquake happening – the majority of
people will then think or prefer the larger government is better.”
“Military expenses – I and most of society would want a bigger
government for our safety.”“I think a big government has more
power and will be able to take action against big matters – some
examples are a major disaster or war.”“More social programs
from this type of government are incredibly beneficial to the
overall population…It also regulates people and businesses to
act fairly in a socio-economic way; trying to benefit society/the
planet/communities.”“When we are in a crisis with our
economy, the government is there to lift us back up…their role
should be to use their power to help us in our time of
need.”“More government intervention in improving the quality
of our lives.”“A big government to serve & protect their
citizens.”“I believe we need more government because there are
a lot of illegal business activity still happening,”
25. CHAPTER 2
*
THREE MODELS OF GOVERNMENT-BUSINESS
RELATIONSBusiness centered approach Shareholder model
Strategic Business model Stakeholder model
Not a comprehensive list
THE SHAREHOLDER MODEL Considers only business
interestsEmphasis on profit-making Government and business
should be separate – government as little as possibleFocuses on
internal efficiency and competition (Adam Smith – free
market)Example: investment banks
*
WHAT IS A SHAREHOLDERA shareholder is any person,
company or other institution that owns at least one share of a
company’s stock.
26. Because shareholders are a company's owners, they reap the
benefits of the company's successes in the form of increased
stock valuation.
If the company does poorly, however, shareholders can lose
money if the price of its stock declines.
*
CRITIQUE OF THE SHAREHOLDER MODEL Market failure
demands government vigilance and intervention.Business’
demands for government and advantageous position to benefit
from government Too much emphasis on monetary and material
gainsDoes not focus on external issues – environment,
community, etc.
SAMS CLUB CLOSED 63 STORESShareholder model
*
WHAT DO YOU THINK ABOUT SAMS CLUB CLOSING 63
STORES?Walmart is closed 63 Sam's Club stores.The closures
span 24 states and Puerto Rico.Illinois lost seven stores, the
highest number of any state.The Memphis, Tennessee Sam's
Club and nine additional stores were turned into e-commerce
distribution centers.
27. *
THE STRATEGIC BUSINESS MODEL The model emphasizes
competition Most efficient and effective use of resources;
playing the game wellGovernment with low taxes and few
regulations, stable policies and strong performance, and
protections in global competitionThe model also emphasizes
collaborationGood strategies for a winning team – win win
situations Practical use of governmental resources – Boeing
Corporation Example of Strategic Business Model – Community
banks/credit unionsCommunity focused – local needs and
conditionsStrategic in managing the local connections
*
CRITIQUE OF THE STRATEGIC BUSINESS MODEL More
balanced and realistic than the shareholder perspective.
Yet,Unclear and inconsistentgovernment and business
relationship is a flow of complex exchanges of influence, which
is subjected to multiple social, political, and economic forces.
Difficult to be strategic in market place.Business is a major
initiator of change through its interaction with government.
*
28. THE STAKEHOLDER MODEL Corporation locates at the
center of an array of mutual relationships with
stakeholders:Primary stakeholders have immediate, continuous,
and powerful impact. Secondary stakeholders have less mutual
immediacy, benefit, burden, or power to influence.The model is
an ethical theory of management , in which the welfare of each
stakeholder must be considered as an end
*
THE STAKEHOLDER MODEL While profits are important,
business and social values are still importantLong term view is
more important than short term viewBusiness perspective and
value of reputation versus profit maximization Better Business
Bureau – 1912 Good Housekeeping Seal of Approval -
1909Consumer Reports – 1936Corporate Social Responsibility -
1979Views community and environment as necessary factors to
consider – not because of requirementsFocuses on customer
confidence, employee loyalty, civic trust – (Commercials after
oil-spills) Many large corporations have adopted methods and
processes to analyze their stakeholders and engage them.
*
WHO ARE STAKEHOLDERS? A stakeholder is any individual
or group who can affect or is affected by the actions, decisions,
29. policies, practices, or goals of the organization. a. The key
stakeholder is the company or group that is the center or focus
of an analysis. b. Primary stakeholders include owners,
customers, employees, suppliers, stockholders and the board of
directors. c. Secondary stakeholders include all other interested
groups, such as the media, consumers, lobbyists, courts,
governments, competitors, the public, and society.
CRITICS TO THE STAKEHOLDER MODEL Unrealistic
assessment of power relationships between the corporation and
other entitiesToo vague a guideline to substitute for the
yardstick of profits Not clear who or what is a legitimate
stakeholder
*
COMPARISON OF THREE MODELS
*
OVERVIEW The three models demonstrate that the choices
involved in designing a country’s political and economic
systems are not easy ones.Therefore they provide some
theoretical bases for our exploration of the question: how
extensive a role government should play in a nation’s economic
development.