Social Context of Business Chapter 1

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Business and Society- Its Relationship

Significance of Business in Social Context:
-Business affects and is affected by the society in which it operates. -For managers to operate effectively, an understanding of business’ domestic macro-environment is essential.

What exactly is business’ “domestic Macro environment”? -It is intuitive that business can affect and be affected by other businesses -But business can affect, also be affected by:
–Civil society

Understanding “The Modified Boulding Triangle”
-There is an interrelationship/interdependence between the three sectors of the triangle (business, civil society and government) -Each part is affected by each of the other parts




Canada’ Domestic Macro environment (The Boulding Triangle continued) -Depicts the three segments of the domestic macro environment- Business (B) Government (G) and Civil Society (S) -The corners of the triangle represent B, G and S at their purest forms:

-Pure reciprocity (civil society)
-Pure exchange (Business)
-Pure coercion (government)
-All the inner territory represents organizations embodying different mixes of the three parts. -Rules/ arrangements for each segment are based on different principles:
-Business -supply and demand forces
-Government -redistribution and coercion
-Civil society –cooperation and solidarity
-The new Canadian domestic macro environment requires:
-The need to collectively mobilize the intelligence, imagination and knowledge of all stakeholders to innovate -The tapping of the intelligence, imagination and knowledge of all the stakeholders to compete effectively -Individuals from any one of the three sectors (of the triangle) to develop at least a working knowledge of the other two

Drivers of Change in Canada’s Social Context
1.Population demographics (aging, more diverse and multicultural population with more complex issues) -Aging Population- the baby boomers (Born late 1940s-1960s)
Affects on Business:
-This group is the highest earners and the largest cohort and represents enormous demand -Aging…therefore different products
-Who will replace this cohort in the workforce?
Affect on government
-Largest single voting cohort
-Demand certain things of importance to an aging group
-Tax breaks
-Pension management
-Personal services
-Can influence who gets elected
Affect on civil society
-Can strongly influence the agenda of civil society organizations
-Largest group of potential volunteers
-Largest group of charitable supporters
-Most are well Connected and experienced
2.Continuing advances in information communication technologies
Affect on Business:
-Instant communications
-Increased expectations of stakeholders
-Greater visibility of business activities
-Greater competition
Affect on Government:
-Instant communications
-Increased expectations of stakeholders
-Greater visibility of government policy issues and greater public scrutiny on actions of government Affect on social society:
-Increased ability to influence government and business
-Increased capacity to garner public support to play on business and government agendas -Increased demands on its services
Affect on Business:
-Pressure to innovate
-Unpredictable competition from everywhere
-Multicultural workforce at home and related management issues -Manufacturing activities in foreign countries
-More security and safety issues
Affect on Government:
-Need to work with different governments in different cultures and different political systems to effect economic growth -Must recognize developing nations’ issues
-Less protection for domestic industries
Affect on social society:
-Increasing knowledge of other civil societies
-Increasing complexity if civil society issues
-Opportunity to work more collaboratively with government and business

Factors Influencing Attitudes Towards Business...
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