Word Count 2237

Assessment 1B
ORG20002: Business and Society

Assessment 1B

During the past decade more businesses and organizations have responded to global trends by
addressing the issues of social performance principals and social sustainability. In this essay we
will look at how has the business-society relationship changed over time and how is stakeholder
management is becoming more relevant to the manager's role.
Business in society has evolved to include the description, analysis and evaluation of business
complex societal and ecological relations. These relations and impacts, and the management
thereof are popularly referred to as the field of corporate citizenship (also known as corporate
social responsibility, sustainability or a number of variations on these).
Concerns for the environmental impact and the social impact of business activities became more
urgent in the latter part of the 20th century. This came about due to a number of factors and in
response to a variety of environmentally significant industrial accidents. There was publicized
opposition of indigenous peoples to logging and mining operations, and the discovery of human
impacts on global systems such as the atmospheric ozone layer and climate. One of the major
factors involved in this change of awareness came with the introduction of technology that could
inform the population more quickly and graphically, that is television. As technological
advances have continued and protest groups have evolved the ability to draw attention to issues
and the ability to get media and public support has become more effective.
Governments have also played a role in the change and a prime example is the restrictions placed
on tobacco companies to stop advertising and sponsorship of sporting team. According to
Richards (2016) Tobacco sponsorship of sporting organizations, teams, and events has been
banned because of the moral and public health concerns surrounding tobacco goods. In 1989

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alone, the tobacco industry put $20 million a year into NSW Rugby League and $14 million into
cricket through on ground advertising and competition naming rights.
Up until the latter part of last century companies paid little respect to the environmental effects
of production, rivers were polluted, landscapes were laid bare by forest harvesting and mining
operations and the atmosphere used as dumping ground for toxic fumes. For example, lead in
petrol, CFCs from refrigeration equipment.
Public awareness, pressure along with scientific discoveries and predictions have seen
governments in modern countries move to prevent this pollution and to put in place laws to
penalise breaches. Environmental impact studies have become part of planning applications.

Land rights for indigenous people in early Australia were not recognise, land for mining was
simply taken over and used, farming land was acquired without regard to people who
traditionally lived there. Current laws prevent this and traditional owners are now negotiated
with on issues of land use and respect to sacred sites.
There has been a recent growth in partnerships between business and environmental activists,
companies have seen social and economic benefit of collaboration over confrontation. The use of
degradable packing, planned revegetation and ethical farming and fishing methods have begun to
be used in marketing products to consumers. Some examples are fish that are caught in nets that
are dolphin safe, coffee beans that guarantee that the farmers have been fairly paid, paper that
comes from plantation only sources and environmental tourism.
It has been suggested by Carroll & Bucholz (2015, p435) Businesses would stop damaging the
environment only when it became illegal and/or unprofitable to do so. It could also be said that

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business would stop damaging the environment when it became obvious that there was benefit or
profit to be gained by being seen to be environmentally safe or beneficial.
Stakeholder management has become a critical part of a managers role, the relevance is driven
by consumer awareness, laws and penalties and the need for companies to be seen an ethical,
reliable and beneficial.
Stakeholders include but are not limited to, the community, the environment, governments,
shareholders, companies that are linked to a business and financial backers.
In recent times we have seen purposeful involvement with stakeholders to achieve an overall
improvement in economic, environmental and social performance. The extent of this
involvement can vary due to the industry, the company size and its customer base.
Dean (2015) suggests the role of business is to add value to society, this would look at the shared
value model (SVM.) He poses that two kinds of valuebusiness and socialshould be brought
together through corporate strategy to focus more on the business society relationship with a
view to optimizing competitive advantage.
Peoples and organizations capacity to collaborate must be built. This includes understanding
distinct goals and differences, defining outcomes that each party values and creating both mutual
commitment to achieve the goals collaboratively. It is increasingly the role of management to
build beneficial relationships with the stakeholders.
Goddard (2005) suggests that businesses are now having such an impact on communities that
soon their profile as a corporate citizen will be very important to their licence to operate. A
companys influence on society is now more closely scrutinised. Being seen as socially

Assessment 1B

responsible is important long term if a business is going to be successful, as a poor relationship

between society and its people will have a dramatic impact on sustainability and profit.
According to Porter and Kramer, a companys social responsibility happens through the
sustained success of business activities that simultaneously generate business and social value.
Businesses need to been to working more closely with society to achieves it goals and to be seen
as a good corporate citizen.
Matten and Crane (2005) suggest that the term corporate citizenship (CC) was introduced by
business players because it takes the notion of pro-active social involvement by business to a
dimension in which they can better understand the advantages to business. CC is also being seen
in terms of corporate accountability in society that includes social and economic responsibilities
and the use of philanthropy in the good times of business. The corporation should identify lines
of business that can return a profit while delivering something of social value, its philanthropy,
and other corporate social responsibility(CSR) initiatives, should aim to shape the competitive
context of the company (Porter and Kramer 2002; 2006; 2011).

Stakeholders are defined as: Individuals or groups who will be impacted by, or can influence the
success or failure of an organisations activities (Bourne & Walker 2006). Which leads to the
argument that businesses need to understand the concerns of shareholders, employees, lenders
and suppliers, in order to develop goals that stakeholders could support.
Good management of stakeholders will not only clear path of any possible objections but will
lead to supporting the good processes and see an improvement of the results they deliver. It can

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be said it is not about keeping a stakeholders happy, it is about using their expertise, time and
influence to help a business reach their goals.
According to Glover (2015) Stakeholders may not be in the driving seat, but they can be
extremely useful advocates, sponsors and agents of change.
From a companys perspective it is important for them to form opinion on their stakeholders
while dismissing any preconceived expectations they may have held. To be engaged with the
stakeholders companies must clarify their own conditions and motives before engaging in
business.
It is suggested by Donaldson and Preston (1995 p. 67) that "stakeholder theory is managerial in
the broad sense of that term" in that it portrays managers as entities who pay attention to the
legitimate interests of all appropriate stakeholders, both in the establishment of organizational
structures and general policies and in case-by case decision making". By satisfying the stake
holder group the organization creates legitimacy and trust from the group and there is a greater
possibility that the organization will then achieve their goals.
It is important to manage stakeholders closely. Effective stakeholder management is at the top of
the list in terms of executive priorities today. This process requires a strong commitment on the
part of management (Carroll & Buchholtz 2015, p. 82). For it to be successful it requires a
significant skill set from managers to manage threats and to capitalize on the opportunity
presented to businesses. There are many criticisms that are directed at business calling for
business to have better corporate citizenship with in the global business community.
(Carroll & Buchholtz 2015, p. 87) argues large companies need to build social issues into
strategy in a way which reflects their actual business importance.

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An example of this is in engaging with non-profit special interest groups who can also be sources
of information and insight (rather than pests). Recently McDonalds entered into an alliance
with Environmental Defense Fund when trying to eliminate non-biodegradable packaging.
Companies now need to articulate business's social contribution and define its ultimate purpose
in a way that has more subtlety than the business of business is business. Companies need to
be less defensive than most current CSR approaches. It can help to view the relationship between
big business and society in this respect as an implicit social contract:
According to Burton et al (2006) Pluralism can be defined as the view that more than one basic
principle operates equally in an area of human endeavor. Within moral philosophy (Becker,
1992; Timmons, 2002), pluralism is considered a middle ground between monism (the view that
one principle or good is basic) and relativism (the view that no principle or good is basic across
individuals or societies). In moral pluralism, a certain finite number of principles or intrinsic
goods are identified as basic. All are examined in the course of making a decision, and moral
judgment is called upon in judging which principle or good gains the highest priority while still
fulfilling other principles or attaining other goods as far as is practical.
An example of this is when in 1978 the Tasmanian Hydro-Electric Commission, owned by the
Tasmanian Government, planned to construct the Franklin Dam or the Gordon-below-Franklin
Dam on the Gordon River. The dam would have flooded a large section of the Franklin River in
South-West Tasmania. The Tasmania government argued that the dam was needed but pressure
from the Greens and public opinion on environmental ground led the federal government to step
in and ban the construction.

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Environmental activist groups have traditionally targeted states and international organisations in
order to promote international norms and rules that bind companies and force change upon them.
As stated by Runciman (n.d) the rhetoric of pluralism-and-individual protection of citizens
means that elements of the legal system must be seen as 'impartial' in any dispute between
interest groups.
While this remains an important avenue for creating global governance, social movements have
long come to realise that it is not the only, or even most promising, strategic option available to
them.

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Conclusion
Change has been dramatic in the last half a century, social attitudes, increased legislation and
increased public awareness have led to a situation where managers now have to recognize and
plan for corporate social responsibility.
This essay argues that corporate social responsibility is a vital element for any business
corporation. It argues that there are many different areas in which a company may choose to
focus its corporate and stake holder management. Having a Social responsibility investment
combines investors financial goals with their obligation and dedication to factors that ensure the
well being of society. This includes environmental friendly practices, and economic growth that
is seen to provide justice within society.
These elements are not only aspects of corporate social responsibility, but also a show of the
ethical standards of a company. It is unethical for some individuals to own so much and earn so
much, at the expense of other suffering members of society. It is also unethical for companies to
engage in environmentally degrading practices that result in illnesses and loss of life. It can be
concluded that Social corporate responsibility and the maintenance of high ethical standards is
not an option but an obligation for all business.

References:

Assessment 1B
Becker, L. C. (1992). Places for pluralism. Ethics, 102, 707-719.
Bourne, L. and Walker, D.H., 2006. Using a visualising tool to study stakeholder
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Burton, B.K., Dunn, C.P. and Goldsby, M., 2006. Moral pluralism in business ethics
education: It is about time. Journal of Management Education, 30(1), pp.90-105.
Carroll, AB & Buchholtz, AK 2015, Business & Society: Ethics, Sustainability, and
Stakeholder Management, Ninth Edition, Cengage, Stamford USA (p435)
Dean S, 2015 Restoring the balance between business and society viewed 21st
April
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Donaldson, T. and Preston, L.E., 1995. The stakeholder theory of the corporation:
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Goddard, T 2005, Corporate citizenship and community relations: contributing to
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Matten, D & Crane, A 2005, Corporate citizenship: toward an extended theoretical
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Porter, ME & Kramer MR 2011, The Big Idea: creating shared value; how to reinvent
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Richards R, 2016 Tobacco Sponsorship and Advertising in Sport, viewed 29 April
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Runciman, C (n.d), The right of protest: responses to the Franklin blockade, viewed
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<https://www.humanrights.gov.au/sites/default/files/HRC_assembly_runciman.pdf>
Timmons, M., 2012. Moral theory: an introduction. Rowman & Littlefield Publishers.