Relationship between business organization and society

"Examining the relationship between business and society: Constructions" by Vidhi Chaudhri

relationship between business organization and society

to play an important role in the relationship between business and society. Moreover, at the dawn of the 21st century many in society expect businesses not .. Moreover, it allowed for organizations to file discrimination charges on behalf . Explain the relationship between business and society and the ways in which business and society are part of an interactive system, and explain how the Saint . This report aims to stimulate an attitude among businesses that is thoughtful, ambitious trade organisations specially invited to take part put forward their views. The social skills of company owners, together with relationships maintained.

The business has to clearly study the inflation rate, the purchasing capability of the customers before actually introducing their product. Income and living standards may be significantly different from one place to another and feasibility study is a must for the business. The interest rate, exchange rate, income are the major determinants of the business success and failure Political Legal: Business operates in the environment that is government by various rules and policies imposed by the government.

Various acts like environment protection act, labor act, taxation policy must be followed by the company, regardless of whether they like it or not. Some opt out of the pressure, others rely on lobbying. Government binds certain activities which might have been the reason for the competitive advantage, everyone of these things needs to be considered to operate in the society.

From the traditional to technological, business must adapt to change, quick. Those who are quick at adapting technology can channel the advantage into their business process. Those who are slow falls behind. Society wants products that are better and cheaper and one way to provide them is through efficient production through the technology- namely automation, online payment, e-business, etc.

These forces provides enormous opportunities to the companies as well as biggest threats. Compliance may lead to a competitive advantage from the competitors, else, they are forced to discharge. Forces determining business and societal relationship Some of the forces which determines how the business and societal relationship interacts are as follows: Forces that shape the business and societal relationship Changing social expectation: Every other company can provide similar goods but consumers looks for those who not only work for the customers but also the society as a whole.

Those company who are socially responsible and act in the favor or social issues and are the good citizen in the society are accepted. If and only if the companies, follow the ethical practices of the society will they be able to survive in it. Companies who relies on child labor or depletion of the environment is not something that will act in their favor. Vigilance and cautiousness are the key. The most talked about issues of the presented generation is one the issues that cannot be underestimated.

As we now are living in the more integrated society, goods and services are traded to the part of the world whose rules and customers are far more different than ours. Similarly, the goods that we have in our table may have come from other half of the globe. National boundaries have become a hypothetical border like it actually is. Not only the goods but the situation of the country are traded as well. With operation in others land comes problem such as depletion of natural resources, equality and other social issues which must be treaded carefully.

In this flat world, one must be able to satisfy customers from around the globe while looking at the individual demands. Evolving government regulations and business response: Government works in a mysterious way. From time to time, the policy that the government changes and these has significantly impacted how the business operates in the society.

It restricts activities that may be fruitful to the company but actually is bad for the society as a whole. Similarly, it may impose such rule that the company is new to. This dynamic forces that we called government regulates how the business functions.

Pierpont Morgan, and George Pullman, took advantage of the demands to provide the capital, transportation, oil, and other goods and services required to make the country grow and prosper. Few people gave any thought to what impact industry would have on the environment or society. All industrialists cared about was profits, and they had the federal government on their side, as well.

The government did not want to involve itself in the affairs of business during the late s. It discouraged labor unions and in general gave business owners carte blanche in running their companies as they saw fit. After all, the public did not seem dissatisfied with the way businesses ran their affairs. That began to change, however, in the late s. Several monopolies existed in the United States toward the end of the 19th century.

Industrial combinations controlled such commodities as whisky, oil, transportation, sugar, lead, and beef. Individual states, particularly those in the South and West, passed antitrust laws to regulate monopoly activities.

However, they could not impact industries that crossed state lines. Thus, there grew a demand from the public to enact federal legislation to control interstate commerce. The federal government was reluctant at first to involve itself in direct affairs of business. Slowly, though, it acceded to public demands.


For example, in the House and Senate passed the Interstate Commerce Act, which created the first regulatory commission in U. Three years later, the Sherman Antitrust Act of became law. It stated that "every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several states, or with foreign nations, is hereby declared to be illegal.

Still, not all business leaders required government intervention to express social norms through their policies. A notable early 20th century example was Henry Ford, whose company established an elaborate code of living for its workers.

relationship between business organization and society

The Ford ideology, for a time supported by a sort of social-work unit called the Ford Sociological Department, set out to instruct factory workers in proper and moral living. To advance the cause, the company distributed pamphlets advising workers not to live in overcrowded urban settings, but to seek clean and comfortable family housing.

The Ford literature even instructed employees on what the management considered were proper bathing habits. Ford was, in fact, intent on Americanizing his large immigrant work force. Beyond the negative stereotypes his policies assumed, however, they led also to more tangible drawbacks for workers who didn't fit the mold. Workers who didn't provide evidence of their wholesome living, mastery of English, and other valued traits were subject to lower pay or even dismissal.

The general legislative trend in first half of the 20th century was toward curbing businesses' clout and strengthening labor, investor, and consumer rights. This period emphasized legal remedies and safeguards for individuals who had direct dealings with companies as employees, shareholders, and customers, whereas later developments would add to that list the local communities and the broader society.

relationship between business organization and society

The so-called Progressive Erafollowed by the New Deal, ushered in the precursors to modern regulations in such arenas as food and drug safety and antitrust enforcement.

The s and s also brought new labor laws that began to codify certain employee rights and employer responsibilities, including a minimum wage, as well as legislation that promoted the shareholder's right to reliable information.

The second world war and shifting political tides during the s and s contributed to a slowdown in the U. Some new laws of this period, notably the Taft-Hartley Act ofactually dismantled certain pro-labor policies set forth by New Deal legislation. The decade marked a new era in social awareness concerning virtually every aspect of life. People became more concerned with the environment, corporate profits, and a wide range of social issues.

Educators implemented innovative courses defining the relationship between business and society and outlining business's social responsibilities. As a result, a new "contract" between business and society, based on the latest definition of public policy, fell into place.

Under the terms of the old "contract," the success or failure of a business was based on how much money it made and how many jobs it produced. People in the s developed a new awareness of the environment and the effects manufacturing had on air, water, etc.

They realized for the first time that there sometimes existed an adverse relationship between economic growth and social progress. Critics of the "business at any cost" policy pointed to a number of problems that had been ignored or overlooked for years unsafe workplaces, urban decay, discrimination in the workforce, and the increasing use of toxic substances in the production process.

Business and Society

To combat these problems, activists pushed for a higher level of social awareness on the part of business and among the population in general. They advocated a reduction in the social cost of doing business. Their goal was not to negate the old contract. They recognized that businesses had to make profits in order to survive. What they promoted was simply the addition of new policies to the old contract. Their ideas created considerable debate over the concept of social responsibility.

The relationship between business and society | Madan Mohit -

Doing so would give business a better image in the public's eye and benefit it in the long run. More importantly, it would help business avoid government regulation and provide business opportunities. After all, the proponents said, business has useful resources that it could employ to solve or alleviate social problems. Opponents did not fully agree, they suggested that it was not business's responsibility to solve social problems, particularly from a free enterprise stand-point.

In their viewpoint, honoring social responsibilities would put American businesses at a competitive disadvantage in the rapidly emerging international competitive arena and water down their responsibilities to shareholders.

Second, they argued, corporations are not moral agents. Third, they claimed the very definition of social responsibility was so vague no one could state exactly what business's role in it would be. Finally, they stated that business simply did not have the skills or incentives to handle social problems.

In effect, opponents said, business would be shooting itself in the foot if it assumed a role as a watchdog of societal problems. Both sides presented viable arguments, and they did agree on one central issue: Nor did it consider the competitive arena in which businesses functioned. For example, if an individual firm implemented its own social responsibility program that resulted in extra costs and reduced shareholders' profits, the company would be adversely affecting its ability to compete.

Thus, individual companies were not willing to act unilaterally in meeting social responsibilities. As a result, business in general dragged its heels in formulating a united approach to social responsibility. Consequently, it was inevitable that the government would step in to set guidelines. Sometimes they acted individually; at other times they combined forces.

relationship between business organization and society

As a result, business owners complained that government was driving them out of business and destroying the traditional capitalistic American economic system. The critics who complained that bureaucratic interference became too pervasive and comprehensive in the s had a legitimate complaint. Government regulation of business literally became a growth industry of its own during that period. Between andthe number of federal employees engaged in social regulation increased dramatically.

For example, according to figures presented by Melinda Warren and Kenneth Chilton, the number of government workers employed in consumer safety and health regulation rose 31 percent during that time. That was low compared to the employee increases in job-safety and other working-conditions regulatory agencies percent and environment and energy percent. There were similar jumps in economic regulation agencies, although they were considerably smaller. Warren and Chilton also revealed that the number of regulation-agency employees rose 56 percent in the field of finance and banking, 21 percent in industry-specific fields, and 33 percent in general business.

Overall, there was a 62 percent increase in the number of such workers. The rapid increase bewildered business owners, who simply could not keep up with the number of new laws and regulatory agencies with which they had to deal. The federal government had already involved itself in three types of regulation: During the s regulation of labor and a new category—what may be loosely termed "social"—took center stage.

A look at a few of the agencies created by the federal government in the s through the s attests to the effect social legislation had on labor and management. Business, therefore, is inextricable linked to society. The dynamic environment of business One core argument is that the external environment of business is dynamic and ever changing.

Businesses and their stakeholders do not interact in a vacuum. On the contrary, most companies operate in a swirl of social, ethical, global, political, ecological, and technological change that produces both opportunities and threats.

People increasingly expect business to be more responsible, believing companies should pay close attention to social issues and act as good citizens in society. New public issues constantly arise that require action.

Increasingly, business is faced with the daunting task of balancing its social, legal, and economic obligations, seeking to meet its commitments to multiple stakeholders. Growing emphasis on ethics The public also expects business to be ethical and wants corporate managers to apply ethical principles or values—in other words, guidelines about what is right and wrong, fair and unfair, and morally correct—when they make business decisions. Fair employment practices, concern for consumer safety, contribution to the welfare of the community, and human rights protection around the world have become more prominent and important.

Business has created ethics programs to help ensure that employees are aware of these issues and act in accordance with ethical standards. Globalization People live in an increasingly integrated world economy, characterized by the unceasing movement of goods, services, and capital across national boundaries. Large transnational corporations do business in hundreds of countries. Today, economic forces truly play out on a global stage.