Chapter 1 the business and society relationship

law1541X_fm_i-xviii i 12/29/15 03:24 PM

Stakeholders, Ethics, Public Policy Fifteenth Edition

Anne T. Lawrence San José State University

James Weber Duquesne University

Business and Society

Final PDF to printer

law1541X_fm_i-xviii ii 12/30/15 11:35 AM

BUSINESS AND SOCIETY: STAKEHOLDERS, ETHICS, PUBLIC POLICY, FIFTEENTH EDITION

Published by McGraw-Hill Education, 2 Penn Plaza, New York, NY 10121. Copyright © 2017 by McGraw-Hill Education. All rights reserved. Printed in the United States of America. Previous editions © 2014 and 2011. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of McGraw-Hill Education, including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning.

Some ancillaries, including electronic and print components, may not be available to customers outside the United States.

This book is printed on acid-free paper.

1 2 3 4 5 6 7 8 9 0 DOW/DOW1 0 9 8 7 6

ISBN 978-1-259-31541-1 MHID 1-259-31541-X

Senior Vice President, Products & Markets: Kurt L. Strand Vice President, General Manager, Products & Markets: Marty Lange Vice President, Content Design & Delivery: Kimberly Meriwether David Managing Director: Susan Gouijnstook Brand Manager: Laura Hurst Spell Editorial Director: Michael Ablassmeir Product Developer: Laura Hurst Spell Marketing Manager: Casey Keske Digital Product Analyst: Sankha Basu Director, Content Design & Delivery: Terri Schiesl Executive Program Manager: Faye M. Herrig Content Project Managers: Mary Jane Lampe Buyer: Susan K. Culbertson Cover Designer: Studio Montage Content Licensing Specialist: Deanna Dausener Cover credit: Alija/Getty Images Compositor: SPi Global Printer: R. R. Donnelley

All credits appearing on page or at the end of the book are considered to be an extension of the copyright page.

Library of Congress Cataloging-in-Publication Data Names: Lawrence, Anne T., author. | Weber, James (Business ethics professor), author. Title: Business and society : stakeholders, ethics, public policy / Anne T. Lawrence, San Jose State University, James Weber, Duquesne University. Description: Fifteenth edition. | New York, NY : McGraw-Hill Education, [2017] Identifiers: LCCN 2015044071 | ISBN 9781259315411 (alk. paper) Subjects: LCSH: Social responsibility of business. Classification: LCC HD60 .F72 2017 | DDC 658.4/08--dc23 LC record available at http://lccn.loc.gov/2015044071

The Internet addresses listed in the text were accurate at the time of publication. The inclusion of a website does not indicate an endorsement by the authors or McGraw-Hill Education, and McGraw-Hill Education does not guarantee the accuracy of the information presented at these sites.

All brand or product names are trademarks or registered trademarks of their respective companies. CPT five-digit codes, nomenclature, and other data are © 2015 American Medical Association. All rights reserved. No fee schedules, basic unit, relative values, or related listings are included in the CPT. The AMA assumes no liability for the data contained herein. CPT codes are based on CPT 2015. All references to ICD-10-CM codes, guidelines, or related data are based on the International Classification of Diseases, Tenth Revision, Clinical Modification (ICD-10-CM) 2015. All references to CMS HCPCS codes, guidelines, or related data are based on the Centers for Medicare and Medicaid Services (CMS), Healthcare Common Procedure Coding System (HCPCS) Level II 2015. All names, situations, and anecdotes are fictitious. They do not represent any person, event, or medical record.

mheducation.com/highered

Final PDF to printer

iii

law1541X_fm_i-xviii iii 12/29/15 03:24 PM

About the Authors Anne T. Lawrence San José State University Anne T. Lawrence is a professor of management at San José State University. She holds a Ph.D. from the University of California, Berkeley, and completed two years of postdoc- toral study at Stanford University. Her articles, cases, and reviews have appeared in many journals, including the Academy of Management Review, Administrative Science Quar- terly, Case Research Journal, Journal of Management Education, California Management Review, Business and Society Review, Research in Corporate Social Performance and Pol- icy, and Journal of Corporate Citizenship. Her cases in business and society have been reprinted in many textbooks and anthologies. She has served as guest editor of the Case Research Journal for two special issues on business ethics and human rights, and social and environmental entrepreneurship. She served as president of both the North American Case Research Association (NACRA) and the Western Casewriters Association and is a Fellow of NACRA, from which she received a Distinguished Contributor Award in 2014. She received the Emerson Center Award for Outstanding Case in Business Ethics (2004) and the Curtis E. Tate Award for Outstanding Case of the Year (1998, 2009, and 2015). At San José State University, she was named Outstanding Professor of the Year in 2005. In 2015, she received a Master Teacher in Ethics Award from The Wheatley Institution at Brigham Young University.

James Weber Duquesne University James Weber is a professor of management and business ethics at Duquesne University. He also serves as the executive director of the Institute for Ethics in Business and coor- dinates the Masters of Science in Leadership and Business Ethics program at Duquesne. He holds a Ph.D. from the University of Pittsburgh and has taught at the University of San Francisco, University of Pittsburgh, and Marquette University. His areas of interest and research include managerial and organizational values, cognitive moral reasoning, busi- ness ethics, ethics training and education, eastern religions’ ethics, and corporate social audit and performance. His work has appeared in Organization Science, Human Relations, Business & Society, Journal of Business Ethics, Academy of Management Perspectives, and Business Ethics Quarterly. He received the SIM Sumner Marcus Award for lifetime contribution to the Social Issues in Management division of the Academy of Management in 2013 and the Best Reviewer Award from Business & Society in 2015. He was recognized by the Social Issues in Management division with the Best Paper Award in 1989 and 1994 and received the Best Article Award from the International Association for Business and Society (IABS) in 1998. He has served as division and program chair of the Social Issues in Management division of the Academy of Management. He has also served as president and program chair of the IABS.

Final PDF to printer

iviv

law1541X_fm_i-xviii iv 12/29/15 03:24 PM

Preface In a world economy that is becoming increasingly integrated and interdependent, the rela- tionship between business and society is becoming ever more complex. The globalization of business, the emergence of civil society organizations in many nations, and new govern- ment regulations and international agreements have significantly altered the job of manag- ers and the nature of strategic decision making within the firm. At no time has business faced greater public scrutiny or more urgent demands to act in an ethical and socially responsible manner than at the present. Consider the following: