Affluence

The level of wealth, disposable income, and standard of living of the society.

Business
The collection of private, commercially oriented organisations. Business involves
the transformation of inputs (factors of production) into outputs (goods and services) to meet
particular needs or wants of people in society (consumers).
Business Dominance Model
Business occupies a privileged position in policy making,
unmatched by any other group. This privileged position arises from government dependence
on business to ensure a healthy economy. This results in business being able to "control
without trying".
Business Power

The ability or capacity to produce an effect or to bring influence.

Cause Related Marketing (CRM) Marketing activities that usually link an organisation's
product(s) directly to a social cause through the firm's marketing plan.
Corporate Citizenship

Comprised of three areas:

Corporate social responsibility is seriously considering the impact of the company's actions on
society,
Corporate social responsiveness is about action,
Corporate social performance is about outcomes.
Corporate Governance
How a company is set up to ensure it operates in a way that meets
its social, economic, philanthropic and ethical responsibilities. It refers to the method by which
a firm is being governed, directed, administered or controlled and to the goals for which it is
being governed. It is a formal system of oversight, accountability and control for
organisational decisions and resources:
Oversight relates to a system of checks and balances that limit employees' and managers'
opportunities to deviate from policies and codes of conducts.
Accountability relates to how well the content of workplace decisions are aligned with a firm's
stated strategic direction.
Control involves the process of auditing and improving organisational decisions and actions.
NB: The philosophy that is embraced by a board or firm regarding oversight, accountability
and control directly affects how corporate governance works.
Corporate Power

See Pluralism, Neocorporatism and the Business Dominance model.

Corporate Public Policy

A firm's posture, stance, strategy or position regarding the public,
social, global, and ethical aspects of stakeholders and corporate functioning.
Corporate Social Performance

Brings together three major dimensions:

Social responsibility

Economic, Legal, Ethical and Philanthropic.

Social responsiveness

Reaction, Defensiveness, Accommodation or Proactive.

Social/ stakeholder Issues Consumers, Environment, Employees, etc.

Corporate Social Responsibility Numerous definitions of CSR exist and have evolved as
follows:
CSR seriously considering the impact of the company's actions on society.

Social responsibility is the obligation of decision makers to take actions which protect and
improve the welfare of society as a whole along with their own interests. This definition
suggests there are two aspects of social responsibility
protecting and improving.
The idea of social responsibility supposes that the corporation has not only economic and
legal obligations but also certain responsibilities to society which extend beyond obligations.
CSR relates primarily to achieving outcomes from organisational decisions concerning specific
issues or problems which (by some normative standard) have beneficial rather than adverse
effects upon pertinent corporate stakeholders. The normative correctness of the products of
corporate action have been the main focus of CSR.
The social responsibility of business encompasses the economic, legal, ethical and
discretionary (philanthropic) expectations that society has of organisations at a given point in
time (the most recent).
Entitlement Mentality
The general belief that someone is owed something just because
he/she is a member of society.
Global Compact
A communication framework established by the United Nations in 2000. It
is a voluntary initiative to promote and advance responsible business by having participant
businesses internalise 10 principles as part of business startegy, operations and culture, and
to also facilitate partnerships in support of broader UN goals. It is a global network of likeminded businesses and other stakeholders that work to achieve compliance with 10 principles
that are based on universally accepted conventions i.e. Universal Declaration of Human
Rights, ILO Declaration, Rio Declaration and UN Convention Against Corruption.
GlobalisationThe shift toward a more integrated and interdependent world economy.
Globalisation has two facets:
the globalisation of markets, and
the globalisation of production.
Two macro factors underlie the trend toward greater globalisation:
The decline in barriers to the free flow of goods, services, and capital since the end of World
War II, and
Technological change.
Ideology
A system of beliefs and values. An ideology can be a framework of political
understanding and commitment E.g. Socialism, Conservatism, Liberalism.
Iron Law of Responsibility In the long run, those who do not use power in a manner society
considers responsible will tend to lose it.
Legitimacy The perception or belief that a stakeholder's actions are proper, desirable or
appropriate within a given context. This definition suggests that stakeholder actions are
considered legitimate when claims are judged to be reasonable by other stakeholders and by
society in general.
Market Optimists A political view that the role of government should be restricted as far as
possible and leave things to the "free market".

Market Pessimists A political view that the role of governments is to step in to rectify the
failings of markets.
Neocorporatism/ Neocorporatist Model The Neocorporatist Model emphasises the importance
of economic interests (i.e. business and labour). Governments need to secure the cooperation
and support of business and the trade unions in order to be able to manage the economy
effectively. This model includes the concept of "tri-partism" and "social partners" between
these groups.
Offshore outsource/ Offshoring Refers to the relocation of business processes to a different
country.
Outsourcing Refers to the relocation of business processes to a different company.
Philanthropy A desire to help humankind as indicated by acts of charity and the love of
humankind. a more restricted contemporary usage of the word is "business giving". A problem
with dictionary definitions of philanthropy is that the motive for the giving is characterised as
charitable, benevolent or generous, however, in actual practice, it is difficult to assess the
true motives behind businesses' or anyone's giving of themselves or their financial resource.
Pluralism/ Pluralist Model The Pluralist Model emphasises the plurality of groups or interests
seeking to influence government i.e. A diffusion of power among society's groups and
organisations. Thus, business influence is nothing special and group competition is a healthy
part of the democratic process.
Power A stakeholder has power to the extent it has access to coercive, utilitarian or symbolic
means to impose or communicate its views to an organisation:
Coercive power

involves the use of physical force, violence or some type of restraint.

Utilitarian power
involves financial or material control, such as boycotts that affect a
company's bottom line.
Symbolic power
relies on the use of symbols that connote social acceptance, prestige or
some other attribute.
Profit Motive Along with "competition", "profit" is one of the two key drivers of business
behaviour. The profit motive means that businesses produce only goods and services that
consumers are willing to pay for at prices that yield profit.
Public AffairsThe management processes that focus on the formalisation and
institutionalisation of corporate public policy.
Social Contract
A set of two-way understandings that characterise the relationship
between the major institutions of society and business.
The Social Contract is partially articulated through i) laws and regulations established by
society within which business operate, and also through ii) shared understandings that evolve
as to each group's expectations of the other.
Social Media Forms of electronic communication through which users create online
communities to share information, ideas, personal messages and other content.
Social Media Management
Monitoring, contributing to, filtering, measuring and
otherwise guiding the social media presence of a brand, product, individual or company.

Social Media Strategy

the deployment and development of modern strategic plans for
social media; having a specific goal or direction for the social media of a brand, product,
individual or company.
Social Problem
A gap between society's expectations of social conditions and the current
social realities. From the business firm's perspective, the social problem is experienced as the
gap grows between societys expectations of the firm's social performance and its actual
social performance.
Society
A community, a nation or a broad grouping of people having common traditions,
values, institutions and collective activities and interests.
Special Interest Group
A group, however loosely or tightly organised, that is determined to
encourage or prevent changes in public policy without trying to be elected. Also called an
advocacy group, a lobbying group, or a pressure group. E.g. The Sierra Club, Greenpeace,
Human Rights Campaign.
Spin (Doctoring)
side.

The presentation of one side of the situation, usually only the positive

StakeholdersThose people and groups to whom an organisation has responsibility, and who
have a "stake" or claim in some aspect of the company's products, operations, markets,
industry or outcomes. These people and groups are influenced by businesses, but also have
the ability to affect businesses. Stakeholders can include customers, investors, shareholders,
employees, suppliers, governments, communities, etc. Categories of stakeholders can be as
follows:
Primary stakeholders
Those people/groups whose continued association is absolutely
necessary for a firm's survival; these include employees, customers, investors and
shareholders as well as the governments and communities that provide necessary
infrastructure.
Secondary stakeholders Those people/groups that do not typically engage in transactions
with a company and thus are not essential for its survival; they include media, trade
associations and special interest groups.
Another way of identifying stakeholders includes core, strategic and environmental:
Core stakeholders A specific subset of strategic stakeholders that are essential for the
survival of the organisation.
Strategic stakeholders
Those stakeholder groups that are vital to the organisation's
success and the particular set of opportunities and threats that it faces at a particular point in
time.
Environmental stakeholders
or strategic.

All others in the organisation's environment that are not core

Whether stakeholders are core, strategic or environmental stakeholders depends on their

major characteristics or attributes such as legitimacy, power or urgency
stakeholders
can move from one group to another.
Stakeholder Approach
stakeholders.

The approach taken by businesses to manage their interactions with

One major challenge embedded in the stakeholder approach is to determine whether it should
be seen as a way to better manage stakeholders or as a way to treat stakeholders more
ethically. These issues are addressed by distinguishing between the following approaches:
Strategic approach
views stakeholders primarily as factors to be taken into
consideration and managed while the firm is pursuing profits for its shareholders. They can
both facilitate or impede the firms pursuit of its strategic objectives. Managers take
stakeholders into account because offended stakeholders might resist or retaliate. This is an
instrumental view of stakeholders.
Multi-fiduciary approach views stakeholders as more than just individuals or groups who can
wield economic or legal power. Management has a fiduciary responsibility to stakeholders just
as it has this same responsibility to shareholders. In this approach, managements traditional
fiduciary, or trust duty, is expanded to embrace stakeholders on roughly the same footing
with shareholders. Thus, shareholders are no longer of exclusive importance as they were
under the strategic approach.
Stakeholder Synthesis approach
holds that business has moral responsibilities to
stakeholders but they should not be seen as part of a fiduciary obligation. As a consequence,
managements basic fiduciary responsibility to shareholders is intact, but it is also expected to
be implemented within a context of ethical responsibility to other stakeholders. This ethical
responsibility is businesss duty not to harm, coerce, lie, cheat, steal, etc. The result is the
same in the multi-fiduciary and stakeholder synthesis views, however, the rationale is
different.
Stakeholder Concept
Comprises three views of the firm in which the evolution and
progress of the stakeholder concept parallels the growth and expansion of the business
enterprise:
Production View of the firm
Owners thought of stakeholders as only those individuals or
groups that supplied resources or bought products or services.
Managerial View of the firm
With the growth of corporations and the resulting separation
of ownership and control, business firms began to see their responsibilities toward other major
constituent groups.
Stakeholder View of the firm
The view that management must perceive of its stakeholders
as not only those groups that management thinks have some stake in the firm, but also those
groups that themselves think or perceive that they have a stake in the firm. It encompasses
many different individuals and groups that are embedded in the firms internal and external
environment. Each stakeholder group is composed of subgroups E.g. the government
stakeholder group includes federal, state and local government groups as subgroups.
Strategic Management
The overall management process that strives to identify corporate
purpose and to position a firm relative to its market environment.
Strategy Levels Enterprise-Level Strategy: "What is the role of the organisation in society?"
Corporate-Level Strategy: "What business(es) are we in or should be in?"
Business-Level Strategy: "How we should compete in a given business or industry?"
Functional-Level Strategy: "How should a firm integrate sub-functional activities and relate
them to its functional areas?"

Strategic Philanthropy
An approach in which corporate giving and other philanthropic
endeavours of a firm are designed in a way that best fits with the firm's overall mission, goals
or objectives.
The State
The State is comprised of the complex set of institutions that make up the public
sector as a whole.
Urgency
Stakeholders exercise greater pressures on managers and organisations when
they stress the urgency of their claims. Urgency is based on two characteristics: time
sensitivity and the importance of the claim to the stakeholder.
Victimisation Philosophy The belief by a number of individuals and groups that they are
victims of society. E.g. People who sue airlines or restaurants such as McDonalds for not
having sufficiently large enough seats.