BUS 100 Textbook Notes Chapters 1-2

What is business?

• An organization that is engaged in making a product or providing a service for a profit.

• A theory that holds that all organisms are open to, and interact with, their external environments.

• Refers to human beings and to the social structures they collectively create; specifically refers to segments of humankind, such as members of a particular community, nation, or interest group.

• The closely intertwined relationships between business and society.

What is society?

• A theory that holds that all organisms are open to, and interact with, their external environments.

• An organization that is engaged in making a product or providing a service for a profit.

• Refers to human beings and to the social structures they collectively create; specifically refers to segments of humankind, such as members of a particular community, nation, or interest group.

• The closely intertwined relationships between business and society.

What is general systems theory?

• The closely intertwined relationships between business and society.

• A theory that holds that all organisms are open to, and interact with, their external environments.

• Refers to human beings and to the social structures they collectively create; specifically refers to segments of humankind, such as members of a particular community, nation, or interest group.

• An organization that is engaged in making a product or providing a service for a profit.

What is an interactive social system?

• Refers to human beings and to the social structures they collectively create; specifically refers to segments of humankind, such as members of a particular community, nation, or interest group.

• An organization that is engaged in making a product or providing a service for a profit.

• A theory that holds that all organisms are open to, and interact with, their external environments.

• The closely intertwined relationships between business and society.

What is shareholder theory of the firm?

• Their core arguments are: descriptive, instrumental, and normative

• A theory that holds that the purpose of the firm is to create value for society.

• A theory that holds that the purpose of the firm is to maximize its long-term market value. (Also known as ownership theory of the firm.)

• A person or group that affects, or is affected by, a corporation’s decisions, policies, and operations. (See also market stakeholder and nonmarket stakeholder.)

What are the three core arguments for the supporters of the stakeholder theory of the firm?

• • Many laws give protection to stakeholders 

• • A person who exercises power on behalf of another 

• Their core arguments are: descriptive, instrumental, and normative

• • When a manager identifies relevant stakeholders to understand their interest and power, they may have to assert these interests 

What is the stakeholder theory of the firm?

• A theory that holds that the purpose of the firm is to create value for society.

• A person or group that affects, or is affected by, a corporation’s decisions, policies, and operations. (See also market stakeholder and nonmarket stakeholder.)

• Managers must pay attention to their quarterly and annual financial performance 

• • An organization that does the stakeholder analysis 

What is a fiduciary?

• A stakeholder that does not engage in direct economic exchange with a company, but is affected by or can affect its actions.

• A stakeholder that engages in economic transactions with a company.

• Individuals who are employed by the firm, such as employees and managers.

• A person who exercises power on behalf of another

What does descriptive argument mean in terms of the stakeholder theory of the firm?

• Individuals or groups that may important transactions with a firm but are not directly employed by the firm, such as customers or suppliers.

• The stakeholder management is more effective as a corporate strategy

• The stakeholder management is simply the right thing to do

• The stakeholder view is simply a more realistic description of how companies really work

What does instrumental argument mean in terms of the stakeholder theory of the firm?

• The stakeholder management is more effective as a corporate strategy

• The stakeholder management is simply the right thing to do

• Individuals who are employed by the firm, such as employees and managers.

• A stakeholder that does not engage in direct economic exchange with a company, but is affected by or can affect its actions.