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Communication In Business

Communication in Business 100 (Curtin University of Technology)

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Communication in Business: Business and Society

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
 Business: The collection of private, commercially oriented
organizations.

 Business is a way of dealing with the problem of scarcity
 Business involves the transformation of inputs (‘factors of production’)
into outputs (goods & services) to meet particular needs or wants of
people in society (consumers)

 The private sector is characterised by production of commodities for
sale, with the prime objective of making a profit

 Competition and profit motive are 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 yields a
profit

 Competition & the profit motive produce important benefits to society

 Responsive to consumers and to improve efficiency
 Improve lifestyle

 But there is a downside

 Firms are not interested in you unless you have money in your
pocket
 Consumerism

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 Society: A broad group of people and other organizations, interest

groups, a community, a nation.

A Changing Society:
• Dominance of free market economics
• Knowledge economy
• Labour power shifts
• Social obligations of business
• All of these events shape how business communicates and interact

How does Business deal with issues in society?

 Enviroment
 Impact = Population x Technology x Affluence
 Environmental policies, management systems and reports
 Regulations and pressure from stakeholders

 Equality
 Crosses many sectors of business
o Treatment of employees of difference
o Discrimination due to religion or ethnicity

 Unequal employment practices across different countries of the

same corporations
o Role of women

 Community Building
 Role of building community and infrastructure in the places of
operation.
o Education
o Malaria and HIV/AIDs programmes
o Infrastructure building

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 Corporate Social Responsiveness: connotes a dynamic, action

orientated condition

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
 Corporate citizenship: embraces all the facets of corporate
social responsibility, responsiveness, and performance.

 Drivers:
 Traditions and values
 Reputation and image
 Business strategy
 Recruiting and retaining
employees
 Customers and consumers
 Expectations in the community
 Laws and political pressures

 Corporate Public policy: Corporate public policy is a firm’s posture,

stance, strategy or position regarding the public, social, global, and
ethical aspects of stakeholders and corporate functioning
 Affirmative action
 Environmental sustainability
 Sexual Harassment
 Employee Privacy
 Product Safety

 Corporate Governance: Explore corporate governance and the ways

in which it has evolved.

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• Explain the concept of legitimacy and the part that corporate

governance plays in establishing the legitimacy of business
• Explore how good corporate governance can mitigate problems
created by separation of ownership
• Board Structure
• Continuous Disclosure
• Addresses the issues facing business and to improve
communication, transparency, trust and relationships.

Four Key Strategy Levels

Emphasis on Enterprise-Level Strategy

• Codes of ethics
• Codes of conduct
• Mission statements
• Values statements
• Corporate creeds
• Vision statements
• Policy-oriented codes and statements

 CSR: The social responsibility of business encompasses the economic,

legal, ethical and discretionary
expectations that society has of organizations at a given point in time.
 Seriously considering the impact of a company’s actions on society.

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 Requires the individual to consider his/her acts in terms of a whole

social system, and holds him/her responsible for the effects of acts
anywhere in that system.


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Arguments against CSR:

• Restricts the classic economic goal of profit maximization
• Business is not equipped to handle social activities
• Dilutes the primary purpose of business
• Increases the power of business
• Limits the ability to compete in a global marketplace

Arguments for CSR:

• Addresses social issues brought on by business, and allows business
to be part of the solution
• Protects business
self-interest
• Wards off future government intervention
• Addresses issues by using business resources and expertise
• Addresses issues by being proactive
• The public supports CSR

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 Social Contract:

 “Today, it is clear that the terms of the contract between society and
business are, in fact changing in substantial and important ways.
Business is being asked to assume broader responsibilities to society
than ever before, and to serve a wider range of human values….In as
much as business exists to serve society, its future will depend on the
quality of management’s response to the changing expectations of the
public. ” (From: Bernstein, A. 2000. Too much corporate power,
Businessweek September 1: 149. )

Stakeholders - primary/secondary: Individuals and groups with a
multitude of interests, expectations, and demands as to what business
should provide to society. It is a role, rather than a person.
 External: outside the organization
 Internal: inside the organization
• Primary stakeholders are those stakeholders that have a direct
stake in the organization and its success
• Secondary stakeholders are those that have a public or special
interest stake in the organization
• Core stakeholders are essential to the survival of the
• firm
• Strategic stakeholders are vital to the organization and the
threats and opportunities the organization faces
• Environmental stakeholders are all others in the organization's
environment

 People change stakeholder roles due to 3 reasons:

 Changes in the environment (e.g. earthquakes - TEPCO)

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 Actions by the company (e.g. accidents - BP)

 Actions by the stakeholder (e.g. activism - Woodside)

Power refers to the ability or capacity of a stakeholder to produce an

effect
• Symbolic power: reputation, image, ethics, honour
• Utilitarian power: money, material means
• Coercive power: (threat of) physical force

Legitimacy refers to the perceived validity of the stakeholder’s claim

to a stake
• PETA
• Greenpeace

Urgency refers to the degree to which the stakeholder’s claim

demands immediate attention

Views of stakeholders:
• Strategic approach considers stakeholders primarily as factors
managers should manage in pursuit of shareholder profits
• Multifiduciary approach considers stakeholders as a group to
which management has a fiduciary responsibility
• Synthesis approach considers stakeholders as a group to whom
management owes an ethical, but not a fiduciary responsibility

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Pluralism: Refers to a diffusion of power among society’s many groups
and organisations. Wide decentralization and diversity of power

 Strengths of Pluralistic society

 Prevents concentration of power
 Maximizes freedom of expression and action
 Disperses individual allegiances
 Creates diversified set of loyalties
 Provides checks and balances

 Weaknesses
 Pursuit of self-interest
 Proliferates organizations and groups with overlapping goals
 Forces conflicts to center stage
 Can be inefficient

Special interest groups….

• make life more complex for business and government
• number in the tens of thousands
• pursue their own focused agenda
• are more active, intense, diverse and focused
• attract a significant following
• often work at cross purposes, with no unified set of goals

 The State: The state is comprised of the complex set of institutions

that make up the public sector as a whole

 Neocorpratism Emphasises the importance of economic interests –

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
 ‘Tri-partism’, ‘social partners’

 Business Dominance Model: Business occupies a privileged position

in policy making, unmatched by any other group

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 This privileged position arises from government dependence on

business to ensure a healthy economy
 ‘Control without trying’

 Corporate Public Policy: Corporate public policy is a firm’s posture,

stance, strategy or position regarding the public, social, global, and
ethical aspects of stakeholders and corporate functioning”

 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

 Globalisation: Globalisation enhances the power of business

 But business is still dependent on government. Globalisation refers to
the shift toward a more integrated and interdependent world economy

 Views
 Globalisation critics argue that falling barriers to trade are destroying
manufacturing jobs in advanced countries
 Supporters of globalisation contend that the benefits of this trend
outweigh the costs that
countries will specialise in what they do most
efficiently and trade for other goods and all
countries will benefit

Global Institutions
 The World Trade Organization (WTO) is primarily responsible for
policing the world trading system and making sure that nation-states
adhere to the rules laid down in trade treaties signed by WTO members
 The International Monetary Fund and the World Bank were created in
1944
 The IMF was established to maintain order in the international
monetary system
 The World Bank was established to promote economic development
 The United Nations was established in1945 to:
 maintain international peace and security;
 develop friendly relations among nations;
 cooperate in solving international problems and in promoting respect
for human rights; and

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 be a center for harmonising the actions of nations.

Two macro factors underlie the trend toward greater

globalisation:
• The decline in barriers to the free flow of goods, services, and
capital that has occurred since the end of World War II.
• Technological change .

Implications of technological change for the globalisation of

production include:
• Lower transportation costs that enable firms to disperse production
to economical, geographically separate locations.
• Lower information processing and communication costs that enable
firms to create and manage globally dispersed production systems
• low cost global communications networks help create electronic
global marketplace
• low-cost transportation help create global markets
• Global communication networks and global media are creating a
worldwide culture, and a global market for consumer products

 Power: The ability or capacity to produce

an effect or to bring influence

BP: Relationship between business messages, their interactions

and relationships?

 Business: The collection of private, commercially oriented

organizations
 Society: A broad group of people and other organizations, interest
groups, a community, a nation.
 The private sector is characterised by production of commodities for
sale, with the prime objective of making a profit
 Competition and profit motive are 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 a
profit
 Responsibility to people and societies

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 Stewardship of scarce resources

 Legitimate aspect of business
 Not in conflict with growth and profitability


 UN Global Compact:
 Human Rights
 Principle 1: Businesses should support and respect the protection of
internationally proclaimed human rights; and
 Environment
 Principle 7: Businesses should support a precautionary approach to
environmental challenges;
 McDonalds
 McDonald's employ more than 1.8 million people around the world
(People 2013)
 McDonald's are one of the biggest trainers and employers in Australia
(Our People 2013).
 Human rights is vital for high-quality corporate citizenship and is a key
performance indicator for companies globally (Business and Human
Rights 2013).

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 The environment is an issue where McDonald's has had focus, is one of

the core values identified as a challenge that not only applies to our
industry, but industries globally.
 Since the beginning McDonald's have proved our dedication to doing
the righteous thing through various business practices that permits us
to facilitate and take advantage of the dimension and range of our
company to lend a hand to build towards a difference (Values in Action
2013).

 Suppliers to conduct in a approach that is outlined by the United

Nations Universal Declaration of Human Rights (Supplier Code of
Conduct 2012).

 Supplier Workplace accountability which enables a unified set of

standards to apply to all workers who are involved in the supply chain
(Supplier Workplace Accountability 2011).
 A "Total life cycle" strategy which involves Reducing, Reusing and
Recycling waste products is a policy taking on by McDonald's that could
be adapted by any company wishing to reduce their effects on the
environment (Global Environment Commitment 2013).
 Ensuring Accountability Procedures (Global Environment Commitment
2013). This creates a role within the company with a responsibility to
guarantee devotion to environmental goals throughout the supply
chain of all companies.

 Sime Darby
 Community development
 Education
 Employment
 Environmental protection

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