Three Spheres of Human Civilization Chapter 3

1. Three Spheres of Human CivilizationChapter 3 1

2. Stakeholder Relationships Primary: Employees Suppliers and Allies Customers Owners Critical Secondary: Governments Communities Particular Secondary: Specific others

3. Globalization: Process to create competitive environment • Mobility - capital, people, and ideas transcend boundaries • Simultaneity - goods and services become available everywhere at once • Bypass - alternative routes to getting goods and services to the purchasers, thus reducing dependencies on stakeholders • Pluralism - decentralization will continue to devolve responsibility to smallest entrepreneurial units possible

4. How to be “world-class” • Awarenessof leading edge concepts that guide progressive companies • Technologically connectedwithin their communities, and within the industries with all of the stakeholders • Continue to develop competenceamong all of their important stakeholders by investing in on-going learning throughout the enterprise

5. Assumptions of the Neoclassical Model numerous buyers and suppliers readily available information costs are internalized externalizing costs paid by public investment capital stays within national borders (Ricardian view) and international trade is balanced savings are invested in productive capital Reality oligopolies exist trade secrets keep information hidden many costs are externalized increasing shareholder wealth perspective dominates Neoclassical Model vs Reality

6. Economic sphere: Business • Values “economizing” • prudent, rational use of resources to produce goods and services as efficiently as possible • ...and Power Aggrandizing • Based on a public ‘charter’ that grants rights and responsibilities • Public and private responsibilities of managers/leaders

7. Public Responsibilities of the Corporation • Primary • "the role that defines its nature and social purpose and that provides the basis for exchange relationships between it and the rest of society."(Preston and Post, 1975, p. 95.) • Secondary • "all those relationships, activities, and impacts of the organization that are ancillary or consequential to its primary involvement activities," (Preston and Post, 1975, p. 96.)

8. Political Sphere: Government(s) • Focuses on directing and controlling actions with broad implications for society • Includes • political structure and constitution • public policy process and outcomes • laws, rules, regulations • branches of government • Value power aggrandizing

9. Political Sphere • Public policy makers, whether elected or appointed to public office, at least in democratic societies, are charged with responsibility for "the public interest" or the "common good." • the critical role of institutions in the political sphere is to determine what actions, policies, and rules are in the public interest or the common good, establish infrastructure, and set the rules of society that foster that common good. • the common good is the particular standards and values that people in a society would generally agree are in the best interests of that society.

10. Political Sphere • Values of power aggrandizing (bureaucratic organization) • Public policy is implemented through the “public policy process” • A nation's political structure and constitution determine the public policy process and its outcomes, which in turn, dictate how laws, court, and executive decisions are to be made. • Public Policy Agenda - public issues that are dealt with through public policy decisions and rulings

11. Influential Government LEVELS • Local community or municipal • State or Provincial • National • International (increasingly)

12. Why Government? • Protect and define the public good (shared and external benefits that accrue to all citizens from actions taken by others) • Deal with externalities (shared and usually indivisible costs that accrue to people or organizations even when they do not take the deleterious actions themselves.) • Prisoners Dilemma - incurring costs in order to avoid dumping it all on the public • Tragedy of the Commons - public goods available to everyone which can be consumed or destroyed if overused • Free Riders - the difficulty of excluding people or organizations from the benefits

13. Government... • Creates Laws, Regulations and Court Rulings • - create a system that attempts to balance public goods and externalities, avoid the tragedy of the commons, and reduce free ridership, making the so-called playing field level for all.

14. Why government? • Governments deal with… • Common good • public interest--in the interest of society • Public Goods • shared, generally indivisible, external benefits accruing to all citizens from actions by others • Externalities • shared, indivisible, costs that accrue from deleterious actions of others

15. Why government? • Avoid tragedy of the commons • overuse of public goods • Deal with free riders • ensuring participating in generating needed public goods • Create infrastructure • Create system of laws, rules, regulations, and court rulings

16. Society shifts because of... • Technological Change • Recognition of unmet needs • Consciousness about issues raised through increased information

17. Shaping the Public Policy Agenda Public opinion Political and social activists Leadership in social organizations Shifting Public Issues Elements of Public Issues controversy for a stakeholder gap between at least one stakeholder’s perception of what “is” and what “should be” question of legitimacy or cost/benefit of resolution

18. legislation public attention trigger event re-emerges public concern resolved diminished attention activists involved issue dies opinion leaders late early -time- Issue Life Cycle media interest

19. Ideology - “the collection of ideas that a community uses to make values explicit in some relevant context."Lodge and Vogel • The relationship between the human being and the community, the individual, and the group; and the means to individual fulfillment and self-respect; • The institutional guarantees and manifestations of that relationship, such as property rights; • The most appropriate means of controlling the production of goods and services; • The role of the state; and • The prevailing perception of reality and conception of nature, concerning, for example, the role of science and the functions of education.

20. “Ideal-type” ideologies • Individualism - the atomistic notion that a community is no more than the sum of the individuals in it. • Lodge and Vogel, 1987, p. 12-23. • Communitarism -is characterized by an emphasis on community, with the belief that the community is something organic and whole in itself, comprised of more than the sum of its parts

21. Economic Development and the Political Sphere • Leading Corporate Citizens... • Are aware of the pressures that exist on countries to trade human lives and ecological protection for economic development • Work interactively with governmental bodies to create conditions of employment, jobs, and economic opportunities that maintain a healthy environment and society wherever they operate

22. Civil Society Sphere... • Definition: “those forms of communal and associational life that are organized neither by the self-interest of the market nor by the coercive potential of the state." Wolfe Fundamental purposes: to construct relationships among social institutions and peoples that give meaning to the terms civility and community • Values:relationship, civility, and community

23. Civil Society Sphere • X-values - values that are encompassed in friendships, loyalties, love, and personal values and build relationships rather than the economizing or power aggrandizing values of the economic and political spheresFrederick (1995) • Foundation of connectedness • Shared norms and values emerge • Provides humanizing elements

24. Bowling Alone:decline in civic engagement • Symptoms • fewer people vote or become actively involved in public life • fewer people take part in public meetings • less attendance at political events less political participation • less religious affiliation, union membership, parent teacher association, volunteering • Factors of Influence • pressure of time and money, • changing role of women • breakdown of family • rise of welfare and generational effect

25. Healthy Civil Society • Strong families • Development of trust • High social capital • Shared identity • Sense of community • Result: proactive and capable citizens.

26. Jihad v. MacWorldBarber • “Tribalism and parochial ethnicity, v. globalizing market forces” • Strong civil ties enable citizens to challenge governments and locally unacceptable corporate practices but too much social capital can be exclusionary and quite negative. • Strong civil society counterbalances multinational corporations with values focused on material goods and consumerism

27. Balance... • Key Factors for leading corporate citizens • Recognize the (appropriate) interests businesses have in productivity, efficiency, and wealth. • Recognize that sufficiently strong and democratic government have important roles to play in achieving equity and social justice among citizens. • Develop enhanced awareness of the critical role of social capital in health civil society institutions in achieving a meaningful and values-based sense of community locally and globally

28. Ecology, Competition, Collaboration “Partnership is essential to sustainable communities. --Partnership: the tendency to associate, establish links, live inside one another, and cooperate--is one of the hallmarks of life.” “Interdependence, the cyclical flow of resources, cooperation, and partnership--are all different aspects of the same pattern of organization. This is how ecosystems organize themselves to maximize sustainability.”(Capra, p. 301)

29. Business Organizations (Private)Proprietorship, Partnership, Corporation • Key Stakeholders: (primary) Owners Customers Employees Suppliers (virtual) (secondary) Community Government • Sphere of Influence: Economic • Primary Purpose: Goods and services • Dominant Values: Economizing

30. Governmental OrganizationsExecutive branch, Legislatures, Judiciary • Sphere of influence • political • Purpose • serve public good • Dominant Values • power-aggrandizing • Key stakeholders • government • general public • employees • clients/customers and “society”

31. Non-GovernmentalOrganizationsnon-profit, religious, health-care, educational, civil and civic organizations, political, trade, and industry associations • Sphere of influence • Civil Society • Primary purpose • Build/maintain society and community • Dominant values • Civilizing, building and maintaining relationships • Key Stakeholders • funders • clients • employees • suppliers • “society”

32. Stakeholders in the Spheres Sphere Purpose DominantKey Economic/Business Values*Stakeholders Proprietorship Produce Economizing Primary: owners Partnership goods & customers Corporation services employees suppliers (virtual) Secondary: community government(s) Political Serve public Power- Primary: government Governments good/interest aggrandizing general public employees clients/’customers’ served ‘society’ Civil Society Build/maintain Civilizing, funder(s) NGOs society and building and clients community maintaining employees relationships suppliers ‘society’ Adapted from Frederick, 1995

33. Dominant Values Within the Spheres* Economic/Business Political (and Business) Civil Society Economizing ValuesPower-aggrandizingRelational Economizing Hierarchical organizing Care (Efficiency) Managerial decision power Connectedness Growth Power system equilibrium Community Systemic integrity Power aggrandizement Civility Technological Values X-Factor (Individual Values)Nature (Ecological) Instrumental pragmatics Personal, idiosyncratic, Ecologizing Values Cooperative/ role-conditioned values Linkage coordinative Diversity Technical expertise Homeostatic Public openness succession Participatory leveling Community *Adapted from Frederick, 1995