Prepared by Dr. Stephen Hartman, School of Management, New York Institute of Technology

CHAPTER ONE

1. What were the major contributing factors to the public policy problems the John Manville Corporation was facing?

The reluctance to disclose what the company knew about the dangers of asbestos when questions about the safety of the product first began to appear.

The attitude toward bankruptcy court proceedings where management apparently thought they would be in control.

The lack of political skills to negotiate successfully during bankruptcy proceedings to keep the company from being so drastically changed.

Changes in thinking about product viability that puts more of the responsibility for product related injuries and diseases on the company.

2. What impacts did public policy make on Manville Corporation and its management?

Impact on management time devoted to public policy issues.

Impact on issues discussed at the annual meeting.

Impact on the corporate image.

Impact on product lines of the company.

Impact on the governance process.

3. What are the major socio-political elements that make a more complicated environment for business and have redefined the role of business in society?

Changes in values and ideologies.

Upgrading of ethical standards.

Increased importance of the media and communications.

Changing attitudes of society towards business.

Increased importance of internal stake holder groups.

Increased influence of external interest groups

Increased government intervention.

The internationalization of business.

4. What managerial skills, according to Walter G. Held, does management need to acquire to be effective?

Technical

Administrative

Human Relations

Public Policy

5. Describe the skills that are relevant to the public dimension of management.

Broadened awareness of environmental influences that impact on the corporation and management decision making. Integration of the concerns related to business policy and public policy into a total management strategy. Development of an ability to think strategically about the kind of environment that business will face in the future. Knowledge about organizational structures that can enable the corporation to respond more effectively to public issues. Political skills to resolve conflicting interests between different constituencies. Communication skills to articulate a business position on public policy issues and persuade people that this position deserves consideration. Intellectual skills to analyze and understand complex public issues. Behavioral and attitudinal changes that can enable managers to carry out their new public role effectively.

CHAPTER TWO

1. What common elements are present in most definitions of corporate social responsibility?

private corporations have responsibilities to society that go beyond the production of goods and services at a profit.

corporations have a broader constituency to serve than that of stockholders alone.

corporations relate to society through more than just the marketplace and serve a wider range of human values than traditional economic ones.

corporations have a responsibility to help society solve some of its most pressing social problems.

2. What are the major arguments for social responsibility?

business must accommodate itself to changes in public expectations

profit maximization should be seen over a longer time period

business will gain a better public image

avoidance of government regulation

business has resources that are useful in solving social problems

social problems can be seen as business opportunities

business must balance its power with responsibility to society

business has a moral obligation to be responsible for problems it helped create

3. What are the major arguments against the concept of social responsibility?

definitional problems at both conceptual and operational

levels

the lack of accountability of business management in making social decisions

an increase of the power and influence of business over society

the sole responsibility of business is to the shareholders

lack of skills and incentives to solve social problems

reduced international competitiveness

corporations are not moral agents which makes it difficult for them to respond to moral imperatives

would- undermine the principles on which a free enterprise system is based

4. What are the advantages of the notion of corporate social responsiveness?

managerially oriented: ignores the philosophical debate about responsibility and obligation and focuses on the ability of a corporation to respond to social problems

lends itself to more rigorous analytical research to discover patterns of response that are more effective than others and ways to improve the response process.

5 List the major problems with the concept of corporate social

responsiveness?

does not clarify how corporate resources shall be allocated for the solution of social problems

puts business in a passive role of simply responding to a society that actively expresses its wishes

still plagued by the problem of accountability suggests that management itself decides the meaning of social responsiveness

6. Describe the evolutionary sequence of societal expectations of business performance.

without a proper business response. .

societal expectations of today become...

political issues of tomorrow...

legislated requirements the next day...

and litigated penalties the day after that

7. What are the advantages of the public policy approach to

relating business to broader environmental concerns?

precisely defines the nature and extent of management's social responsibilities

treats business in its institutional context

ignores the moral debate about social responsibility

8. What problems exist in using the public policy concept as a theoretical underpinning for the field?

lack of principles for managerial behavior

appropriate role for business and government to play in the public policy process

lack of a moral underpinning for public policy involvement

CHAPTER THREE

1. What are the basic ethical theories that are useful in analyzing business and government decisions?

teleological theories which hold that the moral worth of actions or practices is determined solely by the consequences of the actions or practices

deontological theories which hold that an act itself has intrinsic value apart from an appeal to consequences

2. What are the steps involved in making a utilitarian decision?

determining what alternative actions are available in any specific decision situation

estimating the costs and benefits that a given action would produce for each and every person affected by the action

choosing the alternative that produces the greatest sum of utility or the least amount of disutility

3. What are the tests that Kant recommends using to judge

whether an action or practice is moral?

it must be possible for the action or practice to be made consistently universal

it must respect rational beings as ends in themselves

it must stem from and respect, the autonomy of rational beings

4. What are the different theories of Justice that have been discussed in the literature?

egalitarian theory that holds human beings are equal in some fundamental respect and thus promotes some form of equality as an ethical goal

libertarian theory which holds that the freedom of the individual is a paramount value that should not be interfered with by the state in the interests of promoting equality or any other social goal

5. What are the different kinds of rights that are reflected in

public policy measures?

negative rights where the individual is protected from

interference by the state or other citizens

positive rights where the individual is entitled to something

from the state or from other citizens

CHAPTER FOUR

1. Describe how values are assigned to goods and services

through the exchange process?

the interaction of individually assigned values

the role of self-interest is critical in describing how people behave in the exchange process

for exchange to take place, people's value preferences must be matched so they are willing to part with something to attain something of greater value

2. What is the invisible hand and how does it work?

aggregation of individual preferences into the forces of supply and demand

resources are allocated to their most productive use as defined by individuals in the marketplace

3. Describe the difference between consumer choice and consumer

sovereignty?

consumer choice relates to a specific purchase decision

consumer sovereignty implies this decision also guides the productive apparatus of society when aggregated with all other consumer choices

this process is the opposite of a totally planned economy with a central planning authority

4. What are the essential characteristics of public goods and services?

indivisible in the sense that the quantity produced cannot be divided to match individual preferences

public in that people must collectively enjoy roughly the same amount

5. What are the major ways of defining the public interest?

an aggregation, weighing, and balancing of a number of special interests

a common or universal interest which most or all members of society- share

An idealist perspective referring to some absolute standard of value that exists independently of individual citizens

a procedural definition focusing on the process by which decisions about the public interest are made

CHAPTER FIVE

1, Describe the nature of the competitive process?

people engage in the competitive process to win rather than to lose or draw

logic dictates that someone will win and come to dominate the other competitors

the outcome of a completely unregulated economy is likely to be a monopoly or an oligopoly in most industries bringing an end to the competitive game

without rules, competitive behavior sinks to the lowest common denominator

2. Describe the three theories with respect to the development of industry regulation and the antitrust area?

public policy in these areas was the result of a strong populist movement that was fearful of the power of big business combinations

public policies were developed in order to rationalize the system by establishing rules of competition that everyone had to follow. These rules made a more secure

and predictable environment for business.

the invisible hand of the market was replaced by the visible hand of management, thus, government had to fill the gap by regulating business in the "public interest"

3. List some of the major causes of the depression?

a soaring stock market was more the result of speculation than increases in real wealth

the prosperity of the late twenties was not widely shared throughout the society

passage of the Smoot-HawleY tariff

a restrictive monetary policy adopted by the Federal Reserve

4. What problems did the New Deal legislation address?

unemployment including youth unemployment

loss of confidence in the banking system

poverty through the emphasis on welfare programs

helping a depressed agriculture sector

spurring a stagnant economy through government spending

establishing labor's right to bargain collectively

providing economic security for old age

5. Describe the social movements of the 1960s and their effect

on public policy?

the civil rights movement and civil rights legislation

the ecology movement and pollution control legislation

the consumer movement and consumer legislation

the women's movement and an emphasis on equal rights

the war on poverty and the creation of a national effort to eliminate poverty

an increase in safety and health consciousness resulting in increased emphasis on safety and health in the workplace and marketplace

ethical concerns and the banning of foreign payments

6. What are the different types of industrial policy that have been proposed?

government aid to high technology industries

help for basic industries such as steel that are vital to our competitive position in the world and our economic independence

help for employees to retrain and relocate if necessary to find new jobs in a changing society

Some kind-of a bail-out agency to help failing companies to make the necessary adjustments to survive in a changing economy

CHAPTER SIX

1. Name and describe the important dimensions that should be taken into consideration when forecasting value change?

extensiveness of the value in the total activity of the system

duration of the value intensity with which the value is sought or maintained

prestige of value carriers

2. Name and describe the important value systems that are common

to most societies?

theoretic: pursuit of knowledge

economic: pursuit of material goods and services

aesthetic: importance of beauty

social: desire to associate and interact with other people

political: pursuit of power

religious: adherence to the ideas and precepts of a particular religious system

ethical: desire to make the right decision and exemplify the right kind of behavior in accordance with a particular ethical system

3. Name some of the important influences on values. Give examples of value changes in response to these influences?

technology

information

population

education

basic institutions

affluence

4. Describe the concept of ideology and the functions ideology performs in society?

shared set of beliefs of framework of ideas

integrates and synthesizes all aspects of life

give purpose and identity to individuals in a society

simplifying devices that out through the complexity and ambiguity of the real world

serve to aside human behavior in the midst of social and cultural confusion

5. List the major components of traditional American ideology?

free enterprise

competition

individualism

private property

limited state

6. Describe the stages in the development of a social movement and trace a recent social movement through these stages?

dissatisfaction of a group

dramatic events

strategies to obtain social change

emergence of strong leadership

7. From what factors does a power-elite or establishment derive its influence in society?

shared attitudes, value, and goals

gate keepers of the issues

broad scope of decision-making power in major institutions

power to employ and reward other people

8. What functions do interest groups perform for their members?

symbolic: provide legitimacy for certain ideas or values

ideological: provide an opportunity to appeal to certain strongly held principles

economic: provide a way for members to pursue their economic self-interest

information: provide political and technical information in which members may be interested

instrumental: enable members to pursue goals that are non-economic in nature

9. List and give examples of the various tactics groups can use to advance their interests?

boycotts

public demonstrations

terrorism

uses of the inertia

lobbying

litigation

10. What are the advantages of a pluralistic form of social-political organization?

more open system

diffusion of power

more opportunities for leadership

allows more interests to be represented

improved policy decisions

11. What are the disadvantages of a pluralistic form of social-political organization?

groups become dominated by their own leadership

minorities and the poor are not adequately represented

conflict of interest

lack of central direction

ignores collective consequences of policy decisions

CHAPTER SEVEN

1. What are some of the reasons behind the growth of government to its present size?

growth of military expenditures

the development of entitlement programs

change of social values

philosophy of open-ended government responsibility

reinterpretation of the constitution

2. What are the major roles that government plays in the

economy?

promoter of business

regulator of business

guarantor of business survival

buyer of products

ownership of some economic entities

manager of the economy

planner of the society

3. What are some of the major arguments for government bailing out failing companies?

failure would increase unemployment and cost the government money for increased welfare expenditures

losses in income taxes could be severe

ripple effects on suppliers and subcontractors

national defense may be an issue

there may be international implications

4. What are some of the major arguments against government

bailing out failing companies?

undermines purposes of a free enterprise economy

rewarding poor management

incentives to be efficient destroyed

sets a dangerous precedent

contributes to a stagnant economy

5. Describe the three major provisions of the Employment Act of 1946

as far as mechanisms to meet the purposes of the Act:

Economic Report of the President: specific current level of employment, production, and purchasing power in the United States. Contains current and foreseeable trends in employment, production, and purchasing power. Reviews programs of the Federal government for carrying out a full employment policy.

Council of Economic Advisors: assists and advises in preparation of the economic report. Gathers information about current economic trends and developments. Appraises federal programs. Recommends national economic policies and legislation to the President.

Joint Economic Committee of Congress: studies matters pertaining to the economic report. Co-ordinates programs and provides guidance to Congressional committees as they take up legislative proposals related to the economy.

6. What are the major arguments in support of government planning?

economic problems make planning a necessity

planning has been successful in business corporations

business would benefit from planning

planning exercise itself would be beneficial

7. What are the major arguments against government planning?

further concentration of economic and political power in government

size and complexity of socio-economic system beyond the capability of men and machines to coordinate effectively

business planning not comparable to government planning--government can command that the goals of planning be accomplished

8. What are the different types of economic planning policies that have been advocated?

accelerationists: promote changes in the market

adjusters: increase aid to workers and communities adversely affected by economic change

targeters: emphasize growth in a few select high-growth industries

central planners: comprehensive planning

bankers: federally backed industrial development bank to provide venture capital to new businesses and industries

Chapter 8

1. Describe the impact regulation has had on the functional areas of a corporation?

Research and Development: safety and health regulations and defensive research

Manufacturing: safety and health and pollution control regulations impact on capital expenditures and operations

Marketing: deception in advertising, disclosure of product characteristics, warning labels, packaging regulations

Personnel: equal opportunity for women and minorities, age discrimination, hiring of handicapped people

Finance: disclosure of more information, paperwork

2. What are the different types of regulation? Name an agency representing each type:

regulation of competitive behavior FTC

industry regulation ICC, SEC, FCC, FPC

social regulation EEOC

regulation of labor management relations NLRB

3. What are the unique characteristics of industry regulation?

focuses on a specific industry

concerned about economic well-being

deals with rates, routes, and the obligation to serve

captured by the industry being regulated

4. What are the distinguishing characteristics of social regulation?

cuts across industries

affects conditions under which goods and services are produced

affects physical characteristics of products

concerned with non-economic matters

special interest constituency

5. Describe the first, second, and third order effects of regulation?

First Order: direct costs of regulation including administrative and compliance masts

Second Order: indirect costs such as losses of productivity, effects on employment

Third Order: induced effects such as impacts on capital formation' innovation, and diversion of management attention

CHAPTER NINE

1. Name and briefly describe the major public policy measures in the antitrust area?

The Sherman Act of 1890: Section 1 attacks every contract, combination, or conspiracy that would restrain domestic or foreign trade. Section 2 enjoins market structure where seller concentration is so high it could be called a monopoly

The Clayton Act of 1914: attacks a series of business practices that would substantially lessen competition or tend to create a monopoly including prior discrimination, tying arrangements, and mergers between competitors by stock acquisition

The Federal Trade Commission Act of 1914: declares that unfair methods of competition and unfair or deceptive acts or practices in or affecting commerce are unlawful

2. Describe the difference between a "rule of reason" and "per se" approach to the antitrust laws?

The rule of reason approach meant that the courts would review all relevant facts and circumstances to determine whether a contract, combination, or conspiracy unduly restricts and hampers competition. Relevant factors could include: facts peculiar to the business, (2) the condition of the business before and after the restraint, (3) the nature of the restraint and its effects, (4) the history of the restraint, and (5) the reason and purpose for adopting the restraint.

The per se approach means that certain kinds of conduct are so unreasonable that they cannot be excused by evidence that they do not adversely affect competition. Proof can be limited to the fact and amount of damage. Parties to an antitrust suit and the courts are relieved from inquiring into the factors which were relevant to a rule of reason analysis

3- What are the major goals of antitrust policy?

maintenance of competition

promotion of fair competition

promoting desirable economic results

the limitation of big business

4. Describe the difference between aggregate concentration and market concentration and discuss the limitations of each method?

Aggregate concentration measures overall concentration in the economy. This is done by taking some segment of the largest corporations in the country and determining whether their share of total corporate assets, sales, income, or value added has increased or decreased over some period of time. This approach says nothing about the kind of markets in which these companies function.

Market concentration is defined as the percentage of total industry sales that are contributed by the largest few firms in an industry ranked in order of market shares. The most common measure is the percentage of industry sales made by the leading four firms in the industry. This approach assumes all industries are equal in terms of their impact on the total economy.

5. What is the difference between the structural and performance approaches to economic concentration?

The structural approach holds that concentration is bad because the economic power that goes with concentration can and will affect industry predetermining their behavior and performance.

The performance view holds that concentration is due to underlying economic, sociological, and technological forces in society. Thus the performance of large firms must be measured independently and cannot be inferred from the structure of the economy or industry in which they function. Structure is by and large irrelevant to the performance of corporations because a concentrated structure is not the result of attempts to monopolize a segment of the economy.

6 What are some of the major reform proposals in the antitrust area?

abolish the laws altogether

limit concern to business practices and conduct alit abolish concern about size and structure

clarify more precisely in the legislation itself what business practices are unlawful

replace the antitrust laws with direct regulation

focus on the welfare of consumers

adopt a per se approach to the size of corporations

CHAPTER TWELVE

1. Describe the different kinds of relationships that can take place between groups.

cooperation: acceptance and interaction in a color-blind and sex-blind manner

respect: recognition of each other's rights to share equally in the opportunities and rewards of society

tolerance: a degree of co-existence - no open warfare or overt discrimination

predilection: preference for members of one's own group--little interaction with members of other groups

prejudice: evaluating individuals on the basis of their group membership rather than in terms of their individual characteristics

discrimination: making decisions with respect to individual on the basis of assumed group characteristics

scapegoating: full-fledged aggression against members of a group

2. Describe the important terms of Title VII of the Civil Rights of 1964?

forbade discrimination in employment by an employer, employment agency, or labor union on the basis of race, color, sex, religion, or national origin, in any term, condition, or privilege of employment

3. What are the important provisions of the Equal Employment Opportunity Act of 1972?

broadened coverage of the Civil Rights Act

gave the EEOC power to bring enforcement action in the courts

provided that discrimination charges may be filed by organizations on behalf of aggrieved individuals

4. Describe the different types of affirmative action programs?

passive nondiscrimination: willingness to treat all races and sexes alike pure affirmative action: expand the pool of applicants, hire the best qualified

affirmative action with preferential hiring: systematically favor women and minority groups

hard quotas: specific numbers or proportions of minorities or women must be hired

5. Describe the difference between equal pay for equal work and goal pay for work of comparable value?

the former concept involves tests of skill, effort, responsibility, and working conditions in judging the equality of work

the latter concept involves evaluating jobs in terms of their intrinsic worth or value to the company

CHAPTER SEVENTEEN

1. What are the benefits that public issues management can bring to a corporation?

allows management to select issues that will have the

greatest impact on the corporation

allows "management of" rather than "reaction to" issues

inserts relevant issues into the strategic planning process

gives the company ability to act in tune with society

provides opportunities for business leadership on issues of concern to the public

protects the credibility of business

2. Describe the different stages of a typical public issue

management system?

identifying public issues and trends in public expectations using some kind of a forecasting or environmental scanning system

evaluating the impact of these issues and establishing priorities

researching and analyzing those issues of high priority

developing a corporate position witch respell to those issues

choosing a strategy and integrating this strategy with overall corporate strategy

implementing the strategy with regard to the high priority issues

evaluating the effort

3. Describe the steps involved in stakeholder analysis?

mapping of stake holder relationships

mapping stake holder coalitions

assessing the nature of each interest

assessing the nature of each stake holder's power

constructing a matrix of stake holder priorities

monitoring shifting coalitions

3. Describe the four types of overall strategic response patterns related to corporate responses to public issues?

inactive: ignoring change

reactive: accommodative or obstructive

proactive: influencing change internal or external

interactive: seeking mutually acceptable outcomes

4. Describe the stages involved in the life cycle of a public issues from the corporate point of view?

latent: issues are not being discussed very widely

emerging;: issues are not fully politicized but are the subject of discussion- for sang groups and affected parties

current: being debated or otherwise acted upon in governmental institutions

institutionalized: formal legislation and regulation

5. Describe the four-sided forecasting model?

economic forecasting at the micro and macro levels

legal forecasting of trends and new developments in the legal environment

political forecasting including trends in legislation and political pressures

social forecasting of value changes, changing life-styles, and demographic charges

6. Describe Ian Wilson's principles that should guide the development of a scanning effort?

holistic in its approach to the business environment

must be continuous or iterative in its operation

must be designed to deal with alternative futures

should lay stress on the need for contingency planning

should be an integral part of the decision-making system of the corporation

CHAPTER EIGHTEEN

1. What are the reasons a corporation may engage in some kind of advocacy advertising?

counteract public hostility because of ignorance or misinformation with respect to an issue

counteract the spread of misleading information by business critics

fill the need for a greater explanation of a complex public issue of concern to business

foster the values of the free enterprise system

counteract inadequate access to and bias in the news media

2. What pitfalls exist in the use of advocacy advertising?

maintenance of a high level of integrity

there must be a congruence between the message of advocacy

advertising and business performance

treatment of advertising expenditures with regard to taxation issues as a waste of corporate assets.

3. What are the functions of lobbying at both the governmental and grass roots levels?

present the company's views on pending legislation

avoid embarrassing investigations of and attacks on a company or an industry

provide information to Congressmen or their staffs that may he useful in drafting legislation

let congressional representatives know what immediate constituencies believe with respect to an issue

build a closer link of accountability between elected officials and the people they represent

4. What are the objectives of public policies that make campaign contributions illegal?

destroy business influence over elections

protect stockholders from use of corporate funds for political purposes to which they have not given their assent

protect the freedom of the individual's vote

5. Describe the operation and organization of a typical Political Action Committee?

Each PAC must have a chairman and a treasurer, and a number have contributions committees

Officers of the PAC often decide where the money will go, but some allow designations by contributors and most solicit suggestions

Costs of administering the PAC can be paid for by the company

Money for contributions has to be solicited from employees, stockholders, and others in a voluntary fashion. Coercion cannot be used

Operation of the PAC is monitored by the company's legal counsel

6. What guidelines exist with respect to managerial involvement in political activities?

management must be proactive rather than reactive

must be constructive rather than destructive

must adopt a nonpartisan approach

limit political activity to areas of competence and credibility

the Chief Executive Officer must be committed and involved