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Contents List of Cases Preface Part I Strategy and the Nonmarket Environment CHAPTER 1 MARKET AND NONMARKET ENVIRONMENTS Introduction The Environment of Business The Role of Management Market and Nonmarket Environments Analysis of the Nonmarket Environment: The Four I's The Nonmarket Environment of the Automobile Industry Issues Interests Institutions Information Change in the Nonmarket Environment Anticipating Change in the Nonmarket Environment EXAMPLE: GRADUATION CARDS The Nonmarket Issue Life Cycle Summary Organization of the Book Cases The Nonmarket Environment of the Pharmaceutical Industry An Emerging Issue: MTBE The Nonmarket Environment of McDonald's CHAPTER 2 INTEGRATED STRATEGY Introduction Strategy in the Nonmarket Environment The Importance of Nonmarket Strategy Competition and Change in the Nonmarket Environment Strategy and the Nonmarket Issue Life Cycle Strategies and Borders Integrated Strategy Nonmarket Positioning EXAMPLE: EBAY'S POSITIONING IN LEGAL SPACE Nonmarket Positioning and Market Strategies Positioning Spaces The Perils of Positioning Nonmarket Assets, Competencies, and Reputation A Framework for the Analysis of Nonmarket Issues EXAMPLE: CITIBANK AND CREDIT CARDS FOR UNDERGRADUATES Organization of the Nonmarket Strategy Function Summary Cases Exclusive Resorts: Entrepreneurial Positioning and Nonmarket Defense Envirotest Systems Corporation (A) Personal Watercraft, aka Jet Skis CHAPTER 3 THE NEWS MEDIA AND NONMARKET ISSUES Introduction The Role of the News Media in Nonmarket Issues Messages and Their Interpretation A Theory of News Media Coverage and Treatment Intrinsic Audience Interest Societal Significance Combining the Perspectives Extending the Theory Newsworthiness The Cost of Coverage Balance and Fairness The Nature of the News Media News Organizations as Businesses The Profession Does the News Media Treat Issues Selectively? Bias, Accuracy, and Fairness Business Interactions with the News Media The Need for Information Media Strategies Responses and Vacuums Media Interviews Anticipating Issues Unanticipated Events EXAMPLE: THE BODY SHOP Recourse in Disputes with the Media Private Recourse EXAMPLE: PROCTER & GAMBLE AND NEIGHBOR TO NEIGHBOR Recourse to the Law: Defamation and Libel Political Recourse Summary Cases The Alar Episode General Motors Like a Rock (A)? Illinois Power Company (A) CHAPTER 4 PRIVATE POLITICS Introduction Campaigns EXAMPLE: PIZZA HUT AND HEALTH INSURANCE REFORM Private or Public Politics? Activist Strategies Advocacy Science EXAMPLE: FISH FARM ACTIVISM Target Selection A Generic Strategy of Activists Activist Organizations Activists and Their Organizations Greenpeace Interacting with Activist Groups Assessment Strategy and Negotiations EXAMPLE: NEGOTIATING WITH ACTIVISTS: ONBANK Challenging the Activists Summary Cases Shell, Greenpeace, and Brent Spar Nike in Southeast Asia Strategic Activism: The Rainforest Action Network Part I Integrative Case Anatomy of a Corporate Campaign: Rainforest Action Network and Citigroup (A) Part II Nonmarket Strategies and Government Institutions CHAPTER 5 POLITICAL THEORY AND GOVERNMENT INSTITUTIONS Introduction Markets The Role and Functioning of Markets Consumer Surplus and Economic Rents The Connection Between the Market and Nonmarket Environments The Demand for Nonmarket Action The Costs of Nonmarket Action The Free-Rider Problem and Collective Action Social and Political Dilemmas The Prisoners' Dilemma Dilemmas, Repeated Encounters, and Cooperation Majority Rule Institutions Properties of Majority Rule Condorcet's Paradox and Arrow's Impossibility Theorem Agendas Committees in Legislatures The Median Voter Theorem Bargaining Versus Voting Vote Trading and Pivotal Voters Institutions Congress The Organization of Congress The Legislative Process Committees Committee and Individual Power Bargaining in Political Institutions Delegation Legislators and Their Constituents Committee and Personal Staffs Parties The Presidency and the Executive Branch State Governments Politics and the Public Interest The Politics of the Extension of Daylight Saving Time The Nature of Political Explanations The Legislative History of the Extension The Politics of Daylight Saving Time The Role of Information An Analytical Characterization of the Politics of Daylight Saving Time Summary Cases Summertime in the European Union Repeal of the Luxury Tax UPS and Multi-Employer Pension Plans CHAPTER 6 NONMARKET ANALYSIS FOR BUSINESS Introduction A Framework for the Analysis of Nonmarket Action in Public Politics Interests and Interest Groups The Amount of Nonmarket Action The Demand for Nonmarket Action The Costs and Effectiveness of Nonmarket Action The Distributive Politics Spreadsheet The Nature of Political Competition EXAMPLE: INTERNET WINE SALES Institutions and Institutional Officeholders Moral Determinants of Collective Action Boeing in a Pickle Analysis of Boeing in a Pickle The Nonmarket Issue Distributive Consequences Boeing's Nonmarket Agenda and Objectives The Nature of the Politics Interests and the Demand for Nonmarket Action The Supply Side The Distributive Politics Spreadsheet Institutions and Institutional Officeholders Nonmarket Strategy Formulation The Outcome Summary Cases Tobacco Politics Scrubbers and Environmental Politics Leasebacks by Tax-Exempt Entities CHAPTER 7 FORMULATING NONMARKET STRATEGIES FOR GOVERNMENTAL ARENAS Introduction Responsible Nonmarket Action Criticisms of Business Nonmarket Action Nonmarket Strategy Formulation Managers and Nonmarket Strategies An Approach to Strategy Formulation Generic Nonmarket Strategies Representation Strategies EXAMPLE: TOSHIBA AND TRADE SANCTIONS Majority-Building Strategies Informational Strategies Public Officeholders as Targets of Nonmarket Strategies EXAMPLE: CHINA AND MOST FAVORED NATION STATUS Institutions, Interests, and Strategy Choice Institutions Interests: Client and Interest Group Politics Summary Cases Federal Express and Labor Organization The Bermuda Triangle Wal-Mart and Its Urban Expansion Strategy CHAPTER 8 IMPLEMENTING NONMARKET STRATEGIES IN GOVERNMENT ARENAS Introduction EXAMPLE: PACIFICARE'S NONMARKET PORTFOLIO Lobbying The Nature of Lobbying Technical and Political Information Credibility of Information Access Timing and Focus Government Allies Controls on Lobbying Electoral Strategies Myths and Realities of Campaign Financing EXAMPLE: CAMPAIGN FINANCE INNOVATION OR ABUSE? Election Financing Laws The Pattern of Campaign Contributions Purposes of Campaign Contributions EXAMPLE: SILICON VALLEY GOES TO WASHINGTON Grassroots and Constituency Campaigns Mobilization Business Grassroots Campaigns The Effectiveness of Grassroots Programs Coalition Building Peak Associations Trade Associations EXAMPLE: CALGENE AND CANOLA Ad Hoc Coalitions Coalitions and Consensus EXAMPLE: PHARMACEUTICAL POLITICS Testimony Public Advocacy Judicial Strategies Organizing for Nonmarket Effectiveness Summary Cases Drexel Burnham Lambert and Junk Bond Politics Proposition 211: Securities Litigation Referendum (A) Internet Taxation Part II Integrative Case CAFE Standards 2002 Part III Government and Markets CHAPTER 9 ANTITRUST: ECONOMICS, LAW, AND POLITICS Introduction Antitrust Law The Antitrust Statutes EXAMPLE: MONOPOLY Exemptions Enforcement of the Antitrust Laws Government Enforcement Private Enforcement Per Se Violations and the Rule of Reason Antitrust Thought The Structural Approach The Chicago School The New IO Approach Examples of the Differences in Antitrust Thought Vertical Arrangements Predatory Pricing and Entry Deterrence Collusion and Price Fixing Mergers and Merger Guidelines Compliance The Politics of Antitrust Summary Cases Apple Computer and Mail-Order Sales The Staples-Office Depot Merger? The Microsoft Antitrust Case CHAPTER 10 REGULATION: LAW, ECONOMICS, AND POLITICS Introduction Periods of Regulatory Change The Constitutional Basis for Regulation Regulatory Commissions and Agencies Delegation, Rule Making, Due Process, and Discretion The Nonmarket Environment of Regulatory Agencies EXAMPLE: REGULATORY RULE MAKING IN THE BUSH ADMINISTRATION Explanations for Regulation Market Imperfections Natural Monopoly Externalities Public Goods Asymmetric Information Moral Hazard Government Imperfections The Political Economy of Regulation Capture and Rent-Seeking Theories A Nonmarket Theory of Regulation Redistribution and Cross-Subsidization Cost-of-Service Regulation Deregulation Telecommunications Electric Power Auctions Summary Cases The FCC and Broadband Regulation Echelon and the Home Automation Standard (A) The FCC Media Ownership Rules CHAPTER 11 ENVIRONMENTAL PROTECTION: ECONOMICS, POLITICS, AND MANAGEMENT Introduction Socially Efficient Regulation of Pollution Externalities The Coase Theorem EXAMPLE: THE COASE THEOREM Transactions Costs and the Limits of the Coase Theorem Tradable Permits System Acid Rain and Tradable Permits Global Climate Change and Emissions Trading Systems Emissions Trading Within BP plc (British Petroleum) The Environmental Protection Agency Enforcement Standard Setting and Engineering Controls EXAMPLE: INTEL AND THE PROJECT XL Incentive Approaches Superfund The Politics of Environmental Protection The Nature of Environmental Politics Judicial Politics Advocacy Science Distributive Politics EXAMPLE: ENVIRONMENTAL POLITICS: SCRUBBERS AND THE CLEAN AIR ACT AMENDMENTS Private and Public Politics EXAMPLE: THE EQUATOR PRINCIPLES NIMBY and Private Politics EPA Activism and Cost-Benefit Analysis Management of Environmental Protection Issues EXAMPLE: DOW CHEMICAL AND LOCAL ENVIRONMENTALISTS EXAMPLE: MCDONALD'S AND WASTE REDUCTION Voluntary Collective Environmental Programs Summary Cases Philips and the Low-Mercury Fluorescent Lamp Environmental Activism at Home Depot Procter & Gamble and Disposable Diapers CHAPTER 12 LAW AND MARKETS Introduction The Common Law Property Bargaining Incentives and Appropriability Intellectual Property EXAMPLE: INTELLECTUAL PROPERTY ENFORCEMENT AND DIGITAL PIRACY Intellectual Property Protection EXAMPLE: MICKEY MOUSE POLITICS AND LAW Contracts EXAMPLE: GENENTECH AND CITY OF HOPE Enforceability Breach Remedies Torts The Product Safety Problem and Social Efficiency Entitlements, Liability, and Social Efficiency Entitlements and their Protection The Assignment of Social Costs and the Choice Between Liability and Regulation Products Liability The Development of Products Liability Law Allowable Defenses Under Strict Liability Damages Imperfections in the Liability System EXAMPLE: SILICONE BREAST IMPLANTS The Politics of Products Liability Summary Cases California Space Heaters, Inc. eBay and Database Protection Obesity and McLawsuits CHAPTER 13 INFORMATION INDUSTRIES AND NONMARKET ISSUES Introduction The Economics of Winner-Take-Most Markets Internet Privacy EXAMPLE: BANKRUPTCY AND INTERNET PRIVACY: TOYSMART.COM The Internet and Tax Policy Online Communities Summary Cases DoubleClick and Internet Privacy eBay: Private Ordering for an Online Community Google: Gmail and Privacy Part III Integrative Case Pharmaceutical Switching Part IV International Political Economy CHAPTER 14 THE POLITICAL ECONOMY OF JAPAN Introduction Issues Interests Institutions The Diet (Parliament) Political Parties and the Electoral System The Bureaucracy Economic and Political Reform The Judicial System and the Antimonopoly Law Cultural Foundations Tying the Components Together: A Framework of Political Exchange Political Exchange Characteristics of Business Business-Government Interactions The Organization of Business for Nonmarket Action Nonmarket Strategies Information Corporate Nonmarket Styles Summary Cases The Breakup of Nippon Telephone and Telegraph? The Privatization of Japan Post Uniqlo: Success Breeds Nonmarket Challenges CHAPTER 15 THE POLITICAL ECONOMY OF THE EUROPEAN UNION Introduction The European Union The Single European Act The Maastricht Treaty The Institutions of the European Union The European Commission The Council of Ministers The European Parliament The Court of Justice The European Economic and Social Committee The EU Legislative Process Economic and Monetary Union The EU Constitutional Treaty Competition Policy EXAMPLE: MICROSOFT AND EU COMPETITION POLICY State Aids and the Common Agriculture Policy The Social Charter, Social Democracy, and Labor Markets Nonmarket Issues EXAMPLE: DATA PRIVACY Interests and Their Organization Nonmarket Strategies in the European Union EXAMPLE: PRONUPTIA AND FRANCHISING Summary Cases The European Union Carbon Tax The European Union Data Protection Directive Aldeasa and the EU Duty Free Abolition (A) CHAPTER 16 CHINA: HISTORY, CULTURE, AND POLITICAL ECONOMY Introduction Historical Background Pre-Republican The Republican Era The Communist Era The Reform Era Confucianism and Social Explanations Applications in Society, Politics, and Business The Nonmarket Environment and the Four I's Institutions and Government State Institutions Provincial and Local Governments Business: State-Owned Enterprises, Investment, and International Trade State-Owned Enterprises Foreign Direct Investment Regulation International Trade Continuing Issues Human Rights and Political Reform EXAMPLE: AN INTELLECTUAL PROPERTY CHALLENGE Summary Cases Wugang and the Reform of State-Owned Enterprises Direct Selling in China Fresenius Medical Care in China CHAPTER 17 THE POLITICAL ECONOMY OF INTERNATIONAL TRADE POLICY Introduction The Economics of International Trade Competitive Theory Strategic Trade Theory The Political Economy of International Trade Policy The Dual Nature of the Politics of International Trade Assymetries in the Politics International Trade Agreements The World Trade Organization General Agreement on Trade in Services (GATS) Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agriculture Government Procurement Antidumping, Countervailing Duties, and Safeguards Dispute Settlement The Doha Round of WTO Negotiations Other Trade Agreements U.S. Trade Policy The Structure of U.S. Trade Policy U.S. Trade Law and Its Administration The Political Economy of Protectionism Formal Policies Channels of Protection EXAMPLE: STEEL IMPORTS AND THE NONMARKET CAMPAIGN The Political Economy of Market Opening The North American Free Trade Agreement Market Opening Under the Threat of Retaliation Summary Cases Cemex and Antidumping The Kodak-Fujifilm Trade Dispute Sophis Networks and Encryption Export Controls (A) Part IV Integrative Case Toys '?' Us and Globalization Part V Ethics and Responsibility CHAPTER 18 CORPORATE SOCIAL RESPONSIBILITY Introduction Compliance with the Law EXAMPLE: ENRON AND MERRILL LYNCH: GO DIRECTLY TO JAIL The Role of Business in Society The Societal Efficiency Perspective Concerns About the Efficiency Perspective Market Capitalism and Managerial Capitalism The Social Responsibility Perspective The Stakeholder Concept Corporate Social Responsibility or Rosponsiveness EXAMPLE: TUNA AND DOLPHINS Conceptions of the Social Rosponsibility of Business Corporate Social Responsibility as Profit Maximization The Business Roundtable Statement on Social Responsibility Discussion Strategic Corporate Social Responsibility Fulfilling Expectations Corporate Social Performance A Framework for Assessing Corporate Social Responsibility Examples of Corporate Social Responsibility? Corporate Governance Social Accountability The Duties of Boards of Directors Sarbanes-Oxley The Market for Control Summary Cases The Collapse of Enron: Governance and Responsibility Advanced Technology Laboratories, Inc. Delta Instruments, Inc. CHAPTER 19 ETHICS SYSTEMS: UTILITARIANISM Introduction The Managerial Role of Ethics What Ethics Is and Is Not Business Ethics Issue: Integrity Tests Ethics and Private Interests Ethics, Politics, and Change Casuistry EXAMPLE: SAVING THE DIVISION The Methodology of Ethics The Relationships Among Moral Philosophy, Ethics, and Political Philosophy Utilitarianism: A Consequentialist System Utilitarianism and Self-Interest Aligning Self-Interest with Societal Well-Being Utilitarianism, Distribution, and Altruism Summary of the Components of Utilitarianism Utilitarian Duty and the Calabresi and Melamed Principles Act and Rule Utilitarianism Jointly Determined Consequences Decision Making in the Face of a Moral Transgression Utilitarianism and Rights Criticisms of Utilitarianism Philosophical Criticisms Interpersonal Comparisons of Utility Identifying Costs and Benefits The Measurement Problem The Information Problem Utilitarianism in Application Categories of Situations Methodology EXAMPLE: LIVING BENEFITS EXAMPLE: INTEGRITY TESTS EXAMPLE: LIFE INSURANCE SCREENING FOR PREEXISTING CONDITIONS EXAMPLE: REDLINING Summary Cases Pricing the Norplant System Enron Power Marketing, Inc., and the California Market Merck and Vioxx Pfizer and Celebrex CHAPTER 20 ETHICS SYSTEMS: RIGHTS AND JUSTICE Introduction Classification of Ethics Systems Classes of Rights Kantian Maxims or Moral Rules EXAMPLE: LIVING BENEFITS The Relationship Between Maxims and Rights Intrinsic and Instrumental Rights EXAMPLE: PRIVACY Criticisms of Kantian Rights Applied Rights Analysis Claimed and Granted Rights A Methodology for Rights Analysis EXAMPLE: INSURANCE SCREENING FOR PREEXISTING CONDITIONS Conflicts Among Rights Rights and Interests Prioritization EXAMPLE: INTERGITY TESTS Equal Employment Opportunity Disabilities and Rights Neoclassical Liberalism Categories of Justice Theories Distributive Justice Compensatory Justice Injustice Rawls's Theory of Justice The Framework for Justice as Fairness The Principles of Justice The Role of Incentives EXAMPLE: LIVING BENEFITS Duty in Rawls's Theory EXAMPLE: CLINICAL TRIAL OBLIGATIONS Criticisms of Rawls's Theory EXAMPLE: AFFIRMATIVE ACTION Applying the Principles of Justice EXAMPLE: INTEGRITY TESTS EXAMPLE: INSURANCE SCREENING FOR PREEXISTING CONDITIONS Higher Order Standards for Exaluating Ethics Systems Summary Cases Genetic Testing in the Workplace Environmental Justice and Pollution Credits Trading Systems RFID Tags CHAPTER 21 IMPLEMENTING ETHICS SYSTEMS Introduction EXAMPLE: LEVI STRAUSS & COMPANY AND GLOBAL SOURCING Moral Determinants of Nonmarket Action EXAMPLE: CIRCLE K'S HEALTH CARE POLICY The Challenge of Corporate Social Responsibility Corporate Social Responsibility and Ethics in Practice BP and Social Responsibility Wal-Mart: Reputation and Stakeholder Management Citigroup: Responsibility Under Fire Statements of Commitment and Expectations EXAMPLE: JOHNSON & JOHNSON'S OUR CREDO Core Principles and Their Evolution The Body Shop and the Social Audit Codes of Conduct Competitive and Proprietary Information Principles and Reasoning Ethics Programs Compliance Tensions in the Implementation of Ethics Principles Paternalism Political Action and Restraint Sources of Unethical Behavior Summary Cases Denny's and Customer Service Citigroup and Subprime Lending Reporting of Clinical Trial Results CHAPTER 22 ETHICS ISSUES IN INTERNATIONAL BUSINESS Introduction International Law and Institutions Cultural Relativism Human Rights and Justice Slave Labor in Saipan? Operating in Developing Countries AIDS and Developing Countries EXAMPLE: GLAXOSMITHKLINE AND NONMARKET SPILLOVERS Responsibility for Working Conditions in Suppliers' Factories Sweatshops Private Governance and Self-Regulation: The Fair Labor Association Company Responses Social Entrepreneurship EXAMPLE: IGNITE INNOVATIONS International Codes Questionable Foreign Payments and Corruption Questionable Payments and Ethics Principles The Lockheed Case A Utilitarian Analysis of Bribery The Foreign Corrupt Practices Act Company Codes Cummins Practice Transparency International The OECD Anti-Bribery Convention Summary Cases Complications in Marnera The Fair Trade Movement University Games, Inc. Part V Integrative Case GlaxoSmithKline and AIDS Drugs Policy References Index
Library of Congress Subject Headings for this publication:
Social responsibility of business.