Week 1 & 2 Notes
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BUS G 202
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This 4 page Class Notes was uploaded by Kaitlyn Palmer on Friday January 23, 2015. The Class Notes belongs to BUS G 202 at Indiana University taught by Ellie Mafi-Kreft in Spring2015. Since its upload, it has received 336 views. For similar materials see Business, Government, and Society in Business at Indiana University.
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Date Created: 01/23/15
G202 Day 2 11515 Topic 1 PEST Framework and NonMarket Stakeholders Case quotFarming Pharmaceuticals Ventria Bioscience and the Controversy over PlantMade Medicines Corporate Social Strategy 0 Competition in the marketplace makes managers think in outcomes pro ts sales market share 0 Processes gain in importance with nonmarket players oversight quality assurance social repuatation 0 Corporate Social Strategy Integrate nonmarket forces PEST into your market strategy 0 Nonmarket opportunities to exploit mitigate nonmarket risks PEST Framework 0 Political Economic Social Technology NonMarket Strategy Firm and Market Strategy Integrated Corporate Social Strategy Case BP s Nonmarket Integration 0 BP acquires ARCO oil gas and SOLAREX solar energy 0 Making them the largest solar energy company and oil gas recovery company 0 How to proceed o Launched the Beyond Petroleumquot campaign amp rebranded with new Helios Sun God logo Pro t Drivers 0 Customers caring about the brand of Oil Gas 0 Gas is a commodity making price and convenience important Enhanced corporate brand differentiates and leads to more franchise openings 0 Employees Reputation of who they work for to be the number 1 energy company attract workers 0 Investors More and more SRIs Sociallyresponsible investors High returns with no guilt 0 Policy Makers Inudstry leaders in uence E new policy is written and shape how it is written Proactive selfregulation can preempt the need for regulation Industry leaders give testimony on new regulation and feasibility BP creates RPS Renewable Portfolio Standard Policies meaning they make states have solar their specialty required Risks 0 NGOactivists had heightened public expectations 0 Received the Greenpeace Greenwash of the year award nega ve Invested a lot more in ARCO marketing Day 3 12215 Market Ef ciency and Social Regulators Market Output The amount decided to be produced 0 Business try to be pro t maximizing and not usually socially ef cient NGOs take political direct action when market inef ciencies exist 0 Lack of property rights market power abuses quality concerns externalities incomplete info 0 Public policy changes correct existing inef ciency or can cause inef ciency Socially Ef cient Production Level 1 Consumers value more than the costs of production 2 Avoid producing selling that consumers value less than cost of production Markets and Ef ciency 0 Gauging social ef ciency 0 Demand Based on the value to consumers Consumer Surplus Diff between what consumers are willing to pay and price they have to pay 0 Supply Based on cost to producers Producer Surplus Diff between the price sellers receive and the minimum supply price needed to cover costs 0 Social Ef ciency Occurs at market equilibrium if all costs and value are accounted for in the DampS curve Qe Ways the Government Regulates Business JI P Pe Markets and Somali Efficiency Preeueffee eets it e Seefell E ifeieney eeure s Iii f eneumer Melee ml EEIDW e Flu Eire lli lifil39ll up prdueini exme unite thet ere veiluedi mete then their predluetive eeete i Mi Eif ld 5 are predlueingin e reinie whr tlh inlnii39e ere veilil leee tlhen tlhEill39 predluetive eete The Effects of Taxes 0 Taxes imposed on sellers Inward shift of supply curve decreased supply raising cost of production overall negative for businesses O 0000 Gov t revenue increases Increased prices to buyers consumer surplus decreases Decreased prices to sellers producer surplus decreases Reduced quantity bought and sold Ef ciency enhancing in markets that are over producing relative to social ef ciency The Effects of Subsidies o Subsidies given to sellers Outward shift of the supply curve increase supply effectively lower costs of production overall positive for business 0 O O O Decreased prices to buyers consumer surplus increases Increased prices to sellers producer surplus increases Increase quantity bought and sold Ef ciency enhancing in markets that are under producing relative to social ef ciency The Effects of Productive Regulation 0 Productive Regulation on sellers Inward shift of the supply curve decreased supply overall negative for business O 0000 Sellers incur higher operating costs compliance costs Increased prices to buyers consumer surplus decreases Decreased prices to sellers producer surplus decreases Reduced quantity bough and sold Productive regulations are ef ciency enhancing in markets that are overproducing relative to social ef ciency