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Unformatted text preview: Chapter 6 18/03/2008 17:10:00 Owners/Investors Learning Objectives Introduce and explain business owners as a stakeholder Introduce the concept of corporate governance Discuss Issues relating to the separation of ownership and control Clarify the role of the board of directors Discuss composition of the board of directors Discuss the role of government in protecting owners interests Discuss how the Sarbanes-Oxley Act affects corporate governance Chapter Questions Which concept is somewhat abstract which helps us the understand the importance of the relative roles of a corporations charter, shareholders, board of directors, management, and employees? o The concept of legitimacy Of what are these roles components? o These roles are all components of the corporate governance system What is Talcott Parsons definition or legitimacy? o Organizations are legitimate to the extent that their activities are congruent with the goals and values of the social system within which they function. What do we see from Talcott Parsons definition of legitimacy? o From this definition, we may see legitimacy as a condition that prevails when there is congruence between the organizations activities and societys expectations. What is the difference between legitimacy and legitimation? o Legitimacy is a condition and legitimation is a dynamic process by which business seeks to perpetuate its acceptance. What do we refer to at the micro level of legitimacy? o At the micro level of legitimacy, we refer to individual business firms achieving and maintaining legitimacy by conforming with societal expectations. According to Epstein and Votow, how can companies seek legitimacy? o Companies seek legitimacy by adapting its methods of operating to conform to what it perceives to be the prevailing standard or a company may try to change the publics values and norms to conform its own practices by advertising other techniques. Finally, an organization may seek to enhance its legitimacy by identifying itself with other organizations, people, values, or symbols that have a powerful legitimate base in society. Which do we refer to at the macro level of legitimacy? o The macro level of legitimacy refers to the corporate systemthe totality of business enterprises. What is at stake in the macro level of legitimacy? o What is at stake is the existence, acceptance, and form of business as an institution in our society. What does William Dill suggest about legitimacy?...
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This note was uploaded on 05/03/2008 for the course BUS 101 taught by Professor Rollins during the Spring '08 term at Miami University.
- Spring '08