Define and discuss the strengths and weaknesses of the pluralistic society. Identify and
discuss the central components of the stakeholder environment. How might the
stakeholder approach to business management improve sustainability in the competitive
Pluralism is a diffusion of power among society’s many groups and organizations.
pluralistic society is one in which there is a wide decentralization and diversity of power
concentration.” In spite of the pros and cons of pluralism, society has preferred this situation, for
pluralism has worked to achieve some equilibrium in the balance of power of the dominant
institutions that constitute our society.
One of the strengths of a pluralistic society is that it prevents power from being concentrated
in the hands of a few. It also maximizes freedom of expression and action.
provides for a built-in set of checks and balances so that no single group dominates.
maximizes the freedom of expression and action.
A pluralistic society also has its weaknesses.
It creates an environment in which diverse institutions pursue their own self-interests.
no unified direction to bring together individual pursuits.
Also, groups and institutions grow
rapidly, and thus goals tend to overlap, causing confusion as to which organizations best serve
It also forces conflict onto center stage because of its emphasis on autonomous
groups, each pursuing own self-interests and objectives.
The central components of the stakeholder environment are the government, employees,
community, owners, and consumers. Within the stakeholder environment, each central
component has a direct stake in the organization and its success, making them very influential.
The government has the power to change and create laws and regulations.
Employees can shape
whether or not consumers have positive experiences with a company’s product or service.
Employees can also have shares in the company. The community is comprised of the general
public, environmental groups, and civic groups. Owners include private citizens, institutional
groups, and board members. Consumers have purchasing power. If they stop buying from a
company, that company loses money. Companies must continue to entice shoppers and increase
If consumers need and want change, companies are expected to change with them.
The stakeholder view of the firm requires management to perceive its stakeholders as
groups that think or perceive themselves as having a stake in the firm. A stakeholder view of the
firm perceives stakeholders having the attributes of legitimacy, power, and urgency.
refers to the perceived validity of the stakeholders’ claim to a stake. Owners, customers, and
employees represent a high degree of legitimacy due to their direct relationships with the
company. Power is the ability to produce an effect, meaning that the stakeholder could affect the
business. An influential social activist group could use the media to support or go against a