POKHARA UNIVERSITY

 

Level: Bachelor                                 Semester-Spring                             Year : 2016

Programme: BBA                                                                                  Full Marks: 100

Course: Business and Society                                                             Pass Marks: 45

                                                                                                             Time : 3hrs.

Candidates are required to give their answers in their own words as far as practicable. The figures in the margin indicate full marks.

                                                   Section "A"

                                 Very Short Answer Questions

Attempt all the questions.                                                                      10×2

1. Write just one paragraph about the logic behind the subject "Business and Society".

2. List out benefits of CSR.

3. List out the drivers of CSR.

4. What is a stakeholder coalition?

5. Describe internal and external stakeholders. 

6. What are the causes of ethical problems?

7. What is the Code of Ethics?

8. What is Agency Theory?

 9. Explain the status of CSR in Nepal.

10. How do you interlink CSR with business ethics in Nepal?

                                           Section "B"

                       Descriptive Answer Questions                                                           6x10

Attempt any six questions.

11. Explain the relationship between business and society from the system perspective in detail.

12. Shareholders' interest and stakeholders' interest are always being the matter of discussion in business houses. In your opinion, how shareholder value theory and stakeholder theory of the firm differ from each other?

13. Explain how you analyse the stakeholders interest, power and coalitions.

14. Explain the core elements of ethical character. Also explain the concept of whistle-blowing in the organisation. 

15. Define corporate Governance, its scope and its principles.

16. Discuss the role of the Government in promoting CSR in Nepal.

17. Highlight the corporate governance system in Nepalese organisations with the suitable suggestions for improving the existing corporate governance system in Nepal.

                                             Section "C

                                          Case Analysis

18. Read the scenario and answer the question that follows.                              [20]

 Amy Miller, manager of strategic planning for banking operations at inland national bank (INB), was facing a problem. Inland recently acquired another local bank, Home Saving bank. INB's senior management was reorganising the company's retail banking operations, and some of the branches were sure to be closed. Located in a medium- size city in the Midwestern United States, INB has earned a good reputation for community involvement and solid financial performance. The decision to reorganise the bank's branches made economic sense, but Amy was troubled by how it would affect a number of local neighbourhoods. She was especially concerned about two retail branches.             

 Rockdale Branch  

This was a small savings branch. The problem here was obvious: The neighbourhood was old and on the decline. Home savings had not modernized the facility for many years, and a major investment was needed to improve the facility. Amy thought the cost would be about $ 500, 000. It was unclear whether the financial potential of the neighbourhood warranted such an investment. Home Savings had been the last bank with a branch in Rockdale; the other entire bank had closed their branches at least five years ago. If the local office was closed, Rockdale customers could use INB's branch in Culver Heights, about a 10-minute auto or bus ride from Rockdale. The Culver Heights branch was conveniently located on a local bus route. 

North Madison Branch

Miller was also concerned about a branch office located in north Madison, a neighbourhood adjacent to Rockdale. North Madison was a poor neighbourhood, with average income that was $2,000 per household below that of any other neighbourhood in the city. Many of North Madison's residents were on welfare and public assistance. Home savings banks had a branch office on the main street of North Madison's commercial district. INB had closed its local branch in North Madison more than a decade ago.

The senior executive in charge of INB's business strategy bad talked about replacing branches with automatic teller machines in convenient locations such as the North Madison shopping district. The move would eliminate a total of 20 jobs at the branch. Only a few of these employees were likely to find other jobs within the bank. INB's CEO had given a number of speeches in which he discussed how technology could better serve customers. The bank had announced that it would soon introduce new online banking services for its customers.

 Other Factors

Rockdale resents had organized a group of picketers in front of the home savings branch a few days after the merger announcement was made. A local television station sent a crew to cover the story. One local resident who was interviewed said. "INB just hates old people, and old people are all that live in Rockdale! They care more about money than people."

INB has also received angry telephone calls from several city officials. Sheila Thomas was an elected member of the city council whose district included both the Rockdale and North Madison neighbourhoods. She was outspoken about the bank's plan and questioned whether the bank was acting in good faith toward all of the city's residents. During a television interview Thomas said, "It's wrong for this bank to cut the heart out of the neighborhood by replacing people with ATMs”. Amy Miller respected Sheila Thomas, but she also recognized that the council member was an ambitious politician with a talent for media coverage. 

Inland National Bank operated under the regulatory supervision of several federal and state banking agencies. The bank had a good record with these authorities, but the branch reorganization plan clouded the picture. Under the federal Community Reinvestment Act (CRA), INB had to disclose where its deposits came from and where they were invested. This was to help ensure that money was being fairly reinvested in the communities where depositors lived and worked. The law gave banking officials some leverage to force bank to pay attention to local community needs.

 The protests from residents and merchants had gotten the attention of the state banking officials who had to approve INB's branch closings. The traditional test for banking officials was whether the financial solvency of the bank would be improved or harmed by the proposed action. The governor had recently appointed a new state banking commissioner who had given a number of speeches urging banks to "invest at home," and "in people, as well as technology. Rockdale and North Madison were raising tough new issues.

The Decision

At a recent meeting with INB's CEO and senior management committee, Miller learned that the state banking officials had told INB to submit a plan that responded to the issues raised by the residents of Rockdale and North Madison. She was named to a team that had to recommend a course of action to INB's CEO by the end of the week The team's leader had called a meeting for this afternoon. He had suggested that one way for INB to get out of this problem was to close just one of the branches. Miller had been asked to bring her analysis of the Rockdale and North Madison branches to the meeting.

Questions:

a) Who are the stakeholders in this case? Which are primary, and which are secondary? What influence do they have?

b) If INB decides to close one or both of the branch banks, how will the business government-society relationship come into play? How might the issue develop?

c) What should Amy Miller recommend to her team? Does the "close one branch" option solve the problem for the bank or the community?

d) What steps can, or should, the bank take to soften the impact of a closing?