BA635 Current Marketing Issues
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Transcript of BA635 Current Marketing Issues
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BA635 BA635 Current Marketing IssuesCurrent Marketing Issues
The Bio & Power The Bio & Power SpheresSpheres
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Lecture Outline:The Meta-Convergence of Spheres
• Increasing interplay between Bio & Power Spheres
• The rise of consumer/citizen eco-consciousness & environmentalism and the response of Business, NGO’s & Gov’t
• The Challenge of Commerce & Regulation in a Global market
• The Collapse of Consensus
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-just as the sub-spheres of the BioSphere…
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Are interdependent…
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So too are the spheres of our society… Wherein: Change in one sphere….
BIOBIOPSYCHO
TECHNO
POWERSOCIOSOCIO
INFO
impacts all other Spheres…
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That Interaction among Spheres
Accelerating &
Intensifying
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Meta-convergence: “the tightening of connections among spheres that have hitherto been more
independent”
"Culture, religion, politics, environment, ethics, are all going to interpenetrate one another to an extent never before seen, and they will, in turn, penetrate business in all sorts of strange new
ways…“ Riding the third wave: A conversation with Alvin
Toffler
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• Instead of the single "bottom line" on which most executives have been taught to fixate
• the third wave corporation requires multiple bottom lines– • social, environmental,
informational, political, and ethical bottom lines-- all of them interconnected."
Toffler, The Third Wave--1980, p.240
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Bio & Power-sphere Pressures on Today’s Corporation
•Environment / Global Warming
* Employment/ outsourcing;
•Health & Quality-of-life
Corporate Psyche
•Responsibility- obligation
•Performance- results•Responsiveness- action
•Community/ WorkplaceBI
OPo
wer
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The 21st Century- The 21st Century- Meta ConvergenceMeta Convergence
-Industry & Business
Associations
Corporate, & activist –
Shareholder organizations
-NGO’s- IMF, WTO, World Bank
-Religious & Secular Groups
-Local, State & National Gov’t
Agencies
-Special Interest & Affinity groups
Consumer Activists
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The 3rd Wave’s Rising Tide of Activism
META-CONVERGENCE
60’s… 70’s… 80’s… 90’s
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The 3rd Wave’s Rising Tide of Activism
1965- Unsafe at Any Speed- Nader 1969- April 22nd= Earth Day 1980s Social investing becomes
significant 1990’s-corporate governance
activists begin use of shareholder resolutions targeted at specific corporate practices
META-CONVERGENCE
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Activist Funds Make Waves A new class of social investor doesn't believe
in boycotting problem companies -- it's opting to reform them from within
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By 2000- Shareholders put $2 trillion in socially responsible options
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Upscale-SESUpscale-SES Liberal in Liberal in
Attitude & Attitude & LifestyleLifestyle
Initially- Consumer & Eco Activists- generally came from niche segment of society
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Accordingly Green Marketing Impact .. Early on –Not so much-
41% of consumers - don’t buy green products because fear products won’t work as well
Only 29% of shoppers have recently bought a product because it was “green”
- March 6, 2002- Green' Sales Pitch Isn't Moving Many Products
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… circa 2000…
70% of baby food buyers preferred convenience of plastic to glass jars
•recycling rate of plastic soda bottles was ~1/3 of 1995 rate ….•single serve bottles on shelves - more then doubled to 18 billion
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Phillips billed it’s energy-saving bulbs as “EarthLight” & sales never materialized
Phillips repackaged & relaunched as convenient, seven year Marathon bulbs
Sales went up 12% ….
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TodayEco- consciousness has
become mainstream
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Roper Starch WorldwideProfile of Consumers has tracked 5 Green Consumer segments since the 1990’s
LOHAS
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Consumer & Eco Activists-
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SproutsSwing group- May participate in conservation/ recycling-& look for green products– But will buy only if price not higher
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Doggedly Indifferent
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~mid ’90’s
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Shift in 1 decade:
1996 2007
True Blues 10% 30%
Green-Backs 5% 10%
Sprouts 33% 26%Grousers 15% 15%
Apathetics 37% 18%
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NEW YORK–August 22, GfK Roper Green Gauge® study
found vast majority (87%) consumers agreeing --are seriously concerned about the environment.
http://www.gfkamerica.com/news/gfk_roper_environment_companies.htm
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Roper and StarchProduct purchasing
& consumption = #1 way-Americans
act upon their environmental
concerns
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And if the- Consumer cares
….Companies care
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BENTONVILLE, Ark., Oct. 24,2005 - Wal-Mart's chief executive announced a set of sweeping, specific environmental goals
“Mr. Scott's announcement signals that the nation's largest retailer is joining the nation's largest manufacturer, General Electric, in pursuing policies that set specific goals for environmental performance, while advertising those goals to shareholders and customers and the public as strategic business decisions.”
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The New Red, White & BlueFront lines of a green revolution.
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“This is not bleeding-heart liberalism.
This is about managing risks in a challenging global context
-- Equity analyst
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… reporting of a company’s reputation is now on par with the reporting of finances.
Corporate Social Responsibility (CSR) – has become part of the bottom line…
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Source: Globescan 2005
Most Important Thing a Company Can Do to Be Seen as Socially Responsible
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“
70% of global investment managers surveyed believe that integrating environmental, social and governance issues into analysis will become mainstream in 3-10 years” --
Mercer Consulting, 2005
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The only business of business is business--Milton Friedman
…to the extent that customers express satisfaction in a product or a service, in continued purchases, the producer serves the "public interest."
A successful business satisfies enough customers at a high enough price so as to return a profit to those who have invested in the entrepreneurial activity…
Stark Contrast w/ 2nd wave Mantra:
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Ford’s Model T Mentality “Business is not
designed/staffed/equipped for addressing social issues
The over-riding responsibility of business is to maximise the profits of its owners & shareholders
The advancement of the Social welfare – best handled by gov’t, church & charitable institutions”
The Model TThe Model T Requires 7,882 tasks requiring: “949 strong men 3,338 ordinary men 670 legless 2,637 one legged 2 armless 715 one armed 10 blind men”*
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By 2002
Just 2% still believed that the only business of business is business.
Do more, say the people
Murray ArmstrongMonday November 25, 2002
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Very important
Fairly important
24%25%
6%
45%
Don’t know
Not important
Q When forming a decision about buying a product from a particular company - how important or unimportant is it to you that it shows commitment to social responsibility?
- September 2000 - MORI
. . and 1 in 5 would be very willing to
pay more
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Gen Y --89% likely to switch brands if linked to cause83% trust company more if socially responsible79% want to work for company that contributes to society78% believe companies have responsibility for making a
difference in the world74% more likely to pay attention to a company’s overall
messaging when they see that company has deep commitment to cause they care about
69% consider companies’ CSR reputation when deciding where to shop
61% feel personally responsible for making a difference in the world
56% would refuse to work for an irresponsible corporation
Source: 2006 Cone Millennial Cause Study
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Generation Y Workforce 97% believe
companies should offer employees opportunities to volunteer
80% identify themselves as volunteers
62% prefer to work for companies that give them opportunities to volunteer
Deloitte’s 2007 Volunteer IMPACT Study
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Also the Company
The New CompetitionThe New Competition
And Position
Not just Product
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Indeed- the monitoring of your Company’s Reputation & Social Responsibility has now
been taken up by the United Nations…
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A corporate social responsibility program
A multi-stakeholder platform Based on principles:
Human Rights Labour Conditions Environment Anti-Corruption
Universally recognized
Regulation Company CodesGlobal Compact
Created to fill the void…
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UN Corporate Responsibility Program
Business Participation today
~ 2000 Global, large domestic, SMEs
All business sectors In Developed & developing
world 45 country networks
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http://www.unglobalcompact.org/Portal/Default.asp?
30’ spot
2 hour panel-How Can Business Contribute to the Global Compact?
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“--- want max profit for shareholders
…with honesty in business practices,…safety in the workplace,
..and also serve larger environmental & social issues.”
Today's Managers must balance the bottom-line against the ideals –
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Treat customers well... …but try not to let customer service cut too deeply into profit margins
Create a diverse workforce... …but hire people from most
prestigious & expensive universities
Develop codes of ethics... …even if the corporate culture mainly rewards those who “make their numbers”
Go global ... …but maintain the cultural values of the home office
The “Paradoxes” of Business Today
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Play by the rules...
…but think outside the box.
The “Paradoxes” of Business TodayNetwork, network, network...
Empower employees...…but monitor ‘em carefully because you’re legally liable for their behaviors
…but beware the Old Boys’ Club that can breed corruption
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“Ethical issues in business have become more complicated because of:
Business Ethics; The Columbia Encyclopedia, Sixth Edition. 2001.
the global & diversified nature of many large corporations……and because of the complexity of government regulations …”
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The Power-Sphere -- authority allocated thru formal &
informal political institutions
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Today - No Shortage of Laws & Codes, Controlling Business & Marketing Practices
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Rise of the Bureaucrats
Nor – No Shortage of Agencies, Commissions & Administrations to Enforce those Laws, Codes, Guidelines
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The European Eco-label
Regulation Cradle to Grave
2006- The European Union has passed "end-of-life" legislation, requiring auto makers to recycle or reuse at least 80% of their old cars.
Computers & electrical gear were already covered
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And its only going to get worsehas gotten
As we transform to a global economy---There’s Emerging consensus
that we need some global governance to avoid chaotic & divergent national & local regulation.
Herein-Cited from: Stuart S. Malawer http://www.global-trade-law.com/
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Trade & Foreign Policy Issues for the 21st Century --
1. Uniform Commercial Code for eCommerce 2. Customs & taxation.3. Electronic payment systems.4. Intellectual property protection.5. Privacy (data transfers).6. Cyber Security.7. Content.8. Technical standards.9. Telecommunications Infrastructure, Information
Technology & Internet. Telephone access, connection charges & other restrictions as trade
issues …FDI into domestic telecom & Internet industries. (Many foreign telecoms are still state owned.)
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Key Debate & Discussion
Global trade institutions are only now beginning to address dramatic challenges of Internet trade & eCommerce.
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WTO- World Trade Organization
ITU-International Telecommunications Union
WIPO: (World Intellectual Property Organization
UNCTAD: United Nations Conference on Trade and Development
GBDe (Global Business Dialogue on Electronic Commerce),
Major Players
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IP protection a strategic issue… Established sentiment --nothing wrong w/sharing music/video files … The China syndrome (“Brand-Jacking”) flooding global market w/ illegal copies
--& knockoffs
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Six Emerging Principles.
1. Private sector should lead.2. No undue market restrictions.3. Simple legal environment.4. Recognize uniqueness of Internet.5. The Internet changes everything, business
models & government.
6. Facilitate globalization of E-Commerce & E-Trade via Internet
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Principles reflect the fact that the world has become an interactive, blurred, fluid & MULTIFACITED LANDSCAPE …
Ethno
Techno
Media
Finance
Ideo
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an ethno-scape of mobile populations of businesses, workers, students, refugees…
a techno-scape of diffusion & adoption of mechanical & informational technologies;
a finance-scape of global capital; a media-scape, which includes not only
global spread of media channels, but images they carry;
an ideo-scape of political discourses re: democracy & human rights.
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GLOBALIZATION
So what the hellhell
does that
mean??
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GLOBALIZATION
A process in which: Societies, cultures,
polities & economies in the world are coming together
& world is shrinking in space, time & relations.
DEFINEDDEFINED
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GLOBALIZATION
Globalization is a complex topic
… can be interpreted many different ways,
each of which reveals different facets of its complexity”
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GLOBALIZATION
a complex topic
….leads toConfusionControversy
Conflict
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GLOBALIZATION
What “it” means depends on your perspective:
Politician
Consumer
Anthropologist
Corp. Executive Marketer
Activist
A Chinese Laborer
An IT worker in India
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GLOBALIZATION
What is Globalization?
Is it Good or Bad?Is it a Threat or
Opportunity?Does it have Positive
or Negative Impacts?Is it a Corp. Strategy
or Social Phenomenon?
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GLOBALIZATIONWhat “it” is depends on
who you are…•Business Exec - sees new Markets & Sources of Raw Materials & Labor•Consumer- sees more & Cheaper products•Social Scientist-sees Acculturation – Assimilation…. •Activist- sees Exploitation, Moral Corruption & Environmental Degradation
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GLOBALIZATION
Polarization
AssimilationDomination
Cultural Impacts
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GLOBALIZATION
Domination
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GLOBALIZATION
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GLOBALIZATION
Consequence of Cultural Imperialism
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GLOBALIZATION
Poland
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GLOBALIZATION
BeijingReal Estate
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GLOBALIZATION
From Beijing to Bangladesh
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GLOBALIZATION “M-fluences” on indigenous
cultures…Multi-NationalsMoviesMusic – MTVMcDonald’s
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GLOBALIZATION
McD’sMcD’s
GuangzhouBeijing
JerusalemIstanbul
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GLOBALIZATION
Backlash to Cultural Imperialism=
Backlash to Cultural & Economic
Imperialism=
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GLOBALIZATION
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GLOBALIZATION
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GLOBALIZATION
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GLOBALIZATION
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GLOBALIZATION
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GLOBALIZATION But-Keep it in
Perspective!Most trade still
regional“Local” still
mattersFew global
brandsGlobal Influence-
mainly in big cities
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GLOBALIZATION Cultural Assimilation is
most prevalentGlobalizatioGlobalization often n often results in a results in a melding of melding of foreign & foreign & domestic domestic product product forms & forms & functionsfunctions
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GLOBALIZATION
Kentucky Fried Moose-Toronto
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GLOBALIZATION
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GLOBALIZATION
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GLOBALIZATION
http://babelfish.altavista.com/: “I will explain it to you at Mcdo”
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GLOBALIZATION Brand Preference is
Superficial
One can pay too much attention the kinds of consumer goods that people buy.
That's a superficial aspect of culture
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GLOBALIZATION Example: Cola Turka
Multinational corporations don’t always get their way
Local cultures respond on their own terms
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GLOBALIZATION
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Yet- Regardless of the citizens’ reaction to “foreign” products
Globalization is slowly but surely eroding the preeminence of the nation-state…
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The implications of globalization for the future of the nation-state…
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From Below: -- mounting sectarian pressures –
From Above: global communications, global economy, worldwide environmental repercussions
From Within: Multi/Trans-nationals own agendas- loyal to themselves,
play countries against each other
From W/out: Non-governmental Organizations
The Nation State – The Nation State – pressured from all sidespressured from all sides
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Circumstances differ from country to country…
but what does not differ is the revolutionary challenge posed by the 3rd Wave…
…to obsolete 2nd Wave institutions –
…too slow to keep up w/ the pace of change &... to cope w/ new levels of social & political diversity.
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"As we race into the Third Wave era, those of us who want to expand human freedom will not be able to do so by simply defending our existing institutions.
We shall -- like America's founding parents two centuries ago -- have to invent new ones."
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“In all likelihood it will require the radical overhaul –or even scraping-of:
Congress, Politburos, Houses of Common & Lords, Bundastags, Diets…
The giant ministries and entrenched civil service… and systems—
In short all the unwieldy & unworkable apparatus of supposedly representative governments”…
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2nd WavePowerSphere~Collapse
"As the Second Wave produced a mass society, the Third Wave de-massifies us,………. moving the entire social system to a much higher level of diversity & complexity.
This revolutionary process, much like the biological differentiation that occurs in evolution, helps explain one of today's most noted political phenomena - the collapse of consensus."
Toffler, The Third Wave, p. 408
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Toffler, The Third Wave, p. 410
the collapse of consensus
In 2nd Wave society a political leader could glue together half a dozen major blocs, as Roosevelt did in 1932, …..& expect the resulting coalition to remain locked in position for many years.
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Toffler, The Third Wave, p. 410
the collapse of consensus
Today it is necessary to plug together hundreds, even thousands, of tiny, short-lived special interest groups… that cleave together just long enough to elect a president, then break apart again the day after the election, leaving him without a base of support for his programs
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In a de-massified society, we not only lack national purpose, we also lack regional, statewide, or
city-wide purpose. ...
In a mass industrial society, when people and their needs were fairly uniform and basic, consensus was an attainable goal.
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What, then, happens to the very notion of 'representative
democracy?'
The elected representative cannot represent the
general will for the simple reason that
there is none!
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http://www.guardian.co.uk/2020/0,15047,1299021,00.html
“The onward march of individualism - either through choice or fate - is still probably
the major force shaping our world”
The central question is: Will the slow collapse of institutions that have been vehicles for our
shared identity mean collapse of identity itself?
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Vid-Clip Outline:
• McDonald’s CSR progress (~5’)• Corporate Social Responsibility (~5’)• UN Global Compact-
o Timberland- (~10’)
o Frontline- The Persuaders - Segment (~15’)
o Toffler-2nd vs. 3rd Wave PowerSphere (~15’)