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Business & Society Business & Society Ethics, Sustainability, and Stakeholder Management Eighth Edition Archie B. Carroll Ann K. Buchholtz © 2012 South-Western,

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Presentation on theme: "Business & Society Business & Society Ethics, Sustainability, and Stakeholder Management Eighth Edition Archie B. Carroll Ann K. Buchholtz © 2012 South-Western,"— Presentation transcript:

1 Business & Society Business & Society Ethics, Sustainability, and Stakeholder Management Eighth Edition Archie B. Carroll Ann K. Buchholtz © 2012 South-Western, a part of Cengage Learning 1

2 Chapter 16 Business and Community Stakeholders © 2012 South-Western, a part of Cengage Learning 2

3 Learning Outcomes © 2012 South-Western, a part of Cengage Learning 1.Identify and discuss two basic ways of business giving. 2.Discuss reasons for community involvement, various types of community projects, and management of community stakeholders. 3.Explain the pros and cons of corporate philanthropy, provide a brief history of corporate philanthropy, and explain why and to whom companies give. 4.Differentiate between strategic philanthropy, cause-related marketing, and cause branding. 5.Characterize the nature of, magnitude of, reasons for, and impacts of offshore outsourcing and business or plant closings. 6.Address steps that a business or plant might take before a decision to close is made. 7.Identify strategies that a business or plant might employ after a decision to close has been made. 3

4 Chapter Outline Community Involvement Corporate Philanthropy or Business Giving The Loss of Jobs Summary Key Terms 4 © 2012 South-Western, a part of Cengage Learning

5 A Company’s Positive Impact Community involvement Voluntary activities in the community Company contributions Support of programs in: Education Culture Urban development The arts Civic activities Health and welfare Corporate philanthropy Business giving Enlightened self-interest and moral reasons 5 © 2012 South-Western, a part of Cengage Learning

6 Standards of Excellence in Corporate Community Involvement 1.Leadership 2.Issues Management 3.Relationship Building 4.Strategy 5.Accountability 6.Infrastructure 7.Measurement 6 © 2012 South-Western, a part of Cengage Learning

7 Benefits of Employee Volunteerism 7 © 2012 South-Western, a part of Cengage Learning

8 Corporate Community Involvement 8 © 2012 South-Western, a part of Cengage Learning

9 Developing a Community Action Plan 1.Get to know the community. 2.Assess the company’s resources. 3.Select projects to support; match community needs to company resources. 4.Monitor performance of the community actions program and make adjustments. 9 © 2012 South-Western, a part of Cengage Learning

10 Philanthropy A desire to help mankind as indicated by acts of charity; love of mankind. Business giving  Can be difficult to assess the true motives behind philanthropic giving. 10 © 2012 South-Western, a part of Cengage Learning

11 A Call for Transparency Companies need not disclose direct donations to charities. There is a debate raging over whether they should. Some fear that disclosure would result in fewer donations. Concerns that nonprofits are being established to bypass campaign financing laws restricting the use of soft money. 11 © 2012 South-Western, a part of Cengage Learning

12 Giving to the “Third Sector” Third sector The nonprofit sector Nonprofits require business giving to survive. No profits No tax receipts Why do companies give? Charitable giving Community investment Commercial giving where businesses expect to benefit from the donation 12 © 2012 South-Western, a part of Cengage Learning

13 Categories of Corporate Contributions Programs 1.The Nondonor 2.The “What’s In It for Us” Donor 3.The “Company President Believes in Art Support” Donor 4.The “We Are a Good Citizen” Donor 5.The “We Care” Donor 13 © 2012 South-Western, a part of Cengage Learning

14 To Whom Do Companies Give? Major categories of recipients 1. Health and human services 2. Education 3. Civic and community activities 4. Culture and the arts 14 © 2012 South-Western, a part of Cengage Learning

15 Managing Corporate Philanthropy Base giving on business skills, resources, and capabilities to enhance philanthropic outcomes. Focus on philanthropy that will enhance corporate profitability and also make a difference in the community. Seek to align corporate philanthropy with business objectives, reputation, and branding. 15 © 2012 South-Western, a part of Cengage Learning

16 Factors Influencing Corporate Giving Priorities  Aligning closely with business needs  Limits on budgetary resources  Directions from the CEO and/or the Board  Strengthening the brand  Costs of responding to natural disasters  Being more responsive to stakeholders  Changes in the workforce  Employee needs/requests  Community needs  Global giving 16 © 2012 South-Western, a part of Cengage Learning

17 Community Partnerships and Strategic Philanthropy Community partnerships Occurs when a for-profit business enters into an arrangement with a nonprofit for their mutual advantage. Strategic philanthropy An approach by which corporate giving and philanthropic endeavors are designed to fit with the firm’s mission, goals, or objectives. 17 © 2012 South-Western, a part of Cengage Learning

18 Strategic Philanthropy 1.Make as direct a contribution as possible to the financial goals of the firm. 2.Bring contribution programs into sharper alignment with business endeavors. 3.Ensure that philanthropy is well planned and managed. 18 © 2012 South-Western, a part of Cengage Learning

19 Implementation of Strategic Philanthropy 1.Integrate philanthropy into strategic goals and company mission. 2.Connect philanthropy with other community involvement programs. 3.Budget appropriately for philanthropy. 4.Ensure effective program infrastructure. 5.Formalize policies and guidelines for funding. 6.Involve employees in philanthropy-related activities. 7.Incorporate stakeholder communication. 8.Develop long-term business/nonprofit partnerships. 19 © 2012 South-Western, a part of Cengage Learning

20 Cause-Related Marketing Cause-related marketing Directly linking a business’s product or service to a specified charity.  Businesses enhance their public image and increase sales.  Nonprofit organizations get funding and visibility. 20 © 2012 South-Western, a part of Cengage Learning

21 Cause Branding Cause branding A longer-term commitment than cause- related marketing. Is related more directly to the firm’s line of business and the target audience. 21 © 2012 South-Western, a part of Cengage Learning

22 Global Philanthropy The size of a company’s international workforce is the greatest determinant of the size of its charitable contributions to that market. International development will be one of the main areas that will see funding growth in the future. Businesses want to protect communities in which they operate. 22 © 2012 South-Western, a part of Cengage Learning

23 Loss of Jobs Outsourcing The relocation of business processes to a different company. Offshore outsourcing (Offshoring) The relocation of business processes to a different country. Affects blue collar and white collar workers. Even skilled high-tech jobs are offshored. 23 © 2012 South-Western, a part of Cengage Learning

24 Best Offshore Outsourcing Practices 1.Go offshore for the right reasons. 2.Choose your model carefully. 3.Get your people on board. 4.Be prepared to invest time and effort. 5.Treat your partners as equals. 24 © 2012 South-Western, a part of Cengage Learning

25 Plant Closings Businesses and plants close for many reasons Poor economic conditions Consolidation of organizations Moving jobs to another country with low cost labor Outsourcing or offshoring Foreign competition Declining sales 25 © 2012 South-Western, a part of Cengage Learning

26 Business and Plant Closings 26 © 2012 South-Western, a part of Cengage Learning Before Deciding to Close Diversification New ownership New owner Employee ownership

27 Business and Plant Closings (continued) 27 © 2012 South-Western, a part of Cengage Learning After Deciding to Close Conduct a community impact analysis Provide advance notice to employees/ community Provide advance notice to employees/ community Provide transfer, relocation, and outplacement benefits Phase out the business gradually Help attract replacement industry

28 Community Impact Analysis 28 © 2012 South-Western, a part of Cengage Learning

29 Advance Notice Worker Adjustment and Retraining Notification Act (WARN) Requires firms with 100 or more workers to provide 60 days advance notice before shutting down or conducting layoffs. The recent global economic crisis has prompted some states to strengthen WARN protections. WARN often falls short of its goals of protecting workers. 29 © 2012 South-Western, a part of Cengage Learning

30 Communicating With Employees Who are Being Laid Off Be complete Be consistent Inform affected employees first Inform retained employees 30 © 2012 South-Western, a part of Cengage Learning

31 Survivors– The Forgotten Stakeholders 31 © 2012 South-Western, a part of Cengage Learning

32 Key Terms Cause branding Cause-related marketing Community action program Community involvement Community partnerships Employee owned Offshore outsourcing Offshoring Outsourcing Philanthropy Resource-based giving Strategic philanthropy Third sector Worker Adjustment and Retraining Notification Act (WARN) © 2012 South-Western, a part of Cengage Learning 32


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