1. Corporate Responsibility and Society MNGT 5990 Fall 2013 - Shanghai, PRC Robert Serben, Ph.D. Week 6 -

2. This week MNGT 5990 Corporate Responsibility and Society 2

3. CSR Successful CSR strategies take into account the perspectives of stakeholders MNGT 5990 Corporate Responsibility and Society 3

4. Stakeholders “… any group or individual who can affect is affected by the achievement of the organization’s objectives.” Glossary of Terms. Class text. P.xiii Corporate Social Responsibility4

5. Stakeholder concerns – “…any group or individual who can affect or is affected by the achievement of the organization’s objectives.” Stakeholders Stockholders Managers Employees Customers Suppliers Distributors Local Community Government Corporate Social Responsibility5

6. A question and two thoughts… A question: Are middle managers stakeholders? Two thoughts – are these true?: 1.Middle management jobs are easy 2.The day-to-day operations of a business never present middle managers with problems MNGT 5990 Corporate Responsibility and Society 6

7. Middle management 1. Translating strategy into action. 2. Managing competing pressures MNGT 5990 Corporate Responsibility and Society 7

8. Middle manager, employees, and the work Executive Middle Mgt Employees Day-to-day work Plans/objectives MNGT 5990 Corporate Responsibility and Society 8

9. Middle management Typical job titles: Senior Manager Manager Supervisor Group Leader Team Leader MNGT 5990 Corporate Responsibility and Society 9

10. Middle management as a stakeholder 1.How is a middle management role different from an executive role? 2.Can middle management be a CSR stakeholder? 3.If “yes,” why? Small team discussion exercise MNGT 5990 Corporate Responsibility and Society 10

11. Middle management Typical job titles: Senior Manager Manager Supervisor Group Leader Team Leader Responsible for getting the organization’s work done by leading, managing, or supervising the work of others. MNGT 5990 Corporate Responsibility and Society 11

12. Tough work Middle management is responsible for making business strategy successful at the employee level Business strategies may involve changes and new choices – Some can be (quite) disruptive – Disruption = change – People resist change – WHY? MNGT 5990 Corporate Responsibility and Society 12

13. Change and middle management “George F. Brown, Jr. observes, "the single biggest cause of failed strategies is employee resistance to change." Brown is CEO of Blue Canyon Partners, a Chicago consulting firm that advises Fortune 500 companies on how to make change stick.” Source: Fisher, Annie. "How Do You Lead When No One Wants to Follow?" CNNMoney: Middle Management. Fortune Magazine, 10 Jan. 2013. Web. 27 May 2013.. MNGT 5990 Corporate Responsibility and Society 13

14. In the middle “More than 90% of UK workers believe the vast majority of workplace stress is falling on middle management, which is also filtering down to junior staff” Newcome, Tom. "Squeezed Middle Management Face Most Pressure at Work Says Lane4 Survey." HR Www.hrmagazine.co.uk. HR Magazine, 04 Oct. 2012. Web. 27 May 2013.. Can pressure affect our : – 1) judgment or 2)behavior? MNGT 5990 Corporate Responsibility and Society 14

15. In the middle “Almost half (49%) of middle managers in the UK say they are under excessive pressure, either every day or once or twice a week, compared to a survey average of 37%. They are particularly unhappy with their work-life balance; just 44% agree they are satisfied with their work-life balance, compared to 70% among employees with no managerial responsibilities.” – Web location: Woods, David. "Middle Managers Suffer Most from Workplace Stress, CIPD Survey Reveals." HR. HR Magazine. UK, 25 Jan. 2012. Web. 03 June 2013.. MNGT 5990 Corporate Responsibility and Society 15

16. In the middle “Research shows waning interest in middle- management jobs and higher levels of dissatisfaction among those holding the positions. Armour, Stephanie. "Who Wants to Be a Middle Manager?" Money. USA Today, 13 Aug. 2007. Web. 02 June 2013.. MNGT 5990 Corporate Responsibility and Society 16

17. In the middle Just four in 10 managers are extremely or very satisfied working for their employers, according to a 2007 survey of more than 1,400 respondents by Accenture, a management consulting and outsourcing company. Armour, Stephanie. "Who Wants to Be a Middle Manager?" Money. USA Today, 13 Aug. 2007. Web. 02 June 2013.. MNGT 5990 Corporate Responsibility and Society 17

18. In the middle About 25% of those looking for new jobs said they were searching because of a lack of advancement prospects, and 43% of middle managers polled felt as if they were doing all the work but not getting credit for it. One-third reported frustration with their work-life balance.” Armour, Stephanie. "Who Wants to Be a Middle Manager?" Money. USA Today, 13 Aug. 2007. Web. 02 June 2013.. MNGT 5990 Corporate Responsibility and Society 18

19. “View from the Trenches” Lesson for every CSR perspective 1995. In-depth interviews with 30 recent graduates from the Harvard MBA program. – Be careful - ----- Group: – Took an elective course on business ethics – Wrote a paper on ethical dilemmas MNGT 5990 Corporate Responsibility and Society 19

20. “View from the Trenches” Lesson – Ethical practices they experienced in business presented uncomfortable friction with their internal values of right and wrong MNGT 5990 Corporate Responsibility and Society 20

21. “View form the Trenches” Survey findings: Group felt - – Pressured to do things that they believed were unethical – Internal ethics programs and procedures offered little help – Executives were out-of-touch on ethical issues – Became stronger – as people - for having to deal with these problems MNGT 5990 Corporate Responsibility and Society 21

22. “View from the Trenches – Pressures” MNGT 5990 Corporate Responsibility and Society 22 Rewards and consequences Profit Employees Environment Customers Time Competition

23. “View from the Trenches” “Four Commandments” 1.Performance is what really counts 2.Be loyal 3.Don’t break the law 4.Don’t overinvest in ethical behavior MNGT 5990 Corporate Responsibility and Society 23

24. Ethics and the law: “View from the Trenches” Unethical MNGT 5990 Corporate Responsibility and Society 24

25. “View from the Trenches” How did they make decision when confronted with unethical matters? What are some lessons for executives from this article? MNGT 5990 Corporate Responsibility and Society 25

26. Motives and means for unethical behavior MNGT 5990 Corporate Responsibility and Society 26 Conditions for possible unethical behavior PLUS Opportunity for significant rewards Opportunity to avoid significant consequences Pressure for results Exposure level? Motive Organizational position Expertise/know how Means Yield

27. Suspending Ethical Thought Release from responsibility 1.No one will find out 2.Smart people are doing it 3.Everybody’s doing it MNGT 5990 Corporate Responsibility and Society 27

28. Internal CSR Communication and Employee Engagement – PDF – p.9-13 Why the concern about employees and communication ? – “…employees are regarded as a public or stakeholder group.” – Even the best initiatives can be useless without the buy-in from the employees who will be carrying them out. MNGT 5990 Corporate Responsibility and Society 28

29. Change and middle management “George F. Brown, Jr. observes, "the single biggest cause of failed strategies is employee resistance to change." Brown is CEO of Blue Canyon Partners, a Chicago consulting firm that advises Fortune 500 companies on how to make change stick.” Source: Fisher, Annie. "How Do You Lead When No One Wants to Follow?" CNNMoney: Middle Management. Fortune Magazine, 10 Jan. 2013. Web. 27 May 2013.. MNGT 5990 Corporate Responsibility and Society 29

30. Employee engagement Should be important to all stakeholders Are the firm’s employees a stakeholder group ? What do employees want? MNGT 5990 Corporate Responsibility and Society 30

31. Employee engagement Definition - “… an individual's emotional attachment to the organization, fellow associates and the job.” Why should the above point be important to all stakeholders ? MNGT 5990 Corporate Responsibility and Society 31

32. Employee engagement – research Only 31% of employees are actively engaged in their jobs. These employees work with passion and feel a profound connection to their company MNGT 5990 Corporate Responsibility and Society 32

33. Employee engagement – research According to SHRM (Society of Human Resource Management) the cost of replacing one $8 per hour employee can exceed $3,500, which gives companies a strong financial incentive to maintain their existing staff members through strong employee engagement practices. MNGT 5990 Corporate Responsibility and Society 33

34. Employee engagement – research Studies have statistically demonstrated that engaged employees are more productive, more profitable, more customer-focused, safer, and less likely to leave their employer. MNGT 5990 Corporate Responsibility and Society 34

35. Employee engagement – research Beverage company MolsonCoors, found that engaged employees were five times less likely than non-engaged employees to have a safety incident and seven times less likely to have a lost-time safety incident. …the average cost of a safety incident for an engaged employee was $63, compared with an average of $392 for a non-engaged employee. Consequently, through strengthening employee engagement, the company saved $1,721,760 in safety costs in 2002. MNGT 5990 Corporate Responsibility and Society 35

36. Employee engagement research It has been routinely found that employee engagement scores account for as much as half of the variance in customer satisfaction scores MNGT 5990 Corporate Responsibility and Society 36

37. Employee engagement research “…employee disengagement is often the root cause of companies going out of business. Disengaged employees cannot adequately respond to competitive business pressures or changes in serving customers..” http://www.scarlettsurveys.com/papers-and- studies/white-papers/quality-employee- engagement-measurement-and-its-effect-on-ceo- success/2 http://www.scarlettsurveys.com/papers-and- studies/white-papers/quality-employee- engagement-measurement-and-its-effect-on-ceo- success/2 MNGT 5990 Corporate Responsibility and Society 37

38. Employee engagement research “Employee sense of fair treatment underpins engagement — if people feel they are treated unfairly, there is less than a 15% chance they will be positively engaged….” http://www.scarlettsurveys.com/papers-and- studies/white-papers/quality-employee- engagement-measurement-and-its-effect-on-ceo- success http://www.scarlettsurveys.com/papers-and- studies/white-papers/quality-employee- engagement-measurement-and-its-effect-on-ceo- success MNGT 5990 Corporate Responsibility and Society 38

39. Employee engagement research “Based on our sampling, 7 out of every 10 CEOs are less than satisfied with the measurement integrity or return value of their current employee engagement survey” http://www.scarlettsurveys.com/papers-and- studies/white-papers/quality-employee- engagement-measurement-and-its-effect-on-ceo- success/2 http://www.scarlettsurveys.com/papers-and- studies/white-papers/quality-employee- engagement-measurement-and-its-effect-on-ceo- success/2 MNGT 5990 Corporate Responsibility and Society 39

40. Internal CSR Communication and Employee Engagement - PDF MNGT 5990 Corporate Responsibility and Society 40

41. Employee engagement in CSR I’m committed to act I believe I understand the message I’m aware of the message Values, plans, strategies become actions MNGT 5990 Corporate Responsibility and Society 41

42. Engagement and its relevance Summary Points from a research study 1.Only one in every five workers is highly engaged in their work. 2.Increased employee engagement in work results in better employee productivity and loyalty. 3.Companies with high employee engagement outperform low engagement companies in many areas of business success. Attridge, M. (2009). Employee work engagement: best practices for employers. Research works: Partnership for Workplace mental health, 1(2), 1. MNGT 5990 Corporate Responsibility and Society 42

43. Research “…Analyzing data from 1984 to 2011, the researchers discovered that companies listed on the 100 Best Companies to Work for in America produced 2.3 to 3.8 per cent higher stock returns every year. This is an important research finding for managers who invest in employees, but wonder if those investments have measurable, financial payoffs,” …. This research shows there is a significant difference in financial performance in companies where job satisfaction is high versus companies where it is low.” Williams, Lindesy. "Satisfied Employees Boost Your Stock Price." Network For Business Sustainability, 13 May 2013. Web. 02 June 2013.. MNGT 5990 Corporate Responsibility and Society 43

44. Critical Elements Of An Organizational Culture - PDF Study asked EMPLOYEES about managerial actions Looked at 18 cultural elements and 8 measures – Setting a good example – Keeping promises and commitments – Supporting others adhering to ethical standards MNGT 5990 Corporate Responsibility and Society 44

45. Reminder of class dates MNGT 5990. Corporate Responsibility and Society 45 --- Class on September 28 Team presentations --- October 5 class moved to October 7 We review in preparation for the final --- No class on October 12 --- Final exam on October 19

46. Online documents MNGT 5990. Corporate Responsibility and Society 46

47. Team presentation – week 7 Presentation structure: Your team will offer a PowerPoint presentation to address seven CSR strategy questions. The PowerPoint will act as guide the audience’s visual guide to your presentation. You will have up to 20 minutes for your presentation. At the conclusion of your presentation, your team will offer to address questions from either the professor or class members. MNGT 5990. Corporate Responsibility and Society 47

48. Team presentation – Week 7 PowerPoint format: Every team presentation will have a title slide with the title of your presentation, the name of your firm, the number of your class team. The second page will contain the name (printed in English) and student number of you team. Every PowerPoint slide will be numbered. MNGT 5990. Corporate Responsibility and Society 48

49. Team presentation – Week 7 Evaluation Your team’s presentation will be evaluated on: – Participation in the presentation by all team members – Quality and specificity of information presented in the questions addressed by your presentation – Use of course concepts and principles in the presentation MNGT 5990. Corporate Responsibility and Society 49

50. Team presentation – Week 7 A copy of your team’s presentation will be sent to the professor prior the Saturday it is presented MNGT 5990. Corporate Responsibility and Society 50

51. Next week MNGT 5990 Corporate Responsibility and Society 51