Business and Community Stakeholders Chapter 16 Business and Community Stakeholders Business and Community Stakeholders Chapter 16 Prepared by Deborah Baker Texas Christian University Business and Society: Ethics and Stakeholder Management, 7e • Carroll & Buchholtz Copyright ©2009 by South-Western, a division of Cengage Learning.  All rights reserved

Chapter 16 Learning Outcomes Business and Community Stakeholders Chapter 16 Learning Outcomes Identify and discuss two basic ways of business giving. Discuss reasons for community involvement, various types of community projects, and management of community stakeholders. Explain the pros and cons of corporate philanthropy, provide a brief history of corporate philanthropy, and explain why and to whom companies give. Differentiate between strategic philanthropy, cause-related marketing, and cause branding. 2

Chapter 16 Learning Outcomes Business and Community Stakeholders Chapter 16 Learning Outcomes Characterize the nature of, magnitude of, reasons for, and impacts of outsourcing and business or plant closings. Address steps that a business or plant might take before a decision to close is made. Identify strategies that a business or plant might employ after a decision to close has been made. 2

Chapter 15 Outline Community Involvement Business and Community Stakeholders Chapter 15 Outline Community Involvement Corporate Philanthropy or Business Giving The Loss of Jobs Summary Key Terms Discussion Questions Community Involvement Various Community Projects Managing Community Involvement Community Involvement of Foreign-Based Firms Joint Community Involvement Efforts Corporate Philanthropy or Business Giving A Brief History of Corporate Philanthropy Giving to the “Third Sector”—the Nonprofits Managing Corporate Philanthropy Business and Plant Closings Reasons for Plant Closings What Should Business’s Do? Community Lawsuits Summary

Introduction to Chapter 15 Business and Community Stakeholders Introduction to Chapter 15 This chapter focuses on community involvement and corporate philanthropy as community stakeholder issues. Additionally, the topic of outsourcing and business or plant closings as community stakeholder concerns are explored.

A Company’s Positive Impact Chapter 16 Business and Community Stakeholders A Company’s Positive Impact Community Involvement Corporate Philanthropy

Standards of Excellence in Corporate Community Involvement Chapter 16 Business and Community Stakeholders Standards of Excellence in Corporate Community Involvement Leadership Issues Management Relationship Building Strategy Accountability Infrastructure Measurement Figure 16-1

Benefits of Employee Volunteer Programs Chapter 16 Business and Community Stakeholders Benefits of Employee Volunteer Programs Improving employee skills and training Encouraging employee teamwork Developing leadership skills Developing the local labor pool Recruiting and retaining employees Improving corporate reputation

Corporate Community Involvement Chapter 16 Business and Community Stakeholders Corporate Community Involvement Figure 16-2

Developing a Community Action Plan Chapter 16 Business and Community Stakeholders Developing a Community Action Plan Know the community Know the company’s resources Select projects Monitor projects

Philanthropy Philanthropy Chapter 16 Business and Community Stakeholders Philanthropy Philanthropy A desire to help mankind as indicated by acts of charity; love of mankind. http://www.fdncenter.org @

Categories of Corporate Contributions Programs Chapter 16 Business and Community Stakeholders Categories of Corporate Contributions Programs The Nondonor The “What’s In It for Us” Donor The “Company President Believes in Art Support” Donor The “We Are a Good Citizen” Donor The “We Care” Donor Figure 16-3

To Whom Do Companies Give? Chapter 16 Business and Community Stakeholders To Whom Do Companies Give? Major Categories of Recipients Health and human services Education Civic and community activities Culture and the arts

Managing Corporate Philanthropy Chapter 16 Business and Community Stakeholders Managing Corporate Philanthropy Base giving on business resources and capabilities to enhance philanthropic outcomes Focus on philanthropy that will enhance corporate profitability and also make a difference in the community

Factors Influencing Corporate Giving Priorities Chapter 16 Business and Community Stakeholders 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 Other Employee needs / requests Community needs Global giving Figure 16-4

Community Partnerships Chapter 16 Business and Community Stakeholders Community Partnerships Strategic Philanthropy An approach by which corporate giving and philanthropic endeavors are designed to fit with the firm’s mission, goals, or objectives.

Strategic Philanthropy Chapter 16 Business and Community Stakeholders Strategic Philanthropy Make as direct a contribution as possible to the financial goals of the firm. Bring contribution programs into sharper alignment with business endeavors. Ensure that philanthropy is well planned and managed.

Implementation of Strategic Philanthropy Chapter 16 Business and Community Stakeholders Implementation of Strategic Philanthropy Integrate philanthropy into strategic goals and company mission. Connect philanthropy with other community involvement programs. Budget appropriately for philanthropy. Ensure effective program infrastructure. Formalize policies and guidelines for funding. Involve employees in philanthropy-related activities. Incorporate stakeholder communication. Develop long-term business / nonprofit partnerships. Figure 16-5

Cause-Related Marketing Chapter 16 Business and Community Stakeholders Cause-Related Marketing Cause-Related Marketing The direct link of a business’s product or service to a specified charity. “Quid pro quo strategic philanthropy.” Businesses enhance their public image and increase sales Nonprofit organizations get cash as well as visibility

Cause-Related Marketing Chapter 16 Business and Community Stakeholders Cause-Related Marketing Cause Branding A longer term commitment than cause-related marketing. Related more directly to the firm’s line of business and the target audience.

The Loss of Jobs Outsourcing Chapter 16 Business and Community Stakeholders The Loss of Jobs Outsourcing The relocation of business processes to a different company.

Offshore Outsourcing Practices Chapter 16 Business and Community Stakeholders Offshore Outsourcing Practices Go offshore for the right reasons Choose your model carefully Get your people on board Be prepared to invest time and effort Treat your partners as equals

Business and Plant Closings Chapter 16 Business and Community Stakeholders Business and Plant Closings Diversification Before Deciding to Close New ownership New owner Employee ownership

Business and Plant Closings Chapter 16 Business and Community Stakeholders Business and Plant Closings After Deciding to Close Conduct a community impact analysis Provide advance notice Provide transfer, relocation, and outplacement benefits Phase out the business gradually Help attract replacement industry

Business and Plant Closings Chapter 16 Business and Community Stakeholders Business and Plant Closings Community Impact What groups will be affected? How will they be affected? What is the timing of initial and later effects? What is magnitude of the effect? What is the duration of the impact? To what extent will the impact be diffused in the community?

Business and Plant Closings Chapter 16 Business and Community Stakeholders Business and Plant Closings Worker Adjustment and Retraining Notification Act Requires firms with 100 or more workers to provide 60 days advance notice before shutting down or conducting layoffs

Business and Plant Closings Chapter 16 Business and Community Stakeholders Business and Plant Closings Directional support Tactical support Informational support Emotional support The Needs of Survivors

Key Terms Community involvement Community action program Philanthropy Chapter 16 Business and Community Stakeholders Key Terms Community involvement Community action program Philanthropy Third sector Strategic philanthropy Cause-related marketing Cause branding Outsourcing Offshore outsourcing Offshoring Employee owned Worker Adjustment and Retraining Notification Act (WARN)