© 2014 Routledge, Inc., Taylor and Francis Group. All rights reserved. PowerPoint Presentation Design by Charlie Cook CHAPTER 6 Community, Consumerism, and the Media © Routledge

Learning Outcomes After studying this chapter, you should be able to: 1.Define community and briefly explain the business–community interrelationship 2.Discuss community relations and community involvement programs 3.Explain differences between customers, consumers, and consumerism 4.Characterize each of the five consumer rights 5.State what the federal consumer protection regulatory agency acronyms CFPB, CPSC, FTC, FDA, NHTSA, and SEC stand for, and discuss their regulatory responsibilities 6.Compare and contrast various types of warranties 7.Describe what makes a story newsworthy, including its coverage and treatment 8.Define key terms in the chapter

© Routledge Business–Community Interrelationship Business Economic development Products and services Employment and jobs Careers and training TaxesPhilanthropyBusiness Economic development Products and services Employment and jobs Careers and training TaxesPhilanthropy CommunityInfrastructureTransportation Public safety Health care EducationEmployeesCustomersCommunityInfrastructureTransportation Public safety Health care EducationEmployeesCustomers

© Routledge Figure 6.1Eli Lilly and Company and Its Corporate Social Responsibility to Community At Lilly, we’re committed to being a leader in corporate responsibility, which includes being an active participant in the communities we serve. We have a robust history of community involvement and believe we can make an impact that extends far beyond the medicines we make. Many of our donations—including those provided through the Eli Lilly and Company Foundation—focus on improving access to medicines and quality health care for millions of people around the globe. © Copyright Eli Lilly and Company. All Rights Reserved. Used with Permission.

© Routledge Community Relations as Public Relations Volunteer programs Philanthropic resource (in- kind) giving Collaborative partnerships Community Involvement Programs Philanthropic cash giving

© Routledge Figure 6.2Standards of Excellence in Corporate Community Involvement 1.Leadership. Top managers demonstrate support, commitment, and participation in community involvement programs. 2.Issues Management. Managers engage in issues management (Chapter 2) to identify and monitor issues important to the firm’s operations and corporate reputation. 3.Relationship Building. Managers build and maintain trust relationships with the community as part of the firm’s operations and strategy. 4.Strategy. Managers develop and implement a strategic plan for community involvement on issues of mutual benefit to the firm and the community. 5.Accountability. Managers at all levels have specific roles and responsibilities for community involvement. 6.Infrastructure. Managers incorporate systems and policies for supporting, communicating, and instigating community involvement. 7.Measurement. Managers monitor and evaluate community involvement programs and their effect on the firm and the community.

Consumerism Customers buy products from business.Customers buy products from business. Consumers use business products.Consumers use business products. ConsumerismConsumerism  The organized collective efforts to safeguard all consumers by promoting their rights and power. © Routledge

Consumer Rights The right to safety The right to choose The right to be heard The right to privacy The right to be informed

© Routledge Figure 6.3Major Federal Consumer Protection Agencies Consumer Financial Protection Bureau (CFPB) Food and Drug Administration (FDA) Consumer Product Safety Commission (CPSC) National Highway Traffic Safety Administration (NHTSA) Federal Trade Commission Securities and Exchange Commission (SEC)

© Routledge Warranties

Product Liability Litigation Product liability litigationProduct liability litigation  The process of a consumer filing a lawsuit against a firm seeking compensation for harm resulting from defective products or business actions. NegligenceNegligence  An unintentional failure to act as a reasonable prudent person exercising ordinary care. Class action lawsuitClass action lawsuit  The joining of plaintiffs into a group to litigate a case against a business, agreeing to one common judgment or settlement. © Routledge

Strict and Absolute Liability Strict liabilityStrict liability  The plaintiff (injured party) does not have to prove negligence when the activity or product is inherently dangerous. Absolute liabilityAbsolute liability  Strict liability is extended to the unknown for problems and hazards arising from the product or activity. © Routledge

The Cost of Product Liability and Reform Reforming product liability Adopt uniform federal liability standards Place the burden of proving liability on consumers—eliminate absolute liability Limit punitive damages

© Routledge The Nature of the Media The Media Industry Broadcasting technology Broadcasting content Delivering services

© Routledge The Influence of Media on Society Roles for Media To provide news and information To shape attitudes and values To develop nonmarket issue agendas

© Routledge The News Media Public interest Social significance Interesting people Easily told Immediate or urgent Controversy or conflict Newsworthy coverage

© Routledge Treatment of Newsworthy Stories Factual stories Advocacy stories Interpretation stories Implication stories Types of treatment of stories

Business Nonmarket and Market Strategies and Ethics Media Relations GuidelinesMedia Relations Guidelines  Reality (assume everything stated is on the record)  Tell the truth plainly, admit mistakes  Tailor advocacy message to audience  Adopt a society-benefits strategy  Summarize key points of business side of the issue  Elaborate positively on key points of the issue  Follow the three As of the crisis management plan by acknowledging crisis, stating actions taken, and how future crisis will be avoided © Routledge

Societal Consumer Strategies American Society for Quality (ASQ) International Organization for Standards (ISO) Ethics and Codes of Conduct Customer Relations Management (CRM) Consumer Affairs Department Total Quality Management (TQM) Six Sigma Quality

© Routledge Key Terms advocacy advertisements collaborative partnerships community community involvement community involvement programs community relations consumer rights consumerismconsumerscustomers express warranty implied warranty newsworthy stories product liability product liability litigation strict liability warranty