Social Responsibility in a Global Environment CHAPTER 12 Social Responsibility in a Global Environment

Chapter Objectives To define cultural intelligence and its importance To discuss the global nature of stakeholder relationships To examine the importance of national competitiveness To describe the role of business in global development To explore global standards for social responsibility reporting

The Global Marketplace The expanding global marketplace requires that executives and managers develop the ability to conduct business effectively and socially responsibly in different regions of the world.

Cultural Intelligence The ability to interpret and adapt successfully to different national, organizational, and professional cultures Three components: Cognitive Motivational Behavioral

Using Cultural Intelligence (CQ) A person with high CQ is skilled at recognizing how one individual is influenced by national, professional, and organizational cultures. For example, there are multiple layers of cultural effects to manage when an Irish manufacturing process expert from a consulting firm works with a Croatian engineer for a government agency. The Irish expert would have to interpret and act according to Croatia’s national culture, laws and governmental system, the agency’s role and scope, the engineering profession’s code of ethics, and the engineer’s personality and values.

Employee Issues in Global Environment Wages and benefits relative to home country standards Attitudes toward employees from different genders and ethnicities, especially in executive positions Existence of collective bargaining efforts Laws and regulations for employee rights, health, and safety Norms of employee volunteering Availability and comfort with open-door policies and other management practices

Consumer Issues in Global Environment Laws and regulations on product safety and liability Presence and power of consumer rights groups Respect for the product needs of subcultures and minority groups Attitudes and accommodations for customers with disabilities

Shareholder Issues in Global Environment Laws and regulations regarding ownership and corporate governance Stability and governance of stock exchanges Willingness and ability to participate in shareholder meetings

Supplier Issues in Global Environment Ethical and social considerations in the supply chain Prices offered to suppliers in developed countries and developing countries in comparison to other suppliers Availability and attitudes toward minority suppliers

Community Issues in Global Environment Norms of community relations and dialogue Expectations of community service and/or philanthropy Rights of indigenous people Availability and quality of infrastructure (roads, utilities, schools, etc.)

Environmental Issues in Global Environment Environmental law and regulations Availability of “green” electricity, recycled materials, and other environmentally friendly inputs Environmental expectations relative to those in home country Use of natural resources to achieve business goals

Global Reporting Initiative (GRI) Emphasizes consensus and continuous improvement in developing and maintaining the GRI Sustainability Reporting Framework, which seeks to provide transparency Includes three categories of core indicators: economic, environmental, and social performance