THE BUSINESS and SOCIETY RELATIONSHIP

THE BUSINESS and SOCIETY RELATIONSHIP
Chapter 1 THE BUSINESS and SOCIETY RELATIONSHIP BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e Prepared by Deborah Baker Texas Christian University Chapter 1-

The Business & Society Relationship
Business criticism, scrutiny & scandals! Issues: executive compensation, abuse of corporate power, sexual harassment, product liability, toxic waste disposal, whistle blowing, political action committees Businesses must deal with societal concerns: the “rights” movement, loss of jobs to foreign countries, & workplace safety What is the role of business vs. the role of government in our society? What must a co. do to be considered socially responsible? Chapter 1-

Business & Society Business Society
The collection of private, profit-oriented organizations. Society A broad group of people, interest groups, a community, a nation. (shared interests & beliefs or common cause) Larger corporations are more visible, more powerful, more criticized, more impact on society Business & society interrelate in a macroenvironment Chapter 1-

The Macroenvironment Social Segment Focus Political Economic
Demographics, lifestyles, social values Segment Focus Political Government influence Economic Nature & direction of the economy Technological Technological advancements What kinds of ethical issues are we facing? Chapter 1-

U.S. as a Pluralistic Society Power is diffused among society’s many groups & organizations
Strengths Weaknesses Organizations & groups have overlapping goals causing confusion (who do we trust?) Pursuit of self-interest promotes conflict & inefficiency Prevents domination Maximizes freedom of expression Individuals are loyal to many organizations or groups Built-in checks & balances (B. exert power over one another) Chapter 1-

Stakeholders What is a stakeholder? What makes an environment complex?
Anyone impacted by the organization’s D/M Who are they? What makes an environment complex? More SH means more uncertainty Chapter 1-

Stakeholders Business Community Government Employees Consumer Owner
Environmental groups General public Local State Federal Corporate raiders Institutional Investors Private citizens Consumer activists Product liability threats Older employees Women and minorities Unions Civil Liberties activists Chapter 1-

Special-Interest Society
Special Interests groups… make life more complex for business!! number in the tens of thousands pursue their own limited agenda are more active, intense, diverse & focused attract a significant following (more $ and power) often work at cross purposes, with no unified set of goals. @ Chapter 1-

Factors in the Social Environment Creating Atmosphere of Criticism of Business?
Affluence and education  greater expectations & more criticism Public awareness through television Entitlement mentality Rights movement Victimization philosophy Revolution of rising expectations (creating social problem) Chapter 1-

Society’s Expectations versus Business’s Actual Social Performance
Society’s Expectations of Business Performance Social Performance: Expected and Actual 1960s s Time Social Problem Social Problem Business’s Actual Social Performance Chapter 1-

What is society’s #1 criticism of business?
Abuse of power Examples- Examples.. Chapter 1-

Iron Law of Responsibility
In the long run, those who do not use power in a manner society considers responsible will tend to lose it When power gets out of balance, E. forces respond & pressure B. to be more responsible to bring it back into balance. Enron & Arthur Anderson Tobacco co. Physicians & HMOs Chapter 1-

Two-Way Shared Understandings of Each Other
The Social Contract Changing as expectations change, creating confusion Laws or Regulations: “Rules of the Game” Two-Way Shared Understandings of Each Other Society or Stakeholder Groups Business Chapter 1-

Stakeholder Management
Focus of the Book Managerial Approach Business Ethics Right vs. wrong Stakeholder Management What is it? Chapter 1-

Prepared by Deborah Baker Texas Christian University
Chapter 2 BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e CORPORATE CITIZENSHIP: SOCIAL RESPONSIBILITY, RESPONSIVENESS, and PERFORMANCE Prepared by Deborah Baker Texas Christian University Chapter 2- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Business Allegations…
Little concern for the consumer Cares nothing about the deteriorating social order Has no concept of ethical behavior Indifferent to the problems of minorities & the E. 1. Does business have a responsibility to society? 2. How much? What kind? Chapter 2-

Corporate Social Responsibility
Began as- Consideration of the impact of a company’s actions on society. Evolved into- The social responsibility of B. to meet the economic, ethical, legal, & philanthropic expectations society has of organizations at a given point in time. Other definitions in text. Chapter 2-

Since the 1950’s, the concept of CSR has gained considerable acceptance & the meaning has been broadened to include specific issues: product safety honesty in advertising employee rights affirmative action environmental sustainability ethical behavior (precedes laws) global CSR- how to behave abroad Chapter 2-

Definition of CSR The Four Components Responsibility Societal
Expectation Examples Economic Required Be profitable. Produce valuable G/S at fair price Legal Obey laws & regulations (that represent society’s values) Ethical Expected Do what is right, fair, & just Philanthropic Desired/ Expected Be a good corporate citizen How? Chapter 2-

The Pyramid of CSR Components are inseparable & cause conflict
Chapter 2 The Pyramid of CSR Components are inseparable & cause conflict Philanthropic Responsibilities Be a good corporate citizen. Ethical Responsibilities Be ethical. Legal Responsibilities Obey the law. Economic Responsibilities Be profitable. Source: Archie B. Carroll, “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders,” Business Horizons (July-August 1981). © 1991 by the Foundation for the School of Business at Indiana University. Used with permission. Chapter 2-

Stakeholder View of CSR
Stakeholder Group Addressed & Affected CSR Component Owners Con- sumers Employees Community Others Economic 1 4 2 3 5 Legal Ethical Philanthropic Chapter 2-

They withdraw their support!
If society (SH) do not view business at legitimate, what happens? They withdraw their support! --What makes a B. legitimate? Create value for SH Follow the ‘rules’ set forth by society Chapter 2-

Arguments Against CSR Restricts profit maximization
Business is not equipped to handle social activities Dilutes the primary aim of business Business already has enough power Limits the ability to compete in a global marketplace (CSR increases costs). Chapter 2-

Arguments For CSR Business caused the social problems & should be responsible for the solution Limits future government intervention & regulation Better to be proactive than reactive Addresses issues only business has resources & expertise to control Safe product Safe working conditions Protects business self-interest Healthy climate Reputation Chapter 2-

Ways Firms Respond to CSR Pressure
Cost-benefit approach Do it if benefits > costs Strategic approach Recognize E. changing; build ethics into strategy Innovation & learning approach Look for CSR opportunities to gain competitive advantage Defensive approach Do bare minimum to avoid pressure Chapter 2-

CSR in the 21st Century Corporations are expected to:
Demonstrate commitment to society’s values & contribute to society Insulate society from the negative impacts of company operations & G/S. Share benefits of company activities with SH Demonstrate that the company can make more money by doing the right thing. Chapter 2-

Corporate Citizenship
Corporate Social… Responsibility (CSR) Performance (CSP) Responsiveness (CSR2) Emphasizes… Obligation to society, accountability Accomplishments, outcomes, results (of adopting CSR/CSR2 philosophy) Willingness to take action (in response to society’s demands) Chapter 2-

Corporate Social Performance
Chapter 2-

Corporate Citizenship
…combination of CSR, CSR2, CSP …commitment to ethical business practices, protecting the environment & balancing the needs of SH  Triple Bottom Line Chapter 2-

Benefits of Good Corporate Citizenship
Improved employee relations Improved customer relations Improved business performance Enhanced marketing. Chapter 2-

Relationship Between CSP & Financial Performance
Perspective 1: Socially responsive firms are more profitable Perspective 2: The financial performance of a firm drives its social performance Perspective 3: Social performance, financial performance & reputation are interrelated & we can’t determine what drives what. Virtuous circle Chapter 2-

Socially Responsible Investing
Social Screening Investors screen firms’ levels of CSR, CSR2 and CSP before making investment decisions Why now more than ever? Chapter 2-

For next class Read Martha Stewart Case Make a list of stakeholders
Chapter 2-

Chapter 3 BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e THE STAKEHOLDER APPROACH to BUSINESS, SOCIETY, and ETHICS Prepared by Deborah Baker Texas Christian University Chapter 3- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Stakeholders Individuals/ groups with expectations & demands as to what business should provide to society. Anyone who has an interest, stake, ownership or claim in the company. Decisions made by the co affect SH, & SH affect the co. Vs. stockholder Chapter 3-

Stakeholders Groups Business Government Consumers Owners Community
Employees Chapter 3-

Who Are Stakeholders? Chapter 3-

Stakeholders Primary SH Secondary SH
Have a direct stake in the organization & its success. Very influential! Who are they? Secondary SH Have a public or special interest stake (less direct) in the organization. Still Influential, but B. less accountable to them. Chapter 3-

Remember Secondary SH can become primary SH as the situation changes & they become more urgent (with the help of media & special interest groups) Animal Rights Activists/ Schumacher Furs PETA/McDonalds Chapter 3-

Other SH Primary nonsocial SH Secondary nonsocial SH
Natural environment Future generations Nonhuman species Secondary nonsocial SH Environmental interest groups Animal welfare groups Chapter 3-

SH Attributes How do they get management’s attention?
Legitimacy The perceived validity (appropriateness) of the SH’s claim to a stake. Power The ability of a SH to produce an effect (influence). Urgency The degree to which the SH’s claim demands immediate attention. Chapter 3-

SH Management Who are our SH? What are their stakes?
What opportunities & challenges do they present to the firm? What responsibilities (economic, legal, ethical, & philanthropic) does the firm have to them? What strategies or actions should our firm take to best address SH? Your paper… Case analyses… Chapter 3-

Who Specifically Are Our SH?
Chapter 3-

2. What Are Our SH’ Stakes? What are their interests, concerns, perceptions of rights & expectations? Which SH are the most legitimate? Shareholders at Cnooc Ltd. Which SH have the most power to affect the Co? CPSC for Magnetix toy recall Which SH are most urgent? Pro life activists at abortion clinic Pilots on strike at Delta Chapter 3-

3. What Opportunities & Challenges do SH present?
Opportunities to build goodwill & productive working relationships. The potential for cooperation Ex: Burgerville Eggs Challenges arise because SH needs aren’t being met or because SH think the Co. caused a crisis. The potential for threat (financial or reputation) Ex: Schumacher Furs, Walmart discrimination suits Chapter 3-

4. What Responsibilities Does the Firm Have to SH?
Philanthropic Responsibilities Be a good corporate citizen. Ethical Responsibilities Be ethical. Legal Responsibilities Obey the law. Economic Responsibilities Be profitable. Chapter 3-

5. What Strategies or Actions Should Firm Take?
Do we deal directly or indirectly with SH? Do we take the offense or the defense in dealing with SH? Do we accommodate, negotiate, manipulate or resist SH? Do we employ a combination of the above strategies or just one? Chapter 3-

Strategy: Collaborate Potential for Cooperation
Types of SH Stakeholder Type  Mixed Blessing Strategy: Collaborate Stakeholder Type  Nonsupportive Strategy: Defend Stakeholder Type  Supportive Strategy: Involve Stakeholder Type  Marginal Strategy: Monitor High Low Potential for Cooperation Potential for Threat ? Chapter 3-

Summary … Managers should spend the most energy trying to maximize
the satisfaction of supportive & mixed blessing SH, enhancing their support for the organization. Chapter 3-

Levels of SH Management
Proactive/ responsive to SH Level 2 Scan the environment Level 1 Identify SH & stakes Chapter 3-

Chapter 4 BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e STRATEGIC MANAGEMENT and PUBLIC AFFAIRS Prepared by Deborah Baker Texas Christian University Chapter 4- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Corporate Public Policy (CPP)
Affirmative Action CPP The firm’s position, stance, or strategy regarding the public, social, & ethical issues of SH. Employee privacy AIDS in Workplace Sexual harassment Product safety Chapter 4-

CPP as Part of Strategic Management
How the firm positions itself in relation to the environment. Corporate Public Policy The part of the strategic management that focuses specifically on the public, ethical, & SH issues the firm faces. Chapter 4-

In order for business ethics to be meaningful….
It must be linked to business strategy. Chapter 4-

Strategy Levels CPP Enterprise-Level Strategy Corporate-Level Strategy
Business-Level Strategy Functional-Level Strategy Enterprise-Level Strategy “What business should we be in?” “How should we compete in a given business or industry?” “How should a firm integrate functional activities?” “What is the role of the organization in society?” CPP Chapter 4-

Enterprise-Level Strategy
Key Questions to Address to Develop a CPP What is our role in society? How are we perceived by SH? What values do we represent? What obligations do we have to society? How will we allocate resources? Chapter 4-

Enterprise-Level Strategy
Conveyed in: Codes of ethics Codes of conduct Mission statements Values statements Corporate creeds Vision statements See examples in text @ Chapter 4-

Enterprise Level Strategy
ELS determines how a firm will respond to a SH issue or deal with a public crisis Proactive? Defensive? Insensitive? Who is responsible for making ELS decisions? Public Affairs Department Chapter 4-

The Strategic Management Process How does CPP fit in?
Environmental analysis Strategic control (audit) Strategy implementation Strategy evaluation Strategy formulation Goal formulation Chapter 4-

Strategy Formulation Chapter 4-

Social Audit (Social performance report)
A way for the co. to “make public” their performance (CSP) Audits can be conducted by inside or outside parties Society is now demanding it There are no standardized means to measure social reporting. Chapter 4-

Performance Reporting
Three Steps Set standards Compare actual performance with planned performance Take corrective action. @ Chapter 4-

Global Reporting Initiative (1997)
Mission is to develop & disseminate globally applicable (standardized) Sustainability Reporting Guidelines. These Guidelines are for voluntary use by organizations for reporting on the economic, environmental, & social dimensions of their activities, G/S. FYI---Participating US firms: Ford, Nike, GM, Texaco GRI’s Purpose Chapter 4-

Focuses on the formalization & institutionalization of CPP.
Public Affairs Public Affairs Department Focuses on the formalization & institutionalization of CPP. Responsible for… CPP Issue/crisis management Community relations Governmental relations Corporate communications Chapter 4-

Public Affairs Activities
Chapter 4-

Public Affairs strategies & CSP
More successful when: Top management philosophies adapt to changing society Adopt a collaborative/problem-solving strategy instead of an adversarial strategy (encourage win-win, long term relationship with SH) Chapter 4-

Public Affairs “Thinking”
Make public affairs truly relevant (impact) Help managers develop a sense of ownership (involve them) Make it easy for operating managers (training) Show how public affairs makes a difference (scorecards) Chapter 4-

Chapter 5 ISSUES MANAGEMENT and CRISIS MANAGEMENT
BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e ISSUES MANAGEMENT and CRISIS MANAGEMENT Prepared by Deborah Baker Texas Christian University Chapter 5- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Corporate public policy
The firm’s position, stance, or strategy regarding the public, social, & ethical issues of SH. How do we know? Handled by … ? Affirmative Action Employee privacy AIDS in Workplace Sexual harassment Product safety Chapter 5-

Issues Management Conventional Approach
Issues handled by Public Affairs Department as they arise (reactive) Chapter 5-

Strategic Management Approach
Issues handled by strategic management staff (ethical decisions incorporated into strategy)- proactive More emphasis on anticipation of threats/opportunities & issue identification Newer way of thinking. What is an ISSUE? Chapter 5-

Issue A dispute between parties that
evokes public debate, controversy, or differences of opinion. High visibility, media exposure, special interest SH involved. -Requires the Co. make a decision- Example: ATV safety Chapter 5-

Issues Management Benefits of Early Anticipation of Issues?
More options (prevent crisis!) Clear understanding of the issues Can develop a positive attitude Faster & better identification of SH Opportunity to supply information to public & media. Chapter 5-

First Step of SH Mgmt— Identification of Issues
Scan the environment How? Identify emerging issues & trends “Trend spotting services” Chapter 5-

Identification of Issues
Predictors of Social Change Triggering events Authorities/ advocates New literature Special interest groups (Websites) Political jurisdictions Chapter 5-

Analysis of Issues Which SH are affected?
Who is in a position to exert influence? Who has expressed opinions? Who started the ball rolling? Who is now involved? Who is likely to get involved? Analyzing cases, paper… Chapter 5-

Prioritize Issues Consider SH legitimacy, urgency, power
Assign top priorities to an issues management team (part of Public Affairs Department) Begin to mobilize resources to deal with issue Chapter 5-

Response To Issues Things to consider… Create Strategy Take Action
Have resources needed? Top mgmt support? How to deal with media? Ready for government scrutiny? Can we turn threat into opportunity? Chapter 5-

Evaluation Constant evaluation of SH responses, activities, opinions to the issues Is our strategy on track?  SH audit Chapter 5-

Issue Development Life Cycle (Page 146)
Chapter 5-

Benefits of Issues Management
Better reputation & financial performance Johnson & Johnson vs. Dow Corning Provides a bridge to crisis management And maybe even prevention! Avoid governmental action. Example: McDonalds & Bird-Flu What is CRISIS? Chapter 5-

What is a Crisis? Abrupt Unpredictable Involves a major SH
(hurt, killed, “unfair” treatment) High visibility (media) Usually involves ethical issue “A turning point for better or worse” Potential threat to organization- What kind? Chapter 5-

Types of Crises Economic Physical Personnel (HR) Criminal Information
Reputational Natural disasters Chapter 5-

Outcomes of Major Crises
Escalate in intensity Subject to media & government scrutiny Interfere with normal business operations Damage the company’s bottom line Result in major power shifts. Chapter 5-

Five Steps in Managing Crises
Business Week’s Five Steps in Managing Crises Identify areas of vulnerability Develop a plan for dealing with threats Form crisis teams Simulate crisis drills Learn from experience. Skip the others Chapter 5-

Crisis Communication Most important step in managing a crisis communicate effectively with SH Which SH first? Why? Communicate with all media at the same time Use trained spokespersons (consistency) Tell the truth! Chapter 5-

BUSINESS & SOCIETY Ethics and Stakeholder Management
Chapter 6 BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e BUSINESS’S ETHICS FUNDAMENTALS Prepared by Deborah Baker Texas Christian University Chapter 6- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

2000 National Business Ethics Survey Findings
1 in 8 employees feel pressure to act unethically 2/3 attribute this pressure to internal sources 1 in 3 employees observes misconduct at work Misconduct observed most: lying, withholding information, abusive behavior toward employees, misreporting time worked, & discrimination 1 in 3 employees fears retaliation for reporting unethical behavior Employees say that their organizations’ concern for ethics is a reason they continue to work there. Chapter 6-

Ethics Moral conduct Business Ethics
Set of moral principles or values used to determine right vs. wrong behavior Moral conduct Right vs. wrong behavior Business Ethics Right vs wrong in a business context Chapter 6-

Conventional Approach to Business Ethics (Ch 6)
-Involves a comparison of a decision or practice to prevailing societal norms Decision or Practice Prevailing Norms of Society (acceptability) Chapter 6-

Sources of Ethical Norms in Society
Fellow Workers Family Friends The Law Regions of Country Profession Employer Society at Large Local Community Religious Beliefs The Individual Conscience Chapter 6-

Problems? How do we know if a source is reliable?
How do we handle conflicting messages? What happens if we go to another “society”? “When in Rome, do as the Romans do.” Chapter 6-

Ethics & the Law Overlap Law reflects society’s values
Ethics often represents a standard that exceeds the legal minimum If you break the law, are you behaving unethically? If you behave unethically, are you breaking the law? Ethics Law Overlap Chapter 6-

How We Make Ethical Judgments ? (to decide what is right or wrong)
Observation of behavior or act that has been committed Prevailing norms of acceptability We must take into account the values & perceptions of the observer compare with Chapter 6-

Ethical Relativism When we pick & choose norms to follow based on what we are doing at the time & we justify our actions (maximizes our freedom of choice) We agree on general principles but disagree on actual practices (depending on what situation we’re in) It’s wrong- we need to be aware of it One problem with the conventional approach Chapter 6-

Ethics, Economics, and Law (page 180)
Chapter 6-

Management’s Ethics Immoral Management Moral Management
Active opposition to what is ethical Moral Management High standards of ethical behavior Amoral Management Intentional: does not consider ethics Unintentional: careless Chapter 6-

Immoral Managers Strategy: exploitation (profit @ any cost)
Intentionally do wrong (know right from wrong) Self-centered & self-absorbed; greedy Care only about self or profits Actively oppose what is right, fair, or just No concern for SH Laws are obstacles to overcome An ethics course probably would not help them! Strategy: exploitation any cost) Chapter 6-

Moral Managers Strategy: integrity
Conform to high level of ethical behavior Conform to high level of personal & professional standards Ethical leadership Goal is to succeed, but only within Area 1 of Venn Diagram Operate above legal mandates (law is minimum) Possess an acute “moral sense” & moral maturity Strategy: integrity Chapter 6-

Amoral Managers Intentionally Amoral Managers:
Don’t think ethics & business should “mix” Different rules apply in the business world Unintentionally Amoral Managers: Don’t think about ethics when making decisions, too self-absorbed Lack ethical perception or awareness (afterthought) Well-intentioned, but morally careless, insensitive or unconscious Strategy: compliance Chapter 6-

Ethics in Practice p. 189 Ethical? Legal? Profitable?
What would you do? Chapter 6-

Making Moral Management Real
It’s senior management’s responsibility to create an ethical organizational climate! How do they do this? Recognize that amoral management exists. Chapter 6-

Cognitive Moral Judgment
Chapter 6-

Why Managers Behave Ethically
Most of Us Many of Us Very Few Of Us 1. To avoid some punishment 2. To receive some reward 3. To be responsive to family, friends, or superiors 4. To be a good citizen 5. To do what is right, pursue some ideal Chapter 6-

External Sources of a Manager’s Values How can we be so ethically diverse?
Philosophical values Cultural values Legal values Religious values Professional values Society’s Values Chapter 6-

Internal Sources of a Manager’s Values
Socialization teaches norms which influence behavior Respect for authority Loyalty to bosses & organization Conformity Performance counts Bottom line results count (above all else) -In our society, these norms represent survival & success!! -Is this a setup for unethical behavior? Chapter 6-

Chapter 7 PERSONAL and ORGANIZATIONAL ETHICS
BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e PERSONAL and ORGANIZATIONAL ETHICS Prepared by Deborah Baker Texas Christian University Chapter 7- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Ethical Issues Addressed at
Personal Level Situations faced in personal lives Organizational Level Workplace dilemmas faced as employees Chapter 7-

Ethical Issues Addressed at
Industry Level Situations where a manager or organization might influence business ethics at the industry level Societal and Global Levels Local-to-global situations confronted indirectly as a management team (Ch. 9) Chapter 7-

Personal and Managerial Ethics
Conventional approach (Ch. 6) Principles approach (Ch. 7) Ethical tests approach Resolving Ethical Conflicts Chapter 7-

Principles Approach to Ethics
Principle of … Utilitarianism Rights Justice Whose rights are right? Page 219 Caring Virtue ethics Servant Leadership Golden Rule Chapter 7-

Reconciling Ethical Conflicts
Honor written or verbal obligations There are certain ideals worth striving for Choose the action that produces the greatest good & the least harm. Consider the effects of our decisions on SH Ethics in Practice page 224 Chapter 7-

Ethical Tests Approach What action should I take in this situation?
Test of One’s Best Self Test of Making Something Public Test of Ventilation Test of Common Sense Test of the Purified Idea Gag Test Chapter 7-

Making Organizational Decisions
What factors contribute to unethical decision-making (at work)? What steps can we take to improve an organization’s ethical climate? Chapter 7-

Factors Contributing to Unethical Behavior
Behavior of superiors (poor role models) Behavior of peers (desensitization) Ethical practices of one’s industry or profession Formal organizational policy (or lack of one) Personal financial need Which one is most influential? @ Chapter 7-

Behavior of superiors Why? Top __% Middle __% Lower __%
What % of managers perceive pressure to compromise personal standards to achieve company goals? Top __% Middle __% Lower __% Why? Chapter 7-

Behaviors of Superiors or Peers that Create Questionable Moral Climate
Amoral decision making Acceptance of legality as a standard of behavior “Bottom-line mentality”, expectations of loyalty & conformity Absence of ethical leadership Objectives that overemphasize profits Fundamental attribution bias Insensitivity toward how subordinates perceive pressure to meet goals Inadequate formal ethics policies. Chapter 7-

How do we Improve the Ethical Climate?
Moral Management Ethics Programs and Officers Realistic Objectives Ethical Decision Making Strategies Codes of Conduct # 1 reason? Chapter 7-27 Board of Directors Oversight Ch 19 Corporate Transparency Whistle Blowing Mechanisms Discipline of Violators Ethics Audits Effective Communication of what? Ethics Training Chapter 7-

Board of Director Oversight
The 2002 Sarbanes-Oxley Act Companies are required to protect whistle-blowers without fear of retaliation It is a crime to alter, destroy, conceal, cover up or falsify documents to prevent its use in a federal government lawsuit Chapter 7-

Example of Quick Ethics Screen
Is it legal? Is it in line with co. values? Would I want everyone to know about this? Is it fair to all concerned? How will it make me feel about myself? Chapter 7-

For next class  By April 23rd Read case 14: Toxic Tacos
Read: Why Hospitals Want Your Credit Report By April 23rd Choose the topic for your research paper-- Whose stance will you be taking? Chapter 7-

Chapter 8 BUSINESS ETHICS and TECHNOLOGY
BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e BUSINESS ETHICS and TECHNOLOGY Prepared by Deborah Baker Texas Christian University Chapter 8- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Benefits of Technology
Human labor easier & safer Increased productivity Increased standard of living Raised life expectancy Chapter 8-

Side Effects of Technology
Environmental pollution Depletion of natural resources Technological unemployment Creation of unsatisfying jobs Example: Automobile 1900 Chapter 8-

Ethics and Technology Key Issues Technological Determinism Ethical Lag
“What can be developed will be developed” (without consideration for ethics or side effects) Ethical Lag Speed of T. change exceeds speed of ethical development Chapter 8-

Business Ethics & Technology
Biotechnology E-Commerce Computer technology in the workplace Information Technology Chapter 8-

Issues in E- Commerce Technology
Access (rich vs. poor) Downloading intellectual property Invasion of privacy* Protection of children Security of personal information Unsolicited ads Who do we trust (online scams)? Chapter 8-

Invasion of Privacy (via Internet)
Identity theft Unintentionally revealing information Fake Web sites Access to & distribution of information Article on hospitals accessing credit reports Victim of spying (employer, spouse, hackers) Cyberstalking Sales/ sharing of customer databases. Chapter 8-

Government’s Involvement
The Financial Services Modernization Act of 1999 Allowed banks, insurers, brokers to join forces so consumer can get all services from one company Convenient but… We used to have to “opt in” to have personal information used for purposes other than original intent Now we have to “opt out” (business lobbyists pushed for this). Chapter 8-

Proposed legislation to Protect Consumer Privacy
Consumer Online Privacy and Disclosure Act Online Consumer Protection Act of 2001 Unsolicited Commercial Electronic Mail Act of 2001 Gramm-Leach-Bliley Act Fair Credit Reporting Act Children’s Online Privacy Protection Act Privacy Agenda of the FTC (creation of do-not call list, enforcement against scams, enforcement of telemarketing rules) Ethical lag FYI Chapter 8-

Business Efforts to Protect Privacy
Ethical leadership Privacy policies (“opt-in”) Chief privacy officers Develop Internet policies Assess risk of privacy invasion Handle customer complaints Help firm avoid litigation Chapter 8-

Employee Surveillance
Monitoring: , Internet, cell phone, photocopier & fax Monitoring workers via video camera (secret shoppers) Online background checks Tracking badges & GPS. Why are we doing this? Consequences? Do employees have right to privacy or employers a right to monitor for unethical behavior? Wal-Mart article Chapter 8-

Unethical Employee Activities
Engaged in dangerous activities (using T. while driving) Copied company software for home use Revealing co. information to competitors (blogs) Used office equipment to Internet shop or search for job Accessed private files without permission Intruded on coworkers’ privacy Visited porn Web sites. Chapter 8-

Cell Phone Issues Racking up billable hours
Use of cell phones (texting) while driving 68% of population admits it Employers pressuring employees to work harder Accident liability issues: Is company liable? Chapter 8-

Ethical issues embedded in the use of biotechnology
Bioethics Ethical issues embedded in the use of biotechnology -Hiring bioethethists Proceduralism The use of elaborate protocols to ensure that ethical dilemmas do not arise (informed consent). -“Leftover” blood use for research -Use of cadaver parts Chapter 8-

Genetically Modified Foods
Biotechnology Genetically Modified Foods Genetic Engineering Chapter 8-

Ethical Issues with Genetic Engineering
Stem cell research (Umbilical cord blood banks) Cloning (Technological determinism) Genetic testing & profiling (DNA chips) (Use in workplace) Chapter 8-

Issues with GMFs Safety issues Labeling issues @
Are consumers informed enough? Labeling issues Mandatory GMO label? Non-GMO labels popular. @ Chapter 8-

For next class Read case 24: Firestone and Ford
What are some of the challenges multinational corporations face when they exist in less developed countries? What are some of the actions (strategies) multinational corporations can take to improve international business ethics? Chapter 8-

Chapter 9 ETHICAL ISSUES in the GLOBAL ARENA
BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e ETHICAL ISSUES in the GLOBAL ARENA Prepared by Deborah Baker Texas Christian University Chapter 9- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Multinational Corporations (MNCs)
Challenges of operating in less-developed countries (LDCs)  Corporate legitimacy To be viewed as legitimate, MNC must … ? Underdog vs. bully when issues arise Conflicts of interest Labor saving technology vs. labor creating activities Where to reinvest profits- home or locally? U.S. competitive- LDCs want equitable distribution of wealth Chapter 9-

2. Differing MNC & host country philosophies
Cultural (value, lifestyle) differences Can reduce perceptions of legitimacy Questionable business practices Varying levels of governmental regulation & laws Some co require majority ownership by locals HR management issues Local or foreign employees? Cost to train What wages to pay? -Too low & too high Chapter 9-

Expansion into Foreign Markets
MNCs should- Modify or redesign products so they are appropriate for the intended market Consider consumers’ needs & ability to buy Be sensitive to the impacts of products Luxury & labor saving products are not always appealing Be sensitive to politically-vulnerable products (agitates labor force & stirs debates) Sugar, gas, medicines, tires Chapter 9-

The Dilemma Home Country Stakeholder Pressures
Host Country Stakeholder Pressures Standards Practices Ethics Laws Culture Customs System of Government Socioeconomic System Socioeconomic System The Multinational Corporation Chapter 9-

Ethical Issues faced by MNCs Why worse in LDCs?
1. Questionable marketing practices 2. Plant safety 3. HR management (labor abuse) 4. Corruption (bribery) @ Chapter 9-

Union Carbide Tragedy Bhopal, India – 1984
What are the issues that arose with this incident? Should we adhere to U.S. safety standards regardless of local laws? Should we locate potentially dangerous plants in areas where workforce is unskilled & population ignorant of risks (technology)? Should we be required to staff plants entirely with local people? Some countries force dilution of MNC- ownership &/or employment What is the responsibility of corporations & government in allowing otherwise safe products that become dangerous under local conditions? Chapter 9-

Labor Abuse 1990s  Kathie Lee Gifford & Wal-Mart Sweatshop issues?
Reasons? 1996 Fair Labor Association established as attempt to eliminate sweatshops worldwide, but… 1997 Social Accountability 8000 standards -Receive certification for voluntary compliance Chapter 9-

FYI--Social Accountability 8000 (SA8000)
No child labor (<14) No forced labor Provide safe & healthy work environment Freedom of association & right to collective bargaining No discrimination or sexual harassment Discipline: no coercion, verbal abuse, corporal punishment Working hours: < 48 hrs/wk 1 day off per 7 days < 12 hrs of OT/wk Wages must meet legal & industry standards & meet basic needs of workers. Chapter 9-

Alien Tort Claims Act of 1789
Allows foreign individuals to sue U.S. firms in U.S. courts for their actions abroad Recent lawsuits- human rights abuses Potential for legal & financial liability for MNCs involved in global business Chapter 9-

Bribery For Against Wrong Necessary to do business Illegal in US
Compromise personal beliefs Once started, never stops Benefits recipient only Promotes & creates dependence on corruption Deceives stockholders (pass on costs to customers). Necessary to do business Common practice Accepted practice Form of commission, tax, or compensation. Chapter 9-14 Chapter 9-

Foreign Corrupt Practices Act of 1977
Prohibits American companies from making corrupt payments to foreign officials for the purpose of obtaining or keeping a business Department of Justice is enforcing agency Does not prohibit grease payments. Chapter 9-

Bribes vs. Grease Payments
Relatively large amounts of money given far the purpose of influencing officials to make decisions or take actions that they otherwise might not take. Grease Payments Relatively small sums of money given for the purpose of getting minor officials to: Do what they are supposed to be doing Do what they are supposed to be doing faster Do what they are supposed to be doing better Chapter 9-

Other Global Ethics Issues
Rogue nations: Iran, Syria, Libya Pose threat to US Brutalize their people Squander resources Violate international treaties Reject basic human values Sponsor terrorism US prohibits doing B. w/ them, but law does not apply to foreign subsidiaries if they are run by non-Americans ---Halliburton, Conoco Phillips, GE Chapter 9-

Ethical Choices ETHICAL IMPERIALISM CULTURAL RELATIVISM
Chapter 9 Ethical Choices International Law Global Codes of Conduct BROAD MIDDLE GROUND Mix of Home and Host Country Standards CULTURAL RELATIVISM ETHICAL IMPERIALISM Cultural standards Ethical/moral standards of home country Home Country Host Country Ethical/moral standards of host country Application of Ethical Principles Questions to be resolved by Management: Which ethical standard will be used? Which ethical standard will transcend national boundaries? Worker and product safety? Fair treatment? Health? Discrimination? Freedom? Minimum pay? Consumer rights? Environmental protection? What constitutes moral minimum in each category? Chapter 9-

Challenges: Balancing shareholder profits with global CSP
Balancing ethical traditions in home vs. host country Whose standards will we use? Chapter 9-

Actions for Improving International Business Ethics
Create corporate global codes of conduct Promote consistency with respect to business practices (Mattel) International standards are being developed (FYI: fig 9-6) Proactively integrate ethics into a global strategy Suspend activities in host country when reconciliation not possible P & G closed diaper plant in Nigeria rather than pay bribes to custom officials; Levi pulled out of China- human rights concerns Create ethical impact statements (EIS) Are the actions of the corporation justifiable, & what are the consequences of its actions? Self audit of CSP. Chapter 9-

Basic Guidelines for MNCs
Do no harm Produce more good than bad for host country Contribute to host country’s development Respect the human rights of their employees Pay fair share of taxes Respect local cultural beliefs that do not violate moral norms Cooperate with the government. Chapter 9-

Chapter 10 BUSINESS, GOVERNMENT and REGULATION
BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e BUSINESS, GOVERNMENT and REGULATION Prepared by Deborah Baker Texas Christian University Chapter 10- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Roles of Government & Business
Given all of the tasks that must be accomplished to make our society work, which should be handled by the government & which should be handled by business? How much autonomy are we willing to allow business? What is government’s role in regulating business? Chapter 10-

Interaction of Business, Government, & the Public
Lobbying (Ch 11) Regulation, Taxation & Other Forms of Persuasion (Ch. 10) Advertising Public Relations Elections Voting Interest Groups Contributions Public Business Government Interest groups Boycotting Protests Politicking policy Chapter 10-

Clash of Ethical Beliefs Why is the relationship antagonistic?
Business Government Individualistic ethic Maximize self-interest & freedom of expression View G. regulation as constraints & obstacles (reduces profit) Emphasizes inequalities of individuals (survival of the fittest). Collectivistic ethic Promotes society’s interests View themselves as enforcers of bad behavior Emphasizes equality of individuals. Chapter 10-

Federal Government’s Nonregulatory Influence on Business
Industrial Policy Privatization @ Chapter 10-

Industrial Policy Any G. measure that prevents or promotes changes in the structure of an economy The role G. plays in international trade “Redirecting of resources” The result of G. being active & influential (rather than not intervening) Examples? Chapter 10-

Industrial Policy For Against U.S. competitiveness
Use by other nations Currently ad hoc system (unplanned, haphazard reaction to emergencies) Reduces market efficiency Promotes political decisions (leave politics out of economic decisions) Foreign success variable National attempts are uncoordinated & unplanned Chapter 10-

Government functions:
Privatization The process of “turning over to” the private sector some function that was previously handled by government. (public education, public transit, prisons) Purpose? Pros? Cons? Government functions: 1. Provide a service 2. Produce a service Chapter 10-

Privatization Pros Cons No advantage to G. being involved
Publicly owned enterprises are less efficient Cons There are some things that private B. can’t handle safely or effectively (airport or water port security) Chapter 10-

Other Nonregulatory Influences
Major employer Set standards Large purchaser Subsidies Transfer payments Major competitor Loans & loan guarantees Taxation Monetary policy (Federal reserve) Moral persuasion Chapter 10-

Government’s Regulatory Influence
Regulation means: Having D/M authority Controlling B. by way of law Establishing standards Imposing restrictions Pros? Cons? Reasons for regulation? Chapter 10-

***Reasons for Regulation
Controls negative externalities Achieves social goals Controls excess profits Controls natural monopolies Controls excessive competition Chapter 10-

Types of Regulation Economic Regulation Social Regulation
Civil Aeronautics Board Federal Communications Commission Interstate Commerce Commission Economic Regulation Occupational Safety and Health Administration Equal Employment Opportunity Commission Environmental Protection Agency Social Regulation Chapter 10-

Benefits of Regulation
Fair treatment of employees Safer working conditions Safer products for consumers Cleaner air & water. Chapter 10-

Costs of Regulation Direct costs Indirect costs Induced costs
Reduced innovation Reduced investment in plant & equipment Increased pressure on small business (less resources) Chapter 10-

Sacrificing health & safety.
Deregulation Purpose Balance freedom of B. with control of G. Increase competition with the expected benefits greater efficiency, lower prices, & more innovation. Dilemma Sacrificing health & safety. Chapter 10-

Chapter 11 BUSINESS’S INFLUENCE on GOVERNMENT and PUBLIC POLICY
BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e BUSINESS’S INFLUENCE on GOVERNMENT and PUBLIC POLICY Prepared by Deborah Baker Texas Christian University Chapter 11- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Business Influence on Government?
Lobbying PACs Coalitions Influencing public officials to __ ? Using financial resources to influence government Business (& other groups) joining forces to achieve common goals. Chapter 11-

Levels of Lobbying Umbrella Organizations Trade Associations
Company-Level Lobbying Broad Midrange Narrow/ Specific Representation Chamber of Commerce of the US National Association of Manufacturers Nat’l Federation of Independent B. National Automobile Dealers Assn National Association of Realtors Washington and State Capital Offices Law firms Public affairs specialists PACs Grassroots lobbying Examples Chapter 11-

What Lobbyists Do Gain access to lawmakers
Monitor legislation  Protect firms against surprise legislation Communicate with regulatory bodies Draft legislation, slick ad campaigns, direct-mail campaigns Communicate sentiments of client on key issues Influence outcome of legislation Assist companies in coalition building around issues Help members of Congress get reelected Organize grassroots efforts. Chapter 11-

Grassroots Lobbying Persuading ordinary citizens who
might be directly affected by legislation to take political action. What kind of action? Chapter 11-

Coalitions @ Manipulate the sequence in which issues are addressed
Increase the visibility of certain issues Unbundle issues into smaller subissues. @ Chapter 11-

Political Action Committees
PACs are groups of businesses or special interest groups that use financial resources to influence government (election of public officials) Limitation? Golden Rule of Politics: “He who has the gold, rules.” Chapter 11-

Political Action Committees
For Against PACs expect something in return (other than good government) & this can lead to differing treatment for those who give & those who cannot (the poor). PACs are a reasonable way for business to organize their contributions to candidates for office. “A constructive way to participate.” Chapter 11-

Issues Concerning PACs
Magnitude of activity ($200 M in 2000 elections) Vote buying Campaign financing (politicians dependent on PACs, most going to incumbents-- statistics) Cost to the average US household Soft money. Chapter 11-

Soft Money A contribution made by special interest groups to political parties instead of political candidates $ donated for the purposes of “educating & registering” voters Unlimited! Chapter 11-

Chapter 12 CONSUMER STAKEHOLDERS: INFORMATION ISSUES and RESPONSES
BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e CONSUMER STAKEHOLDERS: INFORMATION ISSUES and RESPONSES Prepared by Deborah Baker Texas Christian University Chapter 12- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

The Consumer’s Magna Carta
Right to Safety Right to Be Informed Right to Be Heard Right to Choose Chapter 12-

Other Consumer Expectations
“Fair value” for money spent Product meets “reasonable” expectations Full disclosure of product specifications Truthful advertising Removal of dangerous products from market. Chapter 12-

A social movement seeking to protect the consumer.
Consumerism A social movement seeking to protect the consumer. Chapter 12-

Major Consumer Issues Product information issues (ch 12)
What are B. ethical responsibilities in the area of product information? Packaging/labeling, warranties, advertising Product safety issues (ch 13) Chapter 12-

The Problem with Advertising…
Firms want to advertise product in a positive, flattering light  that ultimately leads to misrepresentations. Are they intentional? Examples… Chapter 12-

Use of Psychological Appeals
Advertising Abuses Ambiguity Exaggeration (Puffery) Use of Psychological Appeals Concealment of Facts Chapter 12-

Other Controversial Advertising Issues
Comparative Advertising Use of Sex & Women Advertising to Children Brand loyalty by age 8 Advertising of Alcoholic Beverages Cigarette Advertising Health & Environmental Claims Ad Creep Mail-in rebates. @ Chapter 12-

Warranties -Our view of them has changed over the years
Express Warranty Promise that the seller makes at the time of the sale ”30 day money back guarantee” Implied Warranty Unwritten promise that there is nothing wrong with the product & its intended use. Chapter 12-

Magnuson-Moss Warranty Act of 1975
To prevent misunderstandings about warranties Full vs. limited Implied vs. express Clear understanding whether S & H costs are extra. Issues? Chapter 12-

Federal Packaging & Labeling Act of 1967
Prohibits deceptive labeling Requires disclosure of certain important information (contents, ingredients, weights, manufacturer) Which regulatory agency enforces it? Chapter 12-

Federal Trade Commission
Major Activities To maintain free & fair competition in the economy To protect consumers from unfair or misleading practices. Chapter 12-

The Role of the FTC Enforce federal antitrust & consumer protection laws Ensure markets function competitively Monitor advertising Stop actions that limit consumers’ opportunities for informed choice Consumer education. Chapter 12-

View of Customer SH Immoral Management Amoral Management
Customers are viewed as equal partners in transactions Mgmt does not think through the ethical consequences of decisions Customers are viewed as opportunities to be exploited Chapter 12-

BUSINESS & SOCIETY Ethics and Stakeholder Management
Chapter 13 BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e CONSUMER STAKEHOLDERS: PRODUCT and SERVICE ISSUES Prepared by Deborah Baker Texas Christian University Chapter 13- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Product Issues Driven by: Increase in family income (busy lifestyle)
The Issue of Quality Driven by: Increase in family income (busy lifestyle) Intense global competition The Issue of Safety Driven by: Public’s increasing concern with safety & risk-free products Business’s responsibility to address it Chapter 13-

Product Quality What are customers looking for?
Perceived Quality Aesthetics Serviceability Features Reliability Conformance Performance Durability Dimensions of Quality Chapter 13-

Ethical Issues of Quality -Based on the concept of DUTY
Contractual Obligations Due Care Obligations Social Costs Obligations Chapter 13-

Contractual Obligations
B. have responsibility to: Comply with terms of sale Inform customer about product Avoid misrepresentation Not coerce the customer. Chapter 13-

Due Care Obligations Because customers are vulnerable (have less knowledge & expertise about product) the co. has ethical responsibility to: Live up to product claims Take care to avoid consumer injury that could result from product. Chapter 13-

Social Costs Obligations
If a product causes harm, the co. should pay the costs of an injury-- even if the co. took all reasonable precautions Chapter 13-

The Issue of Safety “Free from harm or risk”
Prevailing legal view Caveat Emptor “Let the buyer beware” Historical Perspective 1900s Prevailing legal view Caveat Vendor “Let the seller take care” Chapter 13-

Today manufacturers are held responsible for products.
Can manufacturers make products that are “free from harm or risk” that are still affordable & useful? Think about $ spent on warnings, packaging, package inserts cost prohibitive? (Ex: Little Tikes Toys) Can manufacturers predict all the ways a person could harm himself? Chapter 13-

Allegations in Product Liability Claims
Product poorly designed Product poorly manufactured Manufacturer failed to provide instructions or warnings Manufacturer failed to anticipate misuse of product & warn us. Chapter 13-

Products Associated with Injuries -CPSC tracks ER visits
Sports & recreation activities & equipment Home structures & construction materials Home furnishings Housewares Personal use items Home workshop tools Product packaging & containers Toys. Chapter 13-

Reasons for the Growing Concern
Product Liability FIRST Because of the number of cases where products resulted in injury, illness, or death & the amount of the financial award. SECOND U.S. has become an increasingly litigious society (costs $200 B/ yr) DuPont stats THIRD… Rise in the doctrine of strict liability. Reasons for the Growing Concern Chapter 13-

Doctrine of Strict Liability
Anyone in the value chain(design, manufacture, sale) of a product is liable for harm caused to the user if the product was unreasonably dangerous or defective! residency Absolute liability Manufacturer held liable for failure to warn consumers of a hazardous product even if it had no way of knowing the product might be dangerous at the time of manufacture & sale (asbestos, drugs) Market share liability Manufacturer held liable for delayed reactions to products years after consumption or exposure (DES) Chapter 13-

Product Liability Other Issues Product tampering or extortion
Should business held liable? Move toward tamper-resistant packaging Product liability reform (tort reform) Limits punitive damages payoffs ($250,000 medical malpractice bill, Senator example) Arguments for & against Chapter 13-

Governmental Regulatory Agencies Dedicated to Product Safety
Consumer Product Safety Commission Established in 1972 Food & Drug Administration Chapter 13-

CPSC Works to reduce risk of injuries & deaths from consumer products. How? Develop & enforce safety standards Ban unsafe products Product recall Research on potential product hazards Inform & educate consumers Respond to consumer inquiries. Chapter 13-

CPSC Holes in the Product Safety Net Lack of compliance
(Hamilton Beach) Limited public access to key information Inadequate consumer notification Insufficient funding Holes in the Product Safety Net Chapter 13-

FDA Their Mission Review clinical research on regulated products
Ensure foods, drugs, medical devices & cosmetics are safe, effective & labeled Regulates nutrition labeling Crackdown on deceptive product labeling Monitors accuracy of product claims Chapter 13-

How businesses are responding to consumer activists-
Consumer Affairs Offices Monitors customer satisfaction, complaints & co. responsiveness Product Safety Offices Enforce effort to make safe product audits, recalls TQM Chapter 13-

Philosophy built around quality (continuous improvement),
TQM Philosophy built around quality (continuous improvement), teamwork, productivity, & customer satisfaction. Chapter 13-

TQM Sigma is a statistical measure of variation from the mean higher
values mean fewer defects. Six-Sigma level of operation is 3.4 defects per million. Most co. operate at four-sigma or 6,000 defects per million (0.6% defects or 99.4% yield). Six Sigma Chapter 13-

Chapter 14 THE NATURAL ENVIRONMENT as STAKEHOLDER
BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e THE NATURAL ENVIRONMENT as STAKEHOLDER Prepared by Deborah Baker Texas Christian University Chapter 14- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Environmental Sustainability
The ability to exist & flourish over a long period of time. Threatened by business  waste accumulation, pollution & resource depletion Chapter 14-

Business Impact on the Environment
versus Pollution Productivity @ Chapter 14-

Environmental Issues Ozone depletion
Global warming (“Greenhouse Effect”) Solid & hazardous wastes Fresh water quantity & quality Degradation of marine environments Deforestation Land degradation Endangerment of biological diversity Chapter 14-

Trends in Municipal Solid Waste Generation
Chapter 14-

Increase in Recycling Rate 1960-2001
Chapter 14-

Other Environmental Issues
Ambient air pollution Acid rain Indoor air pollution Energy inefficiency Toxic substances Industrial accidents Radon pollution Noise pollution Aesthetic pollution Chapter 14-

“Not in my Back Yard” NIMBY
The human denial of responsibility for misuse of the environment Entities causing pollution are not identified as the sources of the problem, & do not take action to correct the problem An attitude of avoidance. Chapter 14-

Ethical Dilemma Humans must consume some plants & animals, pollute & destroy some of nature to survive How much degradation is ethical? Values are not enough, we need Governmental control Chapter 14-

Role of Government @ National Environmental Policy Act (NEPA)
Goals: Promote harmony between man & E., prevent damage to the E., increase man’s understanding of ecology/ natural resources Environmental Impact Statement (EIS): Report of studies estimating E. impact of “questionable” activities & alternatives to those practices. Who is required to prepare these? Environmental Protection Agency (EPA) Research pollution problems Give aid to state/ local governmental agencies enforcing laws Administer federal laws. @ Chapter 14-

Clean Air Act Superfund (CERCLA) Endangered Species Act
Air quality legislation Clean Air Act Emissions trading- “Bubble Concept” Land related legislation Superfund (CERCLA) Effort to clean up hazardous waste dumps & spills Funded by taxes on chemicals & petroleum Water quality legislation Clean Water Act- achieve water quality to protect fish & make water recreation safe by eliminating discharge of pollutants into waters. Chapter 14-

International Government Response
United Nations Environmental Programme (UNEP) Montreal Protocol (1987) Worldwide agreement to reduce CFCs Global Waters Assessment To develop policies on international waters Rotterdam Convention Countries must give consent for hazardous wastes to cross their borders. Chapter 14-

Kyoto Protocol Agreement to reduce emissions by 7% from 1990 level by 2012 to reduce global warming. U.S. has not adopted it yet. Chapter 14-

Environmental Stakeholders
Interest groups… Accommodators (World Wildlife Fund) Mainstreamers (Sierra Club) Radicals (Rainforest Action Network) Ecoterrorists (Earth Liberation Front) Green consumers What type of people? Green employees Green investors Chapter 14-

Business Environmentalism -Environmental management
Corporate examples What are they doing? How does it affect the bottom line? Making environmental policy decisions: Cost-benefit analysis  hard to measure costs & benefits What’s the cost of an extinct species? What’s the benefit of a wilderness area? Companies are adopting the Triple Bottom Line Profit, society & environment Strategic environmental management- SKIP Chapter 14-

Future of Business TWO PRESSING QUESTIONS Can the earth support a high- consumption Western lifestyle? If not, what are the implications for business & how should business respond? Chapter 14-

Chapter 15 BUSINESS and COMMUNITY STAKEHOLDERS
BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e BUSINESS and COMMUNITY STAKEHOLDERS Prepared by Deborah Baker Texas Christian University Chapter 15- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

A Company’s Positive Impact
Community Involvement (time & talent) Corporate Philanthropy (money) Chapter 15-

Reasons for Community Involvement
Businesspeople are efficient problem solvers Employee satisfaction & morale A positive image facilitates hiring Prestige & greater community acceptance CSR is the alternative to government regulation A co. benefits from helping institutions essential to continuation of business. @ Chapter 15-

Managing Community Involvement
What are businesses’ stakes in the community? Self-preservation Direct or indirect benefits Reputation (goodwill) Developing a Community Action Program Knowing the community Knowing the company’s resources Selecting projects that match SH needs with company resources. Examples. Chapter 15-

Resource-Based Giving
Business uses its resources & core competences to provide a service to the community Examples? Chapter 15-

Corporate Philanthropy
Reasons to give? 75% of Americans look at corporate philanthropy when deciding whether to do business with that co. Nonprofit organizations depend on it to survive. Chapter 15-

To Whom Do Companies Give? And Why?
Who gets the most? Culture & the Arts Civic & Community Activities Health & Human Services Higher Education Chapter 15-

Strategic Philanthropy
Make as direct a contribution as possible to the financial goals of the firm. Doesn’t make sense to give “randomly”  need a strategy (well planned) B. should support social programs that will directly affect their success Examples? Chapter 15-

Public Purpose Partnerships
A for-profit business enters into a cooperative agreement with a nonprofit for their mutual advantage Achieves both economic & philanthropic objectives Examples? Chapter 15-

A longer term commitment to a specific
Cause-Related Marketing The direct link of a business’s product or service to a specified charity. Examples? Cause Branding A longer term commitment to a specific audience. Examples? Chapter 15-

A Company’s Negative Impact
The Loss of Jobs Outsourcing Business & Plant Closings Chapter 15-

Using international resources to accomplish a task that was once done
Outsourcing Using international resources to accomplish a task that was once done domestically. Why? Potential drawbacks? Company’s responsibilities? Chapter 15-

Business & Plant Closings
What responsibilities (moral obligations) does the business have to employees & community? Chapter 15-

Consider diversifying Before Deciding to Close Consider new ownership
Plant Closings Consider diversifying (find new revenue streams) Before Deciding to Close Make sure closing Is the only option! Consider new ownership New owner Employee ownership Chapter 15-

Plant Closings After Deciding to Close Minimize impact!
Conduct a community impact analysis Provide advance notice  Provide transfer, relocation, & outplacement benefits Gradual phase-outs Help attract replacement industry Chapter 15-

Advance Notice Worker Adjustment & Retraining Notification Act
Requires firms with 100 or more workers to provide 60 days advance notice (to employees) before shutting down or conducting substantial layoffs Advantages for employees? Disadvantages for businesses? Penalties for violating WARN. Chapter 15-

How much should the B. assist community?
Depends on… New trend communities are filing lawsuits against Co. for not being responsible enough. Chapter 15-

Chapter 16 EMPLOYEE STAKEHOLDERS and WORKPLACE ISSUES
BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e EMPLOYEE STAKEHOLDERS and WORKPLACE ISSUES Prepared by Deborah Baker Texas Christian University Chapter 16- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Current Workplace Trends
Changing social contract between workers & organizations Why? Expanding employee rights The workforce is changing. What does the average worker want? How to attract Generation X (born )? Chapter 16-

Changing Social Contract
Old Social Contract New Social Contract Job security Few tenure arrangements Life careers with one employer Few life careers; changes common Loyalty to employer Loyalty to self Paternalism Relationships far less familial Sense of entitlement Personal responsibility for one’s job future Stable, rising income Expected to “add value” to business Focus on individual accomplishments Focus on team building Chapter 16-

Sources of Employee Rights (Claims or privileges)
Statutory rights (rights provided by law) Collective bargaining rights (established by union contracts) FYI: In private sector, union representation has dropped from 36% in to 8% in 2003 Enterprise rights (employers’ promises) Chapter 16-

Employees are treated as the law requires.
Moral Management Employees are a human resource that must be treated with dignity and respect Amoral Management Employees are treated as the law requires. Immoral Management Employees are viewed as factors of production to be used, exploited, and manipulated. Chapter 16-

Job-Related Rights The right not to be fired without just cause
The right to due process & fair treatment The right to freedom (expression & speech) The rights to privacy, safety, & health in the workplace (Ch. 17) Chapter 16-

Right Not to be Fired Without Cause
Public Policy Exceptions Contractual Actions Breach of Good Faith Actions Exceptions to Employment-at-Will Doctrine Protects employees from being fired for refusal to commit crimes or performing public obligation (jury duty, W/B, supply info. to police) Protects employees who have implied contracts with employers (verbal statements, employee handbooks, job offer letters) Employers are expected to hold to a standard of fairness & good faith (give warning & chance to improve performance before firing) Chapter 16-

Right to Due Process & Fair Treatment
The right of an employee to have decisions that adversely affect him (or grievances) be reviewed by an objective, neutral 3rd party. What are some ways we can provide due process in the workplace? Chapter 16-

Open-Door Policy Employee concerns
Only one person reviews what happened Tendency for a manager to support another manager’s decision More fair if followed up with hearing procedure. Chapter 16-

Alternative Dispute Resolution -Types of Third Party Review
Hearing Procedure Peer Review Panel Ombudsman Permits employees to be represented by an attorney or neutral party (grievance committee) Peers (at a grade level equal to or higher than the employee) hear grievances or review work for quality A respected & trusted, neutral 3rd party investigates employee complaints (promises confidentiality) Chapter 16-

--ADR is preferable to litigation!!
Other forms of ADR Mediation Neutral 3rd party guides disputants towards conflict resolution Arbitration Neutral 3rd party hears both sides of a conflict & renders a binding solution. --ADR is preferable to litigation!! --Concern: Many employers are requiring new hires to sign contracts waiving their rights to sue, accepting mandatory arbitration. Is this fair? Chapter 16-

Freedom of Speech in the Workplace
Whistle- Blower An individual who reports ”wrongdoing” to an outside source (someone who could take action to correct it) @ Chapter 16-

Loyalty Obedience Confidentiality
Whistle-Blowing Corporate Employer Loyalty Obedience Confidentiality Employee Traditional Public Employee (conscience) Corporate Employer Whistle blowing Responsibility Emerging Chapter 16-

Consequences of Whistle-Blowing
More stringent criticism of work Less desirable work assignments Pressure to drop charges against the company Heavier workloads Loss of perquisites Exclusion from meetings Termination (> 50%). What is the most common reason to blow the whistle? Chapter 16-

Government Protection
Whistle-Blowing Government Protection Sarbanes-Oxley 2002 Set standards by which public co. report accounting data Unlawful to destroy evidence & records Protects W/B  The right to a jury trial, protection from harassment, compensatory damages, penalties for retaliation False Claims Act 1986 Employees share financial recoveries w/ government 15-25% when government involved 25-30% when government not involved Chapter 16-

How to prevent W/B crisis?
Publicize reporting policies Immediately investigate all complaints & to determine legitimacy Look for solutions that will address the interests of both the objector and the company Make ADR available Publicize investigations. Why? Chapter 16-

Chapter 17 EMPLOYEE STAKEHOLDERS: PRIVACY, SAFETY, and HEALTH
BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e EMPLOYEE STAKEHOLDERS: PRIVACY, SAFETY, and HEALTH Prepared by Deborah Baker Texas Christian University Chapter 17- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

What responsibilities do we have to our employees?
Provide safe & healthy workplace Respect their right to privacy Provide support Employee assistance plans Family support Chapter 17-

Workplace Privacy Issues
Collection/ use of employee information in personnel files Use of the polygraph Honesty testing Drug testing Monitoring employees (work, behavior, location, conversations) Chapter 17-

Collection & Use of Employee Information
Privacy Act 1974 USA Patriot Act 2001 Department of Health and Human Services 2001 Health care providers release minimum info Health info can’t be used for non health reasons w/o authorization from patient Americans with Disabilities Act (ADA) Employers must keep medical info confidential Illegal to make employment decisions based on medical conditions that don’t affect ability to perform job. Chapter 17-

Polygraph Employee Polygraph Protection Act 1988
Banned use of lie detector by private employers Exceptions: security services protection of nuclear facilities shipment or storage of radioactive or toxic waste controlled substances public water supply public transportation federal government. Chapter 17-

Polygraph Pros Cons Employers have a right to protect property
95% accuracy More reliable & less expensive than alternatives Gathers only information the company has a legitimate right to know (if administered properly) Inaccurate diagnoses in 50% of cases Probes into zones of privacy that are personal & not job related Chapter 17-

Avoid “negligent hiring” suits Screen employees cost-effectively
Integrity Testing Avoid “negligent hiring” suits Screen employees cost-effectively Replace polygraphs Reduce employee theft Reasons for Use Chapter 17-

Integrity Testing Critics say: They are unreliable
Causes employers to reject honest job applicants Doesn’t always weed out dishonest applicants They are intrusive & invasion of privacy. Chapter 17-

Drug Testing For High cost of drug abuse
Increased injuries Increased theft Increased propensity to make poor decisions Ethical responsibility to employees & public to provide Safe workplaces Secure asset protection Safe places to transact business Chapter 17-

Drug Testing Against Violates due process rights (questionable accuracy) Invades privacy rights Reduces morale Tests show use, not abuse (at home) High cost Grants greater weight to employers than employees Ignores employee’s actual performance. Chapter 17-

Guidelines for Drug Testing
Do not discipline someone for refusing to take drug test Use only when there is legitimate suspicion of abuse Focus on on-the-job performance Employees should be informed of methods used & results A confirmatory test should be conducted Conduct in a way to respect employee dignity & privacy. Chapter 17-

Drug Testing Legislation State Law Federal Law
Some restrict drug testing to reasonable suspicion Federal Law Americans with Disabilities Act Can’t order medical exam unless job offered Pre-hire drug testing allowed Mandatory testing programs (yearly, random) Federal workers Transportation workers (aviation, trucking, mass transit) Chapter 17-

Employee Assistance Programs
Why? Employees are valuable Better to help troubled employees than fire them Recovered employees are better employees What do EAPs assist employees with? Chapter 17-

At 82% of mid- to large-sized firms
Employee Monitoring At 82% of mid- to large-sized firms video cameras listening devices Internet uses telephone calls GPS camera phones @ Chapter 17-

Effects of Employee Monitoring
Right to Privacy Effects of Employee Monitoring Invades privacy Treats employees unfairly Creates stress & tension Produces low morale Creates a sense of job insecurity Chapter 17-

Chief Privacy Officer (CPO)
High ranking executive responsible for monitoring & protecting the private information held by firms Chapter 17-

Workplace Safety @ What federal agency? Reduces occupational hazards
Promotes a safe & healthy workplace @ Chapter 17-

OSHA Inventories & labels hazardous chemicals in workplace
Train workers on use of hazardous chemicals Chapter 17-

Employee Responsibilities and Rights
OSHA Employee Responsibilities and Rights Employees shall comply with standards, rules, regulations use safety equipment, protective equipment, & procedures provided have the right to report unsafe or unhealthful working conditions be authorized official time to participate in the activities. Chapter 17-

Workplace Violence Statistics 16,400 threats 723 workers are attacked
Each workday… 16,400 threats 723 workers are attacked 43,800 workers are harassed >1,000 homicides at work yearly 1 in 4 workers attacked, harassed or threatened! Mostly by current coworkers Chapter 17-

Workplace Violence Who Is Affected? exchange money with public
Workers who… exchange money with public deliver (passengers, G/S) work alone work late at night or early morning work in community settings with extensive public contact work in high-crime areas. Chapter 17-

Prevention of Workplace Violence
Provide safety education (what to do if you see it?) Secure the workplace (alarms, surveillance, guards, keys) Provide drop safes (limit cash on hand) Equip field staff with cell phones & alarms Instruct employees not to enter unsafe locations (buddy system) Develop policies & procedures for home health-care providers. Chapter 17-

Family Friendly Workplace Rights
90% working adults feel they don’t spend enough home with family Child care Flextime, compressed work week EAPs Dependant care flexible spending accounts Family care leave We are motivated by these things, our children will feel entitled to them! Chapter 17-

Family-Friendly Workplace
Federal Law Family & Medical Leave Act Problems? Employee rights 12 wks unpaid leave in 12 mo for… Given old job or equivalent when return Provide health benefits during leave Protection against retaliation Employer rights < 50 employees exempt Can demand 2nd opinion Employee & same get total of 12 wks. Chapter 17-

Chapter 18 EMPLOYMENT DISCRIMINATION and AFFIRMATIVE ACTION
BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e EMPLOYMENT DISCRIMINATION and AFFIRMATIVE ACTION Prepared by Deborah Baker Texas Christian University Chapter 18- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

1995 – 2 protected groups (women & minorities)
Civil Rights Movement 1964 Resulted in protected groups—SH whose rights are protected by anti-discrimination laws. 1995 – 2 protected groups (women & minorities) 2001 – 26 protected groups Chapter 18-

Federal Anti-Discrimination Laws
Civil Rights Act of 1964: Prohibits discrimination in hiring & other aspects of employment on the basis of race, color, religion, sex, or national origin. Age Discrimination in Employment Act of 1967: Protects workers 40+ years old. Equal Pay Act of 1963: Prohibits sex discrimination in payment of wages. Rehabilitation Act of 1973: Prohibits job discrimination on the basis of a handicap. Americans with Disabilities Act of 1990: Gives individuals with disabilities civil rights protections similar to those given to individuals on the basis of race, sex, national origin, and religion. Chapter 18-

ADA If a person’s disability makes it difficult for that person to function, firms are expected to make reasonable accommodations if they do not represent an undue hardship for the firm. Employee must be able to perform essential functions of their jobs. Make facilities accessible Modify work schedules Modify equipment or training materials Provide interpreters 1 study: average cost $223 per disabled employee Has the ADA made employers more hesitant to hire the disabled? Chapter 18-

Equal Employment Opportunity Commission (EEOC)
FYI Five commissioners President appoints & Senate confirms What does EEOC do? Sets equal employment opportunity policy Investigates employment discrimination complaints Files lawsuits against employers Enforces anti-discrimination laws Chapter 18-

Cases Filed w/ EEOC Why the jump in 1992? Chapter 18-

Expanded Meanings of Discrimination
Disparate Treatment Unequal treatment is discriminatory (intentional) Employer could impose any criteria as long as they were imposed on all groups alike or equally But what if the equal treatment resulted in unequal consequences for minorities? Disparate Impact An employers’ consequences, not intentions, determine whether discrimination is taking place (unintentional) A procedure with disparate impact can only be permissible if employer can prove it’s job-related necessity “Adverse impact”: when minority group does not have 80% (4/5) success rate Chapter 18-

Sex Discrimination Issues for Women
Getting into professional & managerial positions (out of traditional female-dominated positions) Achieving equal pay (hesitation to negotiate) Eliminating sexual harassment (21% of women) Being able to take maternity leave without losing jobs or job status. Chapter 18-

Examples of Sexual Harassment
Chapter 18-

Pregnancy Discrimination Act 1978 Pregnancy & pregnancy-related medical conditions same as any other medical disability (protected under ADA) The concept of “maternity leave” is outdated. That would imply pregnancy is different from other temporary disabilities. Still an issue- charges filed with EEOC increasing. Reason? Downsizing? Fetal protection policies Some co. barred women of child bearing age from working in sites where they (& their fetuses) might be exposed to harmful chemicals 1991: US Supreme Court determined this policy to be discriminatory Will we see children (born with disabilities) of these women filing lawsuits in the future? Chapter 18-

Passive nondiscrimination AA with preferential hiring
Affirmative Action Traditional View) Today’s View Passive nondiscrimination Willingness to treat all races/sexes alike Many previously discriminated against unaware of opportunities Pure AA Enlarge pool of applicants Choose most qualified applicant AA with preferential hiring Favoring women/minorities “Soft quotas” Hard quotas Co. specifies numbers or proportions of minority groups that must be hired Chapter 18-

AA in the Workplace Preferential Treatment
Based on principle of compensatory justice  attempt to restore balance of justice Opposition to affirmative action. Who? Why? --Reverse discrimination How do businesses feel about AA? Chapter 18-

Chapter 19 OWNER STAKEHOLDERS and CORPORATE GOVERNANCE
BUSINESS & SOCIETY Ethics and Stakeholder Management Carroll & Buchholtz 6e OWNER STAKEHOLDERS and CORPORATE GOVERNANCE Prepared by Deborah Baker Texas Christian University Chapter 19- Business and Society: Ethics and Stakeholder Management, 6e • Carroll & Buchholtz Copyright ©2006 by South-Western, a division of Thomson Learning. All rights reserved

Legitimacy When there is congruence between an organization’s activities & society’s expectations. For B. to be viewed as legitimate, it must be steered in the direction society wants it to go (socially responsible) Expectations are always changing. Chapter 19-

Corporate Governance Concerned with the roles, rights, responsibilities, & accountability of internal SH groups (shareholders, BOD, managers, employees). Note the hierarchy Chapter 19-

Separation of Ownership from Control
Past Present Owners Managers Shareholders Board of Directors Management Chapter 19-

Potential Problem? An agency relation occurs when one person (principal) delegates decision-making authority or control over resources to another (agent). Shareholders are principles Top managers are agents Agency problem shareholders have difficulty holding managers accountable. Why? Agent has more knowledge about day to day operations- hard to evaluate their performance. Agent has incentive to pursue personal interests (short term goals). Goals are not aligned. Managers have some control over who sits on BOD. Chapter 19-

Board of Directors What is their primary role?
What situations create conflict of interest? Interlocking directorate Inside directors CEO = Chair. of BOD Inside vs. outside directors. Chapter 19-

Issues Surrounding Compensation
CEO Compensation Issues Extent to which CEO pay is tied to firm’s performance Overall level of CEO pay Executive Retirement Plans Dick Grasso $140 M Outside Director Compensation Now spend about 173 hrs/yr on the board 80% of board members feel directors should be paid for added responsibility of recent board governance reforms Chapter 19-

CEO Compensation Which regulatory agency monitors CEO pay? FYI
: CEO pay increased 571%, worker pay increased 37% 2000: CEO salary 531 X factory worker salary 2003: Ratio of CEO pay to average worker pay 282:1 Chapter 19-

Board Member Liability
It is the duty of the B of D to ensure that a company has an effective reporting & monitoring system in place. If the board fails to do this, individual directors can be held personally & financially liable for losses. Includes things like: financial disclosure, violation of state & federal laws, failure to meet industry standards. Chapter 19-

Improving Corporate Governance
Sarbanes-Oxley Limits the nonauditing services an auditor can provide Requires auditing firms to rotate the auditors Makes it unlawful for accounting firms to provide services where conflicts of interests exist Chapter 19-

Financial disclosure requirements, such as:
Prohibiting personal loans to executives & directors Reporting off balance sheet transactions Audit committees must have at least one financial expert CEOs and CFOs certify & are held responsible for financial representations Proof of code of ethics Whistle-blowers protected Penalties: Noncompliance $1 million or 10 yrs prison Willful misrepresentation $5 million, 20 yrs prison Sarbanes-Oxley Chapter 19-

Improving Corporate Governance
Change composition of B of D Have “outside” directors (“independent board”) Increase diversity of members Limit # outside boards a director can sit on Don’t allow CEO to be chairman of BOD Establish board committees Audit (should select an outside auditor) Nominating (should be composed of outside directors) Compensation (should be composed of outside directors) Public policy (deal with issues like: affirmative action, equal employment opportunity, health & safety in workplace) Board should “get tough” with the CEO Chapter 19-

Increased Role of Shareholders
Traditional Shareholders Only interested in the firm’s financial performance. Social Activist Shareholders Pressuring firms to adopt their postures on social causes. Chapter 19-

Shareholder Initiatives
Rise of shareholder activist groups meetings) Filing of shareholder proposals Filing of shareholder lawsuits @ Chapter 19-

Company Responsibilities to Shareholders
Full Disclosure (Transparency) Disclosure should be made at regular & frequent intervals & should contain any information that might affect investment decisions. Chapter 19-

THE BUSINESS and SOCIETY RELATIONSHIP

Similar presentations

Presentation on theme: "THE BUSINESS and SOCIETY RELATIONSHIP"— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

THE BUSINESS and SOCIETY RELATIONSHIP

Similar presentations

Presentation on theme: "THE BUSINESS and SOCIETY RELATIONSHIP"— Presentation transcript:

Similar presentations

About project

Feedback