1. Archie B. Carroll Ann K. Buchholtz
Business & Society Ethics, Sustainability, and Stakeholder Management Eighth Edition
Archie B. Carroll
Ann K. Buchholtz
© 2012 South-Western, a part of Cengage Learning

2. Chapter 16 Business and Community Stakeholders
© 2012 South-Western, a part of Cengage Learning

3. © 2012 South-Western, a part of Cengage Learning
Learning Outcomes
Identify and discuss two basic ways of business giving.
Discuss reasons for community involvement, various types of community projects, and management of community stakeholders.
Explain the pros and cons of corporate philanthropy, provide a brief history of corporate philanthropy, and explain why and to whom companies give.
Differentiate between strategic philanthropy, cause-related marketing, and cause branding.
Characterize the nature of, magnitude of, reasons for, and impacts of offshore outsourcing and business or plant closings.
Address steps that a business or plant might take before a decision to close is made.
Identify strategies that a business or plant might employ after a decision to close has been made.
© 2012 South-Western, a part of Cengage Learning

4. © 2012 South-Western, a part of Cengage Learning
Chapter Outline
Community Involvement
Corporate Philanthropy or Business Giving
The Loss of Jobs
Summary
Key Terms
© 2012 South-Western, a part of Cengage Learning

5. A Company’s Positive Impact
Community involvement
Voluntary activities in the community
Company contributions
Support of programs in:
Education
Culture
Urban development
The arts
Civic activities
Health and welfare
Corporate philanthropy
Business giving
Enlightened self-interest and moral reasons
© 2012 South-Western, a part of Cengage Learning

6. Standards of Excellence in Corporate Community Involvement
Leadership
Issues Management
Relationship Building
Strategy
Accountability
Infrastructure
Measurement
© 2012 South-Western, a part of Cengage Learning

7. Benefits of Employee Volunteerism
Benefits to the employee
Benefits to the corporation
Benefits to the community
Improves performance
Builds brand awareness and affinity
Provides skilled and talented volunteer pool
Increases job satisfaction, attitude and morale
Strengthens trust and loyalty among consumers
Offers direct cost savings for community service organizations
Encourages teamwork
Enhances corporate image and reputation
Creates quantifiable social impact
Promotes leadership and skill development
Improves employee retention
Helps bring community needs into focus
Improves intra-organizational communications
Increases employee productivity and loyalty
Provides and effective vehicle to reach strategic goals
© 2012 South-Western, a part of Cengage Learning

8. Corporate Community Involvement
© 2012 South-Western, a part of Cengage Learning

9. Developing a Community Action Plan
Get to know the community.
Assess the company’s resources.
Select projects to support; match community needs to company resources.
Monitor performance of the community actions program and make adjustments.
© 2012 South-Western, a part of Cengage Learning

10. © 2012 South-Western, a part of Cengage Learning
Philanthropy
Philanthropy
A desire to help mankind as indicated by acts of charity; love of mankind.
Business giving
Can be difficult to assess the true motives behind philanthropic giving.
© 2012 South-Western, a part of Cengage Learning

11. A Call for Transparency
Companies need not disclose direct donations to charities.
There is a debate raging over whether they should.
Some fear that disclosure would result in fewer donations.
Concerns that nonprofits are being established to bypass campaign financing laws restricting the use of soft money.
© 2012 South-Western, a part of Cengage Learning

12. Giving to the “Third Sector”
The nonprofit sector
Nonprofits require business giving to survive.
No profits
No tax receipts
Why do companies give?
Charitable giving
Community investment
Commercial giving where businesses expect to benefit from the donation
© 2012 South-Western, a part of Cengage Learning

13. Categories of Corporate Contributions Programs
The Nondonor
The “What’s In It for Us” Donor
The “Company President Believes in Art Support” Donor
The “We Are a Good Citizen” Donor
The “We Care” Donor
© 2012 South-Western, a part of Cengage Learning

14. To Whom Do Companies Give?
Major categories of recipients
Health and human services
Education
Civic and community activities
Culture and the arts
© 2012 South-Western, a part of Cengage Learning

15. Managing Corporate Philanthropy
Base giving on business skills, resources, and capabilities to enhance philanthropic outcomes.
Focus on philanthropy that will enhance corporate profitability and also make a difference in the community.
Seek to align corporate philanthropy with business objectives, reputation, and branding.
© 2012 South-Western, a part of Cengage Learning

16. Factors Influencing Corporate Giving Priorities
Aligning closely with business needs
Limits on budgetary resources
Directions from the CEO and/or the Board
Strengthening the brand
Costs of responding to natural disasters
Being more responsive to stakeholders
Changes in the workforce
Employee needs/requests
Community needs
Global giving
© 2012 South-Western, a part of Cengage Learning

17. Community Partnerships and Strategic Philanthropy
Occurs when a for-profit business enters into an arrangement with a nonprofit for their mutual advantage.
Strategic philanthropy
An approach by which corporate giving and philanthropic endeavors are designed to fit with the firm’s mission, goals, or objectives.
© 2012 South-Western, a part of Cengage Learning

18. Strategic Philanthropy
Make as direct a contribution as possible to the financial goals of the firm.
Bring contribution programs into sharper alignment with business endeavors.
Ensure that philanthropy is well planned and managed.
© 2012 South-Western, a part of Cengage Learning

19. Implementation of Strategic Philanthropy
Integrate philanthropy into strategic goals and company mission.
Connect philanthropy with other community involvement programs.
Budget appropriately for philanthropy.
Ensure effective program infrastructure.
Formalize policies and guidelines for funding.
Involve employees in philanthropy-related activities.
Incorporate stakeholder communication.
Develop long-term business/nonprofit partnerships.
© 2012 South-Western, a part of Cengage Learning

20. Cause-Related Marketing
Directly linking a business’s product or service to a specified charity.
Businesses enhance their public image and increase sales.
Nonprofit organizations get funding and visibility.
© 2012 South-Western, a part of Cengage Learning

21. © 2012 South-Western, a part of Cengage Learning
Cause Branding
Cause branding
A longer-term commitment than cause- related marketing.
Is related more directly to the firm’s line of business and the target audience.
© 2012 South-Western, a part of Cengage Learning

22. © 2012 South-Western, a part of Cengage Learning
Global Philanthropy
The size of a company’s international workforce is the greatest determinant of the size of its charitable contributions to that market.
International development will be one of the main areas that will see funding growth in the future.
Businesses want to protect communities in which they operate.
© 2012 South-Western, a part of Cengage Learning

23. © 2012 South-Western, a part of Cengage Learning
Loss of Jobs
Outsourcing
The relocation of business processes to a different company.
Offshore outsourcing (Offshoring)
The relocation of business processes to a different country.
Affects blue collar and white collar workers.
Even skilled high-tech jobs are offshored.
© 2012 South-Western, a part of Cengage Learning

24. Best Offshore Outsourcing Practices
Go offshore for the right reasons.
Choose your model carefully.
Get your people on board.
Be prepared to invest time and effort.
Treat your partners as equals.
© 2012 South-Western, a part of Cengage Learning

25. © 2012 South-Western, a part of Cengage Learning
Plant Closings
Businesses and plants close for many reasons
Poor economic conditions
Consolidation of organizations
Moving jobs to another country with low cost labor
Outsourcing or offshoring
Foreign competition
Declining sales
© 2012 South-Western, a part of Cengage Learning

26. Business and Plant Closings
Diversification
Before Deciding to Close
New ownership
New owner
Employee ownership
© 2012 South-Western, a part of Cengage Learning

27. Business and Plant Closings (continued)
After Deciding to Close
Conduct a community impact analysis
Provide advance notice to employees/
community
Provide transfer, relocation, and outplacement benefits
Phase out the business gradually
Help attract replacement industry
© 2012 South-Western, a part of Cengage Learning

28. Community Impact Analysis
What groups will be affected?
How will they be affected?
What is the timing of initial and later effects?
What is magnitude of the effect?
What is the duration of the impact?
To what extent will the impact be diffused in the community?
© 2012 South-Western, a part of Cengage Learning

29. © 2012 South-Western, a part of Cengage Learning
Advance Notice
Worker Adjustment and Retraining Notification Act (WARN)
Requires firms with 100 or more workers to provide 60 days advance notice before shutting down or conducting layoffs.
The recent global economic crisis has prompted some states to strengthen WARN protections.
WARN often falls short of its goals of protecting workers.
© 2012 South-Western, a part of Cengage Learning

30. Communicating With Employees Who are Being Laid Off
Be complete
Be consistent
Inform affected employees first
Inform retained employees
© 2012 South-Western, a part of Cengage Learning

31. Survivors– The Forgotten Stakeholders
Directional support
Tactical support
Informational support
Emotional support
The Needs of Survivors
© 2012 South-Western, a part of Cengage Learning

32. © 2012 South-Western, a part of Cengage Learning
Key Terms
Cause branding
Cause-related marketing
Community action program
Community involvement
Community partnerships
Employee owned
Offshore outsourcing
Offshoring
Outsourcing
Philanthropy
Resource-based giving
Strategic philanthropy
Third sector
Worker Adjustment and Retraining Notification Act (WARN)
© 2012 South-Western, a part of Cengage Learning