978-0470639948 Chapter 12 Solution Manual Part 1

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Chapter 12:

COMMUNITY OUTREACH AND RESPECT

CHAPTER 12 CHAPTER AND ADDITIONAL QUESTIONS

In studying this chapter, students should consider the questions below.

“CQ1” refers to “Chapter Question 1.” This question appears at the end of the textbook

chapter.

“AQ1” refers to an “Additional Question 1.” This is an “additional” question related to

the chapter. It is not listed at the end of the textbook chapter as a “Chapter Question”.

These items are numbered within the two categories based on the order in which the

answer appears in the chapter.

CQ1: What four types of social responsibilities do businesses have?

CQ2: Discuss the ethical pros and cons of doing business with a sweatshop in a developing

nation.

CQ3: What are the competitive advantages of community involvement?

CQ4: Describe the six phases of issues-driven multi-stakeholder dialogue?

CQ5: Discuss the four ways that businesses give to the community and the three strategic

approaches they can take.

CQ6: How can managers determine an optimal win-win community partner?

CQ7: Describe the steps a manager should take to develop a highly effective community

involvement program.

AQ1: How can you assess community impacts?

CHAPTER 12 LEARNING OBJECTIVES

After completing this chapter, students should be able to:

Describe four types of social responsibilities businesses have

Articulate the competitive advantages of community involvement

Understand the six phases of issues-driven multi-stakeholder dialogues

Develop a diverse portfolio of giving opportunities—money, products or services, skills,

and job opportunities

Align community outreach with the company’s mission and assets

Choose community organizations for strategic partnerships

Administer the community involvement process

Assess and report social performance

CHAPTER 12 OVERVIEW

Organizations are embedded in the communities where they operate. Ethical

organizations aspire to be model community citizens. This chapter begins with a discussion on

the extent to which businesses have social responsibilities and describes the business case for

community involvement. An organization’s reputation is critical to its success. Public criticisms

against an organization generate a negative stigma that can be very difficult to undue. Managers

can engage multiple community stakeholders on a wide variety of issues. Philanthropy and

employee volunteerism are the most common forms of community involvement. Managers must

determine how much and what to give to whom. The chapter also explores how to manage the

community involvement process, and what community impacts to assess and report.

CHAPTER 12 LECTURE OUTLINE

Teaching Objective: To teach how to be a good corporate citizen and align community outreach

with the company’s mission.

Suggested Time: Two to three hours of class time is recommended to present this chapter.

I. Chapter Question 1: What four types of social responsibilities do businesses have?

II. Chapter Question 2: Discuss the ethical pros and cons of doing business with a

sweatshop in a developing nation.

Double standard problem

III. Chapter Question 3: What are the competitive advantages of community

involvement?

IV. Chapter Question 4: Describe the six phases of issues-driven multi-stakeholder

dialogue?

Interpenetrating Systems Model

V. Chapter Question 5: Discuss the four ways that businesses give to the community

and the three strategic approaches they can take.

Philanthropy and volunteerism

Four ways to give

Giving skills

Giving job opportunities

Social entrepreneurship

VI. Chapter Question 6: How can managers determine an optimal win-win community

partner?

VII. Chapter Question 7: Describe the steps a manager should take to develop a highly

effective community involvement program.

Community involvement management process

VIII. Additional Question 1: How can you assess community impacts?

CHAPTER 12 SUPPORTING MATERIALS

Textbook Inserts

Ethical Dilemma Analysis

What would you do?

Let’s Build a Building

In the Real World: Enron

Exhibits

Exhibit 12.1: United Nation Global Compact Principles

Exhibit 12.2: Supplier Labor and Occupational Health & Safety Practices

Exhibit 12.3: Interpenetrating Systems Model

Exhibit 12.4: Key Stakeholder Attributes

Exhibit 12.5: Community Organizations that Benefit the Most from a Strategic

Partnership

Exhibit 12.6: Community Organizations that Benefit the Company the Most

Exhibit 12.7: Community Involvement Management Process

Exhibit 12.8: Top Three Indicators for Five Community Impact Topics

Thematic Boxes

Tips and Techniques

Best Practice in Use

CHAPTER QUESTION 1: WHAT FOUR TYPES OF SOCIAL RESPONSIBILITIES DO

BUSINESSES HAVE?

EXTENT OF SOCIAL RESONSIBILITIES

The Nobel Prize-winning economist Milton Friedman famously articulated the

viewpoint that the only social responsibility for business is to maximize profits within

the guidelines of the law.

Managers have a fiduciary duty to always act in the best interests of shareholders.

Stay focused on your organization’s mission, Friedman instructs managers, and don’t

be distracted by activities not associated with core operations.

Friedman’s narrow conceptualization of social responsibility has been criticized by

many scholars.

Corporations can legally avoid paying taxes to maximize profits by employing

accountants well versed in tax loopholes, but doesn’t that violate a civic duty

to pay taxes in the nation where they really operate, particularly if recipients

of federal bailout money?

Professor Archie Carroll differentiates four different components of social

responsibility:

economic responsibilities

legal responsibilities

ethical responsibilities (activities and practices that society expects even

though they are not codified by law), and

philanthropic responsibilities (voluntary and discretionary activities that give

back to the community, such as corporate giving, product and service

donations, and employee volunteerism).

According to Carroll’s conceptualization, a socially responsible business is profitable,

law abiding, ethical, and a good corporate citizen.

DISCUSSION ACTIVITY

Milton Friedman argues that the only social responsibility for business is to maximize profits

within the guideline of the law. Archie Carroll argues that businesses have two additional

responsibilities beyond economic responsibility and legal responsibilities – ethical

responsibilities and philanthropic responsibilities. Who do you agree with, Friedman or Carroll?

Why?

Have students respond independently, put them on teams with people who agree with them and

prioritize reasons that support their viewpoint. Then facilitate a discussion or debate between the

two different viewpoints.

WORK-LIFE BALANCE

In Book I of Nicomachean Ethics, Aristotle surmises that “happiness is the meaning

and the purpose of life, the whole aim and end of human existence”. Happiness is the

only thing human beings desire for its own sake. All others items of desire – such as

wealth, prestige, and love – are pursued in hopes of achieving happiness.

The developmental psychologist Erik Erikson complemented Aristotle’s conception

of happiness by noting that happiness is achieved through the appropriate balancing

of work, love, and play.

Employees need adequate time off from work to care for their families and participate

in civic organizations. Work-life balance refers to achieving the appropriate balance

between time spent working and one’s personal life.

No matter how enjoyable or essential work may be, employees need time

away from work to develop their personalities, replenish their energy, and

avoid burnout.

On average, Americans work 350 more hours a year, 9 full weeks more than their

European counterparts. Many women bear the extra burden because they are also

primarily responsible for family and childcare duties.

Long working hours contribute not only to poor health conditions and emotional

exhaustion, but also less time for family activities and civic engagement.

Take Back Your Time, a national coalition to reduce work hours, has been lobbying

governments for a variety of work-life balance benefits, including guaranteed paid

leave for parents after the birth or adoption of a child, one week of paid sick leave,

and three weeks of paid annual vacation leave.

Specific examples of family-friendly and community-friendly policies include

flexible time, onsite childcare, paid vacations, and paid leave.

DISCUSSION ACTIVITY

Work-life balance advocates maintain that every workday should consist of 8 hours of work, 8

hours of personal/family/community (“play”) time, and 8 hours of sleep. In a typical week, what

is the average number of hours a day you work, “play,” and sleep? If not balanced, why? Do you

want these three activities to be balanced? Why? What would it take to achieve balance? Discuss

answers in small groups.

CHAPTER QUESTION 2: DISCUSS THE ETHICAL PROS AND CONS OF DOING

BUSINESS WITH A SWEATSHOP IN A DEVELOPING NATION?

DOUBLE STANDARD PROBLEM

Corporate citizenship expectations have spread throughout the world. Every nation has

different standards and expectations based on its political, economic, regulatory, and

social historical evolution.

Social activists have long accused American businesses of unethical behavior in

Managers of these companies have adopted a “double standard” – one set of behaviors

Sweatshops in developing nations epitomize the difficulty of imposing a universal

standard on all organizations in all nations. Chinese and Indonesian sweatshops

These conditions are in clear violation of U.S. labor laws but not host country laws.

Managers and political, economic, and moral theorists defend the double standard based

on cultural relativism and utilitarianism.

But from a deontological (human rights) and virtue ethics (practicing virtues) perspective,

these working conditions are unacceptable.

DISCUSSION ACTIVITY

Have students independently answer the following questions: Are sweatshops or paying a

reduced wage to workers in offshoring situations ethical? Why? Then put students on teams with

classmates who agree with them and have them prioritize their reasons. Then facilitate a

discussion or debate between the two opposing perspectives.

UNITED NATIONS GLOBAL COMPACT PRINCIPLES

oThe United Nations (UN) has developed guiding principles for conducting business

anywhere in the world.

oIn 1999, UN Secretary-General Kofi Annan presented the UN Global Compact

Principles to business leaders attending the World Economic Forum in Davos,

Switzerland.

oAs of 2010, more than 7,700 businesses from over 130 countries have officially

committed to the principles.

oThe ten principles are in the areas of human rights, labor, environment, and corruption

(see Exhibit 12.1 “United Nations Global Compact Principles).

DISCUSSION ACTIVITY

Have students review the “United Nations Global Compact Principles” in Exhibit 12.1. Should

businesses be working for the effective abolition of child labor or is not employing child laborers

sufficient action? If you knew that a competitor operating in another nation paid a bribe, would

you inform federal authorities? Why?

SUPPLIER ASSESSMENTS

oHewlett-Packard requires its suppliers to submit a self-assessment questionnaire

developed in partnership with the Global e-Sustainability Initiative Supply Chain

Working and the Electronic Industry Code of Conduct Implementation Group, and

copyrighted by the United Nations Environment Programme.

oReview the questions to ask suppliers about their labor and health & safety practices

appear in Exhibit 12.2 “Supplier Labor and Occupational Health & Safety Practices”

DISCUSSION ACTIVITY

Have students read Exhibit 12.2 “Supplier Labor and Occupational Health & Safety Practices”.

Is it asking too much of business to have them gather all this information about their suppliers?

What percentage of the 13 questions should have socially acceptable responses before you would

be willing to do business with the supplier? Why? Should all questions count equally, or are

some questions more important than others? Why? Which of the 13 questions do you think are

more important?

CHAPTER QUESTION 3: WHAT ARE THE COMPETIVE ADVANTAGES OF

COMMUNITY ENGAGEMENT?

oA very strong business case supports being a model corporate citizen.

oA company’s reputation as a good citizen favorably impacts employee, customer,

community, and investor relations in the following ways:

oBenefits to Customer Relations

oBenefits to Community Relations

oBenefits to Investor Relations

oThe Socially Responsible Investment (SRI) financial market is huge.

oSRI funds screen companies for (1) financial performance – meets financial goals, solid

return on investment, and (2) social performance – generates social benefits through good

oThe FTSE KLD 400 Social Index firms are selected by a committee for having met

financial screens (such as earnings, liquidity, stock price, and debt to equity ratio) and

DISCUSSION ACTIVITY

The FTSD KLD 400 Social Index does not include companies or industries that produce unsafe

products, violate human rights, or are considered to be socially irresponsible. Below is a list of

criteria used to eliminate companies from the SRI fund. For each criterion, do you believe it

should be used to eliminate companies from the fund? Why?

1. alcohol

2. tobacco

3. firearms

4. gambling

5. nuclear power

6. military weapons

Have students discuss their answers in small groups and/or facilitate a class discussion or debate

on these criteria.

CHAPTER QUESTION 4: DESCRIBE THE SIX PHASES OF ISSUES-DRIVEN

MULTI-STAKEHOLDER DIALOGUE.

INTERPENTRATING SYSTEMS MODEL

oReview EXHIBIT 12.3 “Interpenetrating Systems Model,”, which segments human

activities into four major subsystems: Government, Business, Nonprofits, and

Personal-Communal, each with its own purpose.

oThe four subsystems impact each other. What happens in the business subsystem often

impacts the other three subsystems.

MULTIPLE STAKEHOLDER DEMANDS

oIt is very challenging for managers to respond appropriately to multiple stakeholders

making simultaneous demands. All stakeholders matter. But from a practical perspective,

managers cannot address all, and sometimes conflicting, stakeholder demands.

oSecondary stakeholders are those who indirectly affect or are affected by the company’s

activities, such as community members, nonprofits, the media, and the government.

oManagers need to scan their environment to determine when these three stakeholder

characteristics – power, legitimacy, and urgency – exist.

DISCUSSION ACTIVITY

Have students read the Kate Hanni and the “Passenger Bill of Rights” summary in the

“Interpenetrating Systems Model” section. Do you believe the federal government over-reacted

by approving the “Passenger Bill of Rights” regulations? Why? If you were an airline executive,

what strategies could you have pursued to reach an agreement with Hanni independent of

government regulation? Discuss answers in small groups or with the entire class.