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ADDITIONAL QUESTION 1: HOW CAN YOU ASSESS COMMUNITY IMPACTS?
COMMUNITY REPUTATION ASSESSMENT
Assess key constituents to ensure that a key intended benefit of community involvement
– a better reputation – is being accomplished.
Send the three-item survey, measured on a one-to-five Likert scale, to multiple
stakeholders or administer the survey at a focus group meeting. The survey items are:
SOCIAL PERFORMANCE REPORTING
A company can also demonstrate respect for the community by being transparent about
its operations and impacts.
More than 3,500 corporate responsibility reports are published annually.
Review EXHIBIT 12.8 “Top Three Indicators for Five Community Impact Topics,”
which provides the top three indicators used to measure performance in each of the five
areas.
DISCUSSION ACTIVITY
Have students, or a team of students, explore the following social reporting websites, summarize
what they like and don’t like about one social report, and share answers in small groups or with
the entire class.
1. Ben & Jerry’s, “Social Environmental Assessment Reports,” available at
http://www.benjerry.com/company/sear/
2. Timberland Company, 2007-2008 Corporate Social Responsibility Report, available at
http://www.timberland.com/graphics/media/tbl/2007-2008_Timberland_CSR_Report.
pdf
3. Starbucks, Global Responsibility Report 2009, available at
http://assets.starbucks.com/assets/ssp-g-p-full-report.pdf
4. Others on CorporateRegister.com website, available at
http://www.corporateregister.com/about.html
CHAPTER 12 CHAPTER AND ADDITIONAL QUESTIONS SUMMARY
Chapter Question 1: What four types of social responsibilities do businesses have?
The Nobel Prize-winning economist Milton Friedman famously articulated the viewpoint that
Friedman’s narrow conceptualization of social responsibility has been criticized by many
Professor Archie Carroll differentiates four different components of social responsibility:
FOR DISCUSSION: 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.
Employees need adequate time off from work to care for their families and participate in
No matter how enjoyable or essential work may be, employees need time away from work to
On average, Americans work 350 more hours a year, 9 full weeks more than their European
Long working hours contribute not only to poor health conditions and emotional exhaustion,
Take Back Your Time, a national coalition to reduce work hours, has been lobbying
Specific examples of family-friendly and community-friendly policies include flexible time,
FOR DISCUSSION: 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.
Sweatshops in developing nations epitomize the difficulty of imposing a universal standard
on all organizations in all nations. Chinese and Indonesian sweatshops manufacture products
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.
FOR DISCUSSION: 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.
oIn 1999, UN Secretary-General Kofi Annan presented the UN Global Compact Principles
to business leaders attending the World Economic Forum in Davos, Switzerland.
o The ten principles are in the areas of human rights, labor, environment, and corruption (see
Exhibit 12.1 “United Nations Global Compact Principles).
FOR DISCUSSION: 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?
oReview the questions Hewlett-Packard requires their suppliers to submit about their labor and
health & safety practices appear in Exhibit 12.2 “Supplier Labor and Occupational Health &
Safety Practices”
FOR DISCUSSION: 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 competitive advantages of community involvement?
oA very strong business case supports being a model corporate citizen. Corporate citizenship
oBenefits to Employee Relations
oBenefits to Customer Relations
oBenefits to Community Relations
oBenefits to Investor Relations
The Socially Responsible Investment (SRI) funds screen companies for (1) financial
performance – meets financial goals, solid return on investment, and (2) social performance
The 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 social screens
FOR DISCUSSION: 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.
Chapter Question 4: Describe the six phases of issues-driven multi-stakeholder dialogue?
Review EXHIBIT 12.3 “Interpenetrating Systems Model,”, which segments human
Primary stakeholders are those who have an economic relationship with the organization,
Secondary stakeholders are those who indirectly affect or are affected by the company’s
Review EXHIBIT 12.4 “Key Stakeholder Attributes,” which categorizes stakeholders and
issues based on three attributes: power, legitimacy, and urgency
FOR DISCUSSION: 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.
Julia Roloff highlights six phases of issues-driven multi-stakeholder dialogues.
Chapter Question 5: Discuss the four different ways that businesses give to the community
and the three different strategic approaches they can take.
Philanthropy is the donation of money or property to assist a nonprofit organization or
people in need.
FOR DISCUSSION: Do you agree with industrialist and philanthropist Andrew Carnegie that:
(1) Wealthy individuals, particularly the self-made rich, have a moral responsibility to invest
their fortunes for the well-being of society, (2) Business fortunes should be administered during a
person’s lifetime to harmonize relationships between the rich and poor, (3) God will reward
philanthropists in the afterlife?
Four ways to give:
oMoney
oProducts or services
oSkills
oIn 2009, 63.4 million Americans over the age of 16 volunteered a total of 8.1
oJob opportunities
A systematic giving program would cover all four areas.
FOR DISCUSSION: Have students describe how the college, Business School, or their employer
donates money, products or services, or employee skills to nonprofit organizations, or provides
job opportunities for hard-to-employ segments of the population. What are the organization’s
giving strengths and weaknesses? How can the organization transform a weakness into a
strength? Discuss the answers in small groups.
oSocial entrepreneurship refers to using business principles to directly meet basic human
needs. Many social entrepreneurs participate in nonprofit organizations, although some
develop for-profit ventures.
oWho should an organization give to and how should an organization give? Managers can:
(1) reactively give on a first-come first-serve basis,
a. The American Institute of Philanthropy (AIP) Charity Rating Guide &
Watchdog Report grades more than 500 national charities based on how
nonprofits spend donations.
b. Charity Navigator, an independent nonprofit organization, rates the financial
health of more than 5,500 of the largest charities for daily operations and
program sustainability.
(2) outsource giving to the United Way and other intermediary organizations that select
recipients,
a. Companies can donate money to international social projects (GlobalGiving),
individual microloan recipients (Kiva), and scholarship recipients (Vittana).
b. Another option is to allocate money to an investment fund that lends it to
businesses operating in disadvantaged communities, such as the Calvert Social
Investment Foundation.
(3) proactively develop a few key strategic partnerships with nonprofit organizations
a. Strategic philanthropy is the partnering of a company and nonprofit
organization to achieve a communal good that also benefits the company.
b. Michael Porter and Mark Kramer differentiate three social issue categories
that may impact business operations: (1) Generic social issues, (2) Value
chain social impacts, (3) Competitive context social dimensions.
FOR DISCUSSION: Tell students that they are responsible for managing a $500 donation to one,
and only one, recipient. Have students browse websites for the local United Way, Charity
Navigator (www.charitynavigator.org), GlobalGiving (www.globalgiving.com), Kiva
(www.kiva.org), and Vittana (www.vittana.org) for a potential recipient. Who was the chosen
recipient? Why? Have students discuss their answers in small groups and with the entire class.
Chapter Question 6: How can managers determine an optimal win-win community
partner?
oReview EXHIBIT 12.5 “Community Organizations that Benefit the Most for a Strategic
oAn optimal partner is a community organization with a similar mission that can benefit from
FOR DISCUSSION: Tell students that they must determine the optimal community organization
recipient for the college, Business School, or their employer’s annual donation of money,
products/services, and employee skills. Answer the questions in Exhibit 12.5 “Community
Organizations that Benefit the Most for a Strategic Partnership”. What community organization
would be the optimal recipient? Why? Discuss in small groups
oAlso determine what community organizations can supply inputs to the company or purchase
the company’s products or services.
oReview EXHIBIT 12.6 “Community Organizations that Benefit the Company the Most,”
which provides questions that can help managers determine which community organizations
would contribute the most to the company achieving its strategic goals.
oAn optimal partner is a community organization that can supply you with future employees
and whose employees and customers can supply you with future sales.
FOR DISCUSSION: Tell students that they must determine the optimal community organization
that would benefit the college, Business School, or their employer the most. Answer the
questions in Exhibit 12.6 “Community Organizations that Benefit the Company the Most”. What
community organization would be the optimal recipient? Why? Discuss in small groups.
A community organization that rises to the top after applying the questions in Exhibit 12.5
(community organizations that benefit the most from partnering with the company) and
Exhibit 12.6 (community organizations that benefit the company the most) is an optimal
choice for a win-win strategic partnership.
Cause-related marketing is a win-win strategic partnership where nonprofits benefit by
revenue generated through the sales of the donor’s product or service.
Chapter Question 7: Describe the steps a manager should take to develop a highly effective
community involvement program.
Philip Mirvis and Bradley Googins describe a five-stage corporate citizenship developmental
Review EXHIBIT 11.7 “Community Involvement Management Process,” which describes
FOR DISCUSSION: Have students assess the college, Business School, or their employer’s
community involvement management process based on each of the 13 steps in Exhibit 12.7
“Community Involvement Management Process.” What are the organization’s strengths and
weaknesses? How can the organization transform a weakness into a strength? Discuss answers in
small groups.
Community involvement provides an opportunity for team building, leadership training, and
Timberland uses community service projects to teach employees project management skills.
Community involvement provides many opportunities for networking with other businesses
Managers can join the Rotary, Chamber of Commerce, Better Business Bureau, and other
FOR DISCUSSION: Have students independently explore the Internet to determine and find 5
business networking opportunities that exist in the local community. Share the list of networking
organizations in small groups and with the entire class.
Additional Question 1: How can you assess community impacts?
Assess key constituents to ensure that a key intended benefit of community involvement – a
The Council on Foundations has created a Corporate Philanthropy Index (CPI) for companies
Review EXHIBIT 12.8 “Top Three Indicators for Five Community Impact Topics,” which
CorporateRegister.com, founded in 1998, profiles more than 23,000 social responsibility
FOR DISCUSSION: Have students, or a team of students, explore the following social reporting
websites, summarize what they like and don’t like about one social report, and share answers in
small groups or with the entire class: (1) Ben & Jerry’s, “Social Environmental Assessment
Reports,” available at http://www.benjerry.com/company/sear/, (2) Timberland Company,
2007-2008 Corporate Social Responsibility Report, available at
http://www.timberland.com/graphics/media/tbl/2007-2008_Timberland_CSR_Report.
pdf, (3) Starbucks, Global Responsibility Report 2009, available at
http://assets.starbucks.com/assets/ssp-g-p-full-report.pdf, and (4) 4. Others on
CorporateRegister.com website, available at
http://www.corporateregister.com/about.html.
