Chapter 16
Business and Community Stakeholders
LEARNING OUTCOMES
After studying this chapter, you should be able to:
1. Discuss reasons for community involvement, various types of community projects, and
management of community stakeholders.
TEACHING SUGGESTIONS
INTRODUCTION – This chapter examines the relationship between business and its
surrounding community. This relationship can have both positive and negative effects. Within
the positive realm, the authors focus on community involvement and corporate philanthropy.
Companies also can do damage to their communities, especially by outsourcing jobs and/or
closing facilities. In both instances, the authors focus on ways to manage the process and
interact ethically with the community.
KEY TALKING POINTS – As good corporate citizens, companies try to maximize the benefits
of their resources for themselves and their communities. In broad terms, their resources consist
Because current economic conditions are bleak for many workers in the United States, the
negative side of the business/community relationship may be of more immediate concern to
students. Offshore outsourcing and facilities closings have become important facts of life for
many blue and white collar workers. This situation is due to two other trends—globalization and
advances in technology. Globalization provides easy access to cheap labor, vastly reducing
expenses. Technology provides the means to substitute machines for human labor.
function (especially if the impetus is primarily to enrich shareholders at the expense of
employees), corporate reputations suffer in the eyes of society.
PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of:
Cases:
1-Wal-Mart- The Main Street Merchant of Doom
16-Coke & Pepsi in India
18-Dole’s DBCP Legacy
22-A Smoke-Free Generation in Tasmania
25-The Hudson River Cleanup and GE
Ethics in Practice Cases:
Matters of Good Intentions
Competition in the Nonprofit Workplace
Spotlight on Sustainability:
Corporate Philanthropy through Greening the Workforce
LECTURE OUTLINE
I. COMMUNITY INVOLVEMENT
A. Volunteer Programs
B. Managing Community Involvement
1. Business Stake in the Community
2. Developing a Community Action Program
II. CORPORATE PHILANTHROPY OR BUSINESS GIVING
A. A Brief History of Corporate Philanthropy
Ch 16, Instructor’s Manual, Business & Society, Carroll 10e
b. Education
c. Civic and Community Activities
d. Culture and the Arts
e. Giving in Times of Crisis
D. Managing Corporate Philanthropy
1. Community Partnerships
2. Strategic Philanthropy
a. Factor (Supply) Conditions
3. Cause-Related Marketing
4. Global Philanthropy
III. DETRIMENTAL IMPACTS ON COMMUNITIES
A. Offshoring and Reshoring
B. Business and Plant Closings
1. Before the Decision to Close Is Made
2. After the Decision to Close Is Made
a. Community-Impact Analysis
3. Survivors: The Forgotten Stakeholders
IV. SUMMARY
SUGGESTED ANSWERS TO DISCUSSION QUESTIONS
Students should recognize that their answers to these discussion questions should be well
reasoned and supported with evidence. Although some answers will be more correct than others,
students should be aware that simplistic answers to complex questions, problems, or issues such
as these will never be “good” answers.
1. Question: Have you participated in community involvement at work? What type of
program did the company endorse? Outline what you experienced to be the benefits of
employee volunteerism.
Answer:
Answers will vary depending on community involvement opportunities at workplaces.
Many workplaces offer paid time off to participate in volunteer work. Some companies
2. Question: Explain the pros and cons of corporate philanthropy, provide a brief history of
corporate philanthropy, and explain why and to whom companies give.
Answer: Arguments for community involvement and philanthropy center on the fact that
business has the resources and expertise to help meet social needs. Many also note that
business should be responsible for the problems that it creates. In addition to these factors,
it also is important to note that these activities also can help the firm and its employees
through increased employee morale, better firm reputation, etc. Arguments against these
3. Question: Differentiate among strategic philanthropy, cause-related marketing, and cause
branding. Provide an example of each not discussed in the text.
Answer: Strategic philanthropy is the process of tailoring a firm’s giving to best fit with its
own mission and goals, by making contributions that hold the promise of helping the
firm’s financial goals, giving to causes that align with corporate activities, and explicitly
planning the giving process. An office supply store might make contributions to a school
by donating discontinued supplies and equipment. Cause-related marketing is the direct
linking of a business’s product or service to a specified charity. Each time a consumer uses
the service or buys the product, a donation is given to the charity by the business. Some
4. Question: Identify and discuss briefly what you think are the major trade-offs that firms
face as they think about offshoring and reshoring. When substantial layoffs are involved,
what are firms’ responsibilities to their employees and their communities?
Answer: The major tradeoff that most managers never address is the decision to increase
profits, which primarily benefit shareholders and senior managers, at the expense of
workers’ incomes. This tradeoff is not addressed because the managers have effective
control of the corporation and have a way to enrich themselves, and shareholders are a
5. Question: In your opinion, why does a business have a responsibility to employees and
community stakeholders in a business- or plant-closing decision?
Answer: Businesses have a clear responsibility to workers and the community in the case
GROUP ACTIVITIES
Group Activity 1 – Community Action Programs
Divide students into groups of four to five students. Assign each group a well-known company.
Ask each group to develop a community action program for the assigned company. Students
should assume that the assigned company operates in the community where your school is
Group Activity 2 – Outsourcing Movie Night
(Note: This Activity also may be used in conjunction with Chapter 10.)
Invite groups of students to watch the Outsourcing episode of the FX reality series 30 Days
(Season 2, Episode 2). In this episode, Christopher (Chris) Jopin, an unemployed computer
programmer, travels to India where his job was outsourced. While in India, Chris lives with an
Indian family who works in outsourced jobs, and he obtains an outsourced job. The episode
examines American perceptions / attitudes regarding outsourcing, as well as the impact of
outsourced jobs to India’s economy and culture.
India.
INDIVIDUAL ASSIGNMENT
(Note: This Assignment also may be used in conjunction with Chapter 2)
Distribute the following instructions to each student:
