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Part I: BUSINESS, SOCIETY, AND STAKEHOLDERS. 1. The Business and Society Relationship. 2. Corporate Citizenship: Social Responsibility, Performance and Sustainability. 3. The Stakeholder Approach to Business, Society, and Ethics. Part II: CORPORATE GOVERNANCE AND STRATEGIC MANAGEMENT ISSUES. 4. Corporate Governance: Foundational Issues. 5. Strategic Management and Corporate Public Affairs. 6. Issue, Risk, and Crisis Management. Part III: BUSINESS ETHICS AND MANAGEMENT. 7. Business Ethics Fundamentals. 8. Personal and Organizational Ethics. 9. Business Ethics and Technology. 10. Ethical Issues in the Global Arena. Part IV: EXTERNAL STAKEHOLDER ISSUES. 11. Business, Government, and Regulation. 12. Business Influence on Government and Public Policy. 13. Consumer Stakeholders: Information Issues and Responses. 14. Consumer Stakeholders: Product and Service Issues. 15. Sustainability and the Natural Environment. 16. Business and Community Stakeholders. Part V: INTERNAL STAKEHOLDER ISSUES. 17. Employee Stakeholders and Workplace Issues. 18. Employee Stakeholders: Privacy, Safety, and Health. 19. Employment Discrimination and Affirmative Action. Cases.
© 2015 Cengage Learning Chapter 16 Business and Community Stakeholders © 2015 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 offshoring and the movement toward reshoring 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 © 2015 Cengage Learning Chapter Outline • Community Involvement • Corporate Philanthropy or Business Giving • The Loss of Jobs • Summary • Key Terms © 2015 Cengage Learning Business and Community Stakeholders • • • • The actions of a business affect a range of communities Managers must be aware of these impacts, and manage in a way that respects community stakeholders We focus on the immediate locale, but instant communication means that the relevant community includes the region, nation, or the world For business and community stakeholders, there are two major kinds of relationships: • The positive contributions business can make to the community • The harm business can cause to community stakeholders We discuss here community involvement and corporate philanthropy © 2015 Cengage Learning Community Involvement • Business involvement in the community represents enlightened self-interest, because businesses help themselves in the process of helping others Volunteer Programs - such programs reflect the resourcefulness and responsiveness to communities, and are essential for attracting and retaining the best talent in the workforce Employees want to work for the “good guys.” Managing Community Involvement – focuses on the contribution of managerial and employee time and talent © 2015 Cengage Learning Standards of Excellence in Corporate Community Involvement Leadership Issues Management Relationship Building Strategy Accountability Infrastructure Measurement © 2015 Cengage Learning Benefits of Employee Volunteerism © 2015 Cengage Learning Developing a Community Action Plan Knowing 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 © 2015 Cengage Learning Corporate Community Involvement © 2015 Cengage Learning 10 A Call for Transparency • • Companies need not disclose direct donations to charities, but proposed legislation would require disclosure • Proponents say the money belongs to the shareholders, and they should make the decision, not managers giving to their favorite charities, which would not benefit the business • Some fear that disclosure would result in fewer donations, and would reveal company strategy Non-disclosure has led to a rise in “dark money” political funding to nonprofits from undisclosed sources © 2015 Cengage Learning 12 Giving to the Third Sector: Nonprofits Business and government – are supported by profits and taxes The third sector – (churches, museums, hospitals, libraries, colleges, and more) depends on philanthropy Why companies give? •Charitable – (no expected benefit for the business) •Community - (gifts support business goals) •Commercial – (giving that benefits the business) © 2015 Cengage Learning 13 To Whom Do Companies Give? • During any budget year, firms receive numerous requests for contributions from a variety of applicants, and decide which to honor Estimates of most business giving - Health and human services Education Civic and community activities Culture and the arts © 2015 Cengage Learning 14 Managing Corporate Philanthropy- of • • Two aspects to the pressure on businesses to be more businesslike in their 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 (a strategic approach) Strategic giving is on the rise © 2015 Cengage Learning 15 Managing Corporate Philanthropy- of • • • • • Factor Conditions – the available inputs for production Demand Conditions – concerned with the nature of the company’s customer and the local market Related and Supporting Industries – can also be strengthened through strategic giving Cause-Related Marketing – a direct linking of a firm’s product or service to a specified charity; each time a consumer buys the product, a donation is given to the charity by the business (is this really philanthropy?) Global Philanthropy – depends on the size of the firm’s workforce in international markets © 2015 Cengage Learning 16 The Loss of Jobs • A negative consequence of a firm's actions; has a detrimental impact on the community From Offshoring to Reshoring – • Offshoring - The relocation of business processes to a different country • Affects blue collar and white collar workers • Even skilled high-tech jobs are offshored • Reshoring – returning of business processes to their original location; the costs often outweighed the benefits © 2015 Cengage Learning 17 Business and Plant Closings (1 of 2) • Business and plant closings have detrimental impact in the community • What rights and responsibilities does business have in relation to employee and community stakeholders? Consider: • Before the Decision to Close is Made – • Is this the only option? • Diversification • New ownership or employee ownership © 2015 Cengage Learning 18 Business and Plant Closings (2 of 2) • After the Decision to Close is Made – • Community-Impact Analysis • Transfer, Relocation, and Outplacement Benefits • Gradual Phase-Outs • Helping to Attract Replacement Industry • Survivors: The Forgotten Stakeholders, need• Emotional support • Directional support • Tactical support • © 2015 Cengage Learning Informational support 19 2-Business and Plant Closings Diversification Before Deciding to Close New ownership New owner Employee ownership © 2015 Cengage Learning 20 3-Business and Plant Closings (continued) Conduct a community impact analysis Provide advance notice to employees/ community After Deciding to Close Provide transfer, relocation, and outplacement benefits Phase out the business gradually Help attract replacement industry © 2015 Cengage Learning 21 ?Community Impact Analysis © 2015 Cengage Learning 22 WARN? 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 © 2015 Cengage Learning 23 ? Communicating With Employees Who are Being Laid Off Be complete Be consistent Inform affected employees first Inform retained employees © 2015 Cengage Learning 24 ?Survivors– The Forgotten Stakeholders © 2015 Cengage Learning 25 Key Terms • cause branding • cause-related marketing • community action program • community involvement • community partnerships • employee owned • • • • • offshoring outsourcing philanthropy reshoring strategic philanthropy • third sector • Worker Adjustment and Retraining Notification Act (WARN) © 2015 Cengage Learning 26 [...]... Learning 17 Business and Plant Closings (1 of 2) • Business and plant closings have detrimental impact in the community • What rights and responsibilities does business have in relation to employee and community stakeholders? Consider: • Before the Decision to Close is Made – • Is this the only option? • Diversification • New ownership or employee ownership © 2015 Cengage Learning 18 Business and Plant... benefit for the business) •Community - (gifts support business goals) •Commercial – (giving that benefits the business) © 2015 Cengage Learning 13 To Whom Do Companies Give? • During any budget year, firms receive numerous requests for contributions from a variety of applicants, and decide which to honor Estimates of most business giving - 1 Health and human services 2 Education 3 Civic and community... and community activities 4 Culture and the arts © 2015 Cengage Learning 14 Managing Corporate Philanthropy- 1 of 2 • • Two aspects to the pressure on businesses to be more businesslike in their 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... Relocation, and Outplacement Benefits • Gradual Phase-Outs • Helping to Attract Replacement Industry • Survivors: The Forgotten Stakeholders, need• Emotional support • Directional support • Tactical support • © 2015 Cengage Learning Informational support 19 2 -Business and Plant Closings Diversification Before Deciding to Close New ownership New owner Employee ownership © 2015 Cengage Learning 20 3 -Business and. .. philanthropy” which benefits both society and the business © 2015 Cengage Learning 11 A Call for Transparency • • Companies need not disclose direct donations to charities, but proposed legislation would require disclosure • Proponents say the money belongs to the shareholders, and they should make the decision, not managers giving to their favorite charities, which would not benefit the business • Some fear that... would result in fewer donations, and would reveal company strategy Non-disclosure has led to a rise in “dark money” political funding to nonprofits from undisclosed sources © 2015 Cengage Learning 12 Giving to the Third Sector: Nonprofits Business and government – are supported by profits and taxes The third sector – (churches, museums, hospitals, libraries, colleges, and more) depends on philanthropy... inputs for production Demand Conditions – concerned with the nature of the company’s customer and the local market Related and Supporting Industries – can also be strengthened through strategic giving Cause-Related Marketing – a direct linking of a firm’s product or service to a specified charity; each time a consumer buys the product, a donation is given to the charity by the business (is this really... international markets © 2015 Cengage Learning 16 The Loss of Jobs • A negative consequence of a firm's actions; has a detrimental impact on the community From Offshoring to Reshoring – • Offshoring - The relocation of business processes to a different country • Affects blue collar and white collar workers • Even skilled high-tech jobs are offshored • Reshoring – returning of business processes to their original... Provide advance notice to employees/ community After Deciding to Close Provide transfer, relocation, and outplacement benefits Phase out the business gradually Help attract replacement industry © 2015 Cengage Learning 21 ?Community Impact Analysis © 2015 Cengage Learning 22 WARN? Advance Notice Worker Adjustment and Retraining Notification Act (WARN) •Requires firms with 100 or more workers to provide 60... 2015 Cengage Learning 24 ?Survivors– The Forgotten Stakeholders © 2015 Cengage Learning 25 Key Terms • cause branding • cause-related marketing • community action program • community involvement • community partnerships • employee owned • • • • • offshoring outsourcing philanthropy reshoring strategic philanthropy • third sector • Worker Adjustment and Retraining Notification Act (WARN) © 2015 Cengage .. .Chapter 16 Business and Community Stakeholders © 2015 Cengage Learning Learning Outcomes Identify and discuss two basic ways of business giving Discuss reasons... 17 Business and Plant Closings (1 of 2) • Business and plant closings have detrimental impact in the community • What rights and responsibilities does business have in relation to employee and. .. Learning Business and Community Stakeholders • • • • The actions of a business affect a range of communities Managers must be aware of these impacts, and manage in a way that respects community stakeholders