Exam III Flashcards
What is this last exam about?
Corporate Social Responsibility or CSR
What is a license to operate for this class and CSR?
Doing business in a responsible way
What is the overall theme of BA342?
Responsibility
CSR language: what term is now used to describe corporate social responsibility?
Old: CSR
New: Sustainability
Used interchangeably in most applications
Banking and Investment industry uses CSR
What are the five major stakeholders of business?
Community Government Employees Consumers Owners
CSR is important to you because?
It helps you to understand stakeholders
Def: Responsibility
The ability or authority to act or decide in one’s own without supervision
aka
can you do the right thing
(theme of this class)
Def: responsible leadership
acc. to financial times
making business decisions that takes into acct stakeholders such: as workers, clients, suppliers, the environment, the community, and future generations
Walmart and New Orleans
A case on CSR
Business saved the community
Disaster recovery unit to help people, operations, and the community
Donated $, sent truckloads of free supplies for people, located and helped employee’s families
Business can deploy faster than emergency services because there is already supply chains set up to move things quickly
Overall, what are some Pros of Walmart?
wide reach low prices largest company employs 1.4M in US Gave $1B cash and 2.2M hrs in 2012 Sustainability efforts helped save the gulf
Overall, what are some Cons of Walmart?
not well trained/paid employees dirty/disorganized stores bad merchandizing drives consumerism hurts mom&pop shops legal issues (most sued comp. in US) bribery scandal in Mexico 2012 downtown declines green becomes pavement closed culture
What makes you a good citizen?
volunteering nice/respectful following the law fair/just golden rule looking out for others tolerance honest/responsible etc. ** Characteristics for the individual are the same as an organization **
Corporate citizenship encompasses which three things?
responsibility, responsiveness, and performance
chart in notes
According to the business case for CSR, what are the 4 approaches?
- defensive
- cost-benefit
- strategic
- innovation and learning
According to the business case, what are the six reasons businesses take up CSR programs?
- innovation
- cost savings
- brand differentiation
- long term thinking
- customer engagement
- employee engagement
Walmart Case in the book
Sam Walton’s early CSR initiatives: Buy American plan (made in the USA to combat buying foreign goods to keep prices cheap) and Environmental Awareness campaign (using environmentally friendly practices like recycled product tags)
CSR: regulatory vs. revenue (IBM)
used to be compliance now it adds money to the bottom line
Only __% of companies said they were going to decrease CSR efforts according to IBM
6
CSR and Duke
Does being good = doing well
need to agree on standard metrics then users can weigh which categories are most important to them
Hershey Food and CSR Initiatives
project peanut butter to fight malnutrition
increase cocoa farmer productivity
decrease water usage and waste
people give time and money to help community
What is not a direct benefit of CSR?
increased production
Why is Adam Smith important to BA342?
He’s like the original prof
“A wealth of Nations”
“Theory of Moral Sentiments”
If you do business morally you will do well
What are the 4 eras of the history of CSR?
- Economic Model - 1700
- Legal Model - 1800
- Social Model - 1850
- Stakeholder Model 1950+
What is the Iron Law of Responsibility?
In the long run those who do NOT use their power in a way in which society considers responsible, they will tend to lose it
Unilever and CSR
1st was all about shareholder value and profits in the 70s
more recently said “It’s all about products, but you also have to play about the rules”
Unilevers most CSR centered products have performed the best ex. Dove
Stockholders vs. Stakeholders
Stockholders = owners stakeholders = people with interest in the company in some other way
Case New Holland and their stakeholders
Belville, PA
local tractor company that had plant go out of business because it was too expensive
Shut down = local economy crashed
employees, families, local economy, mgmt, local business, housing, other plants, local govt, taxes
CSR: the 4 key stakeholder groups
Employees
Consumers
Gov’t and non-gov’t
Community
*employee and consumers are main two
Def: social contract
a contract between employer and employee with how they will do business
ex. Toyota’s no lay-off policy
Social progression and employees
- personnel
- human resources
- human capital
iFactory and Fox Conn: pros and cons
Apple’s Social Contract?
Pros: jobs modern facility benefits shelter/food social interaction
Cons: long days w/ low wage unscheduled OT no privacy (living) company food/dorm low interest work suicide leave home/family
Def: moral management (employees)
employees are a human resource and you should treat them with dignity
Def: Amoral management (employees)
treat employees the way the law requires
Def: Immoral management (employees)
employees are just factors of production so you can exploit them for personal gain
Moral management example (employees)
alta gracia and knights apparel brand
tagging clothes with messages from the makers of the garments - customers will pay premium to know that their clothes came from a socially responsible place
they are given livable wages and turnover is extremely low in their plant
Immoral management example (employees)
child labor laws
UN developing global guidelines on child employment
exploited in other countries
Amoral management example (employees)
investment banking long hours w/ no work/life balance get paid a lot but at what price? worked to the bone suicide relationships fail drug use **Overworked and Underwhelmed article**
What are the big 3 rights that employees have?
Fired w/ cause shared
Due process
Freedom of speech
Example: fired for cause
Steve Jobs
you can’t fire people because you have differing viewpoints or you will get sued
have to have a real HR problem to fire appropriately
What is employment at will?
In the US, you sign a “deal” but can back out at any point in time as an employee, and the employer also reserves the right to fire you as long as your basic rights are not infringed upon
The article from HR Magazine was about?
Employment at Will
pros and cons
What are the exceptions to “At Will”? (4)
public policy - you cannot fire an employee because they refuse to commit an illegal act
Implied control - employees can be held to standards set in the handbook or code of conduct that they may have not known existed
Good faith principle - employers run the risk of getting sued if they do not give their employees every chance to succeed before their termination
Discrimination laws - protected classes have own set of rights
What are the 4 things to keep in mind when you are going to fire someone?
- have you been fair?
- have you been consistent with all?
- was it business related?
- do you have good documentation?
Def: due process
right to receive an impartial review of one’s complaints and to be dealt with fairly
Def: ADR
Alternative Dispute Resolution
aka
resolving suits without litigation
those numbers don’t get reported for $$ rewarded
Due Process and Coca Cola
MLK set to boycott coca cola before he was assassinated because they treated blacks unfairly
lawsuits even to this day about discrimination in coke factories
def: freedom of speech
the right to express your opinions without censorship, restraint, or retaliation
falls under responsibility
def: whistle blower
a former or current employee who discloses improper actions by members of the organization with the goal to effect change
Ex. Whistle Blowing
ADM and price fixing
largest case in history happened in 1990
Mark Whittiker took them down (movie The Informant)
Employee stakeholders have three expectations, what are they?
privacy
safety
health
Def: privacy
right to keep personal affairs to oneself and to know about how information about you is being used
Ex. Privacy
ruling in Europe that says you can petition google to have excessive/damaging information about you removed from their search engine
still an issue, Europe more conservative than US on privacy laws, are we entitled to that info since it is online
google can reject petitions
What are some privacy laws?
surveillance and monitoring electronic communication privacy act background checks integrity interviews fair credit reporting act EEOC laws drug testing ADA
What are the 6 job safety injury categories?
transportation contact with objects harmful substance exposure assaults/violent acts falls fire and explosions
What is the most dangerous job in the world?
commercial fisherman
What does OSHA stand for?
Occupational Safety and Health Administration
created in 1970
What are three health initiatives in the workplace today?
family and medical leave act
smoking
americans with disabilities act
Why did we watch the video The Naked Brand?
to show that the creation and communication of our products needs to be accurate and truthful
What was the importance of Dutch Boy lead paint?
National lead brand but rebranded with a picture of a kid and advertised to children to create the illusion that it was safe but kids were actually dying from ingesting the paint
they lobbied gov to allow them to regulate themselves and performed unethically
today there is still lead paint out there and recalls for lead paint products; harm kids and employees
Customer Care Measurement and Consulting numbers
45% serious issues
60-70% enraged over how the issue was managed
45% of CEOs felt they did not gain their customer’s loyalty
What is the iceberg analogy when it comes to customer complaints?
1-5% complain to management
45% complain to front-line employees
50% don’t complain at all
If we have a bad experience how many people are we going to tell versus if we had a good experience?
2 people = bad
1 person = good
According to the Better Business Bureau, what 3 industries have the most complaints?
- banking
- advertising
- automotive
What are the 4 basic rights of consumers according to the Consumer Magna Carta?
safety
choice
informed
heard
Who creates the rights for consumers?
The Consumer Product Safety Commission
Def: moral management (consumers)
customers are equal partners so you have to give them a fair value and full information
Def: amoral management (consumers)
letter of law and management rights
profits are not customer driven
Def: immoral management (consumers)
customers are normally exploited
there is an intent to cheat or deceive them
What type of management (moral, amoral, immoral) is the dutch boy paint case?
amoral - CEOs planning to use child to appeal to children
immoral - their absolute decision to allows those things to happen
Def: consumerism
a social movement seeking to augment the rights and powers of buyers in relation to sellers
Is every stockholder a stakeholder?
yessss
Coke and Pepsi in India
pesticides in the water and other drinks they offered
indian gov doesn’t have proper regulations on this sector
unethical business practices
now their taking too much from the water supply too
tried to attack with marketing but realized they needed to take a CSR approach
Coca Cola and CSR
realized marketing wasn't working in India so they implemented these measures: water conservation and knowledge rainwater harvesting refurbishing water tables giving clean water to children schools recycling scholarships employing the physically disabled rehabilitation after tsunami partnering with local schools and universities showing employees working for consumers
What are some problems that consumers have with businesses?
overprices products poor quality misleading ads hidden fees poor service product failures ignoring complaints poor guarantees mishandled complaints dangerous products poor information unclear service help misleading labeling
What are the two major consumer stakeholder focuses?
product information
and
the product itself (safety and quality)
ex. smartphone info from online class
Product information must be these 3 things:
clear
accurate
adequate
What are the 4 major advertising issues? (what NOT to do)
ambiguous advertising
concealed facts
exaggeration
psychological appeals
Ex. psychological appeals
words like: healthy, protect, keep safe, look young, strong, prevent
Designed to target what your weak point is or what you are sensitive about and exploit it
ex. bowflex 20mins/day you can look hot
ex. Sense weightloss look thin (statements not guaranteed; not clear on what you should eat or not)
Ex. exaggeration
words like: greatest, best in class, top seller, must have
puffery!
ex. burger king pictures vs. reality
ex. vitamin water - restore nutrition (but low nutritional value, pretty much sugar water)
Ex. concealed facts
words like: never goes up, rates up after two years
AIRLINES and Cellphone plans
fine print syndrome: prices, taxes, fees, side effects, etc.
Product placement, past vs. present
past was very subtle
now its more upfront these days
can change what the actor/actress says based on location
FTCs stance on Product Placement
people have the right to know when they are being advertised to and by whom
ex. ambiguous advertising
Words: deluxe, cool, effective, fast,etc.
ex. “fresh cigarettes”
Free and sale, are they real?
free but continue to charge you (cable companies)
retail and sales - not really what you believe
What did the CEO of JCPenny have to say about sales?
they initially mark up their products to protect there margins whenever a sale price is applied
What are the big issues associated with advertising to children?
influences $5B in spending companies spend $15B to market to them don't understand the intent to buy recognize logos at young age dont understand advertising claims might have issues
If you are advertising to children, what should it entail?
know children cannot discern ads don't be deceptive/unfair have objective information dont stimulate unreasonable expectations don't market inappropriately avoid social stereotypes advertising should be educational contribute to parent-child relationship
What 2 groups have regulation on product information?
government
and
industry
Def: Industry Regulation on product information
self discipline
do it themselves
pure by industry
sometimes they will call in a 3rd party to regulate
Def: Government Regulation on product information
negotiated between industry and the gov
mandated to be legal
costs more $$
Professional ethics - AICPA
have laws to regulate their own industry
ethics everyone must follow in their sector
What is the point of the Better Business Bureau?
advertising code
in every community in the United States
Rates businesses by consumers
What are the 2 purposes of the FTC?
Federal Trade Commission
- maintain free and fair competition in the economy
- protect consumers from unfair or misleading practices
think Adam Smith and how people should act
The product itself has two parts, what are they?
- the safety of the product
2. the quality of the product
What is the CPSC?
Consumer Product Safety Commission
help settle product issues
Firestone/Ford case and the product itself
tread comes loose from the firestone tires and the companies go back and first blaming it on each other instead of just owning up to it
eventual recalls after highway traffic safety admin is involved
product safety and quality
What are the three legal views on product quality and safety?
Contractual - should know how to use
Due Care - stickers, warnings, instructions
Social costs - any unknown issues ex. falls off ladder
Def: caveat emptor
let the buyer beware
def: caveat vendor
let the seller take care
