Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-1 BA Business Environment Chapter 15 Business and Community Stakeholders BA Business Environment Week 7 ~ Part 1

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-2 BA Business Environment Chapter 15 Business and Community Stakeholders Agenda Chapter 15 Business & Community Stakeholders Search the Web The Foundation Center is a clearinghouse that publishes the “The National Directory of Corporate Giving”:

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-3 BA Business Environment Chapter 15 Business and Community Stakeholders Ch. 15 Topics Community Involvement Various Community Projects Corporate Philanthropy vs. Business Giving Business and Plant Closings

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-4 BA Business Environment Chapter 15 Business and Community Stakeholders Reasons for Community Involvement 1.Businesspeople are efficient problem solvers. 2.Employees gain satisfaction and improved morale. 3.A positive image facilitates hiring. 4.A company gains prestige and greater community acceptance. 5.Social responsibility is the alternative to government regulation. 6.A company benefits from helping institutions essential to continuation of business.

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-5 BA Business Environment Chapter 15 Business and Community Stakeholders Encouraging Employee Volunteerism Recognition through articles, awards, and commendations Publicity about volunteer opportunities Executives who have board memberships Company- sponsored projects with multiple volunteers Ongoing endorsement of programs by CEOs

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-6 BA Business Environment Chapter 15 Business and Community Stakeholders Company Benefits of Employee Volunteerism Indirect community benefits –Healthier communities –Improved image –Enhanced impact of monetary contributions Employee benefits –Build teamwork skills –Improve morale Bottom-line benefits –Facilitates acheivement of strategic goals –Increased employee productivity

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-7 BA Business Environment Chapter 15 Business and Community Stakeholders Resourced-Based Giving Assess resources Assess competencies Determine where resources and competencies will achieve the most good

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-8 BA Business Environment Chapter 15 Business and Community Stakeholders Managing Community Involvement Business has a stake in the community –Self-interest and preservation –Direct or indirect benefits Community Action Program Overview –Knowing the community –Knowing the company’s resources –Selecting projects –Monitoring projects

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 1-9 BA Business Environment Chapter 15 Business and Community Stakeholders Community Needs Assessment Demographics Environmental and land use Infrastructure and physical services Leadership Leisure Local economy Local education Local government Local health and human services Knowing the Community

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Knowing the Company’s Resources Mix and range of resources Personnel Money Meeting space Equipment Supplies Time

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Selecting Projects Plan and organize projects Meet cost effectives business standards Capitalize on corporate talents and resources Involve employees in projects Select communities familiar to the corporation Select projects with high probability of success Use corporate policy to support ongoing programs Select projects that allow people help themselves

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Monitoring Projects Review execution strategy for congruence with plan and schedule Obtain feedback from participants

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Community Involvement of Foreign-Based Firms 81% had community involvement projects 71% reported community expectations were very important or moderately important parts of their business plans 50% were satisfied with their community involvement programs

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Community Involvement of Foreign-Based Firms Motivations Moral obligations (61 %) Community expectations (56%) Image strengthened (56%) Self-interest (50 %)

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Business Giving: Why? Nondonors: No evidence of charitable giving... “ “What’s in it for Us” donors: Firm’s contributions relate to company’s direct interest... “We Are a Good Citizen” donors: Firm’s traditionally supports nonprofit business institutions... “We Care” donors: Firm’s go to newer organizations, too, that deal with nontraditional issues Competitiveness, even for companies with lofty goals, competitiveness still determines that corporate giving be strategic—aligned with profitability objectives.

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Business Giving: Who? Education Health and human services Civic and community activities Culture and the arts Other organizations

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Business Giving: Managing Corporate Philanthropy Pressures require careful giving –Intesnse competition –Scare resources Approaches –Public purpose partnerships –Strategic philanthropy –Cause related marketing –Global philanthropy

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Public Purpose Partnerships A for-profit business enters into a cooperative agreement with a nonprofit for their mutual advantage –Reconciles financial and social goals

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Strategic Philanthropy Giving fits the firm’s overall mission, goals or objectives by: –Contributing to firm’s economic success – Aligning with the firm’s business endeavors

Characteristic of Effective Strategy

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Implementation Strategy for Strategic Philanthropy Appoint a philanthropy czar Support czar’s efforts to find “natural” causes Promote dialogue between business and philanthropy functions Decentralize the philanthropy function Make the parts add up to more than the whole Continue evaluating corporate philanthropy

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Cause-Related Marketing Direct link between a firm’s product or service and charity Purposes of cause-related marketing –Global marketing –Short-term promotion –Image building –Marketing to women Cause branding

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Business Giving: Global Philanthropy - Advantages An improved corporate image A boost in market penetration Improved personal relations Improved government relations

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Business and Plant Closings What should business do? –Before deciding to close: Propose new ownership Explore employee ownership –After deciding to close: Conduct community impact analysis Provide advance notice Provide transfer, relocation and outplacement Act to phase out business gradually Assist community with replacement industry

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Business and Plant Closings Employee Ownership: Factors Employee readiness for ownership Union attitudes Management/entrepreneurial skills among employees Products and markets Technology Proposed organizational structure Potential funding sources

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Business and Plant Closings Advance Notice Worker Adjustment and Retraining Notification Act More notice than the law requires

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Business and Plant Closings Benefits Transfer Relocation Outplacement

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Business and Plant Closings Gradual Phase-Outs Buys time for employees Buys time for communities Attracting Replacement Industry Cooperation Assistance

Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved BA Business Environment Chapter 15 Business and Community Stakeholders Factors in Plant Closing Assistance Size and impact of closing Extent of corporate commitment to employees and community Length of time firm located in community Length of time firm employed employees Resources available to firm to provide assistance Firm’s sense of social responsibility