Corporate social responsibility: charity and work arrangements Spyros Lioukas

Sustainable Development Sustainable Development includes environmental, economic sustainability, social sustainability Sustainable Development –Uses an Integrated Approach –Takes a Long-term Perspective –Respects Diversity/Pluralism –Requires Equity and Justice between generations –Relies on Participatory Approaches

Facts About Charitable Giving 2000 Total contribution in the United States was about $203 billion. Corporate giving was about $10.9 billion. Individuals gave about $152 billion. Two-thirds of corporations do not engage in active giving.

Corporate Philanthropy: HOW? $10.9 BILLION.Has grown from very little direct giving until contributions in 2000 exceed $10.9 BILLION. UP TO 10% OF PRE-CONTRIBUTION NET INCOMEThe tax law currently allows corporations to deduct direct contributions of UP TO 10% OF PRE-CONTRIBUTION NET INCOME. Most corporations do not give anywhere near this maximum. Corporate giving takes many forms: Direct gifts & grants of cash & other assets Lending of executives Widespread rank & file employee involvement

Corporate Philanthropy: WHO GETS IT? IN 1999:EDUCATION35% HEALTH & HUMAN SERVICES30% CIVIC & COMMUNITY14% CULTURE & ARTS 9% ALL OTHER12% REMEMBER: 2000 CONTRIBUTIONS EXCEEDED $10.9 BILLION

How to Give –Select effective grantees –Signal other funders –Improve grantees performance –Advance knowledge and practice

Employees Changes in Workplace: Trends 1. AN INCREASE IN TECHNOLOGICAL HAZARDS 2. THE COMPUTER AND INTERNET INVASION OF THE WORKPLACE 3. THE DIVIDED LOYALTIES OF PROFESSIONALS 4. THE INCREASED MOBILITY OF PROFESSIONALS

Old View My Basic mind set was, there’s an implicit contract. I expect that the company will provide me with a career, development opportunities, and reasonable pay and benefits; and they, in turn, should expect from me that I am willing to work very hard for them. When either one of us is unhappy with that situation, the contact is broken.

Changing Social Contract (1980s) –Changing technologies were producing demand for employees with new skills –Companies found it easier to hire workers on the external labor market with the skills needed rather than retain current employees –Time to get rid of “dead wood” – older employees were seen as more complacent and more expensive –Power of unions declined, making it more difficult to bargain for employment security –More economically appealing and socially legitimate to use subcontractors and temp worker

The New Social Contract Focus on team building and projects Focus on individual accomplishments Pay for “value added”Stable, rising income Personal responsibility for one’s job future Sense of entitlement Relationships far less familialPaternalism Loyalty to selfLoyalty to employer Fewer life careers; changes common Life careers with one employer Few tenure arrangementsJob security New Social ContractOld Social Contract

Global Phenomenon European workers have experienced a decade of unemployment averaging 10% or more In Japan, lifetime employment being reconsidered in the wake of economic stagnation Movement from “lifetime employment” to “lifeline employability”

Take-Aways - Management’s Response to Job Claims Stay on the right side of the law. The company that conducts itself honestly has the least to fear from disgruntled employees. Investigate complaints in good faith. Well-motivated complaints should be checked out and handled internally. Deal in good faith with employees. Employees continue to win court cases when companies don’t honor commitments. Fire only for good cause. Management needs to be attentive to retaliatory terminations. Firings must be based on sound records, not thin technicalities.

Redefining the Social Contract “Professional Ethic” (Charles Heckscher ) Open negotiations of obligations between employee and employer Social Contract is one of honesty Requires innovation in work structure –Support Organization New Role of Government Portability of benefits, “disaster insurance”

New Social Contract Each person must take full responsibility for his/her career Old career paths are less common Workers will be rewarded for knowledge and adaptability Workers who flourish in new environment will be prized by employers who are changing the social contract It pays to offer learning opportunities to employees Corporations will need to value and encourage change May be more difficult for older workers to adjust

Take-Aways: Flexible Work Arrangements May help a firm –Retain talented employees –Meet future staffing needs –Build employee appreciation and commitment –Prevent Burnout –Identify better performance criteria than number of hours –Enhance contribution and productivity

Advance planning is important! –Establish procedures for performance reviews and flexible arrangements –Be clear about criteria and timing for promotions –Be explicit about building upon or departing from the precedent –Realize that new policies can make some employees feel like they have won, while others may feel like they have list. –Keep in mind the perceptions of equity and fairness on the part of multiple stakeholders Take-Aways: New Work Arrangements