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

3. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-2 Chapter 15 Business and Community Stakeholders 2 Chapter Fifteen Objectives Identify two basic ways of business giving Discuss the reasons for community involvement, including community projects and stakeholder management Explain the pros and cons of corporate philanthropy Differentiate between strategic philanthropy, cause- related marketing and cause branding Characterize the plant-closing issue –Address steps before a plant-closing decision –Identify strategies after a plant-closing decision

4. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-3 Chapter 15 Business and Community Stakeholders Chapter Fifteen Outline Community Involvement Various Community Projects Corporate Philanthropy or Business Giving Business and Plant Closings Summary

5. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-4 Chapter 15 Business and Community Stakeholders Introduction to Chapter 15 Positive and detrimental effects of the business stakeholder –Community involvement –Corporate philanthropy –Plant closings

6. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-5 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.

7. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-6 Chapter 15 Business and Community Stakeholders Community Involvement 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 Activities Used to Encourage Employee Volunteerism

8. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-7 Chapter 15 Business and Community Stakeholders Community Involvement Company Benefits From Employee Volunteerism Indirect community benefits Employee benefits Bottom-line benefits

9. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-8 Chapter 15 Business and Community Stakeholders Community Involvement America’s Promise Caring adults Safe places and structured activities A healthy start for a healthy future Marketable skills Opportunities to give back through community service

10. Community Involvement

11. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-10 Chapter 15 Business and Community Stakeholders Community Involvement Resourced-Based Giving Assess resources Assess competencies Determine where resources and competencies will achieve the most good

12. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-11 Chapter 15 Business and Community Stakeholders Managing Community Involvement Business stake in the community –Self-interest and preservation –Direct or indirect benefits Developing a Community Action Program –Knowing the community –Knowing the company’s resources –Selecting projects –Monitoring projects

13. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-12 Chapter 15 Business and Community Stakeholders Managing Community Involvement 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 – Community Needs Assessment

14. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-13 Chapter 15 Business and Community Stakeholders Managing Community Involvement Knowing the Company’s Resources Mix and range of resources Personnel Money Meeting space Equipment Supplies Time

15. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-14 Chapter 15 Business and Community Stakeholders Managing Community Involvement 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

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

17. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-16 Chapter 15 Business and Community Stakeholders Managing Community Involvement Knowing the community 1. Knowing the community—The corporation should get involved in the communities it knows. Knowing the company’s resources 2. Knowing the company’s resources— Community involvement must be cost- effective. Selecting projects 3. Selecting projects— Programs should affect and interest those employees involved. Monitoring projects 4. Monitoring projects— Management must run community involvement like other parts of the business. Developing Community Action Programs

18. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-17 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

19. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-18 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 %)

20. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-19 Chapter 15 Business and Community Stakeholders Business Giving: Why Do Companies 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.

21. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-20 Chapter 15 Business and Community Stakeholders Business Giving: To Whom Do Companies Give? Education Health and human services Civic and community activities Culture and the arts Other organizations

22. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-21 Chapter 15 Business and Community Stakeholders Business Giving: Managing Corporate Philanthropy Public purpose partnerships –Strategic philanthropy –Cause related marketing Global philanthropy

23. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-22 Chapter 15 Business and Community Stakeholders Business Giving: Managing Corporate Philanthropy Public Purpose Partnerships A for-profit business enters into a cooperative agreement with a nonprofit for their mutual advantage –Reconciles financial and social goals

24. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-23 Chapter 15 Business and Community Stakeholders Business Giving: Managing Corporate Philanthropy 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

25. Business Giving: Managing Corporate Philanthropy

26. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-25 Chapter 15 Business and Community Stakeholders Business Giving: Managing Corporate 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 Implementation Strategy for Strategic Philanthropy

27. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-26 Chapter 15 Business and Community Stakeholders Business Giving: Managing Corporate Philanthropy 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

28. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-27 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

29. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-28 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

30. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-29 Chapter 15 Business and Community Stakeholders Business and Plant Closings Employee readiness for ownership Union attitudes Management/entrepreneurial skills among employees Products and markets Technology Proposed organizational structure Potential funding sources Employee Ownership: Factors

31. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-30 Chapter 15 Business and Community Stakeholders Business and Plant Closings What groups will be affected? How will they be affected? What is the timing of initial and later effects? What is magnitude of the effect? What is the duration of the impact? To what extent will the impact be diffused in the community? Community Impact

32. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-31 Chapter 15 Business and Community Stakeholders Business and Plant Closings Advance Notice Worker Adjustment and Retraining Notification Act More notice than the law requires

33. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-32 Chapter 15 Business and Community Stakeholders Business and Plant Closings Benefits Transfer Relocation Outplacement

34. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-33 Chapter 15 Business and Community Stakeholders Business and Plant Closings Gradual Phase-Outs Buys time for employees Buys time for communities

35. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-34 Chapter 15 Business and Community Stakeholders Business and Plant Closings Attracting Replacement Industry Cooperation Assistance

36. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-35 Chapter 15 Business and Community Stakeholders Business and Plant Closings 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

37. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-36 Chapter 15 Business and Community Stakeholders Business and Plant Closings Community Lawsuits General Motors case Whitehall Laboratories case

38. Business and Society: Ethics and Stakeholder Management, 5E Carroll & Buchholtz Copyright ©2003 by South-Western, a division of Thomson Learning. All rights reserved. 15-37 Chapter 15 Business and Community Stakeholders America’s Promise Cause-related marketing Cause branding Community action program Community involvement Employee owned Philanthropy Resource-based giving Strategic philanthropy Third sector Worker Adjustment and Retraining Notification Act (WARN) Selected Key Terms