Skip to content
Textbook Guides

Solution Manual for Business and Society: Ethics, Sustainability and Stakeholder Management, 10th Edition

Solution Manual for Business and Society: Ethics, Sustainability and Stakeholder Management, 10th Edition breaks down difficult topics into simple, easy-to-follow explanations.

Preview 16 of 214 pages

See the first 16 pages exactly as they appear in the document.

  1. Page 1
    Read page 1 as text

    Ch 1, Business & Society , Carroll 10 e Chapter 1 The Business and Society Relationship LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Describe and explain business and society as foundational concepts. Describe how society is viewed as the m a croenvironment. 2. Explain the characteristics of a pluralistic society. Describe pluralism and identify its attributes, strengths, and weaknesses. 3. Define a special - interest society and describe how it evolves. 4. Identify, discuss, and illustrate the factors leading up to business criticism and corporate response. What is the general criticism of business? How may the balance of power and responsibility be resolved? What is the changing social cont r act? 5. Highlight the major focuses or themes of the book: managerial approach, business ethics, sustainability, and stakeholder management. TEACHING SUGGESTIONS INTRODUCTION – This chapter introduces some important basic concepts in the business and society discussion, including pluralism, s pecial - interest societies , business criticism, corporate power, corporate social responsibility to stakeholders , and sustainability . KEY TALKING POINTS – The instructor is likely to find that students have given little or no thought to the role that business plays in our society. Most undergraduates (most people for that matter) have never really considered the influence of business in their lives, and so fall victim to the “is/ought” fallacy. They assume that just because something “is” a certain way, then it “ought” to be that way. Thus, they assume that because business is the dominant social institution in our society, it should be. One of the main challenges that the instructor faces in this chapter is simply getting students to reflect on the power that business holds in our society. Most don’t realize the influence that corporations hold over them because they have never given the idea any thought. The second, and even greater challenge , will be getting student s to realize and accept that corporations are dependent on them (the students) for their very existence. Corporations are legal fictions that exist only because we have passed laws that allow them to exist. Thus, the continued existence of the corporation as a legal entity depends on social legitimacy granted to corporations by citizens. Most students will rebel at the notion that they have any power over whether General Motors or General Electric or General Dynamics continues to exist or not (here is a good spot to point out how quickly and easily the students can see where the power lies). Practically speaking, they will be correct — individuals have precious little power to influence our corporate system. But as Margaret Mead, the famed anthropologist, noted, “Never doubt that a small group of thoughtful citizens can change the world. Indeed, it is the only thing that ever has.”

  2. Page 2
  3. Page 3
    Read page 3 as text

    Ch 1, Business & Society , Carroll 10 e PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of: Cases: 1 - Wal - Mart - The Main Street Merchant of Doom 2 - The Body Shop (A) - Pursuing Social and Environmental Change 3 - The Body Shop (B) - Reputation is Tarnished 4 - The Body Shop (C) - Into the New Millennium 7 - Using Ex - Cons to Teach Business Ethics 12 - Banned if You Do, Banned if You Don’t 19 - Should Directors Shine Light on Dark Money? 23 - McDonald’s Coffee Spill 24 - The Betaseron Decision (A) 25 - The Hudson River Cleanup and GE 26 - Cloud Computing – Earth’s Friend or Foe 27 - New Belgium Brewing, Defining a Business on Sustainability 29 - Felony Franks (2), Home of the Misdemeanor Wiener 31 - Moral Dilemma - Head vs. Heart 39 - To Take or Not to Take Ethics in Practice Cases: Working for My C up or the House ? Is Business Power Too Great? Spotlight on Sustainability: Sustainability — What Does It Mean? Power Point slides: Visit http://academic.cengage.com/management/carroll for slides related to this and other chapters. LECTURE OUTLINE I. BUSINESS AND SOCIETY A. Business: Defined B. Society: Defined II. SOCIETY AS THE MACROENVIRONMENT III. A PLURALISTIC SOCIETY A. Pluralism Has Strengths and Weaknesses B. Multiple Publics, Systems, and Stakeholders IV. A SPECIAL - INTEREST SOCIETY V. BUSINESS CRITICISM AND CORPORATE RESPONSE

  4. Page 4
    Read page 4 as text

    Ch 1, Business & Society , Carroll 10 e A. Factors in the Social Environment 1. Affluence and Education 2. Awareness through Television, Movies, the Internet, and Social Media a. 24/7 News and Investigative Programs b. Prime - Time Television Programs c. Commercials d. Movies e. Social Media 3. Revolution of Rising Expectations 4. Entitlement Mentality 5. Rights Movement 6. Victimization Philosophy B. A General Criticism of Business : Use and Abuse of Power 1. Levels of Power 2. Spheres of Power C. Balancing Power with Responsibility 1. Iron Law of Responsibility D. Business’s Response: Concern and a Changing Social Contract 1. Social Contract VI. FOCUS OF THE BOOK A. Managerial Approach 1. Urgent versus Enduring Issues B. Business Ethics Theme C. Sustainability Theme D. Stakeholder Management Theme VII. STRUCTURE OF THE BOOK VIII. SUMMARY SUGGESTED ANSWERS TO DISCUSSION QUESTIONS Students should recognize that their answers to these discussion questions should be well reasoned and supported with evidence. Although some answers will be more correct than others, students should be aware that simplistic answers to complex questions, problems, or issues such as these will never be “good” answers. 1. Question: In discussion of business and society, why is there a tendency to focus on large - sized rather than small - or medium - sized firms ? Have the corporate ethics scandals of the past decade affected small - and medium - sized firms? If so, in what ways have these firms been affected? Answer: We tend to focus on large firms when discussing business and society for a number of reasons. Large firms are more visible, their products and services are more widely known, and we generally equate size with power. All of these factors contribute to the fact that large firms are more susceptible to public scrutiny. It is debatable whether the

  5. Page 5
    Read page 5 as text

    Ch 1, Business & Society , Carroll 10 e ethics scandals of the first decade of the 2000s have had a significant impact on small and medium - sized firms. On the one hand, the scandals may have caused a general increase in the level of distrust of business. This had a chilling effect on stock prices and made it more difficult for smaller firms to raise money, especially through initial public offerings (IPOs). Furthermore, small and medium - sized firms that are not publicly - traded may feel pressure to adhere to the costly provisions of the Sarbanes - Oxley Act, as lenders , investors and competitors continue to stress that SOX provisions are the “best practices” by which all firms are measured. On the other hand, as stated above, the public tends to focus more on larger firms, so the scandals may not have “trickled down” to smaller firms on those occasions when members of society actually do think about them. 2. Question: What is the one greatest strength of a pluralistic society? What is the one greatest weakness? Do these characteristics work for or against business? Answer: The textbook lists several strengths (prevents power from being concentrated, maximizes freedom of expression, allegiance of individuals to groups is dispersed, creates a diversified set of loyalties to many organizations, and provides a set of checks and balances) and weaknesses (no unified direction to align individual pursuits, proliferating groups have overlapping goals, and promotes conflicts among groups). Students could conceivably make a case for any of these as the greatest strength and weakness. In my opinion, pluralism can prevent power from being too concentrated by providing a system of checks and balances, so that may be its greatest strength. However, students should recognize that power is still not evenly distributed, even in a pluralistic society. Some individuals and groups have more power than others — concentration is a matter of degree, not an either/or situation. The greatest weakness seems to lie in the fact that pluralism engenders conflicts of interest among groups with differing goals, thus leading to special - interest groups. There will hardly ever be a consensus among competing groups, which could lead to inaction or ineffective compromise. 3. Question: Identify and explain the major factors in the social environment that create an atmosphere in which business criticism takes place and prospers. Provide examples. How are the factors related to one another? Has the revolution of rising expectations run its course ? O r is it still a reality among young people today? Answer: Many factors contribute to an atmosphere conducive to criticism of business. Affluence, or the level of wealth, allows people the luxury of being critical of social institutions (as Amartya Sen and John Kenneth Galbraith have both noted, people in poverty are primarily concerned with finding enough to eat, not the cause or cure for social ills). In addition, affluence often leads to rising expectations. People generally expect each succeeding generation to have higher standards of living and bec ome dissatisfied if that does not occur. While the recent economic recession may moderate rising expectations in the short - run, the general trend of rising expectations may continue. Such expectations are likely to outpace business’s ability to respond, especially during a recession. Higher levels of education also contribute to a climate of criticism, because people expect more from life, are more aware of ills caused by business, and they are better equipped to research and analyze the causes of social problems. The mass media, particularly television , movies and the internet , often provides negative information about business to the public , which increases the public’s distrust and unfavorable perception of

  6. Page 6
    Read page 6 as text

    Ch 1, Business & Society , Carroll 10 e business . Observers of society have also noted three related trends that contribute to criticism of business, an entitlement mentality, the movement for equal rights, and a victimization philosophy. These trends can also be associated with increased levels of education and affluence, and in some ways, are examples of rising expectations. These trends also may be influenced and exacerbated by the media. 4. Question: Give an example of each of the four levels of power discussed in this chapter. Also , give an example of each of the spheres of business power. Answer: Dr. Epstein identified four levels of corporate power — macro, intermediate, micro, and individual. The macro level encompasses the entire corporate system. This can be seen in business’s ability to effectively lobby Congress to pass laws that enhance corporations’ ability to operate profitably, the fact that nearly half of the largest economies in the world are corporate, not national, or in the profound effects that business has on individuals’ lives. The intermediate level of power resides within particular groups of corporations acting in concert. This type of power is often associated with industries, such as the auto manufacturers , insurance companies or financial services firms. An example of the intermediate level of corporate power is the military - industrial complex that influences defense spending. The micro level of corporate power is wielded by an individual firm. The best example of this level is Microsoft, with its dominance of the computer operating system market. Finally, the individual level of corporate power is vested in individual corporate leaders. Jack Welsh, retired CEO of General Electric, Bill Gates, founder of Microsoft, Warren Buffett, the CEO of Berkshire Hathaway, and Martha Stewart, founder of Martha Stewart Living Omnimedia, are good examples of people who exercise the individual level of corporate power. Spheres of power include economic, political, social/cultural, technological, environmental, and power over the individual. The fact that corporations control billions of dollars in assets and sales shows their economic power. Nearly half of the largest economies in the world are corporations, not nations. Corporate lobbying efforts, political action committees (PACs), and direct influence on elected officials (e.g., former Vice President Cheney’s “secret” energy policy meetings with corporate leaders) all show the political power enjoyed by corporations. Virtually all new technology is manufactured and distributed by corporations, and much of it is invented in corporate R&D labs — such as cellular telephones, medical treatment, and hybrid automobiles. Corporations produce vehicles that are the number one source of air pollution in the world, and determine the fashions that teens wear and the movies that we watch. Because most people work for corporations and buy most of their products from corporations, corporate power over the individual is undeniable. 5. Question: Explain in your own words the Iron Law of Responsibility and the social contract. Give an example of a shared understanding between you as a consumer or an employee and a firm with which you do business or for which you work. Answer: The iron law of responsibility basically says that there is a balance required between power and responsibility to others. The more power an o rganization has, the more responsibilities that same entity will have. This concept is actually one that most children learn in one form or another. “To whom much is given, much is expected.”

  7. Page 7
    Read page 7 as text

    Ch 1, Business & Society , Carroll 10 e “Rights bear responsibilities.” A social contract is an implicit agreement between two parties or social institutions that states the rights and duties of each party. As consumer s , we have a right to expect that the product s we buy will work properly and not subject us t o unreasonable risks . This right extends to financial services products. Abusive practices with credit cards and other predatory practices showed that this social contract was being violated on a regular basis by some corporations. Certain businesses have exploited consumers’ financial circumstances, lack of education or general naivety to bind them to unconscionable contracts. As a result, these consumers may find themselves in situations where they cannot realistically meet their debt obligations. To the extent that these businesses use unfair or predatory practices in selling their financial products, regulation is necessary to protect consumers. As a result, the federal government is justified in creating new regulations to meet this need . GROUP ACTIVITY This group activity focuses on b usiness c riticism and the c orporate r esponse. Divide students into groups of four to five students . Distribute the latest edition of national, regional and local newspapers among different groups in the class. Have the group identify the number of articles that criticize business or an employer - related decision. Have the group identify the number of articles that paint business in a favorable light. Ask students to pick a negative article and a positive article for a more in depth analysis. Students should consider the following questions for each article: • Is the business practice or decision accurately portrayed? • What is the intended audience of the newspaper? Do you think the affluence, education, expectations and mentality of the intended audience impacts the newspaper’s portrayal of the business decision? If so, how? • How should the business in question respond to this situation? Once students have had an opportunity to discuss the review questions in their group, ask each group to report the number of negative versus positive articles and to summarize their answers to the review questions for the class. Look for trends or discrepancies to discuss with the class as a whole. For example, ask students to consider whether they believe business is treated differently by national, regional and local papers based on the responses of each group. Further, ask students to contemplate whether the affluence, education, expectations and mentality of the intended audience affects the way a particular newspaper reports on the actions of business. Finally, encourage students to explore the range of corporate responses to negative and positive media. INDIVIDUAL ASSIGNMENT Distribute the following instructions to each student: Select a company and research recent news items that have been released regarding the company. In a written response, note whether the articles were positive or negative for the company. Describe how the company’s actions may impact an individual’s perception of

  8. Page 8
    Read page 8 as text

    Ch 1, Business & Society , Carroll 10 e business in the United States. Identify responsibilities that the company has to various stakeholder groups mentioned in the articles. Finally, note any sustainability issues that confront the company and provide suggestions for how the company should handle these issues.

  9. Page 9
    Read page 9 as text

    Ch 2 , Business & Society , Carroll 10 e Chapter 2 Corporate Social Responsibility, Citizenship, and Sustainability LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Describe some early views of corporate social responsibility (CSR). Explain how CSR evolved and encompass es economic, legal, ethical, and philanthropic components. Explain the Pyramid of CSR. 2. Articulate the traditional arguments both against and for CSR. Explain how the business case for CSR has strengthened the concept’s acceptance. 3. Describe how the concept of corporate social responsiveness differs from CSR. 4. Summarize h ow corporate social performance (CSP) became more popular. Describe how it is different than CSR. Elaborate on how it differs from corporate social responsiveness . 5. Describe how corporate citizenship is a valuable way of thinking about CSR. Explain its broad and narrow views. Explain how corporate citizenship develops and proceeds in stages. 6. Summarize the three perspectives on the relationship between corporate social performance (CSP) and corporate financial performance (CFP). 7. Explain how sustainability is a broad concept that embraces profits, people, and the planet. Describe how the triple bottom line is a vehicle for implementing sustainability. 8. Elaborate on the ages and stages of CSR. Define CSR Greenwashing and how it may lead to misleading reputational profiles of companies. 9. Describe and characterize the socially responsible investing movement. Differentiate between negative and positive screens that are used in investment decisions. TEACHING SUGGESTIONS INTRODUCTION – This chapter explores several different aspects of the CSR topic and provides some insights into what CSR means and how businesses are carrying it out. An entire chapter is devoted to CSR concepts because it is a core idea that underlies most of the material in the textbook. This chapter also focuses on the concept of corporate citizenship . KEY TALKING POINTS – In some ways this may be a difficult chapter to teach, since the instructor will be laying the foundation for future discussions that will more directly involve analyzing and evaluating corporate social performance. The current chapter focuses on the analytical tools we will be using rather than actually using those tools. In some ways this distinction can be likened to a teenager learning how the steering wheel, brake, and accelerator work in a car, rather than actually getting behin d the wheel and driving. Of course, everyone would want a new driver to understand what the steering wheel does and which pedal to use when she needs to slow down. But that fact alone does not mean that the new driver doesn’t want to skip the lesson on how to use the tools and just go drive. This is compounded by the fact that many students may have heard of or discussed the terms introduced in this chapter in other business courses, specifically corporate social responsibility, but they may not grasp th at CSR

  10. Page 10
    Read page 10 as text

    Ch 2 , Business & Society , Carroll 10 e requires the simultaneous execution of economic, legal, ethical and philanthropic responsibilities. Many students may struggle with the concept that these responsibilities need to be addressed concurrently by firms, since previous exposure to the concept may have focused on the idea that CSR is the culmination of the ethical and/or philanthropic activities of firms rather than the culmination of all four responsibilities. Consequently, students in your class may not be as anxious to delve into the intricacies of corporate citizenship, including corporate social responsibility, corporate social responsiveness and corporate social performance when they could be discussing a juicy corporate scandal. But it is important that students have better tools to help them dissect corporate citizenship than just their gut feelings as they will encounter business colleagues who will argue against and resist implementation of activities that emphasize corporate citizenship. This chapter also is a good starting point for students to begin to focus on what they, as citizens, want from the business sector. Do they want corporations to simply recognize their various responsibilities to society , do they want them to make improvements, do they demand evidence that corporations are making improvements, or do they have more general concerns about the role business plays in society (corporate citizenship)? As they begin to contemplate the implications of their expectations of business, they also should begin to see why this topic has evolved and how the different models can inform their understanding of business’s impact on society. PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of: Cases: 1 - Wal - Mart - The Main Street Merchant of Doom 2 - The Body Shop (A) - Pursuing Social and Environmental Change 3 - The Body Shop (B) - Reputation is Tarnished 4 - The Body Shop (C) - Into the New Millennium 7 - Using Ex - Cons to Teach Business Ethics 12 - Banned if You Do, Banned if You Don’t 19 - Should Directors Shine Light on Dark Money? 23 - McDonald’s Coffee Spill 24 - The Betaseron Decision (A) 25 - The Hudson River Cleanup and GE 26 - Cloud Computing – Earth’s Friend or Foe 27 - New Belgium Brewing, Defining a Business on Sustainability 29 - Felony Franks (2), Home of the Misdemeanor Wiener 31 - Moral Dilemma - Head vs. Heart 39 - To Take or Not to Take Ethics in Practice Cases: The Socially Responsible Shoe Company Burgers with a Soul — Fresh, Local, Sustainable Spotlight on Sustainability: Sustainability ’s Stock is Rising

  11. Page 11
    Read page 11 as text

    Ch 2 , Business & Society , Carroll 10 e Myths a bout Sustainability Power Point slides: Visit http://academic.cengage.com/management/carroll for slides related to this and other chapters. LECTURE OUTLINE I. CORPORATE SOCIAL RESPONSIBILITY (CSR) AS A CONCEPT A. Historical Perspective on CSR B. Adaptations of the Economic Model C. Evolving Meanings of CSR D. A Four - Part Definition of CSR 1. Economic Responsibilities 2. Legal Responsibilities 3. Ethical Responsibilities 4. Philanthropic Responsibilities E. The Pyramid of Corporate Social Responsibility 1. Pyramid as a Unified Whole 2. CSR Pyramid Is a Dynamic, Sustainable Stakeholder Model 3. Ethics Permeates and Global Applications F. CSR in Practi ce 1. Activities of Socially Responsible Firms 2. Rise of CSR Exemplar Firms II. TRADITIONAL ARGUMENTS AGAINST AND FOR C S R A. Arguments a gainst CSR B. Arguments in Support of CSR C. The Business Case for CSR III. AGES AND STAGES OF CSR IV. CSR GREENWASHING V. POLITICAL CSR VI. CORPORATE SOCIAL RESPONSIVENESS VII. CORPORATE SOCIAL PERFORMANCE A. Carrol l ’s CSP Model VIII. CORPORATE CITIZENSHIP A. Broad and Narrow Views B. Stages of Corporate Citizens C. Global Corporate Citizenship D. CSR and Corporate Citizenship Awards by Business Media

  12. Page 12
    Read page 12 as text

    Ch 2 , Business & Society , Carroll 10 e IX. THE SOCIAL PERFORMANCE AND FINANCIAL PERFORMANCE RELATIONSHIP A. Three Perspectives on the Social - Financial - Reputation Relationship 1. Perspective 1: S ocially responsible firms are more financially profitable . 2. Perspective 2: A firm’s financial performance is a driver of its social performance . 3. Perspective 3: T here is an interactive relationship between and among social performance, financial performance, and corporate reputation . X. SUSTAINABILITY — PROFITS, PEOPLE, PLANET A. Creating Shared Value and Conscious Capitalism XI. SOCIALLY RESPONSIBLE, SUSTAINABLE, ETHICAL INVESTING XII. SUMMARY SUGGESTED ANSWERS TO DISCUSSION QUESTIONS Students should recognize that their answers to these discussion questions should be well reasoned and supported with evidence. Although some answers will be more correct than others, students should be aware that simplistic answers to complex questions, problems, or issues such as these will never be “good” answers. 1. Question: Explain the Pyramid of Corporate Social Responsibility> Provide several examples of each “layer” of the pyramid. Identify and discuss some of the tensions among the layers or components. In what sense do the different layers of the pyramid “overlap” with each other? Answer: The Pyramid of Corporate Social Responsibility is a graphic representation of Carroll’s four - part definition of CSR. According to Carroll, society has four expectations of a corporation — economic, legal, ethical, and philanthropic. The pyramid shows the economic responsibility at the bottom, because it is the foundation upon which all others rest. Society’s first expectation of a corporation is that it will be profitable. This is consistent with classical economic thought, which provides that man agement must maximize the profits of its owners. Companies that repeatedly do not show a profit will see falling stock prices and eventual bankruptcy and may find it more difficult (if not impossible) to meet their legal, ethical and philanthropic responsibilities . Several companies in both the auto motive and airline industr ies struggled to meet their economic responsibilities and landed in bankruptcy as a result. The second level is legal, because society requires corporations to follow the law, just as they are required to make a profit. Companies can receive stiff penalties for breaking the law. In the last decade , hundreds of publicly - traded companies were investigat ed by federal regulatory agencies for abusive practices related to stock option grants and were subjected to penalties due to faulty accounting and public disclosures . The third level is the ethical responsibility — society expects ethical behavior of companies. The corporate scandals that shaped the beginning of this century pointed out that society expects honest and fair reporting of financial operations by executives. If this expectation is violated, the executives can face criminal

  13. Page 13
    Read page 13 as text

    Ch 2 , Business & Society , Carroll 10 e charges, as Martha Stewart and several Enron officials discovered. More recently, executives in financial services firms have found themselves subject to public scrutiny for arguably unethical practices related to aggressive lending practices . On the other hand, companies may find themselves recognized for their ethical activities. Starbucks and the Timberland Company are often recognized for their ethical practices. At the top is the philanthropic responsibility. Society desires this of corporations, but the company has discretion in whether it performs at this level or not. Wal m art and AT&T are two firms that are widely praised for their philanthropic endeavors , especially their charitable cash contributions . While the economic responsibility is the base of the pyramid, a CSR or stakeholder perspective would focus on the pyramid as a unified whole. Companies are expected to fulfill their economic, legal, ethical and philanthropic responsibilities simultaneously, meaning that companies need to concurrently (1) make a profit, (2) obey the law, (3) be ethical and (4) be a good corporate citizen. While the simultaneous fulfillment of all four responsibilities can be challenging, the best moral managers will use moral imagination to develop solutions to corporate dilemmas that meet all four responsibilities at the same time. 2. Question: In your view, what is the single strongest argument against the idea of corporate social responsibility? What is the single strongest argument for corporate social responsibility? Briefly explain. Answer: There are few, if any, legitimate arguments against CSR. The closest one could come to making a logical argument is that corporations should not be required to “fill the gaps” in social policy. That is, corporations should not be held responsible for providing funds and services for things that governments should be doing (e.g., school funding or social safety nets). The primary argument for CSR is that corporations are recognized as “persons” and receive as many, if not more, rights and privileges than do actual persons. If corporations are to benefit from such “citizenship,” they should be expected to contribute to society, just like actual persons are. The Wall Street Journal recently reexamined this debate in an August 2010 story entitled “ The Case Against Corporate Social Responsibility .” In this article, Dr. Aneel Karnani, a Professor of Strategy at the University of Michigan's Stephen M . Ross School of Business , argues that “ in cases where private profits and public interests are aligned, the idea of corporate social responsibility is irrelevant: Companies that simply do everything they can to boost profits will end up increasing social welfare. In circumstances in which profits and social welfare are in direct opposition, an appeal to corporate social responsibility will almost always be ineffective, because executives are unlikely to act voluntarily in the public interest and against shareholder interests. ” This article certainly has prompted many in the pro - CSR camp to respond. In a BusinessEthics.com article entitled “ Opinion: The Case Against the Case Against CSR , ” Tim Mohin, the director of corporate responsibility at AMD, contends that CSR is a win - win situation for companies and that smart companies take a long view and build brand value and investment with CSR. 3. Question: Differentiate between corporate social responsibility and corporate social responsiveness. Give an example of each. How does corporate social performance relate to these terms? Where do corporate citizenship and sustainability fit in?

  14. Page 14
    Read page 14 as text

    Ch 2 , Business & Society , Carroll 10 e Answer: Carroll’s four - part definition of corporate social responsibility is “The social responsibility of business encompasses the economic, legal, ethical, and discretionary (philanthropic) expectations that society has of organizations at a given point in time.” The concept of corporate social responsibility has been criticized because its focus is on accountability or obligation to meet certain minimum duties. Corporate social responsiveness is a more proactive and action oriented concept, wherein business firms anticipate social expectations and meet them before they are imposed as a new responsibility on the company. A corporation that obeys existing laws is displaying corporate social responsibility. An example of corporate social responsiveness would be a firm providing child care benefits to its working parents, thus responding to the reality of issues faced by working families. Corporate social performance focuses on what firms are actually able to accomplish – specifically, the outcomes or results of their acceptance of corporate social responsibility and implementation of corporate social responsiveness. Corporate social performance includes a recognition of the four corporate responsibilities identified by Carroll and measures the success of the firm’s responsiveness to these responsibilities. 4. Question: Analyze how the triple bottom line and the Pyramid of CSR are similar and different. Draw a schematic that shows how the two concepts relate to one another. Answer: The Triple Bottom Line provides results of operations in three inter - related fields — economic, social, and environmental. The overriding theme in the Triple Bottom Line is sustainability of the firm’s operations, its stakeholders’ lives, and the environment. The CSR Pyramid recognizes four levels of responsibility — economic, legal, ethical, and philanthropic. Both models recognize the economic sphere. The Triple Bottom Line’s social and environmental concepts could include elements of the legal, ethical, and philanthropic levels of responsibility in the CSR Pyramid. 5. Question: Compare and contrast the socially oriented concepts: CSR, corporate citizenship, sustainability, creating shared value, and conscious capitalism. Do these represent different forms of the business and society relationship or do they represent how and why companies respond in a socially conscious manner? Answer: Corporate Social Responsibility (CSR) can be boiled down to a company’s actions and how they affect society. This is a more board concept whereas the others are a bit more specific. Corporate citizenship is the concept that a company should give back to a community simply because it is a member of that community. This is a philanthropic expectation. Sustainability has three different parts for a company : 1) Economic sustainability, which is looking out for its profits ; 2) Social sustainability , whic h focuses on the quality of people’s lives and equality between people, communities and nations ; 3) Environmental sustainability concerns protecting the environment, focusing on the planet. The people and planet aspects make sustainability more of an ethical expectation. Creating shared value speaks to the economic sustainability focus — the profits. Though shared value is about economic success for the company, the company also creat es opportunity for economic success in other areas of the community , i n a s ense sharing the wealth. Conscious capitalism is another broad concept. It focuses on the interdependence of business, and working toward higher purpose, stakeholder orientation, conscious leadership and conscious culture. If everything, including people, environment, profit, is

  15. Page 15
    Read page 15 as text

    Ch 2 , Business & Society , Carroll 10 e intertwined, to succeed a company must be conscious of its effect on each part. These concepts outline how and why companies respond in a socially conscious manner. As many of the concepts mention, social consciousness is linked to profits. Without those profits, companies no longer exist. 6. Question: Does socially responsible, sustainable, or ethical investing seem to you to be a legitimate way in which the average citizen might demonstrate her or his concern for CSR? Why is it also called impact investing? Discuss. Answer: On the one hand, socially responsible investing seems to send the message that the investor is concerned about the firm’s CSP. However, the fact that returns on ethical investing approximate market returns seems to downplay this view. If the investor is truly concerned with the firm’s CSP, he or she should be willing to accept a lower rate of return on the investment. In addition, the vast majority of investments never reach the firm. Unless the firm is offering a new issue of stock, the proceeds of the sale go to the previous owner of the securities, not to the firm. It is called impact investing because it considers environmental, social, and corporate governance criteria aimed at generating long - term competitive financial returns and positive societal impact. GROUP ACTIVITY Have students establish the parameters for a social screen for investments. Specifically, ask students to identify the criteria for socially responsible investments. Once the class establishes the “social screen” as a group, divide the students into groups of four to five students. Each group will be given a theoretical account with $500 to invest in firms that meet the criteria established by the entire class. Each group should be given a week to research firms for potential investment. Each group should provide a summary sheet to the instructor allocating the $500 among socially responsible investments that meet the class criteria. Each group should track the return on their investments through the end of the semester and report the value of their portfolio at that time. Opportunity should be given to discuss why certain investments were made. Instructors may want to provide some type of reward for the group with the greatest return on investment. Groups that select companies that do not meet the class social screen should be disqualified. INDIVIDUAL ASSIGNMENT Have students read the June 14, 2012 Wall Street Journal article entitled “The Case Against Corporate Social Responsibility , ” by Dr. Aneel Karnani (see http://online.wsj.com/article/SB10001424052748703338004575230112664504890.html ). Ask students to independently research academic and business responses to this article. S tudents should summarize the arguments for and against Corporate Social Responsibility based upon their review of Dr. Karnani’s article and their own independent research. Students then should state which argument that they find most persuasive and why.

  16. Page 16
    Read page 16 as text

    Ch 3 , Business & Society , Carroll 10 e Chapter 3 The Stakeholder Approach to Business, Society, and Ethics LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Identify origins of the stakeholder concept by explaining what a stake is and what a stakeholder is. 2. Explain who business’s stakeholders are in primary and secondary terms. 3. Differentiate among the three stakeholder approaches — strategic, multifiduciary, and synthesis. 4. Identify and explain the three values of the stakeholder model. 5. Name and describe the five key questions that capture the essence of stakeholder management. 6. Explain major concepts in effective stakeholder management to include stakeholder thinking, stakeholder culture, stakeholder management capability, and stakeholder engagement. 7. Describe the three strategic steps toward global stakeholder management. TEACHING SUGGESTIONS INTRODUCTION – In the face of increasingly complex business environments and operations, the models by which businesses are managed are also becoming more complex. Perhaps the principle reason for this increasing complexity is the fact that business organizations are no longer viewed as the sole property or interest of the owners. Recognition of various stakeholders’ interests in the firm requires management models that are capable of identifying and addressing those interests. The stakeholder concept is one such model. KEY TALKING POINTS – The primacy of ownership interest in business organizations is still very much the norm in the United States. When students are asked why shareholders should normatively receive the profits of a business, their standard answer is that the shareholders own the company. The idea that an ownership position entitles privileged treatment is almost universal among U. S. residents. Realization that other groups also have legitimate claims on the corporation is a nearly foreign concept for s ome students . Introduction of the stakeholder model of the firm is an excellent opportunity to make a significant difference in how students think about the firm and its responsibilities. Students should begin to think of the corporation in a different light, with claims on it from many different constituencies. In addition to introducing stakeholder theory, the instructor should be able to make many connections with the previous chapter on corporate social responsibility, responsiveness, and performance . The concepts are virtually opposite sides of the same coin — stakeholder theory shows that there are many groups with legitimate claims on the firm, and corporate social responsibility makes the case why the firm has obligations to those groups. A key element in stakeholder theory that should probably be emphasized more in the chapter is the question of what stakeholder management truly means. If it is interpreted to mean managing the various stakeholder groups to the advantage of the firm

198 more pages in the full document

Unlock it once and it stays in your library, ready to chat with or turn into flashcards.

Unlock the full document

More Business Management study materials

See all

Study this document with CramX

Once it is in your library, every tool can work from it.