Kinh tế học - Chapter 16: Business and community stakeholders

© 2015 Cengage Learning1Chapter 16Business and Community Stakeholders© 2015 Cengage Learning2Learning OutcomesIdentify and discuss two basic ways of business giving.Discuss reasons for community involvement, various types of community projects, and management of community stakeholders.Explain the pros and cons of corporate philanthropy, provide a brief history of corporate philanthropy, and explain why and to whom companies give.Differentiate between strategic philanthropy, cause-related marketing, and cause branding.Characterize the nature of offshoring and the movement toward reshoring.Address steps that a business or plant might take before a decision to close is made.Identify strategies that a business or plant might employ after a decision to close has been made.© 2015 Cengage Learning3Chapter OutlineCommunity InvolvementCorporate Philanthropy or Business GivingThe Loss of JobsSummaryKey Terms© 2015 Cengage Learning4Business and Community StakeholdersThe actions of a business affect a range of communities. Managers must be aware of these impacts, and manage in a way that respects community stakeholders.We focus on the immediate locale, but instant communication means that the relevant community includes the region, nation, or the world.For business and community stakeholders, there are two major kinds of relationships:The positive contributions business can make to the community. The harm business can cause to community stakeholders. We discuss here community involvement and corporate philanthropy © 2015 Cengage Learning5Community InvolvementBusiness involvement in the community represents enlightened self-interest, because businesses help themselves in the process of helping others. Volunteer Programs - such programs reflect the resourcefulness and responsiveness to communities, and are essential for attracting and retaining the best talent in the workforce.Employees want to work for the “good guys.” Managing Community Involvement – focuses on the contribution of managerial and employee time and talent. © 2015 Cengage Learning6Standards of Excellence in Corporate Community InvolvementLeadershipIssues ManagementRelationship BuildingStrategyAccountabilityInfrastructureMeasurement© 2015 Cengage Learning7Benefits of Employee VolunteerismBenefits to the employeeBenefits to the corporationBenefits to the communityImproves performanceBuilds brand awareness and affinityProvides skilled and talented volunteer poolIncreases job satisfaction, attitude and moraleStrengthens trust and loyalty among consumersOffers direct cost savings for community service organizationsEncourages teamworkEnhances corporate image and reputationCreates quantifiable social impactPromotes leadership and skill developmentImproves employee retentionHelps bring community needs into focusImproves intra-organizational communicationsIncreases employee productivity and loyalty© 2015 Cengage Learning8Developing a Community Action PlanKnowing the community.Assess the company’s resources.Select projects to support; match community needs to company resources.Monitor performance of the community actions program and make adjustments.© 2015 Cengage Learning9Corporate Community Involvement10© 2015 Cengage LearningCorporate Philanthropyor Business GivingPhilanthropy a desire to help mankind as indicated by acts of charity; love of mankind.Corporate Philanthropy - Business giving, the motive for which can be difficult to assess. A Brief History of Corporate Philanthropy – Community chest efforts dominated early givingSince 1960, giving has grown to address a variety of initiativesNow, the watchword is “strategic philanthropy” which benefits both society and the business.© 2015 Cengage Learning11A Call for TransparencyCompanies need not disclose direct donations to charities, but proposed legislation would require disclosure.Proponents say the money belongs to the shareholders, and they should make the decision, not managers giving to their favorite charities, which would not benefit the businessSome fear that disclosure would result in fewer donations, and would reveal company strategy.Non-disclosure has led to a rise in “dark money” political funding to nonprofits from undisclosed sources. © 2015 Cengage Learning12Giving to the Third Sector: NonprofitsBusiness and government – are supported by profits and taxesThe third sector – (churches, museums, hospitals, libraries, colleges, and more) depends on philanthropy. Why do companies give?Charitable – (no expected benefit for the business)Community - (gifts support business goals) Commercial – (giving that benefits the business)© 2015 Cengage Learning13To Whom Do Companies Give?During any budget year, firms receive numerous requests for contributions from a variety of applicants, and decide which to honor. Estimates of most business giving -Health and human servicesEducationCivic and community activitiesCulture and the arts© 2015 Cengage Learning14Managing Corporate Philanthropy- 1 of 2 Two aspects to the pressure on businesses to be more businesslike in their philanthropy:Base giving on business skills, resources, and capabilities to enhance philanthropic outcomes.Focus on philanthropy that will enhance corporate profitability and also make a difference in the community (a strategic approach).Strategic giving is on the rise. © 2015 Cengage Learning15Managing Corporate Philanthropy- 2 of 2 Factor Conditions – the available inputs for productionDemand Conditions – concerned with the nature of the company’s customer and the local marketRelated and Supporting Industries – can also be strengthened through strategic givingCause-Related Marketing – a direct linking of a firm’s product or service to a specified charity; each time a consumer buys the product, a donation is given to the charity by the business (is this really philanthropy?)Global Philanthropy – depends on the size of the firm’s workforce in international markets© 2015 Cengage Learning16The Loss of JobsA negative consequence of a firm's actions; has a detrimental impact on the community. From Offshoring to Reshoring – Offshoring - The relocation of business processes to a different country.Affects blue collar and white collar workers.Even skilled high-tech jobs are offshored.Reshoring – returning of business processes to their original location; the costs often outweighed the benefits. © 2015 Cengage Learning17Business and Plant Closings (1 of 2)Business and plant closings have detrimental impact in the community.What rights and responsibilities does business have in relation to employee and community stakeholders? Consider: Before the Decision to Close is Made –Is this the only option?DiversificationNew ownership or employee ownership© 2015 Cengage Learning18Business and Plant Closings (2 of 2)After the Decision to Close is Made –Community-Impact Analysis Transfer, Relocation, and Outplacement Benefits Gradual Phase-Outs Helping to Attract Replacement Industry Survivors: The Forgotten Stakeholders, need-Emotional supportDirectional supportTactical supportInformational support © 2015 Cengage Learning192-Business and Plant Closings20Before Decidingto CloseDiversificationNew ownershipNew ownerEmployee ownership © 2015 Cengage Learning3-Business and Plant Closings (continued)21After Decidingto CloseConduct a community impact analysisProvide advance notice to employees/communityProvide transfer, relocation, andoutplacement benefitsPhase out the business graduallyHelp attract replacement industry© 2015 Cengage Learning?Community Impact Analysis22© 2015 Cengage LearningWARN? Advance NoticeWorker Adjustment and Retraining Notification Act (WARN)Requires firms with 100 or more workers to provide 60 days advance notice before shutting down or conducting layoffs.The recent global economic crisis has prompted some states to strengthen WARN protections.WARN often falls short of its goals of protecting workers.© 2015 Cengage Learning23? Communicating With Employees Who are Being Laid OffBe completeBe consistentInform affected employees firstInform retained employees© 2015 Cengage Learning24?Survivors– The Forgotten Stakeholders25© 2015 Cengage Learningcause brandingcause-related marketingcommunity action programcommunity involvementcommunity partnershipsemployee ownedoffshoringoutsourcingphilanthropyreshoringstrategic philanthropythird sectorWorker Adjustment and Retraining Notification Act (WARN)© 2015 Cengage Learning26Key Terms