BUSINESS AND SOCIETY 11TH EDITION BY ARCHIE B. CAROLL, JILL BROWN (CHAPTER 1_18) SOLUTIONS MANUAL by QuentinAxel

TEST BANK

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

BUSINESS AND SOCIETY 11TH EDITION BY ARCHIE B. CAROLL, JILL BROWN (CHAPTER 1_18) SOLUTIONS MANUAL Chapter 1-18

Chapter 1: The Business and Society Relationship

Table of Contents Purpose and Perspective of the Chapter .................................................................................... 2 Cengage Supplements............................................................................................................... 2 Chapter Objectives .................................................................................................................... 2 Complete List of Chapter Activities and Assessments ................................................................ 2 Key Terms ................................................................................................................................. 3 What's New in This Chapter ....................................................................................................... 4 Chapter Outline .......................................................................................................................... 4 Discussion Questions ................................................................................................................ 5 Additional Activities and Assignments ........................................................................................ 8 Appendix .................................................................................................................................... 9 Generic Rubrics ......................................................................................................................................... 9 Standard Writing Rubric ............................................................................................................................ 9 Standard Discussion Rubric ..................................................................................................................... 11

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to introduce some important basic concepts in the business and society discussion, including pluralism, special-interest societies, business criticism, corporate power, corporate social responsibility to stakeholders, and sustainability.

Cengage Supplements The following product-level supplements provide additional information that may help you in preparing your course. They are available in the Instructor Resource Center.     

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 01.01

Define and explain business and society as foundational concepts. Describe how society is viewed as the macroenvironment.

01.02

Explain the characteristics of a pluralistic society. Describe pluralism and identify its attributes, strengths, and weaknesses.

01.03

Clarify what is a special-interest society and how it poses special challenges for business.

01.04

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?

01.05

Identify what is the changing social contract. Is it better or worse for stakeholders?

01.06

Make clear the major themes characterizing this book: managerial approach, business ethics, sustainability, and stakeholder management.

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 1.1 1.1 1.2

PPT Slide

Activity/Assessment

Duration

2 7 20

Icebreaker: Business and You Discussion: Corporate Ethics Discussion: COVID-19

10 minutes 15 minutes 15 minutes

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

1.4

1.4 1.4

24 26

Discussion: Business Criticism and Rising Expectations Discussion Levels of Power Discussion: Iron Law of Responsibility

15 minutes 15 minutes 15 minutes

[return to top]

Key Terms

Affluence: the level of wealth, disposable income, and standard of living of the society Business: the collection of private, commercially oriented (profit-oriented) organizations, ranging in size from one-family proprietorships Business ethics: ethical issues that arise in the commercial realm Business power: the capacity or ability to produce an effect, have an impact, or to bring influence to bear on a situation or people Economic environment: the nature and direction of the economy in which business operates Education: the process of receiving or giving systematic instruction, especially at a school or university Entitlement mentality: the general belief that individuals are owed something (e.g., a job, an education, a living wage, or health care) just because they are a member of society Iron Law of Responsibility: Whenever power and responsibility become substantially out of balance, forces will be generated to bring them into closer balance. Macroenvironment: the total environment outside the firm Managerial approach: a focus on the three main themes of vital importance to managers, organizations, and society today: business ethics, sustainability, and stakeholder management. Nongovernmental organizations (NGOs): special-interest groups that may be organized on a local, national, or international level Pluralism: a diffusion of power among society’s many groups and organizations Political environment: the processes by which laws get passed and officials get elected and all other aspects of the interaction between firms, political practices, and government Rights movement: a trend and pattern of rising expectations as to how people want to be treated Rising expectation: a belief or an outlook that each succeeding generation ought to have a standard of living higher than that of its predecessor Social contract: a set of reciprocal understandings and expectations that characterize the relationship between major institutions Social environment: the demographics, lifestyles, culture, and social values of the society Social problem: a gap between society’s expectations of social conditions and the current social realities

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Society: community, a nation, or a broad grouping of people with common traditions, values, institutions, and collective activities and interests Special-interest society: a society characterized by tens of thousands of special interest groups, each pursuing its own specific agenda Stakeholder management: the management of integral constituents in the business and society relationship Stakeholders: individuals or groups with which business interacts who have a ―stake,‖ or vested interest, in the firm Sustainability: business’s ability to survive and thrive over the long term Sustainable development: a pattern of resource use that aims to meet current human needs while preserving the environment so that these needs can be met not only in the present but also for future generations Technological environment: the total set of technology-based advancements taking place in society and the world [return to top]

What's New in This Chapter The following elements are improvements in this chapter from the previous edition:              

The key terms have been updated. The endnotes have been updated. The topic Business and society relationship (A-head) is updated. The box spotlight on sustainability has been updated. Figure 1-2 from the previous edition has been renamed as Figure 1-1. Figure 1-3 from the previous edition has been renamed as Figures 1-2. Figure 1-4 from the previous edition has been renamed as Figure 1-3. Image 1-2 is revised. The heading ―Awareness through television, movies, the internet, and social media‖ has been renamed to ―Awareness through various media‖. The heading ―24/7 News and investigative program‖ has been renamed to ―24/7 Television programming‖. The heading ―Revolution of rising expectations‖ is renamed to ―Rising expectations‖. Figure 1-3: The data is revised. The titles of ―Ethics in Practice Case‖ have been updated. Title of figure 1-4 is renamed.

[return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

1.1 Business and Society (Ch. 1.1, PPT Slides 5–7) a. Business: Defined (Ch. 1.1. PPT Slide 6) b. Society: Defined (Ch. 1.1, PPT Slide 6) 1.2 Society as Macroenvironment (Ch. 1.2, PPT Slide 8-10) 1.3 Pluralistic Societies (Ch. 1.3, PPT Slide 11–14) a. Multiple Publics, Systems, and Stakeholders Ch. 1.3, PPT Slide 14) b. A Special-Interest Society (Ch. 1.3, PPT Slide 14) 1.4 Business Criticism and Corporate Response (Ch. 1.4, PPT Slides 15–25) a. Factors in the Social Environment (Ch. 1.4, PPT Slide 17) 1. Affluence and Education (Ch. 1.4, PPT Slide 17) 2. Awareness through Various Media (Ch. 1.4, PPT Slide 17) a. 24/7 Television Programming (Ch. 1.4, PPT Slide 18) b. Movies (Ch. 1.4, PPT Slide 17) c. Social Media (Ch. 1.4, PPT Slide 17) 3. Rising Expectations (Ch. 1.4, PPT Slide 17) 4. Rights Movement (Ch. 1.4, PPT Slide 17) b. A General Criticism of Business: Use and Abuse of Power (Ch. 1.4 Slide 19) 1. Levels of Business Power (Ch. 1.4, PPT Slide 19) 2. Spheres of Business Power (Ch. 1.4, PPT Slide 19) c. Balancing Power with Responsibility (Ch. 1.4, PPT Slide 21) 1. Iron Law of Responsibility (Ch. 1.4, PPT Slide 21) d. Business’s Response: A Changing Social Contract (Ch. 1.1, PPT Slide 22) 1.5 Focus of the book (Ch. 1.5, Slides 26–30) 1.6 Structure of the book (Ch. 1.6, Slides 31–35) 1.7 Summary [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS; as wholeclass discussions in person; or as a partner or group activity in class. 1. Discussion: Corporate Ethics (page 4, 1.1, PPT Slide 7) Duration 15 minutes. a. 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? I. 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 ethics scandals of the first decade of the 2000s have had a significant impact on small and medium-sized firms. On 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

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

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 effect of scandals may not have ―trickled down‖ to smaller firms on those occasions when members of society actually do think about them. 2. Discussion: Pluralistic Society (page 9, 1.4, PPT Slide 20) Duration 15 minutes. a. Question: How will the COVID-19 pandemic alter business and society relationships? Identify and discuss some of the major effects and impacts. I. Answer: The textbook discusses the COVID-19’s impact on the U.S. and the world economies. Many businesses and governments received criticism on the handling and responsibilities of public safety. Students will have a wide variety of examples to choose from as examples of how businesses have changed. As some business begin to reopen, many will not return. Examples of companies such as the buffet-style restaurants, such as Sweet Tomatoes, closed their doors for good. While other businesses, such as Door Dash and Uber Eats thrived through the pandemic, mobile ordering has seen a tremendous spike in usage, as customers seek out less ―in-person‖ shopping. 3. Discussion: Business Criticism and Rising Expectations (pages 6–13, 1.4, PPT Slide 23) Duration 15 minutes. a. 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 pattern of rising expectations run its course? Or is it still a reality among young people today? I. 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 become 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 public’s distrust and unfavorable perception of 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 may also be influenced and exacerbated by the media.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

4. Discussion: Levels of Power, (pages 11–12, 1.4, PPT Slide 24) Duration 15 minutes. a. 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. Is business power excessive? I. Answer: The text draws on Edwin M. Epstein’s 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 militaryindustrial 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. Bill Gates, founder of Microsoft; Warren Buffett, CEO of Berkshire Hathaway; Elon Musk, former CEO of Tesla; or Jeff Bezos, founder of Amazon, 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 treatments, 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. Discussion: Iron Law of Responsibility (page 12, 1.4, PPT Slide 25) Duration 15 minutes. a. 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. I. Answer: The Iron Law of Responsibility basically says that there is a balance required between power and responsibility to others. The more power an organization 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.‖ ―Rights bear

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

responsibilities.‖ A social contract is an implicit agreement between two parties or social institutions that states the rights and duties of each party. Students may be easily misled to think of this law like a form of natural law, which, of course, it is not. Consider consumers’ rights and business power. As consumers, we have a right to expect that the products we buy will work properly and not subject us to 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. The Iron Law of Responsibility does not autonomously correct this. So, the federal government is justified in creating new regulations to meet this need. [return to top]

Additional Activities and Assignments

1. Cases: In this chapter, instructors may utilize a combination of cases: 1- Wal-Mart - The Main Street Merchant of Doom 2- Walmart’s Labor Practices 3- Chipotle’s Struggle with Food Safety: Back on Top Again? 4- The Theranos Story and Fake Blood Testing: Culture,Crime, and Hubris 7- Volkswagen’s Diesel Deception and Its Aftermath 12- Family Business 19- An Ethical Dilemma for Chiquita in Colombia 23- McDonald’s: The Coffee Spill Heard ’Round the World 24- Boeing’s Two Flight Crashes 25- Should States Woo Big Business with Tax Incentives? Amazon Thinks So! 26- Everlane: Ethical Chic and Radical Transparency in Global Supply Chains 27- Slow and Sustainable Fashion 29- ―Dead Peasant‖ Life Insurance Policies 31- Two Vets, Two Dogs, and a Deadlock 33- To Take or Not to Take

2. Group Activity: This group activity focuses on business criticism and corporate response. Divide students into groups of four to five students. Distribute the latest edition of national,

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

regional and local newspapers among different groups in the class. Have the groups 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 impact 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. 3. 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 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. [return to top]

Appendix Generic Rubrics Providing students with rubrics helps them understand expectations and components of assignments. Rubrics help students become more aware of their learning process and progress, and they improve students’ work through timely and detailed feedback. Customize these rubrics as you wish. The writing rubric indicates 40 points and the discussion rubric indicates 30 points.

Standard Writing Rubric Criteria Content

Meets Requirements The assignment clearly and comprehensively addresses all questions in the assignment.

Needs Improvement The assignment partially addresses some or all questions in the assignment.

Incomplete The assignment does not address the questions in the assignment. 0 points

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

8 points The assignment presents ideas in a mostly clear manner and with a mostly strong organizational structure. The assignment includes an appropriate introduction, content, and conclusion. Coverage of facts, arguments, and conclusions are mostly logically related and consistent. 7 points The assignment is based upon adequate academic literature but does not include peer-reviewed journals and other scholarly work. 3 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

15 points The assignment presents ideas in a clear manner and with strong organizational structure. The assignment includes an appropriate introduction, content, and conclusion. Coverage of facts, arguments, and conclusions are logically related and consistent. 10 points

The assignment does not present ideas in a clear manner and with strong organizational structure. The assignment includes an introduction, content, and conclusion, but coverage of facts, arguments, and conclusions are not logically related and consistent. 0 points The assignment is not based upon appropriate and adequate academic literature and does not include peer-reviewed journals and other scholarly work. 0 points The assignment does not follow the required citation guidelines. 0 points The assignment is incomplete or unintelligible. 0 points

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Meets Requirements Submits or participates in discussion by the posted deadlines. Follows all assignment instructions for initial post and responses. 5 points Comments stay on task. Comments add value to discussion topic. Comments motivate other students to respond. 20 points Maintains appropriate language. Offers criticism in a constructive manner. Provides both positive and negative feedback. 5 points

Needs Improvement Does not participate or submit discussion by the posted deadlines. Does not follow instructions for initial post and responses. 3 points Comments may not stay on task. Comments may not add value to discussion topic. Comments may not motivate other students to respond. 10 points Does not always maintain appropriate language. Offers criticism in an offensive manner. Provides only negative feedback. 3 points

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 2: Corporate Social Responsibility, Performance, and Impact

Table of Contents Purpose and Perspective of the Chapter ...................................................................................13 Cengage Supplements..............................................................................................................13 Chapter Objectives ...................................................................................................................13 Complete List of Chapter Activities and Assessments ...............................................................13 Key Terms ................................................................................................................................14 What's New in This Chapter ......................................................................................................15 Chapter Outline .........................................................................................................................17 Discussion Questions ...............................................................................................................18 Additional Activities and Assignments .......................................................................................22 Appendix ...................................................................................................................................24 Generic Rubrics ....................................................................................................................................... 24 Standard Writing Rubric .......................................................................................................................... 24 Standard Discussion Rubric ..................................................................................................................... 25

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to explore several different aspects of the corporate social responsibility, or CSR, topic and provide 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.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 02.01

Describe some early views of corporate social responsibility (CSR). Explain how CSR evolved and encompasses economic, legal, ethical, and philanthropic components. Explain the Pyramid of CSR. How is it a unified whole, dynamic, and sustainable? How does ethics permeate the pyramid? Will the pyramid vary globally?

02.02

Articulate the traditional arguments both against and for CSR. Explain how the business case for CSR has strengthened the concept’s acceptance.

02.03

Describe how the concept of corporate social responsiveness differs from CSR.

02.04

Explain how corporate social performance (CSP) became more popular. Describe how it is different than CSR. What does corporate social impact address?

02.05

Describe how corporate citizenship is a valuable way of thinking about CSR. Explain its broad and narrow views.

02.06

Summarize the three perspectives on the relationship between corporate social performance (CSP) and corporate financial performance (CFP).

02.07

Define CSR Greenwashing and how it may lead to misleading reputational profiles of companies.

02.08

Describe and characterize the socially responsible investing movement. Differentiate between negative and positive screens that are used in investment decisions.

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 2.8

PPT Slide

Activity/Assessment

Duration

Icebreaker: Grassroots Good

10 minutes

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

2.1 2.1

9 13

2.1 2.1 2.2 2.5

15 17 23 31

2.8 2.9

43 47

Discussion: CSR Meaning Discussion: The Pyramid of Corporate Social Responsibility Discussion: Pyramid of CSR Discussion: CSR Exemplar Firm Discussion: Arguments against CSR Discussion: Responsibility, Responsiveness, and Citizenship Discussion: CSR Frameworks Discussion: Impact Investing

15 minutes 15 minutes 15 minutes 15 minutes 15 minutes 20 minutes 15 minutes 15 minutes

[return to top]

Key Terms

Business Case for CSR: the reasons why businesspeople believe that CSR brings distinct benefits or advantages to their organizations as well as to the business community Business for Social Responsibility (BSR): formed to fill an urgent need for a national business alliance that fosters socially responsible corporate policies. Conscious capitalism: a broader term for the concept of corporate social responsibility Corporate citizenship: the concept of corporate social responsibility Corporate social impact: addresses what impact or effect is being realized or felt by the recipients of the firm’s performance initiatives Corporate social performance (CSP): suggests that what really matters is what companies are able to achieve—the results or outcomes of their acceptance of CSR Corporate social responsibility (CSR): seriously considering the impact of the company’s actions on society Corporate social responsiveness: an action-oriented variant of CSR Creating shared value (CSV): argues that business and society could be brought back together again if businesses redefined their basic purpose as creating shared value CSR exemplar firms: socially responsible firms have become models for other firms CSR Greenwashing: intentionally seeking to convey the image of a socially responsible firm when the evidence of their practices does not support this conclusion Economic responsibilities: the objectives to produce goods and services that society needs and wants and to sell them at fair prices Environmental, social, and governance (ESG) investing: a comprehensive investing approach complete with social and environmental screens, shareholder activism, and community investment Ethical responsibilities: encompassing those decision and practice arenas in which society expects certain levels of moral or principled performance but for which it has not yet been articulated or codified into law

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Explicit CSR: voluntary, self-interest-driven policies, programs, and strategies as is typical in U.S.-based understandings of CSR Global corporate citizenship: international extensions of serious considerations of the impact of the company’s actions on society Impact investing: considers environmental, social, and corporate governance (ESG) criteria aimed at generating long-term competitive financial returns and positive societal impact Implicit CSR: embraces the entirety of a country’s formal and informal institutions that assign corporations an agreed-on share of responsibility for society’s concerns Legal responsibilities: reflect society’s view of ―codified ethics‖ in the sense that they articulate basic notions of fair practices that are established by lawmakers Mainstream adopters (of CSR): A third group of CSR exemplar firms that includes all other conventional businesses that have adopted, practiced, and achieved some degree of distinction or recognition for socially responsible policies and practices Philanthropic responsibilities: these are perceived and understood as responsibilities because they reflect current expectations of business by the public Philanthropy: organized charitable giving Purpose-driven business: companies that operate with all important stakeholders in mind, not just shareholders Pyramid of Corporate Social Responsibility (CSR): a useful way of graphically depicting the four-part definition of CSR with four layers or levels Social enterprises: supposes that businesses do have a higher purpose than profits only Social entrepreneurship: entrepreneurship that began their CSR initiatives at their founding and strategically carried it forward Social intrapreneurship: companies that did not have a specific social agenda as part of their initial formation but later developed from within a highly visible social agenda or program Socially responsible, sustainable, or ethical investing: sometimes called impact investing Stages of corporate citizenship: the challenges of credibility, capacity, coherence, and commitment that firms move through as they come to grips with developing more integrated citizenship agendas Stakeholder–bottom line: the view that the firm has ―multiple bottom lines‖ that benefit from CSP Sustainability: business’s ability to survive and thrive over the long term Sustainable development: a pattern of resource use that aims to meet current human needs while preserving the environment so that these needs can be met not only in the present but also for future generations [return to top]

What's New in This Chapter

The following elements are improvements in this chapter from the previous edition:

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

            

Name of Chapter 2 ―Corporate Social responsibility, Citizenship and Sustainability‖ has been renamed to ―Corporate Social responsibility, Performance and Impact‖. Title ―Historical Perspective on CSR‖ (A-Head) has been renamed to ―The beginnings of CSR‖ Figure 2-2 has been updated. Figure 2-3 has been updated. Ethics in Practice case ―Do small businesses have social responsibilities‖ is added. Figure 2-6 has been updated. Title ―Corporate social responsiveness and Corporate social Performance‖ (A-head) has been combined into one title ―Corporate social responsiveness, Performance and Impact‖. Ethics in Practice case ―Fresh, local and sustainable: Burger with a Soul‖ has been updated. Figure 2-8 has been updated. Myths about sustainability has been updated. Title ―Creating shared value and conscious capitalism‖ (A-head) has been renamed to ―Creating shared value, conscious capitalism and purpose-driven business‖. Figure 2-9 is added. Title ―Socially responsible, sustainable, ethical Investing‖ (A-head) has been renamed to ―Socially responsible, sustainable, ESG Investing‖.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

 

Discuss Question has been updated. End Notes has been updated.

[return to top]

Chapter Outline In the outline below, each element includes references (in parentheses) to related content. "CH.##” refers to the chapter objective; “PPT Slide #” refers to the slide number in the PowerPoint deck for this chapter (provided in the PowerPoints section of the Instructor Resource Center); and, as applicable for each discipline, accreditation or certification standards (“BL 1.3.3”). Introduce the chapter and use the Ice Breaker in the PPT if desired, and if one is provided for this chapter. Review learning objectives for Chapter 2. (PPT Slides 1–3). 2.1 Corporate Social Responsibility (CSR) as a Concept (Ch. 2.1, PPT Slides 6–19) a. Business Criticism–Social Response Cycle (Ch. 2.1, PPT Slide 7) b. Corporate Social Responsibility Related Concepts (Ch. 2.1, PPT Slide 8) c. The Beginnings of CSR (Ch. 2.1, PPT Slides 6–7) d. Evolving Meanings of CSR (Ch. 2.1, PPT Slide 9) e. A Four-Part Definition of CSR (Ch. 2.1, PPT Slides 11-12) 1. Economic Responsibilities (Ch. 2.1, PPT Slides 11-12) 2. Legal Responsibilities (Ch. 2.1, PPT Slides 11-12) 3. Ethical Responsibilities (Ch. 2.1, PPT Slides 11-12) 4. Philanthropic Responsibilities (Ch. 2.1, PPT Slides 11-12) f. The Pyramid of Corporate Social Responsibility (Ch. 2.1, PPT Slides 13) g. Top 20 Activities/ Characteristics of a Socially Responsible Company (Ch. 2.1, PPT Slides 16-17) h. Rise of CSR Exemplar Firms (Ch. 2.1, PPT Slide 14) 2.2 Traditional Arguments Against and For CSR (Ch. 2.2, PPT Slides 20-26) a. Arguments against CSR (Ch. 2.2, PPT Slide 21) b. Arguments in Support of CSR (Ch. 2.2, PPT Slide 22) c. The Business Case for CSR (Ch. 2.2, PPT Slide 23) d. Reasons and Benefits Supporting the Business Case for CSR (Ch. 2.2, PPT Slides 24-25) 2.3 CSR Greenwashing (Ch. 2.3, PPT Slides 27-28) 2.4 Political CSR (Ch. 2.4, PPT Slides 30) 2.5 Corporate Social Responsiveness, Performance, and Impact (Ch. 2.5, PPT Slides 28–31) a. Carroll’s CSP Model (Ch. 2.5, PPT Slide 30) 2.6 Corporate Citizenship (Ch. 2.6, PPT Slides 31-34) a. Broad and Narrow Views (Ch. 2.6, PPT Slide 37) b. Stages of Corporate Citizenship (Ch. 2.6, PPT Slide 38) c. Global CSR and Corporate Citizenship (Ch. 2.6, PPT Slide 39) 2.7 The Social Performance and Financial Performance Relationship (Ch. 2.7, PPT Slides 40-42) a. Three Perspectives on the Social-Financial-Reputation Relationship (Ch. 2.7, PPT Slide 41) 1. Perspective 1: Socially responsible firms are more financially profitable. (Ch. 2.6, PPT Slide 41)

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

2. Perspective 2: A firm’s financial performance is a driver of its social performance. (Ch. 2.6, PPT Slide 41) 3. Perspective 3: There is an interactive relationship between and among social performance, financial performance, and corporate reputation. (Ch. 2.6, PPT Slide 41) 2.8 Creating Shared Value, Conscious Capitalism, and Purpose-Driven Business (Ch. 2.8, PPT Slides 40–43) 2.9 Socially Responsible, Sustainable, ESG Investing (Ch. 2.9, PPT Slides 44–47) 2.10 Summary [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS; as wholeclass discussions in person; or as a partner or group activity in class. 6. Discussion: CSR Meaning (pages 20–21, 2.1, PPT Slide 9) Duration 15 minutes. a. Question: Generally speaking, what does CSR mean? What are some of the earlier definitions of CSR? Why were they sometimes ambiguous? I. Answer: CSR meaning refers to the impact a company has on a society. Further definitions provided more detail to the obligations of decision makers to take actions that protect and improve the welfare of society along with their own interests. Therefore, CSR and a company’s actions provided more context to what they were doing. However, other definitions provided more context for the shareholders possibly wondering why capital was being spent but not clearly seeing the results to the bottom line. Therefore, another definition supposes that the corporation has not only economic and legal obligation, but also certain responsibilities to society that extent beyond these obligations. Finally reaching the definition of CSR to encompass the economic, legal, ethical, and discretionary (philanthropic) expectations that society has of organizations at a given point in time. 7. Discussion: The Pyramid of Corporate Social Responsibility (page 24, 2.1, PPT Slide 13) Duration 15 minutes. b. Question: Explain the Pyramid of Corporate Social Responsibility. Define each category and provide several examples of each ―layer‖ of the pyramid. Identify and discuss some of the tensions among and between the layers or components. In what sense do the different layers of the pyramid ―overlap‖ with each other? I. 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 management 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

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

legal, ethical, and philanthropic responsibilities. Several companies in both the automotive and airline industries 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 investigated 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 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. Walmart 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. 8. Discussion: Pyramid of CSR (pages 24–25, 2.1, PPT Slide 15) a. Question: In what sense is the Pyramid of CSR a unified whole, dynamic, and sustainable? How is it stakeholder inclusive? I. Answer: The unified whole pyramid from a stakeholder perspective would focus on how the firm should engage in decisions, actions, policies, and practices that simultaneously fulfill its four components’ parts (Economic, Legal, Ethical, and Philanthropic). From the stakeholder perspective on the dynamic and sustainable models, each of the four CSRs would address different stakeholder perspectives and various priorities, which may change overtime. For instance, economic responsibilities impact owners, shareholders, and employees because if the business is not financially sustainable, owners, shareholders, and employees are directly impacted, who are also stakeholders. 9. Discussion: CSR Exemplar Firm (page 26, 2.1, PPT Slide 17) a. Question: Explain what makes a CSR exemplar firm. Distinguish among social entrepreneurship, social intrapreneurship, and mainstream adopters.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

10.

Answer: Exemplar firms are socially responsible firms that have become models for other firms. Social entrepreneurship firms are those firms that began their CSR initiatives at their founding and strategically carried it forward. Social intrapreneurship firms are companies that did not have a specific social agenda as part of their initial formation but later developed from within a highly visible social agenda or program. Mainstream adopters would include all other conventional businesses that have adopted, practiced, and achieved some degree of distinction or recognition for socially responsible policies and practices.

Discussion: Arguments Against CSR (page 28, 2.2, PPT Slide 23) Duration 15 minutes. a. 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? I. 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: ―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 oppositeion, 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. 11. Discussion: Responsibility, Responsiveness, and Citizenship (page 31, 2.3 and 2.5, PPT Slide 31) Duration 15 minutes. a. Question: In small groups, 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? I. 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

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

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. 12. Discussion: CSR Frameworks (pages 37–8, 2.8, PPT Slide 43) a. 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? I. 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, which 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 creates opportunity for economic success in other areas of the community, in a sense 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, and profit, is 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. 13. Discussion: Impact Investing (pages 38–39, 2.9, PPT Slide 47) Duration 15 minutes. a. 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. I. 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

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

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. [return to top]

Additional Activities and Assignments

4. Cases: In this chapter, instructors may utilize a combination of cases: 1- Wal-Mart - The Main Street Merchant of Doom 2- Walmart’s Labor Practices 3- Chipotle’s Struggle with Food Safety: Back on Top Again? 4- The Theranos Story and Fake Blood Testing: Culture, Crime, and Hubris 7- Volkswagen’s Diesel Deception and Its Aftermath 12- Family Business 19- An Ethical Dilemma for Chiquita in Colombia 23- McDonald’s: The Coffee Spill Heard ’Round the World 24- Boeing’s Two Flight Crashes 25- Should States Woo Big Business with Tax Incentives? Amazon Thinks So! 26- Everlane: Ethical Chic and Radical Transparency in Global Supply Chains 27- Slow and Sustainable Fashion 29- ―Dead Peasant‖ Life Insurance Policies31- Two Vets, Two Dogs, and a Deadlock 33- To Take or Not to Take

5. 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.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

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. 6. 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.ht ml). Ask students to independently research academic and business responses to this article. Students 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 they find most persuasive and why. [return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Needs Improvement The assignment partially addresses some or all questions in the assignment. 8 points The assignment presents ideas in a mostly clear manner and with a mostly strong organizational structure. The assignment includes an appropriate introduction, content, and conclusion. Coverage of facts, arguments, and conclusions are mostly logically related and consistent. 7 points The assignment is based upon adequate academic literature but does not include peer-reviewed journals and other scholarly work. 3 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

Meets Requirements The assignment clearly and comprehensively addresses all questions in the assignment. 15 points The assignment presents ideas in a clear manner and with strong organizational structure. The assignment includes an appropriate introduction, content, and conclusion. Coverage of facts, arguments, and conclusions are logically related and consistent. 10 points

Incomplete The assignment does not address the questions in the assignment. 0 points The assignment does not present ideas in a clear manner and with strong organizational structure. The assignment includes an introduction, content, and conclusion, but coverage of facts, arguments, and conclusions are not logically related and consistent. 0 points The assignment is not based upon appropriate and adequate academic literature and does not include peer-reviewed journals and other scholarly work. 0 points The assignment does not follow the required citation guidelines. 0 points The assignment is incomplete or unintelligible. 0 points

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 3: The Stakeholder Approach to Business, Society, and Ethics

Table of Contents Purpose and Perspective of the Chapter ...................................................................................27 Cengage Supplements..............................................................................................................27 Chapter Objectives ...................................................................................................................27 Complete List of Chapter Activities and Assessments ...............................................................27 Key Terms ................................................................................................................................28 What's New in This Chapter ......................................................................................................30 Chapter Outline .........................................................................................................................30 Discussion Questions ...............................................................................................................32 Additional Activities and Assignments .......................................................................................35 Appendix ...................................................................................................................................37 Generic Rubrics ....................................................................................................................................... 37

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric .......................................................................................................................... 37 Standard Discussion Rubric ..................................................................................................................... 38

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to discuss the increasingly complex models for managing business in the face of increasingly complex business environments and operations. Perhaps the principal 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.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 03.01

Describe stakeholder capitalism and its characteristics. How does it differ from traditional capitalism?

03.02

Identify the origins of the stakeholder concept by explaining what is a stake and what is a stakeholder.

03.03

Who are business’s stakeholders in primary and secondary terms? What is a marginalized or fringe stakeholder?

03.04

Differentiate among the three stakeholder approaches: strategic, multifiduciary, and synthesis.

03.05

Identify and explain the three values of the stakeholder model. Which combination of these values makes the most sense for stakeholder management?

03.06

Name and describe the five key questions that capture the essence of stakeholder management.

03.07

Explain major concepts in effective stakeholder management to include stakeholder thinking, stakeholder culture, stakeholder management capability, and stakeholder engagement.

03.08

Describe the three strategic steps toward global stakeholder management.

Complete List of Chapter Activities and Assessments For additional guidance refer to the Teaching Online Guide. Chapter Objective 3.2 3.1

PPT slide 2 8

Activity/Assessment Icebreaker: The Rights of Glaciers Discussion Activity: Stakeholder Capitalism

Duration 10 minutes 15 minutes

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

3.1 3.2 3.2 3.5 3.6 3.7

9 20 21 37 45 49

Discussion: Students as Stakeholders Discussion: Views of the Firm Discussion: Primary and Secondary Discussion: Five Key Questions Discussion: Stakeholder Engagement Discussion: The Future of the Stakeholder Corporation

15 minutes 15 minutes 15 minutes 15 minutes 15 minutes 20 minutes

[return to top]

Key Terms

Agency culture: a stakeholder culture not concerned with others Altruist culture: a morally based culture that provide the broadest concern for stakeholders Claim: a demand for something due or believed to be due Clarkson Principles: intended to provide managers guidelines for stakeholder relations, they prioritize principles of action and cooperation Corporate egoist culture: culture that focuses mostly on the firm’s shareholders as the important stakeholders Descriptive value (of stakeholder model): provides language and concepts to effectively explain the corporation or organization in stakeholder inclusive terms Five key questions: questions critical to capturing the essential information needed for effective stakeholder management Fringe stakeholders: stakeholders who have little voice, power, or urgency Instrumental value (of stakeholder model): value of a model portraying the relationship between the practice of stakeholder management and the resulting achievement of corporate performance goals Instrumentalist culture: culture that focuses mostly on the firm’s shareholders as the important stakeholders Legitimacy: the perceived validity or appropriateness of a stakeholder’s claim to a stake Managerial view of the firm: view that acknowledges suppliers of goods and users of goods, the owners and employees as stakeholders Marginal stakeholder: stakeholder low on both potential for threat and potential for cooperation Mixed-blessing stakeholder: stakeholder high on both potential for threat and potential for cooperation Moralist culture: culture that is morally based and provide the broadest concern for stakeholders Multifiduciary approach to stakeholders: view that holds that the management has a fiduciary, or trust, responsibility toward stakeholders just as it has this same responsibility toward shareholders

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Nonsupportive stakeholder: a stakeholder high on potential for threat but low on potential for cooperation Normative value (of stakeholder model): stakeholders are seen as possessing value irrespective of their instrumental use to management Power: the ability to affect business Primary nonsocial stakeholders: stakeholders include the natural environment, future generations, and nonhuman species Primary social stakeholders: stakeholders that have a direct stake in the organization and its success and, therefore, are most influential Principles of stakeholder management: Also known as the Clarkson Principles, these are intended to provide managers with guiding precepts regarding how stakeholders should be treated Process level: at this level, organizations develop and implement processes by which the firm may scan the environment and gather pertinent information about stakeholders Production view of the firm: owners thought of stakeholders as only those individuals or groups that supplied resources or bought products or services Secondary nonsocial stakeholders: includes those who represent or speak for the primary stakeholders Secondary social stakeholders: include government and regulators; civic organizations; social activist groups; media and commentators; trade bodies; and competitors Stake: an interest in or a share in an undertaking. Stakeholder: individuals and groups businesses once viewed as powerless and unable to make claims on them Stakeholder approach: view that maintains that to generate and sustain wealth, the firms’ relationships with its stakeholders are the critical factor Stakeholder capitalism: a capitalism that serves all or most stakeholders well Stakeholder corporation: a corporation that accepts the mutuality of interests of stakeholders Stakeholder culture: a culture centered on and revolving around stakeholders and their interests Stakeholder dialogue: a continuous exchange and communication between different stakeholders Stakeholder engagement: the degree to which stakeholders feed information to a corporation Stakeholder identification: the way in which individuals associate with a corporation’s different sets of stakeholders Stakeholder inclusiveness: the commitment to developing loyal relationships with stakeholders Stakeholder management: the type and form of engaging and communicating with stakeholders

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Stakeholder management capability (SMC): to capability to engage and communicate with stakeholders Stakeholder map: a chart of the firm’s stakeholders Stakeholder mindset: an attitude conducive to the consideration of and communication with stakeholders Stakeholder orientation: a manager’s look at the world with a stakeholder script Stakeholder responsibility matrix: a matrix that shows what management might face when assessing the firm’s responsibilities to stakeholders Stakeholder symbiosis: a system that which recognizes that all stakeholders depend on each other for their success and financial well-being Stakeholder thinking: thinking like a stakeholder Stakeholder utility: the practical uses and benefits stakeholders bring to a problem or challenge Stakeholder view of the firm: management must perceive as stakeholders not only those groups that the management thinks have some stake in the firm but also those individuals and groups that themselves think or perceive they have a stake in the firm Supportive stakeholder: high on potential for cooperation and low on potential for threat Synthesis approach to stakeholders: holds that business does have moral responsibilities to stakeholders but that they should not be seen as part of a fiduciary obligation Transactional level: at this highest level of SMC, in which a transformation of the business and society relationship occurs, management must take the initiative in meeting stakeholders Urgency: importance requiring swift action [return to top]

What's New in This Chapter       

The following element is an improvement in this chapter from the previous edition: Chapter Learning Outcomes has been updated. Title ―Stakeholder Approaches: Strategic, Multifiduciary, and synthesis‖ (A-head) has been renamed to ―Strategic, Multifiduciary, and synthesis; three stakeholder approaches‖. Figure 3-8 is updated. Title ―Effective stakeholder management‖ (A-Head) is renamed to ―Effective stakeholder management and engagement‖. Figure 3-9 is added. Discuss Question has been updated. End Notes has been updated.

[return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

PowerPoint deck for this chapter (provided in the PowerPoints section of the Instructor Resource Center); and, as applicable for each discipline, accreditation or certification standards (“BL 1.3.3”). Introduce the chapter and use the Ice Breaker in the PPT if desired, and if one is provided for this chapter. Review learning objectives for Chapter 3. (PPT Slides 1–4). 3.1 Origins of the Stakeholder Concept (Ch. 3.1, PPT Slides 5–8) a. What is the Stake in the Stakeholder (Ch. 3.1, PPT Slide 6) b. What is a Stakeholder (Ch. 3.1, PPT Slide 7) 3.2 Who Are Business’s Stakeholders? (Ch. 3.2, PPT Slides 10–19) e. Three Views of the Firm: Production, Managerial, and Stakeholder (Ch. 3.2, PPT Slides 11–14) f. Primary and Secondary Stakeholders (Ch. 3.2, PPT Slides 15–17) g. Important Stakeholder Attributes: Legitimacy, Power, Urgency (Ch. 3.2, PPT Slides 18–19) 3.3 Strategic, Multifiduciary, and Synthesis: Three Stakeholder Approaches (Ch. 3.3, PPT Slides 22–23) 3.4 Three Values of the Stakeholder Model (Ch. 3.4, PPT Slides 24–25) a. Descriptive Value b. Instrumental Value c. Normative Value 3.5 Stakeholder Management: Five Key Questions (Ch. 3.5, PPT Slides 27–37) a. Who Are the Organization’s Stakeholders? (Ch. 3.5, PPT Slides 27–29) 1. McDonald’s Continuing Experience (Ch. 3.5, PPT Slide 30) b. What Are Our Stakeholders’ Stakes? (Ch. 3.5, PPT Slide 31) 1. Nature or Legitimacy of a Group’s Stakes (Ch. 3.5, PPT Slide 31) 2. Power of a Group’s Stakes (Ch. 3.5, PPT Slide 31) 3. Subgroups within a Generic Group (Ch. 3.5, PPT Slide 31) c. What Opportunities and Challenges Do Our Stakeholder Present? (Ch. 3.5, PPT Slide 32) d. Potential for Cooperation or Threat (Ch. 3.5, PPT Slide 32) e. What Responsibilities Does a Firm Have towards Its Stakeholders? (Ch. 3.5, PPT Slides 33–34) f. What Strategies or Actions Should Management Take? (Ch. 3.5, PPT Slide 35) 1. Type 1: Supportive Stakeholder (Ch. 3.5, PPT Slide 36) 2. Type 2: Marginal Stakeholder (Ch. 3.5, PPT Slide 36) 3. Type 3: Nonsupportive Stakeholder (Ch. 3.5, PPT Slide 36) 4. Type 4: Mixed-Blessing Stakeholder (Ch. 3.5, PPT Slide 36) 3.6 Effective Stakeholder Management and Engagement (Ch. 3.6, PPT Slides 38–45) a. Stakeholder Thinking (Ch. 3.6, PPT Slide 39) b. Developing a Stakeholder Culture (Ch. 3.6, PPT Slide 40) c. Stakeholder Management Capability (Ch. 3.6, PPT Slide 41) d. Stakeholder Engagement (Ch. 3.6, PPT Slide 42) 1. Ladder of Stakeholder Engagement (Ch. 3.6, PPT Slide 42) 2. Transparency (Ch. 3.6, PPT Slide 42) 3. Engaging on Sustainability (Ch. 3.6, PPT Slide 42) e. The Stakeholder Corporation (Ch. 3.6, PPT Slide 43) f. Principles of Stakeholder Management (Ch. 3.6, PPT Slide 44)

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

3.7 Strategic Steps toward Global Stakeholder Management (Ch. 3.7, PPT Slides 46–49) a. Implementation (Ch. 3.8, PPT Slides 47–48) 3.8 Summary (PPT Slides 50–52) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS; as wholeclass discussions in person; or as a partner or group activity in class. 14. Discussion: Stakeholder Capitalism (page 46, 3.1, PPT Slide 8) Duration 15 minutes. a. Question: Explain how stakeholder capitalism has evolved to be a governing system in many advanced nations of the world. Have business firms adapted to this evolving system? I. Answer: 15. Discussion Activity: Students as Stakeholders (page 46, 3.1, PPT Slide 9) Duration 15 minutes. c. Question: Explain the concepts of stake and stakeholder from your perspective as an individual. What kinds of stakes and stakeholders do you have? Discuss. I. Answer: As college students, the people in class may have a widely varied list of stakes and stakeholders. Stakeholders may include parents, a spouse or significant other, possibly children, classmates, the instructor, employers or employees, and many others. The stakes held by each of these groups or individuals will be equally varied, from the pride parents may take in seeing their offspring graduate from college to a spouse who can benefit from the student’s greater earning capacity, to the employer who will have a better qualified employee (and may have to pay more for that person). 16. Discussion: Views of the Firm (page 47, 3.2, PPT Slide 20) Duration 15 minutes. a. Question: Explain in your own words the differences between the production, managerial, and stakeholder views of the firm. Which view is best and why? I. Answer: The production view of the firm was the earliest, most simplistic model. In it, the only groups considered were those who dealt directly with the firm in a business capacity, either supplying factors of production or buying the firm’s products. As business firms became more complex and management functions separated from ownership, a more sophisticated model, the managerial view of the firm, was developed. In addition to the stakeholders recognized in the production view, the managerial view acknowledged other major constituents such as employees and owners. The current stakeholder view of the firm recognizes all of the groups previously mentioned, as well as a myriad of other stakeholders that can affect or be affected by the company. These include, among others, government, community members, and the natural environment. Another significant difference between the stakeholder view of the firm and its predecessors is that benefits of the firm’s operations are seen as accruing to all stakeholders (in one form or another), whereas before, the firm itself was the central figure in that calculus.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

17. Discussion Activity: Primary and Secondary Stakeholders (page 48, 3.2 PPT Slide 21) Duration 15 minutes. a. Question: Differentiate between primary and secondary social and nonsocial stakeholders in a business situation. Give examples of each. I. Answer: Primary stakeholders are those groups or persons who have a direct stake in the organization. Secondary stakeholders have more public or special interests in the firm, rather than direct stakes. Social stakeholders appear to encompass entities that humans consider humanrelated, i.e., individuals and groups of individuals. Nonsocial stakeholders seem to be non-human entities, such as wildlife, the natural environment, or future generations, or groups of humans who represent the interests of those non-humans. If we look at a large manufacturer like Ford Motor Company, its stakeholders might include: (1) primary social stakeholders—customers and employees; (2) secondary social stakeholders—General Motors and the National Highway Safety Board; (3) primary nonsocial stakeholders—polar bears whose natural habitat is being damaged by climate change; and (4) secondary nonsocial stakeholders—citizen groups that support clean air initiatives. 18. Knowledge Check: Five Key Questions, (page 53, 3.5, PPT Slide 37) Duration 15 minutes. a. Question: What are the five key questions that must be answered for stakeholder management to be successful? I. Answer: 1. Who are our organization’s stakeholders? 2. What are our stakeholder’s stakes? 3. What opportunities and challenges do our stakeholders present to the firm? 4. What responsibilities (economic, legal, ethical, and philanthropic) does the firm have to its stakeholders? 5. What strategies or actions should the firm take to best address stakeholder challenges and opportunities? 19. Discussion Activity: Stakeholder Engagement (page 61, 3.6, PPT Slide 45) Duration 15 minutes. a. Question: What are the three levels of stakeholder engagement that a company might use? Explain each. I. Answer: Lower levels of stakeholder engagement can be used for informing and explaining. New coverage, publications, and reports are forms of low-level engagement. Middle levels of stakeholder engagement include communications via conferences, social media, mass e-mails, newsletters, or surveys. Higher levels of stakeholder engagement might include active or responsive attempts to involve stakeholders in company decision making. 20. Discussion Activity: The Future of the Stakeholder Corporation (page 63, 3.8, PPT Slide 49) a. Question: Is the stakeholder corporation a realistic model for business firms? Will stakeholder corporations become more prevalent in the 21st century? Why or why not? I. Answer: A cynic would look at the current business climate and declare that the stakeholder corporation is an impractical dream that will not come to fruition anytime soon. Recent failures in the financial services and automotive industries (among others) and the continuing disparity in CEO and worker pay provide much evidence that primary consideration is

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

given to enriching those in control of the organization at the expense of all others. However, this ignores the groundswell of support for stakeholder inclusion by many, both inside and outside of corporations. This support, along with the complexity of business operations and relationships, will almost require that firms recognize and give credence to the claims their various stakeholders hold on them. There is a paradox at work here, just as there is in the centralization/decentralization question in the management of a firm. As the operating environment becomes more complex, the initial reaction to gaining control is to centralize decisionmaking. However, the sheer complexity soon makes centralization impossible—the few decision makers are overwhelmed. Thus, decentralization becomes the only way to deal with complexity. In a similar manner, the sheer complexity and strength of stakeholder demands will soon mandate that firms recognize them and deal with them. [return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Additional Activities and Assignments

7. Cases: In this chapter, instructors may utilize a combination of cases: 1- Wal-Mart - The Main Street Merchant of Doom 2- Walmart’s Labor Practices 3- Chipotle’s Struggle with Food Safety: Back on Top Again? 4- The Theranos Story and Fake Blood Testing: Culture, Crime, and Hubris 7- Volkswagen’s Diesel Deception and Its Aftermath 12- Family Business 19- An Ethical Dilemma for Chiquita in Colombia 23- McDonald’s: The Coffee Spill Heard ’Round the World 24- Boeing’s Two Flight Crashes 25- Should States Woo Big Business with Tax Incentives? Amazon Thinks So! 26- Everlane: Ethical Chic and Radical Transparency in Global Supply Chains 27- Slow and Sustainable Fashion 29- ―Dead Peasant‖ Life Insurance Policies 31- Two Vets, Two Dogs, and a Deadlock 33- To Take or Not to Take

8. Group Activity: Divide students into groups of four to five students. Have each group review the corporate social responsibility report of a different company. Ask the students to determine the stakeholders addressed by the company’s CSR report. Students should then select one stakeholder group and determine how the company addressed the five key questions of stakeholder management with regards to the selected stakeholder: (1) Who Are Our Stakeholders? (Students should indicate the selected stakeholder group here); (2) What Are Our Stakeholders’ Stakes?; (3) What Opportunities and Challenges Do Our Stakeholders Present?; (4) What Responsibilities Does the Firm Have to Its Stakeholders? and (5) What Strategies or Actions Should Management Take? Each group should make a poster that succinctly addresses the five questions for their company. Students should be encouraged to review the poster presentations of other groups. The instructor may want to quiz the entire class regarding the poster presentations. 9. Individual Assignment: Have students read the following scenario and use the five key questions in stakeholder management to determine how Starbuck’s should handle this stakeholder.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

A few years ago, Starbucks identified three areas in which government could impact the company’s ability to maximize profits in its Corporate Social Responsibility Report: (1) U.S. Tax Policy, (2) U.S. Trade Policy and (3) U.S. Healthcare Policy. Starbucks notes that (1) sound tax policy is critical to its continued competiveness, (2) bilateral and multilateral trade agreements help to create opportunities for corporate investment in emerging markets, and (3) rising healthcare costs could make it more difficult for the company to continue to provide healthcare benefits to its employees. [return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 4: Sustainability and the Natural Environment

Table of Contents Purpose and Perspective of the Chapter ...................................................................................40 Cengage Supplements..............................................................................................................40 Chapter Objectives ...................................................................................................................40 Complete List of Chapter Activities and Assessments ...............................................................41 Key Terms ................................................................................................................................41 What's New in This Chapter ......................................................................................................44 Chapter Outline .........................................................................................................................45 Discussion Questions ...............................................................................................................46 Additional Activities and Assignments .......................................................................................47 Appendix ...................................................................................................................................50

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Generic Rubrics ....................................................................................................................................... 50 Standard Writing Rubric .......................................................................................................................... 50 Standard Discussion Rubric ..................................................................................................................... 51

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter

The purpose of this chapter is to identify what is meant by the term environment and why it has become one of the most significant issues in our lives. As background for the discussion, the authors describe some of the major environmental issues facing us. They then focus on the variety of responses the government and organizations have developed to address these issues. Two themes are emphasized—that humans are part of the natural environment and that environmental issues are extremely complex.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 04.01

Identify the components of the triple bottom line and how it relates to sustainability.

04.02

Discuss the concept of sustainability and its imperative.

04.03

Discuss the UN Global Compact and its sustainability goals.

04.04

Describe the natural environment, the impact of business on the natural environment, and major natural environment issues.

04.05

Identify and discuss the issues that arise for businesses in their responsibility for the environment and sustainability.

04.06

Discuss the role of governments in environmental and sustainability issues.

04.07

Describe other environmental stakeholders, including interest groups, employees, and investors.

04.08

Discuss business environmentalism, sustainability goals, and the future of the business/environment relationship.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 4.3 4.1 4.1 4.2 4.4 4.5 4.6 4.8

PPT Slide 2 7 12 19 38 42 51 59

Activity/Assessment Icebreaker: Is Tesla a Green COMPANY? Discussion: Triple Bottom Line Discussion: The Concept of Sustainability Discussion: Waves of Environmentalism Discussion: Environmental Issues Discussion: Who Is Responsible? Knowledge Check: Can Government Help? Discussion: Growth vs. Green

Duration 10 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes 10 minutes 15 minutes

[return to top]

Key Terms

Air pollution: alteration of the air that leads to acid rain, global warming, smog, the depletion of the ozone layer, and other serious conditions Anthropocene extinction: the ongoing extinction of species as a result of human activity—for example, in the overkilling of big mammals Biodiversity: the variation of life forms inside the system Biofuel: transportation fuels made from biomass materials including ethanol, green diesel, and biogas Cap and trade: intended to reduce a particular pollutant over an entire industrial region by treating all emission sources as if they were all beneath one bubble Carbon dioxide: a colorless gas with a density about 53 percent higher than that of dry air Carbon emission: the release of carbon into the atmosphere Carbon footprint: the total amount of greenhouse gases a person, product, or company emits directly or indirectly Carbon neutral: the maintenance of a balance between producing and using carbon dioxide Carbon offset: a reduction in emissions of carbon dioxide or other greenhouse gases made to compensate for emissions made elsewhere Carbon pricing: tax on individual business units within the company based on energy usage that goes into a common fund that invests in environmental sustainability projects Ceres’ Roadmap to Sustainability: several key drivers that underscore the imperative toward sustainability, presenting both risks and opportunities that parallel the UNGC initiatives Chlorofluorocarbons (CFCs): any of several gaseous compounds that are believed to be a major cause of stratospheric ozone depletion Circular business model: companies working with their ecosystems partners to improve resource efficiency and achieve environmental benefits

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Circular economy: a system of keeping resources and extracting value from them for as long as possible and then recovering and regenerating the resources and products at the end of each life cycle. Climate Action 100+: group of more than 540 investors responsible for more than $52 trillion in assets under management, formed in 2017 in large response to the 2015 Paris Climate Change Conference Climate change: the accelerated change of the world’s climate due to human atmospheric emissions Clean Air Act: comprehensive federal law that regulates air emissions from stationary and mobile sources Clean Water Act: regulates discharges of pollutants into U.S. waters and controls pollution by means such as wastewater standards Corporate sustainability: implementation of a business strategy that focuses on the ethical, social, environmental, cultural, and economic dimensions of doing business Deforestation: logging and clearing of woodlands, destroying the world’s largest store of carbon and biological mechanism to absorb carbon Ecosystems: all living and nonliving substances present in a particular place, often interacting with others Emissions trading: approach to reduce a particular pollutant over an entire industrial region by treating all emission sources as if they were all beneath one bubble Endangered Species Act (ESA): aims to provide a framework to conserve and protect endangered and threatened species and their habitats Energy inefficiency: the wasting of precious nonrenewable sources of energy Environment: anything that is external or internal to an entity Environmental Protection Agency (EPA): independent executive agency of the U.S. federal government tasked with environmental protection matters ESG investing: investing in environmental, social, and corporate governance Exchange-traded funds (ETFs): a type of investment fund that is traded on a stock exchange. Externalities: a side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved Fossil fuels: a natural fuel such as coal, natural gas, petroleum, and Orimulsion, formed in the geological past Fracking: the process of injecting liquid at high pressure into subterranean rocks so as to force open existing fissures and extract oil or gas Global Reporting Initiative (GRI): international independent standards organization that helps businesses and other organizations understand and communicate their impacts on issues such as climate change Global warming: a gradual increase in the overall temperature of the earth’s atmosphere generally attributed to the greenhouse effect caused by increased levels of carbon dioxide

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Green consumers: someone who is aware of his or her obligation to protect the environment by selectively purchasing green products or services Green employees: workers in businesses that produce goods or provide services that benefit the environment or conserve natural resources Green investors: investors who are interested in advancing social causes Greenhouse effect: the trapping of the sun’s warmth in a planet’s lower atmosphere, due to the greater transparency of the atmosphere to visible radiation from the sun than to infrared radiation emitted from the planet’s surface Greenwashing: the process of conveying a false impression or providing misleading information about how a company’s products are more environmentally friendly Internal carbon tax: a tax on individual business units within the company based on energy usage that goes into a common fund that invests in environmental sustainability projects Key performance indicators (KPIs): a quantifiable measure used to evaluate the success of an organization, employee, etc. in meeting objectives for performance Kyoto Protocol: an international agreement adopted in 1997 that aimed to reduce carbon dioxide emissions and the presence of greenhouse gases Montreal Protocol: a global agreement to protect the Earth’s ozone layer by phasing out the chemicals that deplete it Moral hazard: lack of incentive to guard against risk where one is protected from its consequences, e.g., by insurance National Environmental Policy Act (NEPA): a U.S. environmental law that promotes the enhancement of the environment and established the President's Council on Environmental Quality Natural environment: natural world that encompasses all living and non-living things occurring naturally, meaning not artificial NGO: a nonprofit organization that operates independently of any government, typically one whose purpose is to address a social or political issue Ozone: a colorless, unstable, toxic gas with a pungent odor and powerful oxidizing properties, formed from oxygen by electrical discharges or ultraviolet light Recycling: the action or process of converting waste into reusable material Shareholder resolutions: proposals submitted by shareholders for a vote at the company's annual meeting Superfund: a U.S. federal government program designed to fund the cleanup of toxic wastes Sustainability: avoidance of the depletion of natural resources in order to maintain an ecological balance Sustainable Apparel Coalition: an industry-wide group of leading apparel and footwear brands, working to reduce the environmental and social impacts of apparel around the world Sustainable business: the management and coordination of environmental, social and financial demands and concerns to ensure responsible, ethical and ongoing success

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Sustainable development goals (SDGs): a collection of 17 interlinked global goals designed to be a blueprint for a more sustainable future Toxic substance: a substance that can be poisonous or cause health effects Toxic Substances Control Act: a U.S. law passed in 1976 and administered by the U.S. Environmental Protection Agency that regulates the introduction of new or already existing chemicals Tragedy of the commons: a situation in which individuals with access to a shared resource act in their own interest and in doing so deplete the resource Triple bottom line: an accounting framework with three parts: social, environmental, and financial United Nations Environment Programme (UNEP): the leading environmental authority in the UN system United Nations Global Compact (UNGC): a non-binding UN pact to encourage businesses and firms worldwide to adopt sustainable and socially responsible policies and to report on their implementation ―Waters of the United States‖ (WOTUS): a threshold term in the Clean Water Act that establishes the scope of federal jurisdiction under the Act Watershed: an area or ridge of land that separates waters flowing to different rivers, basins, or seas Wicked problem: a problem that is difficult or impossible to solve because of incomplete, contradictory, and changing requirements that are often difficult to recognize [return to top]

What's New in This Chapter The following elements are improvements in this chapter from the previous edition:            

Chapter Learning Outcomes have been updated. The title ―The Sustainability Imperative‖ (A-Head) has been renamed to ―The Sustainability Imperative: A call for Business to Step up‖. Figure 4-1 is added. Figure 4-2 is added. Figure 4-3 is updated. The title ―A Brief Introduction to the Natural Environment‖ (A-head) has been renamed to ―The Impact of business to Natural Environment‖. ―Spotlight Sustainability‖ has been added. ―The Impact of Business on the Natural Environment‖ subheads have been revised. The Section ―Key Environmental Issues (A-Head)‖ has been added. ―Business and environmental partnerships—activists, NGOs, and interest groups‖ has been added in the title ―Other Environmental and Sustainability stakeholders.‖ The discussion questions have been updated. End notes have been updated.

[return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Chapter Outline In the outline below, each element includes references (in parentheses) to related content. “CH.##” refers to the chapter objective; “PPT Slide #” refers to the slide number in the PowerPoint deck for this chapter (provided in the PowerPoints section of the Instructor Resource Center); and, as applicable for each discipline, accreditation or certification standards (“BL 1.3.3”). Introduce the chapter and use the Ice Breaker in the PPT if desired, and if one is provided for this chapter. Review learning objectives for Chapter 4. (PPT Slides 1–4). 4.0 Sustainability and the Natural Environment (Ch. 4.1, PPT Slides 5-6) 5. Triple Bottom Line (Ch. 4.1, PPT Slide 6) 6. What Is Sustainability (Ch. 4.1, PPT Slide 6) 4.1 The Sustainability Imperative: A Call for Business to Step Up (Ch. 4.1, PPT Slides 7–11) 4.2 The Natural Environment (Ch. 4.2, PPT Slide 12–18) 4.3 The Impact of Business on the Natural Environment (Ch. 4.3, PPT Slides 19–20) h. Patagonia (Ch. 4.3, PPT Slide 20) i. Apple (Ch. 4.3, PPT Slide 20) j. Tesla (Ch. 4.3, PPT Slide 20) 4.4 Key Environmental Issues (Ch. 4.4, PPT Slides 21–34) a. Climate Change and Global Warming (Ch. 4.4, PPT Slide 23) b. Air Pollution and Toxins (Ch. 4.4, PPT Slides 25-26) c. Energy and Fossil Fuels (Ch. 4.4, PPT Slide 28) d. Water (Ch. 4.4, PPT Slides 29) e. Waste Management (Ch. 4.4, PPT Slide 30) f. Oceans and Fisheries (Ch. 4.4, PPT Slide 31) g. Deforestation and Biodiversity (Ch. 4.4, PPT Slides 32-22) 4.5 Responsibility for Environmental and Sustainability Issues (Ch. 4.5, PPT Slides 35–38) 1. Environmental Ethics (Ch. 4.5, PPT Slide 37) 4.6 The Role of Governments in Environmental and Sustainability Issues (Ch. 4.6, PPT Slides 39-47) a. Response of Governments – United States (Ch. 4.6, PPT Slides 43–50) 1. Air Quality Legislation (Ch. 4.6, PPT Slide 42) 2. Water Quality Legislation (Ch. 4.6, PPT Slide 43) 3. Land-Related Legislation (Ch. 4.6, PPT Slide 44) 4. Endangered Species and Biodiversity Legislation (Ch. 4.6, PPT Slide 45) b. Responses of Governments – International (Ch. 4.6, PPT Slide 46) 4.7 Other Environmental and Sustainability Stakeholders (Ch. 4.7, PPT Slides 48-51) a. Environmental Interest Groups (Ch. 4.7, PPT Slide 49) b. Other Sustainability Interest Groups (Ch. 4.7, PPT Slide 50) 1. Green consumers (Ch. 4.7, PPT Slide 50) 2. Green Employees (Ch. 4.7, PPT Slide 50) 3. Green Investors (Ch. 4.7, PPT Slide 50) c. Business and Environmental Partnerships-Activists, NGOs, and Interest Groups (Ch. 4.7, PPT Slide 51)

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

4.8 The Future of Business: Greening and/or Growing? (Ch. 4.8, PPT Slides 52–54) 4.9 Summary (PPT Slide 55) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class. 21. Discussion Activity: The Concept of Sustainability (page 69, 4.2, PPT Slide 7) Duration 15 minutes. d. Question: What is sustainability? How does sustainability relate to environmentalism? Discuss. I. Answer: Sustainability is a firm’s ability to meet the needs of the present generation without sacrificing future generations’ quality of life. Firms achieve sustainability by balancing economic prosperity, ecosystem viability, and social justice. 22. Discussion: Environmental Issues (pages 74–81, 4.4, PPT Slide 35) Duration 15 minutes. a. Question: What are several of the most important environmental issues now receiving worldwide attention? I. Answer: The textbook lists several environmental issues that have reached the critical stage: climate change, energy, water, biodiversity/land use, air pollution, waste management, ozone depletion, and deforestation, among others. I would emphasize climate change as possibly the most critical environmental issue, in light of its political, social, and global implications. Furthermore, no other environmental issue has received as much press or attention in recent memory. This particular issue is being addressed in the court of public opinion as well as our nation’s capital. 23. Discussion Activity: Who Is Responsible? (pages 81–82, 4.5, PPT Slide 39) Duration 15 minutes. a. Question: Who has responsibility for addressing environmental issues? I. Answer: Of course, we all have responsibility for addressing environmental issues, because we all have an impact on the environment. How much we consume, the type of cars we drive, and the temperature at which we keep our houses (and much more) all have an impact. However, individual effort can do little to correct the problems we have created. The collective efforts of the international community, through environmental interest groups, and especially businesses and governments are absolutely necessary to even begin to resolve these issues. 24. Knowledge Check: Can Government Help? (pages 81–82, 4.6, PPT Slide 48) Duration 10 minutes. a. Question: Which government measures in the United States have effectively contributed to a containment of pollution and, in some cases, environmental restoration?

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Answer: Especially the federal government has effectively contained environmental destruction with a number of pieces of legislation, which include but are not limited to the National Environmental Policy Act, air quality legislation, the Clean Water Act, the Toxic Substances Control Act, Superfund legislation, and the Endangered Species Act. At the international level, mostly voluntary agreements come with few meaningful consequences of violators.

25. Discussion Activity: The Impact of other Stakeholders (pages 85–88, 4.7, PPT Slide 53) Duration 15 minutes. a. Question: What role can non-government organizations and individuals play in promoting sustainability? I. Answer: Environmental interest groups have a played a large role in promoting awareness and support for legislation. At times, they have influences business practices as hostile stakeholders. Individuals can affect sustainability in their consumption practices, their support or rejection of green or energy-inefficient companies respectively, and in their work as green employees. 26. Discussion Activity: Growth vs. Green (pages 88–89, 4.8, PPT Slide 58) Duration 15 minutes. a. Question: Should businesses and societies continue to focus on unlimited economic growth? Discuss. I. Answer: As noted previously in the text, companies have economic responsibilities, as well as legal, ethical, and philanthropic responsibilities. The key to this question is whether the company should focus on unlimited economic growth. Companies must focus on economic growth, but they cannot do so at the expense of their other responsibilities. Continued emphasis on unlimited economic growth without focusing on a company’s legal and ethical responsibilities will only use up our resources more quickly, thus shortening the remaining life of our planet. The criterion of economic growth was established in a time when survival was the primary concern. We have essentially solved that problem now, so we are using a model designed to answer the wrong question. Several students may object to this line of reasoning, accurately citing the poverty and hunger in less developed countries. Although the results they refer to are correct, they derive from a different problem, not production. The new problems are ones of distribution and sustainability. We grow enough food and make enough stuff for everyone in the world to have at least the basic necessities, but the way those goods are distributed is wildly flawed. Unless we stop population growth, slow, or cap use of resources, develop sources of renewable energy, and redistribute wealth and income, life on this planet will eventually cease to exist. [return to top]

Additional Activities and Assignments

1. Cases: In this chapter, instructors may utilize a combination of cases: 1- Wal-Mart - The Main Street Merchant of Doom 2- Walmart’s Labor Practices

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

12- Family Business 14- Nike, Sweatshops, and Other Issues 16- Big Food, Big Problem: Nestlé in Brazil 18- Coke and Pepsi in India: Water, Issues, and Crisis Management 22- Purdue Pharma, OxyContin, and the Opioid Crisis 25- Should States Woo Big Business with Tax Incentives? Amazon Thinks So! 26- Everlane: Ethical Chic and Radical Transparency in Global Supply Chains 27- Slow and Sustainable Fashion 28- The Perils of Student Loan Debt 29- ―Dead Peasant‖ Life Insurance Policies 34- Workplace Spying 2. Group Activity: Divide students into groups of four to five students. Have students calculate their carbon footprint, which can be determined by various websites (http://www.bp.com/en/global/corporate/sustainability/bp-energy-lab.html, etc.). The instructor may want to review the class results and note the top three to five contributors of carbon dioxide emissions (i.e., car use, airplane use, utility use). Once the top three to five class contributors of carbon dioxide emissions are identified, students should develop proposals of realistic methods/steps that students in the class can take to reduce their carbon dioxide emissions. Students should focus on novel ideas that may not have been developed yet and be ready to present their proposals in a five-minute presentation to the entire class. 3. Individual Assignment: Ask students to research current international agreements and proposed U.S. laws and regulations regarding climate change. As a starting point, instructors may want to guide students to the following websites: https://climate.nasa.gov/scientific-consensus/ https://www.ipcc.ch/report/sixth-assessment-report-cycle/ https://www.pewresearch.org/global/2021/09/14/in-response-to-climate-changecitizens-in-advanced-economies-are-willing-to-alter-how-they-live-and-work/ https://unfccc.int/process-and-meetings/the-paris-agreement/the-parisagreement/key-aspects-of-the-paris-agreement https://theconversation.com/international-climate-agreements-there-must-be-abetter-way-16750 In connection with their research, students should prepare a typed-written response to the following questions:

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

(1) (2)

(3)

What is the conclusion of the latest report from the UN’s Intergovernmental Panel on Climate Change? What is at risk? In the United States, what does the Pew Research Center show has become a new priority for citizens in developed nations? How has this changed in the past 10 years or so? Given the differing view of the political parties, do you expect action by U.S. legislators? Where is most action on climate change being taken—from the top down, or from the bottom up? What can each of us to do to affect the situation?

[return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 5: Business Ethics Essentials

Table of Contents Purpose and Perspective of the Chapter ...................................................................................53 Cengage Supplements..............................................................................................................53 Chapter Objectives ...................................................................................................................53 Complete List of Chapter Activities and Assessments ...............................................................53 Key Terms ................................................................................................................................54 What's New in This Chapter ......................................................................................................55 Chapter Outline .........................................................................................................................56 Discussion Questions ...............................................................................................................57 Additional Activities and Assignments .......................................................................................60 Appendix ...................................................................................................................................63 Generic Rubrics ....................................................................................................................................... 63

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric .......................................................................................................................... 63 Standard Discussion Rubric ..................................................................................................................... 64

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to introduce concepts and background that are essential to understanding business ethics. The authors explore a wide range of topics that combine to form a network within which business decisions are made, how they are made, and how managers develop their abilities to make them.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 05.01

Describe the public’s opinion of business ethics.

05.02

Define business ethics, explain the conventional approach to business ethics, and identify the sources of ethical norms in individuals.

05.03

Analyze the economic, legal, and ethical aspects of a decision by using a Venn model.

05.04

Identify, explain, and illustrate three models of management ethics.

05.05

In terms of making moral management actionable, describe and discuss Kohlberg’s three levels of moral development and Gilligan’s ethics of care.

05.06

Identify and discuss six major elements of moral judgment. How does Rest’s four component model of ethical decision-making build upon these elements?

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 5.1 5.1 5.3 5.4 5.4 5.5 5.6 5.6

PPT Slide

Activity/Assessment

Duration

2 18 36 45 46 51 54 55

Icebreaker: Theranos Discussion: Ethical Business Discussion: The Three Models Discussion: Building Moral Judgement Discussion: Gilligan vs Kohlberg Discussion: Personal Judgment Discussion: Six Elements of Moral Judgment Discussion: Rest’s Model

10 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes

[return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Key Terms

Amoral management: an approach that is devoid of ethical principles or precepts and at the same time implies a positive and active opposition to what is ethical Bottom-line mentality: one-dimensional thinking that revolves around securing bottom-line outcomes to the neglect of competing priorities Business ethics: the study of appropriate business policies and practices regarding potentially controversial subjects including corporate governance Compliance strategy: mitigating risk and adhering to rules set by external authorities Conventional approach: a comparison of a decision or practice to prevailing societal norms Conventional level of moral development (level 2): an acceptance of social rules concerning right and wrong Descriptive ethics: a form of empirical research into the attitudes of individuals or groups of people Elements of moral judgment: evaluations of opinions formed as to whether some action or inaction, intention, motive, or person is Good or Bad Ethical relativism: doctrine that there are no absolute truths in ethics and that what is morally right or wrong varies from person to person Ethical tests approach: a recognized set of steps leading to a decision about what should be done Ethics: moral principles that govern a person's behavior or the conducting of an activity Ethics of care: normative ethical theory that holds that moral action centers on interpersonal relationships and care or benevolence as a virtue Four-component model for ethical decision making and behavior (Rest’s model): ethical decisions with the four-component model, which addresses moral sensitivity, moral judgment, moral motivation, and moral character Individual hypothesis: hypothesis which holds that within each individual manager, these three models may operate at various times and under various circumstances Immoral management: a style devoid of ethical principles and active opposition to what is ethical Integrity strategy: a conception of ethics as a driving force of an enterprise Intentional amoral management: an approach that is devoid of ethical principles or precepts due to a conviction that business lies beyond the realm of moral judgments Kohlberg’s levels of moral development: three levels of moral reasoning that include preconventional, conventional, and postconventional Moral: the desire to act ethically when facing a decision and overcome the rationalization to not be ethical Moral action: taking the necessary steps to transform the intent to do the right thing into reality

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Moral awareness: the ability to detect and appreciate the ethical aspects of a decision that one must make Moral development: the ways we distinguish right from wrong as we grow and mature Moral judgment: the decision whether an action is morally right or wrong Moral management: a state of ethical excellence and the practice and the implementation of the moral maximization principle Morals: a lesson, especially one concerning what is right or prudent, that can be derived from a story, a piece of information, or an experience Normative ethics: branch of moral philosophy, or ethics, concerned with criteria of what is right and wrong Population hypothesis: hypothesis that the distribution of the three models of morality might approximate a normal curve within the management population Postconventional level of moral development: the third stage of moral development, characterized by an individuals' understanding of universal ethical principles Preconventional level of moral development (level 1): the level where individuals do not have a personal code of morality, and instead make moral decisions by the standards of adults and the consequences of following or breaking their rules Principles approach to business ethics: notion that when people agree to form agency relationships and trade with each other in a market, they implicitly agree to abide by a set of identifiable ethical principles Unintentional amoral management: amoral management that stems from a lack of recognition that there is an ethical dimension to what they are doing or the impact their actions might have on others [return to top]

What's New in This Chapter The following elements are improvements in this chapter from the previous edition:          

The data in Figure 5-1 has been updated. Figure 5-2 Business Ethics Today versus Earlier Periods has been newly added. The title The Public’s Opinion of Business Ethics (B-head) has been removed. The title 5.1c, Making Ethical Judgments, has been added. The title of ―To Hunt or Not to Hunt‖ has been changed to ―Little White Lies.‖ The Topic Integrity Strategy has been revised. The topic ―Positive Ethical Behaviors‖ has been removed. The Topic Illustrative cases under the heading ―Moral Management‖ and ―Amoral Management‖ have been revised. The data in Figure 5-12 has been updated. The heading ―Rest’s Model for Ethical Decision Making and Behavior‖ has been added.

[return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Chapter Outline In the outline below, each element includes references (in parentheses) to related content. “CH.##” refers to the chapter objective; “PPT Slide #” refers to the slide number in the PowerPoint deck for this chapter (provided in the PowerPoints section of the Instructor Resource Center); and, as applicable for each discipline, accreditation or certification standards (“BL 1.3.3”). Introduce the chapter and use the Ice Breaker in the PPT if desired, and if one is provided for this chapter. Review learning objectives for Chapter 5. (PPT Slides 1–3). 5.0 Business Ethics Essentials (Ch. 5.1, PPT Slides 4–10) 5.1 Business Ethics: Some Basic Concepts (Ch. 5.1, PPT Slides 11–19) a. Descriptive versus Normative Ethics (Ch. 5.1, PPT Slides 13–14) b. The Conventional Approach to Business Ethics (Ch. 5.1, PPT Slide 15) c. Making Ethical Judgements (Ch. 5.1, PPT Slides 16–17) d. Ethics and the Law (Ch. 5.1, PPT Slide 18) 5.2 Ethics, Economics, and Law – A Venn Model (Ch. 5.2, PPT Slides 19–20) 5.3 Three Models of Management Ethics (Ch. 5.3, PPT Slides 21–36) a. Immoral Management (Ch. 5.3, PPT Slides 22–23) 2. Operating Strategy (Ch. 5.3, PPT Slide 24) 3. Illustrative Cases (Ch. 5.3, PPT Slide 25) a. Enron (Ch. 5.3, PPT Slide 25) b. Everyday Questionable Practices (Ch. 5.3, PPT Slide 26) b. Moral Management (Ch. 5.3, PPT Slides 27–30) 1. Operating Strategy (Ch. 5.3, PPT Slide 27) a. Habits of Moral Leaders (Ch. 5.3, PPT Slide 28) b. Positive Ethical Behaviors (Ch. 5.3, PPT Slide 29) 2. Illustrative Cases (Ch. 5.3, PPT Slide 30) a. CVS Health (Ch. 5.3, PPT Slide 30) b. Merck (Ch. 5.3, PPT Slide 30) c. Amoral Management (Ch. 5.3, PPT Slide 31) 1. Intentional Amoral Management (Ch. 5.3, PPT Slide 31) 2. Unintentional Amoral Management (Ch. 5.3, PPT Slide 31) a. Unconscious Biases (Ch. 5.3, PPT Slide 32) 3. Operating Strategy (Ch. 5.3, PPT Slide 33) 4. Illustrative Cases (Ch. 5.3, PPT Slide 33) a. Wells Fargo (Ch. 5.3, PPT Slide 33) 5. Two Hypotheses Regarding the Models of Management Morality (Ch. 5.3, PPT Slide 34) a. Population Hypothesis (Ch. 5.3, PPT Slide 34) b. Individual Hypothesis (Ch. 5.3, PPT Slide 34) c. Amoral Management Is a Serious Organizational Problem (Ch. 5.3, PPT Slide 35) d. Two Hypotheses Regarding the Models of Management Morality 1. Population Hypothesis 2. Individual Hypothesis 5.4 Developing Moral Judgment (Ch. 5.4, PPT Slides 37–44) a. Levels of Moral Development (Ch. 5.4, PPT Slides 38–41) 1. Level 1: Preconventional Level (Ch. 5.4, PPT Slides 38–41) 2. Level 2: Conventional Level (Ch. 5.4, PPT Slides 38–41)

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

3. Level 3: Postconventional, Autonomous, or Principled Level (Ch. 5.4, PPT Slides 38–41) 4. Ethics of Care Alternative to Kohlberg (Ch. 5.4, PPT Slide 42) b. Different Sources of a Person’s Values (Ch. 5.4, PPT Slide 43) 1. Sources External to the Organization: The Web of Values (Ch. 5.4, PPT Slide 43) a. Religious Values (Ch. 5.4, PPT Slide 43) b. Philosophical Values (Ch. 5.4, PPT Slide 43) c. Cultural Values (Ch. 5.4, PPT Slide 43) d. Legal Values (Ch. 5.4, PPT Slide 43) e. Professional Values (Ch. 5.4, PPT Slide 43) 2. Sources Internal to the Organization (Ch. 5.4, PPT Slide 44) 5.5 Elements of Moral Judgment (Ch. 5.5, PPT Slides 47–51) a. Moral Imagination (Ch. 5.6, PPT Slide 48) b. Moral Identification and Ordering (Ch. 5.6, PPT Slide 48) c. Moral Evaluation (Ch. 5.6, PPT Slide 48) d. Tolerance of Moral Disagreement and Ambiguity (Ch. 5.6, PPT Slide 48) e. Integration of Managerial and Moral Competence (Ch. 5.6, PPT Slide 49) f. A Sense of Moral Obligation (Ch. 5.6, PPT Slide 49) 5.6 Rest’s Model for Ethical Decision Making and Behavior (Ch. 5.6, PPT Slides 52–54) 5.7 Summary (PPT Slides 56–58) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class. 27. Discussion: Ethical Business (pages 98–103, 5.1, PPT Slide 18) a. Question: Provide a definition of ethical business behavior, explain the components involved in making ethical decisions, and give an example from your personal experience of the sources of ethical norms that affect you while making these determinations. I. Answer: Unless students previously have taken a course in moral philosophy, most will have given little thought to the whole issue of ethical decision making. Although they certainly will have opinions regarding what constitutes moral behavior (often very strong opinions), the majority will have little insight into how they make those decisions. One effective way to introduce this element of moral decision making is to show a video clip or read a short passage that presents a clear moral dilemma (e.g., Case 10, Phantom Expenses) and then ask the students how they would decide about that scenario—without allowing them to say what their decisions are. Many will get frustrated with this exercise but will soon recognize the point being made—that they go through a process to get to their decisions, but rarely do they pay any attention to that process. Note that when students describe how they would make their decision, some will describe the use of an ethical principle (i.e., the principles approach); however, many will discuss the use of societal norms in their decisionmaking process (i.e., the conventional approach). Consequently, this

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

exercise also is an opportunity to introduce the three major approaches to business ethics as well as Kohlberg’s three levels of moral judgment. 28. Discussion Activity: The Three Models (pages 106–109, 5.3, PPT Slide 36) Duration 15 minutes. a. Question: To demonstrate that you understand the three models of management ethics—moral, immoral, and amoral—give an example from your personal experience of each type. Do you agree that amorality is a serious problem? Why? Explain. I. Answer: Immoral management entails knowingly deciding to engage in ―wrong‖ actions, often ones that harm others in some way. Moral management, on the other hand, consists of making moral judgments to do the ―right‖ thing. Immoral management often concentrates on measures of profitability to the exclusion of other criteria, while moral management incorporates profit as one of several criteria in deciding. Finally, amoral management views managers’ actions as having no moral consequence—that business operations are somehow outside the boundaries of morality. Examples of immoral management include Enron’s use of special purpose entities to hide corporate debt and the waiver of the code of conduct provisions by Enron’s board which permitted Andy Fastow to serve as the CFO of Enron and the General Partner of certain special purpose entities that were doing business with Enron. Bernie Madoff’s use of a sophisticated Ponzi scheme to defraud investors of over $50 billion is another example of immoral management. Examples of amoral management might include a police department that puts height and weight restrictions in place for police officers. While the department may believe that it has a legitimate reason to use height and weight requirements and does not intend to discriminate in its employment practices, it may fail to recognize the inherent ethical issues with this practice. The management at Starbucks could be considered moral management. The company pursues economic goals, while striving to operate within the confines of the law and focusing on activities that will improve the well-being of its employees, suppliers, and the community in general. Shepard, Shepard, Wimbush, and Stephens (1995) wrote an article entitled ―The Place of Ethics in Business: Shifting Paradigms,‖ in which they argue that business operates in a paradigm of amorality. I would agree that amoral management is a serious problem in business operations. Business has a great deal of power over individuals’ lives, and if that power is wielded without consideration of its effects, the likelihood that people will be harmed is greatly enhanced. Furthermore, it is easier for management to say that ethics has no place in business; hence the saying ―It’s not personal, it’s just business.‖ If management is free to make decisions based on purely economic motivations, then they can avoid the difficult decisions that they may face because of legal and ethical issues. 29. Discussion: Building Moral Judgment (pages 113–114, 5.4, PPT Slide 45) Duration 15 minutes. a. Question: Give examples from your personal experience of Kohlberg’s levels 1, 2, and 3. If you believe you have ever gotten to Level 3, give an example of what it was.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Answer: Level 1, the preconventional level, focuses on self-gratification, and can be seen in virtually any infant or young child. Unfortunately, adults often display characteristics of the preconventional level as well. An example of Level 1 would be when a child takes a certain course of action to avoid a parental punishment (such as a ―time-out‖) or to seek a parental reward (such as permission to do something the child wants to do). The conventional level is characterized by awareness of and concern for others. The locus of analysis of consideration of others widens as a person develops morally, from friends and family to society. An example of Level 2 would be not cutting the line in a public place. While cutting the line is not illegal, individuals recognize that cutting the line is socially unacceptable and their awareness and concern for others usually discourages such actions. In the postconventional level, concern for humankind is manifest, and decisions about right and wrong are based on universal ethical principles rather than societal norms. An example of this level may be individuals who sacrifice a certain percentage of their personal income for charitable causes. Reasoning that the money can be used for the betterment of humankind, individuals may use their resources to support these objectives rather than for their personal gratification.

30. Discussion: Gilligan vs Kohlberg (page 115, 5.4, PPT Slide 46) a. Question: How does Gilligan’s research about the process of moral development differ from that of Kohlberg’s? Have you seen these differences in your personal experiences? Explain by way of example. I. Answer: Gilligan argued that Kohlberg’s conclusions may accurately depict the stages of moral development among men, whom he used as his research subjects, but that his findings are not generalizable to women. Students responses will differ based on experience and examples. 31. Discussion: Personal Judgment (page 118, 5.5, PPT Slide 51) Duration 15 minutes. a. Question: Compare your motivations to behave ethically with those listed in Figure 5-14. Do the reasons given in that figure agree with your personal assessment? Discuss the similarities and differences between Figure 5-14 and your personal assessment. I. Answer: Figure 5-14 is basically a recasting of Kohlberg’s three levels of moral development. I personally agree that most people are morally motivated by the ―negative‖ aspect of avoiding punishment, while conceding that many people seek the more ―positive‖ aspect of doing the right thing or acting constructively toward others. Very few people reach the postconventional level, as evidenced by the honor accorded to people such as Mother Teresa or Desmond TuTu. 32. Discussion Activity: Elements of Moral Judgment (page 118, 5.6, PPT Slide 54) Duration 15 minutes. a. Question: From your personal experience, give an example of a situation you have faced that would require one of the six elements of moral judgment. Which of these six elements are most important and why? I. Answer: Students should use the six elements (1) moral imagination, (2) moral identification and ordering, (3) moral evaluation, (4) tolerance of

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

moral disagreement and ambiguity, (5) integration of managerial and moral competence, and (6) a sense of moral obligation to their example. 33. Discussion Activity: Rest’s Model (page 119, 5.6, PPT Slide 55) Duration 15 minutes. a. Question: Is everyone capable of recognizing a moral issue in stage one (moral awareness) of Rest’s moral decision-making model? Do you think that people can get ―stuck‖ in a stage, for example, imparting moral judgment but incapable of thinking with moral intent? I. Answer: Answers will vary here, but the instructor may want to relate Power and Vogel’s six elements to Rest’s Four Component Model. Moral sensitivity is equivalent to moral imagination; moral judgment is the same as moral evaluation; moral motivation is similar to moral identification and ordering; and moral character is analogous to a sense of moral obligation. Students will have a variety of stories to tell, as well as varying choices for most important element. [return to top]

Additional Activities and Assignments

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Economic/Ethical/Legal

Purely Ethical

MORAL MANAGEMENT

Legal/Ethical

Purely Legal

Economic/Legal Economic/Ethical Purely Economic

IMMORAL AND/OR AMORAL MANAGEMENT

AMORAL MANAGEMENT

Divide students into groups of four to five students and ask them to (1) identify the following activities as moral, immoral, or amoral and (2) categorize the activities as ethical, economic, and/or legal as appropriate: (1)

Enron’s actions of deceiving shareholders by shifting debts from their balance sheet (2) Arthur Andersen’s ordering the shredding of documents related to their transactions with Enron (3) Height and weight requirements for a police force candidate (4) Tobacco company warnings on labels (5) Chick-Fil-A’s policy of being closed on Sunday (6) The creation of a website where users can download music for free by sharing files with other users (7) Provision of HIV/AIDS drugs below cost in third-world countries (8) Installation of an anti-pollution device (9) Smith and Wesson’s addition of safety features to its handguns (10) Ben & Jerry’s distribution of free ice cream in a community (11) Prostitution in the state of Nevada (12) Moving a company overseas because another country has weaker environmental or employment laws (13) Pulling a product from a shelf when it is discovered that there is a product defect Specifically, students should recognize which responsibilities are being pursued by management in each activity and the management style implicated by the pursuit of certain responsibilities. After each group has had time to make its determination, the instructor may want to survey all the groups to determine the assessments made by each group. Differences in categorization among the groups should be discussed by the entire class.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

3. Individual Assignment: Distribute the following instructions to each student: Describe an ethical dilemma that you faced in the workplace and the course of action that you took. Analyze whether your decision was economically, legally, and ethically responsible and defend your response. If you determine that your course of action did not meet all three responsibilities, evaluate whether any alternative course(s) of action would have done so. Finally, ascertain whether you would choose the same course of action again or if you would act differently; explain your response. [return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 6: Managerial and Organizational Ethics

Table of Contents Purpose and Perspective of the Chapter ...................................................................................66 Cengage Supplements..............................................................................................................66 Chapter Objectives ...................................................................................................................66 Complete List of Chapter Activities and Assessments ...............................................................66 Key Terms ................................................................................................................................67 What's New in This Chapter ..................................................................................................7014 Chapter Outline .........................................................................................................................70 Discussion Questions ...............................................................................................................71 Additional Activities and Assignments .......................................................................................76 Appendix ...................................................................................................................................14 Generic Rubrics ....................................................................................................................................... 14 Standard Writing Rubric .......................................................................................................................... 14

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric ..................................................................................................................... 15

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to introduce concepts and background that are essential to understanding business ethics. The chapter explores a wide range of topics that combine to form a network within which business decisions are made, how they are made, and how managers develop their abilities to make them.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 06.01

Identify and explain the different levels at which business ethics may occur and be addressed.

06.02

Enumerate and discuss the principles of managerial ethics and ethical tests for guiding ethical decisions.

06.03

In terms of managing organizational ethics, identify the factors affecting an organization’s ethical culture and provide examples of these factors at work.

06.04

Identify and explain concepts from ―behavioral ethics‖ that affect ethical decision making and behavior in organizations.

06.05

Describe the best practices that management may take to improve an organization’s ethical culture. What are the three most important and why?

06.06

Explain the cascading effect of moral decisions, moral managers, and moral organizations.

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 6.1 6.1 6.3 6.4 6.5

PPT Slide

Activity/Assessment

Duration

2 8 17 21 27

10 minutes 15 minutes 15 minutes 15 minutes 15 minutes

6.6 6.7

32 52

Icebreaker: An Ethical Dilemma Discussion: Ethics at the Personal Level Discussion: Duty or Consequence? Discussion: Ethical Tests Discussion: Changing Organizational Ethics? Business Schools Discussion: Behavioral Ethics Discussion: Best Practices

15 minutes 15 minutes

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

6.7 6.8

53 57

Discussion: Codes of Conduct Discussion: The Moral Manager

15 minutes 15 minutes

[return to top]

Key Terms

Aretaic theories: posits the promotion of virtue as the central aim Behavioral ethics: the study of why people make the ethical and unethical decisions that they do Bounded ethicality: the systemic and predictable ways in which people make decisions without realizing the implications of their behavior Categorical imperative: an unconditional moral obligation which is binding in all circumstances and is not dependent on a person's inclination or purpose Codes of conduct: a policy that outlines principles and standards that all employees and third parties acting on behalf of the company must follow Codes of ethics: a guiding set of principles intended to instruct professionals to act in a manner that is honest and that is beneficial to all stakeholders Common sense, test of: asking whether a decision makes good practical sense Compensatory justice: compensating someone for a past injustice Competing rights: situation when the rights of a person or group come into conflict with the rights of others Compliance officer: employee responsible for ensuring their organization complies with government regulations Compliance orientation: a focus on following laws, rules or policies to the letter of the law Conflict of interest: a situation in which the concerns or aims of two different parties are incompatible Conformity bias: the tendency people have to behave like those around them rather than using their own personal judgment Consequence: a result or effect of an action or condition Conventional approach: a comparison of a decision or practice to prevailing societal norms Corporate transparency: the extent to which a corporation's actions are observable by outsiders Deontological theories: the normative ethical theory that the morality of an act should be measured by a set of rules rather than its consequences Distributive justice: justice that is concerned with the apportionment of privileges, duties, and goods in consonance with an individual’s merits Duty: obligatory task, conduct, service, or function that arises from one's position Ethic of reciprocity: the expectation that people will respond to each other in similar ways

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Ethical due process: fair decision-making procedures, practices, or agreements Ethical ombudsperson: neutral person who is appointed or employed by an organization to investigate and help resolve ethical and other violations that have been reported Ethical tests: more practical or hands-on in orientation and do not require deep principled moral thinking Ethics and compliance (E&I) officer: employee in charge of implementing the array of ethics and compliance initiatives in the organization Ethics audits: mechanisms or approaches by which a company may assess or evaluate its ethical climate or programs Ethics of care: Concept developed by Carol Gilligan more reflective of responsibility to others and on the continuity of interdependent relationships Ethics officer: employee in charge of implementing the array of ethics initiatives in the organization Ethics orientation: a focus on following not just the letter of the law but the ethical principles the organization has subscribed to Ethics screen: several select standards to screen of unethical alternatives Framing: the way that people’s ethical judgments are affected by how a question or issue is posed fraud risk assessments: a systematic process of evaluating the potential risks that may be involved in a projected activity Golden Rule: the principle of treating others as one wants to be treated Ill-conceived goals: setting goals and incentives that unintentionally incentivize a negative effect Incrementalism: belief in or advocacy of change by degrees Indirect blindness: the tendency not to notice unethical actions when people act unethically through others Legal rights: rights which exist under the rules of legal systems Moral decisions: a choice based on what a person believes is proper behavior Moral equilibrium: the idea of keeping a running mental scoreboard that compares one’s selfimage as a good person with actual deeds Moral manager: a person who is dedicated to high standards of ethical behavior Moral organization: an organization dedicated to high standards of ethical behavior Moral rights: rights generally recognized in civil law jurisdictions and, to a lesser extent, in some common law jurisdictions Moral tone: the message from an organization’s top management about ethical conduct Motivated blindness: the tendency to not notice the unethical actions of others when it is against our own best interests to notice Negative right: a right not to be subjected to an action of another person

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Opacity: the condition of lacking transparency Overcoming values: the act of letting questionable behaviors pass if the outcome is good Overconfidence bias: a tendency to hold a false and misleading assessment of our skills, intellect, or talent Positive right: a claim against another person or the state for some good, service, or treatment Principle of caring: the moral significance of the fundamental elements of relationships and dependencies in human life Principle of justice: Rawls’ concept that we first need a fair method by which we may choose the principles through which conflicts will be resolved Principle of rights: the moral and professional responsibility of the management and its company to consider the safety of workers and provide them with appropriate protection against any form of physical or psychological harm Principle of utilitarianism: principle that prescribes actions that maximize happiness and wellbeing for all affected individuals Principles approach: a method of applying a set of principles consistently in every area Procedural justice: the idea of fairness in the processes that resolve disputes and allocate resources Process fairness: treating people fairly along the way, even if the outcome isn't fair Rawls’s principle of justice: Rawls’s concept that we first need a fair method by which we may choose the principles through which conflicts will be resolved Rights: a moral or legal entitlement to have or obtain something or to act in a certain way Role morality: notion that people sometimes fail to live up to their own ethical standards because they see themselves as playing a certain role that excuses them from those standards Self-serving bias: the common habit of a person taking credit for positive events or outcomes, but blaming outside factors for negative events Servant leadership: leadership philosophy built on the belief that the most effective leaders strive to serve others, rather than accrue power for their own benefit Slippery slope: an idea or course of action which will lead to something unacceptable, wrong, or disastrous ―Smell‖ test: informal method for determining whether something is authentic, credible, or ethical Sustainability audit: tool that is used to compare your company's practices with the best practices for sustainability Teleological theory: theory of morality that derives duty or moral obligation from what is good or desirable as an end to be achieved Transparency: the condition of being visible or obvious Utilitarianism: the doctrine that actions are right if they are useful or for the benefit of a majority

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Virtue ethics: theories that emphasize the role of character and virtue in moral philosophy rather than either doing one's duty or acting in order to bring about good consequences [return to top]

What's New in This Chapter The following elements are improvements in this chapter from the previous edition:         

Ethics in Practice Case ―Are There Ethical Issues in Self-Checkout?‖ has been added. The heading ―Competing Rights‖ has been renamed to ―Competing Rights and Ethical Dilemmas‖. The heading ―Factors Affecting the Organization's Moral Climate‖ has been renamed to ―Factors Affecting the Organization’s Ethical Climate‖. Figure 8-4, Factors Influencing Unethical Behavior Question has been removed. Ethics in Practice Case title ―More Sales, Lower Ethics?‖ has been renamed to ―Do More Sales Lead to Lower Ethics?‖. Ethics in Practice Case title ―Fired for Cheating on Employer Tests‖ has been renamed to ―Employees Fired for Cheating on Employer Training Tests‖. The headings ―Ethics Check‖, ―Ethics Quick Test‖ and ―Metaphors for Perceiving Codes‖ have been removed. The spotlight on sustainability title ―The Keys to Successful Transparency‖ has been updated to ―Effective Transparency: How to Make It Happen‖. The End Notes have been updated.

[return to top]

Principles Approach to Ethics (Ch. 6.3, PPT Slides 12–17) a. What is an Ethics Principle? (Ch. 6.3, PPT Slide 13) b. Types of Ethical Principles or Theories (Ch. 6.3, PPT Slide 14) c. Principle of Utilitarianism (Ch. 6.3, PPT Slide 15) d. Kant’s Categorical Imperative (Ch. 6.3, PPT Slide 15) e. Principle of Rights (Ch. 6.3, PPT Slides 15–16) 1. Competing Rights and Ethical Dilemmas (Ch. 6.3, PPT Slide 15) f. Principle of Justice (Fairness Principle) (Ch. 6.3, PPT Slide 15) 1. Rawls’ Principle of Justice (Ch. 6.3, PPT Slide 15)

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

g. h. i. j.

Ethics of Care (Ch. 6.3, PPT Slide 15) Virtue Ethics (Ch. 6.3, PPT Slide 15) The Golden Rule (Ch. 6.3, PPT Slide 15) Servant Leadership (Ch. 6.3, PPT Slide 15)

6.4 Ethical Tests Approach to Decision Making (Ch. 6.4, PPT Slides 18–21) a. Test of Common Sense (Ch. 6.4, PPT Slides 19–20) b. Test of One’s Best Self (Ch. 6.4, PPT Slides 19–20) c. Test of Making Something Public (Disclosure Rule) (Ch. 6.4, PPT Slides 19–20) d. Test of Ventilation (Ch. 6.4, PPT Slides 19–20) e. Test of Purified Idea (Ch. 6.4, PPT Slides 19–20) f. Test of the Big Four (Ch. 6.4, PPT Slides 19–20) g. Gag Test (Ch. 6.4, PPT Slides 19–20) h. Use Several Tests in Combination (Ch. 6.4, PPT Slides 19–20) 6.5 Managing Organizational Ethics (Ch. 6.5, PPT Slides 22–27) a. Factors Affecting the Organization’s Moral Climate (Ch. 6.5, PPT Slides 24–25) 1. Pressures Exerted on Employees by Superiors (Ch. 6.5, PPT Slides 24–25) b. Improving the Organization’s Ethical Culture (Ch. 6.5, PPT Slide 26) 1. Compliance versus Ethics Orientation (Ch. 6.5, PPT Slide 26) 6.6 Behavioral Ethics – Achieving a Deeper Understanding (Ch. 6.6, PPT Slides 28–32) 6.7

Best Practices for Improving an Organization’s Ethics (Ch. 6.7, PPT Slides 33–53) a. Top Management Leadership (Moral Management) (Ch. 6.7, PPT Slide 36) 1. Weak Ethical Leadership (Ch. 6.7, PPT Slide 37) 2. Strong Ethical Leadership (Ch. 6.7, PPT Slide 37) 3. Two Pillars of Leadership (Ch. 6.7, PPT Slide 38) b. Effective Communication of Ethical Messages (Ch. 6.7, PPT Slide 39) c. Ethics and Compliance Programs and Officers (Ch. 6.7, PPT Slide 40) 1. Ethics and Compliance Officers (Ch. 6.7, PPT Slide 41) d. Setting Realistic Objectives (Ch. 6.7, PPT Slide 42) e. Ethical Decision-Making Processes (Ch. 6.7, PPT Slide 43) 1. An Ethics Screen (Ch. 6.7, PPT Slide 43) f. Codes of Ethics or Conduct (Ch. 6.7, PPT Slides 44–45) g. Disciplining Violators of Ethics Standards (Ch. 6.7, PPT Slide 46) h. Ethics ―Hotlines‖ and Whistle-Blowing Mechanisms (Ch. 6.7, PPT Slide 47) i. Business Ethics Training (Ch. 6.7, PPT Slide 48) j. Ethics Audits and Risk Assessments (Ch. 6.7, PPT Slide 49) k. Corporate Transparency (Ch. 6.7, PPT Slide 50) l. Board of Director Leadership and Oversight (Ch. 6.7, PPT Slide 51)

6.8

Moral Decisions, Managers, and Organizations (Ch. 6.8, PPT Slides 54–57) 6.9 Summary (PPT Slides 58–60)

[return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

34. Discussion Activity: Ethics at the Personal Level (page 123, 6.1, PPT Slide 8) Duration 15 minutes. f. Question: From your personal experience, give two examples of ethical dilemmas you have experienced as a member of an organization. Discuss. I. Answer: Students will have many different answers to this question. They may range from decisions related to underreporting time spent at work, to taking company property (pens, damaged goods, petty cash), to reporting the unethical/illegal conduct of others. One that I faced in an organization was whether to tell the managing partner at a law firm where I did not work those associates were padding their hours on their time sheets. The law firm made more money from the additional hours, and I was friends with some of the attorneys who were padding their time. However, the clients were paying for the additional time. Further, since I wasn’t employed with the firm where the practice was occurring, I wasn’t certain how management would respond to the news. Finally, reporting the incident could have had a negative impact on my reputation in the legal community. Another example would be whether to tell a customer those senior managers at a bank were repeating false rumors about the customer’s business practices. Assume that these rumors could potentially do great harm to the customer’s business, but the managers can fire the informant if they desire to do so. Further, assume that this dilemma occurred during a recession, making the likelihood of finding another job comparable to the one at the bank slim. 35. Discussion Activity: Duty or Consequence? (pages 125–132, 6.3 , PPT Slide 17) Duration 15 minutes. a. Question: Which is most important in ethics principles: consequences or duty? Discuss. I. Answer: Obviously, students will have different answers to this question. After all, philosophers have been debating this very question for hundreds of years with no resolution! On the consequential side, our society believes that results matter. What happens to people as a result of my actions is very important. Students like teleological theories, especially utilitarianism, because they often apply a cost-benefit approach to decision making in their other business coursework. However, teleological theories have trouble with questions of rights and justice. We also think that there are some things that just should not be done, regardless of the outcome (e.g., killing an innocent person or denying someone the right to pursue his or her happiness). Many students will agree that there are certain moral and legal rights that cannot be overridden by utility. I personally tend to favor the deontological perspective—I believe there are things that should not be done regardless of the consequences. I also think that the consequences of doing my duty, or ―the right thing‖ will almost always provide positive outcomes. However, when several moral and/or legal rights conflict under the principle of rights or when there are multiple acceptable outcomes using the principle of justice, I would use a teleological theory (e.g., utilitarianism) to reach a final decision. 36. Discussion Ethical Tests (pages 131–133, 6.4, PPT Slide 21) Duration 15 minutes

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

a. Question: Using the examples you provided for question 1, identify one or more of the guides to personal decision making or ethical tests you think would have helped you resolve your dilemmas. Describe how it would have helped. I. Answer: In the first example, I could have used any one of the guides presented in this chapter to help me with my decision. I could have weighed the consequences of my decision, both on the client’s business and on my family; I could have thought about how I would feel if my decision was on the front page of the local newspaper; I could have used the principle of caring—some of the clients were friends of mine. One of the most popular ethical tests in business is the test of making something public. In fact, it is the test that Warren Buffet employs at Berkshire Hathaway. If I had asked myself how I would feel if others knew that I didn’t report the padding of the time sheets, I would have come forward to the management of the law firm where the practice was taking place. 37. Discussion: Changing Organizational Ethics? Business Schools (pages 133–136, 6.5, PPT Slide 27) Duration 15 minutes. a. Question: An ongoing debate concerns whether business ethics can and should be taught in business schools. Do you think ethics can be taught in B-school? Substantiate your point with reasons. Can top managers and board members be taught business ethics? I. Answer: In my opinion, this question does not address the critical issue. Business ethics can be taught. The subject matter is no more difficult to grasp than any other academic subject. People have been making judgments about right and wrong all their lives, using some type of criteria (or maybe just instinct, as the authors point out). People can learn how to use different ethical criteria. The more important, and much more relevant question is one of motivation—Rest’s third component. Because of this, effective ethics training must focus on the organization’s ethical climate, providing an atmosphere that is conducive to and supportive of ethical decisions. As discussed in this chapter, employees of firms feel pressured to compromise their ethics in pursuit of other (usually financial) goals. The problem is not that people don’t know how to make ethical decisions—the problem is that they are worried that doing the right thing will result in punishment rather than reward. So the real question is whether senior managers (those who establish the ethical climate in their organizations) can learn or be persuaded to establish climates that encourage and reward ethical behavior first and foremost, not exclusive pursuit of profit; I believe that current and future managers can be convinced to establish an ethical climate by studying the economic and legal consequences of unethical and ethical behaviors. 38. Discussion: Behavioral Ethics (pages 136–137, 6.6, PPT Slide 32) Duration 15 minutes. a. Question: Which three of the concepts under the field of behavioral ethics appear to be the most powerful? Explain why and give examples. I. Answer: Students will undoubtedly have different answers for the top three concepts and will likely rank them differently. Perhaps the concept with the most impact would be conformity bias. Not only do people take cues from their peers about how to proceed, but this phenomenon is exacerbated in organizations where people work for a living and are concerned about keeping their jobs. Second, bounded ethicality would

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

also exert a powerful influence because it would be difficult to overcome organizational pressures, and not lightly undertaken, since it puts one at risk of losing the job. Perhaps third would be Incrementalism. If one has been restricted in ethical decision making by the cues of one’s peers and the boundaries of the organization, one will undoubtedly have taken some steps towards the slippery slope. 39. Discussion: Best Practices (pages 137–146, 6.7, PPT Slide 52) Duration 15 minutes. a. Question: Identify and prioritize the best practices for improving the organization’s ethical climate. What are the strengths and weaknesses of each? I. Answer: The single most important factor in establishing a strong ethical climate is the commitment and behavior of senior managers. These are the people in the organization who set the standards of behavior for everyone else. If the senior managers authentically believe in ethical behavior, and act that way themselves, there will be little difficulty in establishing an ethical work climate. All of the other practices discussed in the textbook—communicating effectively, establishing ethics programs, setting realistic performance objectives, including ethics in the decisionmaking process, establishing codes of conduct, disciplining violators, setting up hotlines, providing ethics training, performing ethics audits and risk assessments, being transparent, and providing effective board oversight will be helpful, but these measures will only be successful if senior management sets a moral tone at the top.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

40. Discussion: Codes of Conduct (page 141, 6.7, PPT Slide 53) Duration 15 minutes. a. Question: What do you think about codes of conduct? Give three reasons why an organization ought to have a code of conduct and three reasons why an organization should not have a code of conduct. On balance, how do you assess the value of codes of conduct? I. Answer: Codes of conduct, if embedded in the culture of a company, can provide effective guidance to employees. Collins and Porras, in Built to Last, talk about the effects of ―cult-like cultures.‖ These cultures provide ideological control (assuring that employees look at the world in similar ways) and simultaneous operational autonomy. An effective code of conduct can provide a like result. In addition, the Sarbanes-Oxley Act of 2002 requires public companies to have a code of conduct for senior financial officers or to publicly disclose why they do not have this code. Finally, the Federal Sentencing Guidelines direct prosecutors to consider ―the existence and adequacy of the corporation’s compliance program‖ (which includes an effective code of conduct), when determining whether to charge an organization for the criminal actions of its agents. Unfortunately, in reality, most codes of conduct are written to protect the company from its employees’ behaviors, and many are little more than window dressing. On balance, like most things, codes of conduct can be helpful if they are carefully written, properly implemented, uniformly enforced, and embedded in the culture. And like most things, they can be harmful if employees see them as hypocritical, window dressing, or applied capriciously. 41. Discussion: The Moral Manager (page 146, 6.8, PPT Slide 57) Duration 15 minutes. a. Question: Assume that you are in your first managerial position. Identify five ways in which you might provide ethical leadership. Rank them in terms of importance and be prepared to explain your ranking. I. Answer: Because ethical leadership is built upon management that embodies the characteristics of a moral manager and a moral person, I would focus on these aspects of ethical leadership. A moral person exhibits (1) ethical traits (such as honesty, trustworthiness, etc., the foundation of virtue ethics), (2) ethical behaviors and (3) ethical decision making. A moral manager (1) serves as an ethical role model, (2) effectively communicates ethical choices, and (3) uses effective rewards and discipline. Since research has shown that behavior of superiors is the factor most likely to impact an organization’s ethical climate, I believe that it would be paramount for me to serve as an ethical role model by demonstrating ethical behavior, specifically exhibiting the traits of a virtue ethicist and exercising ethical decision making. I would strive to effectively communicate ethical choices, through my own actions and through the implementation of the company’s code of conduct and training courses. Finally, I would emphasize that there are rewards for ethical behavior and punishments for unethical behavior and implement those measures when appropriate. [return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Additional Activities and Assignments

1. Cases: In this chapter, instructors may utilize a combination of cases: 5- Direct-to-Consumer Advertising for Pharmaceuticals: Is It Ethical? 6- The COVID-19 Pandemic: Herculean Challenges for Business and CSR 7- Volkswagen’s Diesel Deception and Its Aftermath 8- Payday Loans: A Needed Product or a Financial Scam? 9- Big Tech’s Power Plays 10- An Epidemic of Cheating in College 12- Family Business 13- What Makes a Good CEO? The Waiter Rule, Humility, and Amazon 17- The Dark Side of Going Green: Tesla’s Ethical Dilemma 22- Purdue Pharma, OxyContin, and the Opioid Crisis 24- Boeing’s Two Flight Crashes28- The Perils of Student Loan Debt 29- ―Dead Peasant‖ Life Insurance Policies Two Vets, Two Dogs, and a Deadlock 32- Are Criminal Background Checks Discriminatory? 33- To Take or Not to Take Ethics in Practice Cases: More Sales, Lower Ethics? Fired for Cheating on Employer Tests The New Ethics Code—Sign or Resign Sometimes Ethics Hotlines Don’t Work Spotlight on Sustainability: The Keys to Successful Transparency 2. Group Activity: Divide students into groups of four to five students. Instruct them to read the following scenario: ―Alex Smith is preparing a sales presentation for his company, Phones4Kids, which manufactures and sells cell phones that are specifically designed for children. Phones4Kids employs several hundred workers in Mooray, Missouri, a small town with only two other large employers in addition to Phones4Kids. Alex hopes to sell specialty phones for boys and girls aged 6–10 to a retailer in Hooptown, Missouri. This sale would represent approximately 25% of the projected revenue for the current year for Phones4Kids. The phones are not specifically designed for internet access; however, about eight percent of the time the phones can pick up a wireless internet connection and the user can access the internet. There is a 48% chance that

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

once a child connects to the internet using one of these specialty phones, he or she could access a pornographic site. Derrick Vance, Alex’s boss, has promised Alex a commission in addition to his regular salary if he makes the sale to the retailer. However, if he tells the retailer about the potential to access pornography via the cell phone, the retailer may buy the phones from a competitor that sells phones without internet access. Alex has reviewed the corporate policy for Phones4Kids and can find no specific guidance on how to handle this situation. However, the policy does indicate that sales representatives are to be honest and fair in their dealings with customers.‖ Each group should determine how Alex should handle this situation in a written memo. Specifically, the group should use the ethical decision-making process to reach a resolution to the hypothetical. The group’s ethics screen should include an analysis of several ethical principles and tests. Instructors may want to have students use the following additional ethical decisionmaking process, which builds on the process provided by the text but incorporates an economic and legal analysis of proposed courses of action: Step 1: State the Problem/Analyze the Problem Step 2: Identify All Courses of Action that You Could Take Step 3: Evaluate Each Course of Action A. Would the proposed course of action meet the firm’s economic responsibilities? B. Would the proposed course of action meet the firm’s legal responsibilities? C. Would the proposed course of action meet the firm’s ethical responsibilities? 1. Note the ethical principles/tests employed by top management. 2. Note the ethical principles/tests required by the code of conduct. Step 4: Evaluate New Alternative (Repeat Step 3) Step 5: Implement Chosen Course of Action 3. Individual Assignment: Distribute the following instructions to each student: Describe an ethical dilemma that you faced in the workplace. Analyze how you would resolve the dilemma using (1) utilitarianism, (2) the principle of rights, (3) the principle of justice, (4) virtue ethics, and (5) the Golden Rule. Based on your analysis of these principles, what course of action would result in the most ethical outcome? Determine what ethical principle(s) or tests(s), if any, were employed by senior management or required by the company’s code of conduct. Finally, describe the course of action that you took in the situation and ascertain whether you would choose the same course of action again or if you would act differently based on your analysis of the ethical principles, management’s behavior and the requirements (if any) of the company’s code of conduct. [return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 7: Ethical Issues in the Global Arena

Table of Contents Purpose and Perspective of the Chapter ...................................................................................81 Cengage Supplements..............................................................................................................81 Chapter Objectives ...................................................................................................................81 Complete List of Chapter Activities and Assessments ...............................................................81 Key Terms ................................................................................................................................81 What's New in This Chapter ......................................................................................................83 Chapter Outline .........................................................................................................................84 Discussion Questions ...............................................................................................................85 Additional Activities and Assignments .......................................................................................88 Appendix ...................................................................................................................................90 Generic Rubrics ....................................................................................................................................... 90

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric .......................................................................................................................... 90 Standard Discussion Rubric ..................................................................................................................... 91

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to introduce the students to ethical issues in the global marketplace, including two infamous examples that demonstrate some of the difficulties encountered by operating in multiple nations. Second, it offers several takes on ways to improve ethical performance in the global economy, using four different popular strategies.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 07.01

Describe the ethical and social challenges faced by multinational corporations (MNCs) operating in the global business environment.

07.02

Summarize the key implications for managers of the following ethical issues: infant formula controversy, Bhopal tragedy, factory collapses, sweatshops, and human rights abuses.

07.03

Define corruption and differentiate between bribes and grease payments, and outline the major features of the Foreign Corrupt Practices Act.

07.04

What are the major global business ethics codes created by international organizations? Which two seem most important and why?

07.05

Identify and discuss strategies companies may employ for improving global business ethics.

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 7.3 7.2 7.2 7.2 7.3 7.3

PPT Slide 2 18 23 25 30 38

Activity/Assessment Icebreaker: Bribery—Fiction and Reality Discussion: Business Ethics on Trial Discussion: Bribery Discussion: Fighting Bribery Discussion: Global Ethical Standards Discussion: Global Ethics Strategies

Duration 10 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes

[return to top]

Key Terms 81

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Alien Tort Claims Act (ATCA): gives the federal courts jurisdiction to hear lawsuits filed by non-U.S. citizens for torts committed in violation of international law Anticorruption movement: international initiative in opposition to corruption and bribery in global business Bhopal tragedy: a gas leak incident in December 1984 at the Union Carbide India Limited (UCIL) pesticide plant in Bhopal, India, considered among the world's worst industrial disasters Bribery: the giving or offering of a bribe Caux Round Table Principles: set of convictions that the world business community should play an important role in improving economic and social conditions Corruption: dishonest or fraudulent conduct by those in power, typically involving bribery Corruption Perception Index (CPI): an index that scores countries on the perceived levels of government corruption by country Cultural relativism: the idea that the values, knowledge, and behavior of people must be understood within their own cultural norms Ethical impact statements: a statement on the potential ethical impacts of an initiative and identifying how to avoid or minimize these negative impacts Ethical imperialism: a situation where a code of ethical behavior or attitude is imposed on another community or society Ethical supply chain: operates in a way that delivers the highest levels of ethical and sustainable operations Fair Labor Association (FLA): a non-profit collaborative effort of universities, civil society organizations, and businesses Foreign Corrupt Practices Act (FCPA): generally prohibits the payment of bribes to foreign officials to assist in obtaining or retaining business Globalization: the process by which businesses or other organizations develop international influence or start operating on an international scale Grease payments: a payment to a foreign official, political party, or party official for ―routine governmental action‖ Hypernorm: applies to principles so fundamental that, by definition, they serve to evaluate lower-order norms, reaching to the root of what is ethical for humanity Infant formula controversy: global controversy and boycott of the Swiss-based Nestle company for its aggressive marketing of baby formula in developing countries where mothers were persuaded to abandon breastfeeding in favor of unaffordable formula Internationalization: the action or process of making something international ISO 26000—Social Responsibility: the international standard developed to help organizations effectively assess and address social responsibilities ISO 37001—Anti-Bribery Management Systems: Requirements with guidance for use, is a management system standard published by the International Organization for Standardization

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Moral minimum: the specific rule that one should do no intentional harm Multinational corporations (MNCs): corporations that have business operations in two or more countries Multinational enterprises (MNEs): enterprises that business operations in two or more countries Social Accountability International (SAI): an auditable certification standard that encourages organizations to develop, maintain, and apply socially acceptable practices in the workplace Sustainable supply chains: companies’ efforts to consider the environmental and human impact of their products’ journey through the supply chain Sweatshop: a factory or workshop, especially in the clothing industry, where manual workers are employed at very low wages for long hours and under poor conditions Transnational economy: an economy going beyond national boundaries or interests Transparency International (TI): the global civil society organization leading the fight against corruption UN Convention against Corruption (UNCAC): the only legally binding international anticorruption multilateral treaty, adopted by the UN General Assembly in October 2003 UN Global Compact: a non-binding UN pact to encourage businesses and firms worldwide to adopt sustainable and socially responsible policies, and to report on their implementation [return to top]

What's New in This Chapter The following elements are improvements in this chapter from the previous edition:         

The A head ―10.1 Business Challenges in a Global Environment‖ has been renamed to ―7.1 Challenges in the Global Environment‖. The heading ―Factory Fire and Building Collapse in Bangladesh‖ has been renamed to ―Factory Fire in Dhaka.‖ And the topic is updated accordingly. The heading ―Rana Plaza Factory Collapse.‖ has been added. The heading ―Debates about Bribery‖ has been renamed to ―Opinions for and against Bribery in Global Settings.‖. FIGURE 10-3 Antibribery Provisions of the Foreign Corrupt Practices Act Key Features has been updated to Figure 7-3 Major Examples of Violations of the Foreign Corrupt Practices Act Charged by the U.S. Securities and Exchange Commission (SEC). The heading ―The Growing Anticorruption Movement‖ has been renamed to ―The Global Anticorruption Movement.‖. Figure 10-6, UN Global Compact and Caux Round Table Principles has been updated to Figure 7-6 Caux Round Table Principles. The B head ―10.3c Corporate Action against Corruption‖ has been removed. Endnotes have been revised.

[return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Ethical Issues in the Global Business Environment (Ch. 7.2 and 7.3, PPT Slides 9–25) a. Questionable Marketing and Plant Safety Practices (Ch. 7.2, PPT Slides 10–12) 1. The Infant Formula Controversy (Ch. 7.2, PPT Slide 11) 2. Plant Safety and the Bhopal Tragedy (Ch. 7.2, PPT Slide 11) a. Factory Fire in Dhaka (Ch. 7.2, PPT Slide 12) b. Rana Plaza Factory Collapse (Ch. 7.2, PPT Slide 12) b. Human Rights, Sweatshops, and Labor Abuses (Ch. 7.2, PPT Slides 13–16) 1. Fair Labor Association (FLA) (Ch. 7.2, PPT Slide 14) 2. Social Accountability 8000 (SA8000) (Ch. 7.2, PPT Slide 15) 3. Individual Company Initiatives (Ch. 7.2, PPT Slide 16) 4. Alien Tort Claims Act and Human Rights Violations (Ch. 7.2, PPT Slide 17)

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

c. Corruption, Bribery, and Questionable Payments (Ch. 7.3, PPT Slides 19–22) 1. Opinions for and against Bribery in Global Settings (Ch. 7.3, PPT Slide 22) 2. The Foreign Corrupt Practices Act (FCPA) (Ch. 7.3, PPT Slide 24) 3. The Global Anticorruption Movement (Ch. 7.3, PPT Slide 24) a. Transparency International (Ch. 7.3, PPT Slide 24) b. Corruption Perception Index (CPI) (Ch. 7.3, PPT Slide 24) c. OECD Antibribery Initiatives (Ch. 7.3, PPT Slide 24) d. UN Convention Against Corruption (UNCAC) (Ch. 7.3, PPT Slide 24)

7.3 Improving Global Business Ethics (Ch. 7.4 and 7.5, PPT Slides 26–38) a. Balancing and Reconciling the Ethics Traditions of Home and Host Countries (Ch. 7.4, PPT Slides 27–29) 1. Ethical Imperialism (Ch. 7.4, PPT Slides 28–29) 2. Cultural Relativism (Ch. 7.4, PPT Slides 28–29) b. Strategies for Improving Global Business Ethics (Ch. 7.4 and 7.5, PPT Slide 31) 1. Global Codes of Conduct (Ch. 7.4, PPT Slides 32–35) a. Corporate Global Codes (Ch. 7.4, PPT Slides 33–35) b. Global Codes Created by International Organizations (Ch. 7.4, PPT Slide 32) Ethics and Global Strategy (Ch. 7.5, PPT Slide 36) a. Levi Strauss & Co. (Ch. 7.5, PPT Slide 36) b. Starbucks (Ch. 7.5, PPT Slide 36) 3. Suspension of Activities (Ch. 7.5, PPT Slide 37) 4. Ethical Impact Statements and Audits (Ch. 7.5, PPT Slide 37) 7.4 Summary (PPT Slides 39–41) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class. 42. Discussion: Global Challenges (pages 153–154, 7.1, PPT Slide 8) Duration 15 minutes. a. Question: Discuss what you think are the main challenges for multinational operations in the global environment today. I. Answer: Students will likely have a vague notion of multinational corporations (MNCs) and the difficulties of operating in widely divergent nations and cultures. Some of the most intractable ethical issues arise in developing countries, due to the vast differences in the level (or stage) of economic development in the home and host countries. For example, a company based in the United States is more likely to encounter difficult ethical issues by operating in Sudan than if it opened a branch in Germany. Part of this difference in ethical standards is due to culture (northern European countries are more culturally similar to the United States than is Sudan), but a significant portion can also be traced to historic and continuing discrepancies in the position of countries in the world economy. 43. Discussion Activity: Business Ethics on Trial (pages 155–157, 7.2, PPT Slide 18) Duration 15 minutes.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

a. Question: Drawing on the notions of moral, amoral, and immoral management introduced in Chapter 5, categorize your impressions of (a) Nestle, in the infant formula controversy and (b) Union Carbide, in the Bhopal tragedy. I. Answer: One of the things that students must keep in mind is that they have the benefit of hindsight, and that case writers have analyzed the events to point out the errors that occurred in each of these cases. This question requires that we approach the situations as if we were in the time period before these events took place, without knowledge of what is about to happen. In the Nestlé case, managers probably thought they were doing something not only ethical, but also extremely beneficial to inhabitants of the tropical locales. The company was providing powdered infant formula that was easily transported and that provided the necessary nutrients for the healthy development of small children. It is quite possible that the problems of impure water supplies never entered their minds, and consequently the problems with the mothers’ breast milk drying up would not have been an issue either. The main ethical issue emerges when Nestlé managers did find out about the problems. At that point, I would have to say that they became immoral managers—they knew a problem existed, and rather than correct the situation, they elected to deny it and continued to actively market their product. In the Union Carbide incident, it is a fine line between amoral and immoral management. The key issue in this case is the fact that the plant was constructed pursuant to lower standards than those required in the United States. Presuming that the U.S. standards were in place in order to assure safety, it seems that the Union Carbide managers made a conscious decision to place a higher risk of accident on the employees and citizens of India than it imposed on its American workers. This is a direct violation of Kant’s categorical imperative, ―treat people only as ends, never as means.‖ If Union Carbide had followed this maxim, it would have decided to adhere to the higher standards, simply to ensure the safety of its Indian stakeholders.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

44. Discussion Activity: Bribery (pages 161–162, 7.3, PPT Slide 23) Duration 15 minutes. g. Question: Differentiate between a bribe and a grease payment. Give an example of each. Discuss. I. Answer: A grease payment is an expected, small, customary payment to an official in order to get him or her to do whatever s/he was supposed to do in the first place. We often think of grease payments as existing only in foreign countries (e.g., paying a customs officer to approve the delivery of personal luggage), but in some sense, paying a bellhop to carry your bags into a hotel, or giving a waiter a tip to deliver your meal could also be viewed in this manner. On the other hand, a bribe is a larger sum that is provided in order to get the recipient to make a choice that favors the briber or to do something that s/he is not required to do. Paying a government official to select your firm’s contract to provide a service, rather than your competitor’s, would be considered a bribe. 45. Discussion Activity: Fighting Bribery (pages 162–165, 7.3, PPT Slide 25) Duration 15 minutes. a. Question: Conduct research, for purposes of updating the latest rankings of Transparency International and the activities of the OECD, UNCAC, and individual country initiatives. Discuss, how could countries such as China, India, and Russia most effective improve their TI rankings? I. Answer: This question is left to the class instructor as time and events will have altered the information available at the time this is being written. While Russia, China and India are all countries with emerging economies, the textbook notes that these countries could do more do deter bribery and corruption. If these countries want to improve their TI rankings, they not only need to pass more stringent anti-bribery and anticorruption laws, they also need to make sure that the laws are enforced. The best way to accomplish this objective is for each country to make sure that all actions covered by the laws are subject to public scrutiny and that the officials in charge of implementing and following the laws are held accountable. 46. Discussion Global Ethical Standards (pages 166–167, 7.4, PPT Slide 30) Duration 15 minutes. a. Question: As an MNC seeks to balance and honor the ethical standards of both the home and host countries, conflicts inevitably will arise. What criteria do you think managers should consider as they try to decide whether to use home or host country ethical standards? Does the use of hypernorms help? Explain. I. Answer: In the first example I could have used any one of the guides presented in this chapter to help me with my decision. I could have weighed the consequences of my decision, both on the client’s business and on my family; I could have thought about how I would feel if my decision was on the front page of the local newspaper; I could have used the principle of caring—some of the clients were friends of mine. One of the most popular ethical tests in business is the test of making something public. In fact, it is the test that Warren Buffet employs at Berkshire Hathaway. If I had asked myself how I would feel if others knew that I didn’t report the padding of the time sheets, I would have come forward to the management of the law firm where the practice was taking place. 47. Discussion: Global Ethics Strategies (pages 133–136, 7.5, PPT Slide 38) Duration 15 minutes.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

a. Question: What are the major strategies companies might employ in improving global business ethics? What are the key steps research has shown are important to successful company anticorruption efforts? I. Answer: As noted in the text, companies can improve global ethics by (1) developing worldwide codes of conduct, (2) factoring ethics into global strategy, (3) suspending activities when faced with unbridgeable ethical gaps, and (4) developing periodic ―ethical impact statements.‖ According to a report issued by The Conference Board and the Ethics and Compliance Officers Association (ECOA), the following are five key steps that companies can take to fight bribery and corruption: 1. 2. 3. 4. 5.

High-level Commitment by Top Management Detailed Statements of Policies and Operating Procedures Training and Discussion of Policies and Procedures Hotlines and Helplines for All Organizational Members Investigative Follow-Up, Reporting, and Disclosure

[return to top]

Additional Activities and Assignments

1. Cases: In this chapter, instructors may utilize a combination of cases: 14- Nike, Sweatshops, and Other Issues 15- The Rana Plaza Factory Collapse 16- Big Food, Big Problem: Nestlé in Brazil 17- The Dark Side of Going Green: Tesla’s Ethical Dilemma 18- Coke and Pepsi in India: Water, Issues, and Crisis Management 21- Big Pharma’s Marketing Tactics 30- The Case of the Fired Waitress 34- Workplace Spying Ethics in Practice Cases: Is the Fair-trade Movement Sustainable? Helping Factories to Pass Sweatshop Audits – Using Cheating Consultants Violations of the Foreign Corrupt Practices Act or Not? Spotlight on Sustainability: Earth Hour: A Global Ethical Sustainability Movement

2. Group Activity: Divide students into groups of four to five students. Ask each group to draft a general global code of conduct that could be used by any multinational corporation. Students should explore which issues might be difficult to implement on a global scale (i.e., issues related to gifts/bribes, discrimination concerns, sexual harassment, etc.). Students should reach a resolution on how to implement global standards in their respective

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

codes regarding these issues. Students also should contemplate the steps that they would need to take to make their code accessible to employees (posting it on the Internet, translating it into various languages, etc.). 3. Individual Assignment: Ask students to categorize the following as a facilitating payment (grease payment), a bribe or neither of these under the Foreign Corrupt Practices Act. Students should explain why they chose a certain answer. (1) Jane Jones, who works for XYZ Corporation (a U.S. publicly traded company), has documents that she needs to clear customs in order to make it to an important business meeting on time. She decides to pay the customs official $500 in order to move to the front of the line. (2) Same facts as above, but Jane decides to pay the customs official $5,000. (3) Jane gives a steel letter opener with XYZ Corporation imprinted on it to a foreign government official as a gift. (4) The country where a major foreign client is based was recently hit by a devastating earthquake. Competitors of XYZ Corporation are donating approximately $150,000 each to foreign relief efforts. XYZ Corporation also decides to donate a similar amount. [return to top]

Additional Resources [return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 8: Business Ethics and Technology: The Digital Enterprise

Table of Contents Purpose and Perspective of the Chapter ...................................................................................93 Cengage Supplements..............................................................................................................93 Chapter Objectives ...................................................................................................................93 Complete List of Chapter Activities and Assessments ...............................................................93 Key Terms ................................................................................................................................94 What's New in This Chapter ......................................................................................................96 Chapter Outline .........................................................................................................................96 Discussion Questions ...............................................................................................................97 Additional Activities and Assignments .....................................................................................100 Appendix .................................................................................................................................102 Generic Rubrics ..................................................................................................................................... 102

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric ........................................................................................................................ 102 Standard Discussion Rubric ................................................................................................................... 103

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to explore the subject of technology and business ethics since technology is such an integral aspect of our work lives and consumer lives. The chapter first considers what technology means and some of its benefits and challenges. It discusses the subject of ethics and technology and finishes by exploring ethical issues connected with two major components of technology—information technology and biotechnology.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 08.01

Identify and describe what the new world of big data and artificial intelligence is all about and the implications it holds for businesses.

08.02

What makes an organization a digital enterprise? How does this relate to business ethics?

08.03

Explain how social media have changed the world of business and technology.

08.04

Discuss how surveillance is a new dimension to being a consumer and an employee and what its implications are for stakeholders.

08.05

Articulate an understanding of technology and the technological environment.

08.06

Identify the characteristics of technology to include their benefits, side effects, and challenges in business.

08.07

Comment on the relationship between technology and ethics.

08.08

Define information technology and discuss the issues relating to e-commerce in business.

08.09

Define biotechnology. Identify the ethical issues involved in genetic engineering and genetically modified organisms (GMOs).

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 8.1 8.1

PPT Slide

Activity/Assessment

Duration

2 10

Icebreaker: Technology—What Is the Point? Discussion: The Lure of Technological Change

10 minutes 15 minutes

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

8.3 8.4 8.6 8.9

16 36 37 44

Discussion: The Two Sides of Technology Discussion: Consumer Surveillance Discussion: Cell Phone Policies Discussion: The Ethics of Biotechnology

15 minutes 15 minutes 15 minutes 15 minutes

[return to top]

Key Terms

Artificial intelligence: the ability of computers or computer- controlled devices to perform tasks that are commonly associated with human beings Big data: the infinite sea of facts, opinions, trends, surveys, and analyses that inundate business on a day-to-day basis Bioethics: the ethical issues embedded in the commercial use of biotechnology, especially in medicine and health care Biometrics: the use of body measurements, such as eye scans, fingerprints, or palm prints, for determining and confirming identity Biotechnology: Technology that involves using biology to discover, develop, manufacture, market, and sell products and services Botnet: a network of bots created by e-mails that get distributed by these compromised computers, and these are controlled by a central computer Botnet scams: one of the latest techniques by which hackers get access to personal and corporate information Business analytics: the processes of using statistical methods for analyzing historical and current data in order to gain new insights and improve decision making Chief privacy officer (CPO): company officials who share the common objective of finding ways to protect consumers and achieve legal compliance while still enabling companies to innovate and grow Cloning: a technique scientists use to make exact genetic copies of living things Cobots: collaborative robots that work alongside humans Cookies: identification tags that websites drop on our personal computer hard drives so they can recognize repeat visitors the next time we visit their websites Data security: the process of protecting data from unauthorized access and data corruption throughout its life cycle Digital amnesia: forgetfulness phenomenon that affects consumers and employees as they outsource brainwork to digital devices Digital enterprise: an organization in which digital technology is at the center of all its business processes Digital transformation: a process in many companies as they strive to integrate digital technology into all areas of their businesses, resulting in fundamental changes in how the businesses operate and deliver value to their customers

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

E-commerce: the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the Internet Electronic commerce: the buying and selling of goods and services, or the transmitting of funds or data, over an electronic network, primarily the Internet Ethical lag: an incidence when the speed of technological change far exceeds that of ethical development Ethical tech: the ethical use of technology Genetic engineering: the development and application of scientific methods, procedures, and technologies that permit direct manipulation of genetic material in order to alter the hereditary traits of a cell organism or population Genetic profiling: the use of biotechnology in identification of the unique characteristics of a person’s DNA for forensic or diagnostic purposes Genetic testing: a type of medical test that identifies changes in genes, chromosomes, or proteins Genetically engineered foods: foods that have had their DNA changed using genes from other plants or animals Genetically modified foods (GMFs): foods that have had their DNA changed using genes from other plants or animals Genetically modified organisms (GMOs): an animal, plant, or microbe whose DNA has been altered using genetic engineering techniques Google effect: a phenomenon where just knowing that some bit of data can easily be retrieved on the Internet makes us less likely to now remember it Identity theft: the fraudulent acquisition and use of a person's private identifying information, usually for financial gain Information technology (IT): the study or use of systems (especially computers and telecommunications) for storing, retrieving, and sending information Online scams: someone using internet services or software to defraud or take advantage of victims, typically for financial gain Phishing: an attempt to obtain financial or other confidential, personal information from Internet users, typically by way of an e-mail that looks like it is from a legitimate organization, such as a financial institution, but contains a link to a fake website that replicates the real one Roboethics: the area of study concerned with what rules should be created for robots to ensure their ethical behavior and how to design ethical robots Social media: websites and applications that enable users to create and share content or to participate in social networking Spam: unsolicited commercial e-mail Technoethics: a discipline that analyzes the moral dimension of the use of technological devices and systems Technological determinism: the imperative that what can be developed will be developed

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Technological environment: the total set of technology-based advancements or progress taking place in society Technology: machinery and equipment developed from the application of scientific knowledge [return to top]

What's New in This Chapter The following elements are improvements in this chapter from the previous edition:       

The section ―Business Ethics and Technology: The Digital Enterprise‖ has been renamed. The section ―The New World of Big Data and Artificial Intelligence‖ has been renamed. The section ―Benefits and Costs of Technology‖ has been updated. The subhead ―Surveillance‖ under ―Technology and Ethics‖ has been updated. The subheads ―Social Media‖ and ―Cybersecurity‖ under the header ―Information Technology‖ have been updated. The subheading ―E-Commerce‖ under ―Information Technology‖ has been renamed. The section ―Key Terms‖ has been revised.

[return to top]

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

a. Illegal Downloading (Ch. 8.4, PPT Slide 32) b. Monitoring Technology (Ch. 8.4, PPT Slide 32) e. The Workplace and Digital Technology (Ch. 8.8, PPT Slides 33–35) 1. Biometrics (Ch. 8.8, PPT Slide 33) 2. Automation and Robotics (Ch. 8.8, PPT Slide 33) 3. Cell Phones and Texting (Ch. 8.8, PPT Slide 33) 4. Unethical Activities by Employees involving Technology (Ch. 8.8, PPT Slide 34) 5. Company Actions (Ch. 8.8, PPT Slide 35) 8.6 Biotechnology (Ch. 8.9, PPT Slides 38–43) a. Bioethics (Ch. 8.9, PPT Slides 38–43) b. Genetic Engineering (Ch. 8.9, PPT Slide 40) 1. Cloning Animals for Food (Ch. 8.9, PPT Slide 41) 2. Genetic Testing and Profiling (Ch. 8.9, PPT Slide 41) c. Genetically Modified Organisms (GMOs) (Ch. 8.9, PPT Slide 42) d. Labeling of GMOs (Ch. 8.9, PPT Slide 43) 8.7 Summary (PPT Slides 45–47) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class. 48. Discussion: The Lure of Technological Change (pages 176–177, 8.1, PPT Slide 10) Duration 15 minutes. a. Question: Is society intoxicated with technology? Does this pose special problems for business with respect to the ethics of technology? Will such intoxication blind people to ethical considerations in business? I. Answer: Whether one concurs with each of the six symptoms identified in High Tech/High Touch is not really the point—we need look no further than popular attitudes about technological unemployment and global warming to provide convincing evidence that we are intoxicated with technology. In the case of unemployment, the prevailing attitude is that new types of jobs will come from somewhere, regardless of our inability to identify the source. ―We’ll invent something…‖ With global warming, many people ignore the fact that the widespread use of technology is the primary cause of global warming and claim that new technology (yet to be invented or even conceptualized) will allow us to avoid this coming disaster. 49. Discussion Activity: The Two Sides of Technology (pages 178–179, 8.3, PPT Slide 16) Duration 15 minutes. h. Question: Are there any benefits or negative side effects of technology in business that have not been mentioned in this chapter? Identify and discuss. I. Answer: One interesting issue related to technology is the fact that the number of hours that Americans work is increasing, not decreasing. As Jeremy Rifkin notes in The End of Work, the primary view of technology’s effects on work would be to provide increasing amounts of leisure. One need look no further than the cartoon series The Jetsons to capture the

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

visions of Rifkin’s ―techno-paradise.‖ Some students will rightfully point out that it is not technology per se that makes us work longer hours—that is a decision we make based on our value systems. However, technology has driven an expectation of constant availability in business—if you aren’t available—someone else will be. In order to remain competitive, employees feel constant pressure to be accessible. While employees may wish to clearly segregate work and personal lives, they may find it increasingly difficult to do so. This is exactly the point that should be made. How we decide to use technology is the ethical issue that we confront. On the other hand, technology has increased our ability to access relevant data in an expedient manner and to market ourselves and our businesses. Tasks that once took weeks to complete (as workers had to rely on traditional methods to obtain forms, information, printed materials, etc.) now can be completed and transmitted in a matter of minutes. Further, social media platforms now remove certain barriers of entry for business and individual marketing. 50. Discussion Activity: Consumer Surveillance (pages 179–180, 8.4, PPT Slide 36) Duration 15 minutes. a. Question: Do you think business is abusing its power with respect to invasion of privacy of consumers? Is surveillance of consumers in the marketplace a fair and justified practice? Which particular practice do you think is the most questionable? I. Answer: Although it would be foolish to expect that business would not use all of the technology available to it to enhance its operations, I do think that business invades the privacy of its customers. Certainly, the concepts of ―right to privacy‖ and ―expectation of privacy‖ are recognized in the court systems. Sitting in the privacy of my home and using the Internet is not an invitation to hundreds or thousands of companies to send me emails or to push advertisements onto my computer screen. Nor should my purchase of a particular product subject me to a multitude of follow-up solicitations to buy other products. Further, I should not have to be concerned with how my information will be used or if it will be sold when it is necessary for me to provide such information to certain businesses. Employees, on the other hand, do not have the same rights or expectations to privacy in the workplace. As noted in a later chapter, businesses can record employee phone calls and review employee emails as long as such activities occur in the ordinary course of business. As a result, students should have few expectations to privacy in the workplace and conduct themselves accordingly. According to an April 2007 Wall Street Journal article, a case involving employee surveillance at Walmart is a good reminder to students regarding workplace privacy. In connection with work related activities, Walmart monitored not only its employees’ phone calls and e-mails from the Walmart server, but also the emails sent from the employees’ personal e-mail accounts (Yahoo, Hotmail, Gmail, etc.) when such e-mails were sent from work. Employer surveillance also can occur in connection with employees’ social media accounts, although businesses should carefully consider when and if they will observe employee information in this medium.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

51. Discussion: Cell Phone Policies (pages 181–190, 8.6, PPT Slide 37) Duration 15 minutes. a. Question: Is it an exaggeration to question the ethical implications for business of cell phone and text-messaging use? Discuss both sides of this issue. I. Answer: There are ethical implications to the use of cell phones and text messaging for business, whether managers want to acknowledge them or not. Any time that one person’s actions affect another, there is a potential ethical situation involved. In the case of cell phone use and text messaging, these issues can range from the mild annoyance caused to others who may be forced to listen to a one-sided telephone conversation or watch an individual texting to life threatening situations when a driver is talking or texting on the cell phone. All of these potential ethical issues are exacerbated by employers’ pressure to ―get more done.‖ In addition to the bystanders who are affected in ways noted above, the employee is also subjected to the pressure to always be available to customers, co-workers, and managers. With a company-provided cell phone, many employees are expected to be available literally anytime someone calls them or to respond to text messages day or night. The effects on the employee’s personal life can be devastating. This constant pressure also impacts business because many employees will leave their current employer when the pressure becomes too much in search of a better opportunity. This translates into dollars and manpower lost for companies. 52. Discussion: The Ethics of Biotechnology (pages 190–193, 8.9, PPT Slide 44) Duration 15 minutes. a. Question: Do you think genetically modified organisms (GMOs) raise a legitimate safety hazard? Should government agencies such as the FDA take more action to require safety testing? Do you think labeling unfairly stigmatizes GMOs and make consumers question their safety? I. Answer: When weighing the needs and rights of companies versus consumers, I think it is plain that individuals should be given clear preference over corporations. Our history is rife with examples of harms done to people by companies selling products whose effects were unknown or not fully understood (e.g., asbestos, lead in gasoline, tobacco, etc.). However, there seems to be growing support from government groups that GMFs are safe for human consumption. As the textbook notes, the World Health Organization claims that current GMFs have passed risk assessments and that human health has not been affected by the consumption of such foods in countries where they have been approved. However, while certain groups may continue to assert that GMFs are not likely to present risks to human health, public perception may be another matter. The text also notes a majority of consumers would not purchase a GMF product (although it is virtually impossible to avoid this). Consequently, warning labels that indicate that a product is a GMF should be required. Consumers have a right to information that is clear and not misleading. If GMF foods are properly labeled, then the consumer is free to make an informed choice regarding consumption. This is not unfair to the GMF industry, especially if it merely alerts the customer that the product is a GMF. It is arguably unfair to the consumer, however, when he or she is not informed that a product is a GMF.

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

[return to top]

Additional Activities and Assignments

1. Cases: In this chapter, instructors may utilize a combination of cases: 14- Nike, Sweatshops, and Other Issues 15- The Rana Plaza Factory Collapse 16- Big Food, Big Problem: Nestlé in Brazil 17- The Dark Side of Going Green: Tesla’s Ethical Dilemma 18- Coke and Pepsi in India: Water, Issues, and Crisis Management 21- Big Pharma’s Marketing Tactics 30- The Case of the Fired Waitress 34- Workplace Spying Ethics in Practice Cases: Twitter Ethics in Business Copyright Infringement? Using Personal Technology in the Workplace Whole Foods: GMO Transparency or Clever Marketing? Spotlight on Sustainability: The Field of Technoethics Is Biotech Agriculture Sustainable?

2. Group Activity: Have students create a Facebook group where they can discuss concerns regarding employee and consumer privacy. Encourage students to invite other students from outside the class. Remind students about defamation laws and that they will have little to no privacy with regards to the information that they post on Facebook. In fact, it has been noted that many employers will access Facebook to review a student’s profile prior to a job interview (many jobs have been lost due to the Facebook review). Students should discuss how the Facebook project has impacted their perceptions regarding employee and consumer privacy. 3. Individual Assignment: Have students read Stem Cell Now by Christopher Thomas Scott. While the main focus of the book is on the science of stem cell research, Scott also explores the ethical and moral issues involved with the use of embryonic stem cells for research purposes (a practice that remains controversial in political, religious, and medical circles). After reading this book, students should summarize what they have learned regarding the scientific possibilities of stem cell research and the ethical issues

100

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

associated with such research. Students also should discuss whether they are in favor of embryonic stem cell research and support their position with appropriate data. Finally, students should explore whether the government should provide federal funding for stem cell research. [return to top]

101

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

102

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 9: Corporate Governance: Foundational Issues

Table of Contents Purpose and Perspective of the Chapter .................................................................................105 Cengage Supplements............................................................................................................105 Chapter Objectives .................................................................................................................105 Complete List of Chapter Activities and Assessments .............................................................105 Key Terms ..............................................................................................................................106 What's New in This Chapter ....................................................................................................110 Chapter Outline .......................................................................................................................110 Discussion Questions .............................................................................................................111 Additional Activities and Assignments .....................................................................................114 Appendix ...................................................................................................................................15

103

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Generic Rubrics ....................................................................................................................................... 15 Standard Writing Rubric .......................................................................................................................... 15 Standard Discussion Rubric ..................................................................................................................... 16

104

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to explore corporate governance and the ways in which it has evolved. It proposes an alternative model of corporate governance, examines the concept of legitimacy, and the part that corporate governance plays in establishing the legitimacy of business. The chapter further explores how good corporate governance can mitigate the problems created by the separation of ownership and control and examine some of the specific challenges facing board members today.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter 09.01

Link the issue of legitimacy to corporate governance.

09.02

Discuss the problems that have led to the recent spate of corporate scandals and problems in corporate governance.

09.03

Discuss the principal ways in which companies can improve corporate governance.

09.04

Discuss the role of shareholders and the idea of strengthening shareholder voice. What are some of the mechanisms that enable this?

09.05

Discuss the role of the Securities and Exchange Commission (SEC) in protecting investors.

09.06

Identify and discuss the principal ways in which shareholder activists exert pressure on corporate management to improve governance.

09.07

Why are investor relations and shareholder engagement important? Discuss.

09.08

Compare and contrast the shareholder-primacy, director- primacy, and stakeholder governance models of corporate governance. What are their respective strengths and weaknesses? Which do you prefer and why?

09.09

In the realm of corporate governance, what should companies do to ensure effective corporate social responsibility (CSR), sustainability, and business ethics?

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 9.6

PPT Slide

Activity/Assessment

Duration

Icebreaker: What Are the Powers of

10 minutes

105

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

9.1 9.2

12 24

9.2 9.3 9.4 9.8-9.9

33 34 38 45

Shareholders? Discussion: Boards of Directors Discussion: Trends and Problems in Corporate Governance Discussion: Corporate Governance Failures Discussion: Improving Corporate Governance Discussion: Shareholder Activism Discussion: Shareholder or Director Primacy?

15 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes

[return to top]

Key Terms

Accounting Reform and Investor Protection Act of 2002: act that amended the securities laws to provide better protection to investors in public companies by improving the financial reporting of companies Agency problems: a conflict of interest inherent in any relationship where one party is expected to act in another's best interests Anglo-American model: one of shareholder primacy, that is, it considers shareholders to be of primary importance Audit committee: board responsible for assessing the adequacy of internal control systems and the integrity of financial statements that are prepared by management Backdating: an instance when the recipient is given the option of buying stock at yesterday’s price, resulting in an immediate and guaranteed wealth increase Board of directors: committee that oversees management on behalf of the shareholders and with full regard for the stakeholders Bullet-dodging: delaying of a stock option grant until right after bad news Business judgment rule: principle that holds that courts should not challenge board members who act in good faith, making informed decisions that reflect the company’s best interests instead of their own self-interest Business Roundtable (BRT): a group representing more than 181 CEOs of large publicly traded companies, that affirmed that their businesses are committed to meeting the needs and providing long-term value to all of their stakeholders, not just shareholders CEO duality: occurrence when the CEO serves a dual function, being both CEO and chair of the board CEO pay ratio: a new rule that would require most public companies to regularly reveal the ratio of chief executive’s pay to that of employees Charter: document issued by the state, giving the corporation the right to exist and stipulating the basic terms of its existence, including corporate governance practices Classified boards (also known as staggered boards): boards that elect their members in staggered terms Clawback provisions: compensation recovery mechanisms that enable a company to recoup compensation funds, typically in the event of a financial restatement or executive’s misbehavior

106

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Clean capitalism: an economic system in which prices fully incorporate social, economic, and ecological costs and benefits, and actors are clearly aware of the consequences of their marketplace actions Compensation committee: committee that has the responsibility of evaluating executive performance and recommending terms and conditions of employment Conflict of interest: a situation in which the concerns or aims of two different parties are incompatible Continental-European (or ―Rhineland‖) model: model where inside directors and civil law dominate, as well as block ownership and bank-orientation and stakeholder- coordinated governance Corporate gadflies: activist shareholders Corporate governance: the system by which companies are directed and controlled Corporate responsibility committee: committee that typically deal with such issues as diversity, equal employment opportunity, environmental affairs, employee health and safety, consumer affairs, political action, and other areas in which public or ethical issues are present Corporate social activism: this occurs when businesses advocate that government change public policies on social or moral issues Corporate sustainability committee: committee that typically deal with such issues as diversity, equal employment opportunity, environmental affairs, employee health and safety, consumer affairs, political action, and other areas in which public or ethical issues are present Council of Institutional Investors (CII): a nonprofit association of corporate, public, and union employee benefit funds Directors & Officers (D&O): insurance that protects directors and officers against lawsuits alleging breach of fiduciary duty Dodd–Frank Wall Street Reform and Consumer Protection Act: passed in the wake of the global financial crisis and signed into law on July 21, 2010, this comprehensive legislation covers 16 major areas of reform affecting banks, credit card companies, credit rating agencies, insurance companies, hedge funds, and futures trading Director-primacy model: a newer perspective challenges the traditional model of shareholder primacy and suggests the balance of power in corporate governance should favor board members (versus shareholders), because board members are elected by shareholders and therefore represent their interests Employees: persons employed for wages or salary, especially at the non-executive level Fiduciary duties: a legal obligation of the highest degree for one party to act in the best interest of another Fragile mandate: the fact that a business’s legitimacy is constantly subject to ratification, and it must realize that it has no inherent right to exist Full disclosure (also known as transparency): timely, meaningful, and reliable disclosures about a company's financial performance Glass Lewis: American proxy advisory services company golden parachute

107

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Information asymmetry: one party having information that another does not Inside directors: directors with ties of some sort to the firm Insider trading: the practice of buying or selling a security by someone who has access to material information that is not available to the public Institutional Shareholder Services (ISS): a proxy advisory firm Legitimacy: the quality of being reasonable and acceptable Legitimation: the act of making lawful Majority vote: the requirement that board members be elected by a majority of votes cast Management: the process of dealing with or controlling things or people Material information: information for which there is a substantial likelihood that a reasonable investor would consider it important in making investment decisions Nominating committee: a select group of directors on a corporate board charged with identifying nominees for election to the board Outside directors: directors independent from the firm and its top managers Personal liability: occurs in the event an accident, in or out of your home, that results in bodily injury or property damage that you are held legally responsible for Poison pill: intended to discourage or prevent a hostile takeover Ponzi scheme: lures investors in with the fake promise of profit but actually pays earlier investors with later investors’ money until the scheme collapses Private Securities Litigation Reform Act of 1995: a measure intended to rein in excessive levels of private securities litigation Proxy access: the ability of a long-term shareowner to place a limited number of alternative board candidates on the company's proxy card for the company's annual shareowner meeting Proxy advisory firms: firm that provides services to shareholders to vote their shares at shareholder meetings of companies Regulation FD (fair disclosure): a rule that ensures that when companies disclose meaningful information to a limited group of individuals like large shareholders and securities professionals, they must do so publicly so that small investors can enjoy a more level playing field Restricted stock: shares in a company issued to employees as part of their pay, but which cannot be fully transferred to them until certain conditions have been met Risk committees: an independent committee of the board of directors that has responsibility for the oversight of the risk management policies and practices of the corporation's global operations Sarbanes–Oxley Act of 2002 (aka SOX or Sarbox): act that amended the securities laws to provide better protection to investors in public companies by improving the financial reporting of companies

108

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Say on Pay movement: a trend that evolved from concerns over excessive executive compensation and failures to link CEO pay to performance Separation of ownership from control: the phenomenon associated. with publicly held business corporations in which the shareholders possess little or no direct control over management decisions Shareholder: an owner of shares in a company Shareholder activism: a person who attempts to use their rights as a shareholder of a publicly traded corporation to bring about change within or for the corporation Shareholder democracy: a concept advocated by corporate shareholders to increase their access to and influence over corporate governance Shareholder-Director Exchange (SDX): a working group to develop protocols for directorshareholder engagement for U.S. public companies Shareholder engagement: the process by which investors in public companies leverage their position as shareholders to influence corporate decision making Shareholder lawsuit: another form of activism that allow shareholders to pursue claims against the corporation in which they hold shares Shareholder-primacy model: a theory in corporate governance holding that shareholder interests should be assigned first priority relative to all other corporate stakeholders Shareholder resolutions: a proposal submitted by shareholders for a vote at the company's annual meeting Social activism: intentional action by an individual to bring about social or political change Spring-loading: an option-granting practice in which options are granted to employees at a time that precedes a positive news event Staggered boards: a board that consists of directors grouped into classes who serve terms of different lengths Stakeholder governance model: corporate governance theory that focuses on the effect of corporate activity on all stakeholders of the corporation Stock option: a benefit in the form of an option given by a company to an employee to buy stock in the company at a discount or at a stated fixed price Team production model: the idea that the board of directors of a company operates as a mediating hierarchy tasked with balancing the interests of a corporation’s various constituencies Tippee: a person who receives a tip, as of money or information Tipper: a person who leaves a specified sort of tip as a reward for services they have received Transparency: being honest and open when communicating with stakeholders about matters related to the business [return to top]

109

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

What's New in This Chapter The following elements are improvements in this chapter from the previous edition:        

Formerly Chapter 4, the new chapter includes an expanded discussion of legislation. The role of the SEC has been reorganized. The complexity of investor relations and shareholder engagement has been illustrated graphically. The scope of alternative models of corporate governance has been expanded. Illustrative examples of excessive CEO compensation and retirement packages have been updated. The subheading ―The Importance of Board Independence‖ has been renamed. The subhead ―The Securities and Exchange Commission‖ has been updated. The section ―Key Terms‖ has been revised.

[return to top]

Chapter Outline In the outline below, each element includes references (in parentheses) to related content. “CH.##” refers to the chapter objective; “PPT Slide #” refers to the slide number in the PowerPoint deck for this chapter (provided in the PowerPoints section of the Instructor Resource Center); and, as applicable for each discipline, accreditation or certification standards (“BL 1.3.3”). Introduce the chapter and use the Ice Breaker in the PPT if desired, and if one is provided for this chapter. Review learning objectives for Chapter 9. (PPT Slides 1–4). 9.1 Legitimacy and Corporate Governance (Ch. 9.1, PPT Slides 5–12) 7.5 The Purpose of Corporate Governance (Ch. 9.1, PPT Slides 6–8) 7.6 Components of Corporate Governance (Ch. 9.1, PPT Slides 9–11) 7.6.1 Roles of Four Major Groups (Ch. 9.1, PPT Slides 9–10) 7.6.2 Separation of Ownership from Control (Ch. 9.1, PPT Slide 11) 9.2 Problems in Corporate Governance (Ch. 9.2, PPT Slides 13–24) a. The Importance of Board Independence (Ch. 9.2, PPT Slide 14) b. Issues Surrounding Compensation (Ch. 9.2, PPT Slide 15) 1. The CEO Pay-Firm Performance Relationship (Ch. 9.2, PPT Slide 16) 2. Excessive CEO Pay (Ch. 9.2, PPT Slides 17–18) 3. Executive Retirement Plans and Exit Packages (Ch. 9.2, PPT Slide 19) 4. Outside Director Compensation (Ch. 9.2, PPT Slide 20) 5. Transparency (Ch. 9.2, PPT Slide 21) c. The Governance Impact of the Market for Corporate Control (Ch. 9.2, PPT Slide 22) 1. Poison Pills (Ch. 9.2, PPT Slide 22) 2. Golden Parachutes (Ch. 9.2, PPT Slide 22) d. Insider Trading (Ch. 9.2, PPT Slide 23) 9.3 Improving Corporate Governance (Ch. 9.3 and 9.5, PPT Slides 25–34) a. Legislative Efforts (Ch. 9.3, PPT Slides 26–27) b. The Securities and Exchange Commission (Ch. 9.5, PPT Slide 28) c. Changes in Boards of Directors (Ch. 9.3, PPT Slides 29–30) d. Board Diversity (Ch. 9.3, PPT Slides 29–30) e. Outside Directors (Ch. 9.3, PPT Slides 29–30)

110

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

f. Use of Board Committees (Ch. 9.3, PPT Slides 29–30) g. The Board’s Relationship with the CEO (Ch. 9.3, PPT Slide 31) h. Board Member Liability (Ch. 9.3, PPT Slide 32) 9.4 The Role of Shareholders (Ch. 9.4 and 9.6, PPT Slides 35–38) a. Shareholder Democracy (Ch. 9.4, PPT Slide 36) b. Shareholder Activism (Ch. 9.6, PPT Slide 37) c. Shareholder Resolutions (Ch. 9.6, PPT Slide 37) d. Shareholder Lawsuits (Ch. 9.6, PPT Slide 37) 9.5 Investor Relations and Shareholder Engagement (Ch. 9.7, PPT Slides 39–41) 9.6 Alternative Models of Corporate Governance (Ch. 9.8 and 9.9, PPT Slides 42–45) 9.7 Summary (Ch. 9.9, PPT Slides 46–48) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class. 53. Discussion Activity: Trends and Problems in Corporate Governance (pages 201–204, 9.2, PPT Slide 24) Duration 15 minutes. a. Question: Explain the evolution of corporate governance. What problems developed? What are the current trends? I. Answer: Corporations at their inception were run by owner-managers who retained full responsibility for all functions of the enterprise. As corporations grew (the availability of limited liability was a significant impetus in this process), owners’ roles became more investor than owner. Berle and Means, in The Modern Corporation and Private Property, refer to this change as moving from active property to passive property. In this process, the functions of managing the business were divorced from the ownership function, leaving managers effectively in charge of the organization. As ―ownership‖ became more diluted among many investors, shareholders soon lost any pretense of control over the firm. Even the board of directors, designed to oversee the company’s operations for the investors, became subservient to management, as many directors have financial, relationship and other ties to management, making it difficult for many directors to make decisions independent of management. Exacerbating this final problem is the proxy process, which effectively turns over to management even the selection of directors. What this means in practice is that managers choose their own bosses and then tell the bosses what to do. Congress, various regulatory agencies, and shareholders of public companies took a critical look at the inherent agency problems present in the corporate form as a result of the scandals that erupted in the early 2000s. As Sarbanes-Oxley, the New York Stock Exchange and the NASDAQ ramped up independence requirements for publicly held companies, a new trend emerged for publicly held boards. Many board members became more active, taking some control back from management. More independent board members began serving on the

111

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

boards of public companies, as well as the audit and nominating committees. Private companies began to follow suit, as creditors, lenders and shareholders considered the implementation of an independent board the best practices for all companies. Directors also began spending more time on their duties. However, while boards became more independent and more focused on corporate responsibilities, corporations are still effectively controlled by management in most cases. Furthermore, the increased focus on corporate governance had an unintended effect: many individuals quit board positions or refused appointments considering the increasing legal hassles associated with regulatory investigations and shareholder lawsuits. 54. Discussion: Boards of Directors (page 201, 9.1, PPT Slide 12) Duration 15 minutes. a. Question: What are the major criticisms of boards of directors? Which single criticism do you find to be the most important? Why? I. Answer: The major criticisms of boards of directors’ center on their effectiveness. Boards are less effective than they should be because too many members are inside directors, they often do not put enough time into their positions, they may be paid too much money for the work they do, and they may become ―yes men‖ to the CEO. The inability to exercise independence is perhaps the most important criticism, especially because board members have a legal obligation to act in the best interest of shareholders. When directors are unable to separate themselves from management, they run the risk of violating their fiduciary duties. In some cases, board members, acting in concert with management, pursue their own best interests rather than the company’s best interests, which may result in shareholder losses and personal liability for the directors involved. 55. Discussion: Corporate Governance Failures (pages 204–210, 9.2, PPT Slide 33) a. Question: How do companies lose legitimacy? Explain how governance failures could happen. How might they be avoided? I. Answer: Governance failures like Enron happen primarily because the power relationship between the board and top management is inverse. Although the board should have authority over top management, the reverse is generally true. Members of top management select who will be on the board and continuing to hold a seat is dependent upon rubber stamping top management’s decisions. For example, members of the board of directors of Enron waived provisions of the company’s code of conduct so that Andy Fastow could serve as CFO for Enron and as general partner for certain limited partnerships (which were established for the benefit of Enron). This was an inherent conflict of interest. Board members were willing to approve the waiver as the company was a Wall Street darling at the time. Further, Enron board members were bringing in large fees for their service to the board. Consequently, the board members did not want to displease and/or disagree with management, as the loss of the board seat could mean a significant loss of income for these individuals. Failures like Enron also happen when the lines between the external auditor, management and the audit committee are blurred. SarbanesOxley attempts to address this corporate governance failure by

112

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

implementing independence requirements for the audit committee and forcing the audit committee to take ownership over the oversight of the external auditor. To remedy this situation, board members will have to be stronger and stand up to top management. It also will require institutional investors to select board members who will provide leadership and take back control of the organization. Robert Greenleaf spoke forcefully of the need for strong leadership from directors (he used the word trustees) in Servant Leadership. Finally, there must be a clear delineation between the roles of management, the external auditor, and the board. 56. Discussion: Shareholder Activism (page 215, 9.4, PPT Slide 38) a. Question: How does shareholder activism change the practices of business and corporate governance? I. Answer: Shareholder activism is not a new phenomenon. It goes back over 60 years to 1932, when Lewis Gilbert, then a young owner of 10 shares, was appalled by the absence of communication between the New York–based Consolidated Gad Company’s management and its owners. Shareholder activism is thriving, shareholders activists have put forth a recorded number of proposals that have led to a shift towards greater shareholder power, and also created tensions between shareholders and board members. 57. Discussion: Improving Corporate Governance (pages 210–214, 9.3, PPT Slide 34) Duration 15 minutes. a. Question: Outline the major suggestions that have been set forth for improving corporate governance. In your opinion, which suggestions are the most important? Why? I. Answer: Several suggestions for improving corporate governance have been made. Most center on board composition and performance. Recommended changes in who sits on boards include more outside directors, more women, and more people of color. Suggestions for changes in activities include more active participation by board committees and getting tougher with CEOs. The relationship between the external auditor, management, and the board also is a key element to better corporate governance. Since many investors view the external auditor as the ―watchdog‖ of their investment, it is important that any inappropriate ties between the external auditor, management, and the board are eliminated. 58. Discussion: Shareholder or Director Primacy? (pages 217–218, 9.8-9.9, PPT Slide 45) Duration 15 minutes. a. Question: Discuss the pros and cons of the shareholder-primacy and directorprimacy models of corporate governance. Which do you prefer and why? I. Answer: Companies can become more responsive to shareholders by fully disclosing their activities and by placing the owners’ interests above the managers’ (although this is probably unreasonable to expect from anyone on a consistent basis). There is a significant danger in focusing on shareholders’ interests, though. Concentrating on this one narrow topic can easily translate into forgetting about other stakeholders such as employees or the community.

113

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

While boards are becoming more responsive to shareholders in general, many boards are still criticized for their executive compensation practices. Many shareholders believe that boards approve compensation packages for executives due to board member/management relationships rather than because of management performance. A few years ago, the SEC implemented new rules regarding executive compensation disclosure. While the SEC stressed that its objective was not wage controls, it did indicate that it wanted to focus on wage clarity. Specifically, the SEC had concerned that companies were using existing proxy statement disclosure rules to avoid disclosure of certain compensation elements. The rules require companies to disclose a total compensation figure for its top executives. In connection with the increased focus on this corporate governance issue, shareholder activism over executive compensation has risen dramatically in the last few years. Both shareholder proposals and proposed legislation have contained initiatives to give shareholders a ―Say on Pay.‖ Specifically, many shareholders want to see executive pay tied to performance and want the right to approve compensation packages. If strides are to be made in this area, shareholders must continue to hold board members accountable for the pay packages that they approve. The director-primacy model of corporate governance asks whether the balance of power in corporate governance should favor shareholders or board members. While in the shareholder-primacy model, the corporation is owned by shareholders, in the director-primacy model, the corporation is not owned, but is instead an independent legal entity that owns itself. In that model, boards are ―mediating hierarchs‖ who are responsible for balancing the competing interests of a variety of stakeholders, but their primary duty is to the corporation, not to the shareholders. In addition, whereas the shareholder-primacy model is based on agency, the director-primary model is based on a team production model of corporate governance. The legal argument favoring director-primacy posits that the laws that support a shareholder-primacy model have been misinterpreted, and that shareholders do not own corporations, but rather simply own stock, so have no right to control the corporation. Students may prefer either model but should be able to articulate why they prefer it. [return to top]

Additional Activities and Assignments

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

17- The Dark Side of Going Green: Tesla’s Ethical Dilemma 20- Dark Money and Corporate Political Spending on Campaigns 21- Big Pharma’s Marketing Tactics 23- McDonald’s: The Coffee Spill Heard ’Round the World 24- Boeing’s Two Flight Crashes 25- Should States Woo Big Business with Tax Incentives? Amazon Thinks So! 27- Slow and Sustainable Fashion 28- The Perils of Student Loan Debt Ethics in Practice Cases: Excessive Director Compensation at Facebook? Monitoring the Monitors Spotlight on Sustainability: Shareholder Impact on Sustainability 2. Group Activity: Divide the students into groups of four to five students. Have the students select a publicly-traded company. The instructor should explain how publicly traded information can be obtained from Edgar (www.sec.gov). Specifically, students should learn how to obtain a company’s annual report (Form 10-K) and proxy statement (Form Def 14A). Students should be encouraged to review these documents (specifically the proxy statement) to get a better understanding of the company’s compensation structure, philosophy, and objectives. The instructor may want to have the students answer specific questions related to executive compensation, using the company’s annual report and proxy statement. The following are sample questions: What is the total compensation for the three highest paid officers (including the value of stock options and other benefits)? What are the company’s compensation philosophy and objectives? How does the company set executive compensation? What are the components of the company’s compensation program (i.e., what ―mix‖ of salary, benefits, stock, etc. does the company use to compensate its executives)? Do you think that the company is using the appropriate compensation incentives? According to the compensation committee, is the current compensation of the top executive(s) justified based on the company’s past and/or current performance? Review the Management’s Discussion and Analysis of the Financial Condition and Results of the Operations (the MD&A) in the company’s annual report. Based on the information in the MD&A, is the compensation to top executives justified? Is it consistent with the compensation committees’ analysis? Based on the information in the proxy statement and the annual report, would any of the other executive officers be an appropriate replacement for the CEO? If not, who

115

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

would you recommend as an outside candidate (hint: you might review the profiles of top management in competitors’ annual reports)? Locate the company’s employment agreement with the CEO (usually listed as an Exhibit 10 in the 10-K). Describe any noncompete and severance arrangements in the employment agreement. Students should be encouraged to assess the executive compensation structure of the group’s selected company and note any issues, deficiencies or suggestions that they may have for improvement in a short presentation to the entire class. 3. Individual Assignment: Visit the website of Institutional Shareholder Services, Inc. (ISS), a provider of corporate governance solutions, at http://www.issgovernance.com/. Go to the ―Policy Gateway‖ tab and select a recently adopted ISS policy. Write a memo to shareholders explaining the policy and how it will affect the corporate governance of companies. You also should explain why ISS has adopted the proposal and whether or not you agree with the proposal. Finally, you should provide a recommendation as to how shareholders should proceed regarding the proposal. [return to top]

116

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

117

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 10: Strategy, Risk, Issues, and Crisis Management

Table of Contents Purpose and Perspective of the Chapter .................................................................................120 Cengage Supplements............................................................................................................120 Chapter Objectives .................................................................................................................120 Complete List of Chapter Activities and Assessments .............................................................121 Key Terms ..............................................................................................................................121 What's New in This Chapter ....................................................................................................123 Chapter Outline .......................................................................................................................123 Discussion Questions .............................................................................................................124 Additional Activities and Assignments .....................................................................................127 Appendix ...................................................................................................................................12

118

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Generic Rubrics ....................................................................................................................................... 12 Standard Writing Rubric .......................................................................................................................... 12 Standard Discussion Rubric ..................................................................................................................... 13

119

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to explore provide a broad overview of how social, ethical, and public issues fit into the general strategic management processes of the organization. Corporate public policy and social performance reporting is also discussed. The chapter also introduces the concepts of risk management, issues management, and crisis management, distinguishes between them, and describes their similarities.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 10.01

Describe and differentiate between the concepts of strategic management and corporate social policy.

10.02

Articulate the four major strategy levels and explain enterprise-level strategy, social entrepreneurship, and the benefit corporation.

10.03

Explain the strategic management process and the role that sustainability reports and integrated reports play in the process.

10.04

Distinguish between risk management, issue management, and crisis management.

10.05

Describe the major categories of risk management and some of the factors that have characterized risk management in actual practice.

10.06

Define issue management and the stages in the issue management process. How is issue management a bridge to crisis management?

10.07

Define crisis management and the types of crises.

10.08

List and discuss the major stages or steps involved in managing business crises. Why is crisis communications so important?

120

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 10.8 10.1 10.2 10.1 10.3 10.3 10.3

PPT Slide

Activity/Assessment

Duration

2 9 20 21 31 32 33

10 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes

10.6 10.6 10.7

56 57 65

Icebreaker: The Nature of Crisis Discussion: Corporate Public Affair Discussion: The Four Levels of Strategy Discussion: The Bottom of the Pyramid Discussion: The Path to Strategic Management Discussion: Integrated Reports Discussion: Integrated Reporting vs Social Performance Discussion: The Issue with Issue Management Discussion: Categorizing Issues Discussion: Crisis Management

15 minutes 15 minutes 15 minutes

[return to top]

Key Terms

B Corporation (B Corps): companies willing to bet on a different conceptualization of ―good business‖ Benefit corporations: companies that have a broader mission that includes having a positive impact on society Bottom of the pyramid: a term used to characterize the largest and poorest socioeconomic group of people Business-level strategy: the combined set of moves and actions taken with an aim of offering value to the customers and developing a competitive advantage Core values: the deeply ingrained principles that guide all of a company’s actions and decisions Corporate affairs (CA): a posture on the public, social, or stakeholder environment or specific issues within this environment Corporate affairs strategy: an approach toward the public, social, or stakeholder environment or specific issues within this environment Corporate-level strategy: an approach that addresses what are often posed as the most defining business question for a firm Corporate public affairs: combines government relations, media communications, issue management, corporate and social responsibility, information dissemination, and strategic communications advice Corporate social policy: firm’s posture, stance, strategy, or position regarding the environmental, social, global, and ethical aspects of stakeholders and corporate functioning Crisis: an event, or a series of events, that causes major disturbance for a business

121

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Crisis communications: the collection, processing, and dissemination of information required to address a crisis situation Crisis management: the identification of a threat to an organization and its stakeholders in order to mount an effective response to it Crisis team: a team that prepares an organization to respond to potential emergencies Enterprise-level strategy: the broadest form of strategy within a business ESG reports: reports published by a company or organization about environmental, social, and governance External risks: external threats that cannot be controlled Functional-level strategy: the actions and goals assigned to various departments that support your business level strategy Global Reporting Initiative (GRI): the independent, international organization that helps businesses and other organizations take responsibility for their impacts Integrated report (IR): the language evidencing sustainable business Issue development life cycle process: a perception that issues tend to develop according to an evolutionary pattern and that a life cycle emerges Issues management: a strategic, anticipatory management process that helps organizations identify and respond to developing trends and changes within socio-political environments Preventable risk: internal risks that offer no strategic benefits Public affairs (PA): term used to describe an organization's relationship with stakeholders. Public affairs management: term used to describe an organization's relationship with stakeholders Public affairs strategy: term used to describe an organization's relationship with stakeholders Risk management: the process of finding, assessing, and controlling threats to your company's financial security Risk shifting: the transfer of risk(s) from one party to another party Shared value: that holds that economic and social goals are not mutually exclusive—business can pursue profit while also promoting the common good Social audit: an effort to measure a firm’s overall value creation and to spur integrated thinking Social entrepreneurship: an enterprise with a primary mission of societal value creation Social responsibility report: a report on an effort to measure a firm’s overall value creation and to spur integrated thinking Strategic corporate social responsibility (strategic CSR): an organization's obligation to consider the interests of their customers, employees, shareholders, communities, and the ecology Strategic management: the ongoing planning, monitoring, analysis and assessment of all necessities an organization needs to meet its goals and objectives strategic

122

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Strategic management process: a process of setting goals, planning, and/or controlling the organizing and leading the execution of any type of activity Strategic risks: internal risks that offer no strategic benefits Sustainability report: a report on an effort to measure a firm’s overall value creation and to spur integrated thinking Value proposition: a promise by a company to a customer or market segment [return to top]

What's New in This Chapter The following elements are improvements in this chapter from the previous edition:      

The section ―Strategy, Risk, Issues, and Crisis Management‖ has been renamed. The section ―Strategic Management and Corporate Social Policy‖ has been renamed. The section ―Four Key Strategy Levels‖ and its sub-topics are updated. The section ―The Strategic Management Process‖ and its sub-topics are updated. The section ―Public Affairs as a Part of Strategic Management‖ has been updated. The section ―Key Terms‖ has been revised.

[return to top]

123

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

2. Global Reporting Initiative (Ch. 10.3, PPT Slide 29) 10.4 Public Affairs as a Part of Strategic Management (Ch. 10.1, PPT Slides 34–36) 10.5 Risk, Issue, and Crisis Management (Ch. 10.4, PPT Slides 37–40) 1. Relationships between Risk, Issue, and Crisis Management (Ch. 10.4, PPT Slide 38) 10.6 Risk Management (Ch. 10.5, PPT Slides 41–43) 10.7 Issue Management (Ch. 10.6, PPT Slides 44–57) a. Four Strategy Levels Described (Ch. 10.6, PPT Slides 45–47) 1. Identification of Issues (Ch. 10.6, PPT Slide 45) 2. Analysis of Issues (Ch. 10.6, PPT Slide 45) 3. Ranking or Prioritization of Issues (Ch. 10.6, PPT Slide 50) 4. Formulation and Implementation of Responses (Ch. 10.6, PPT Slide 52) 5. Evaluation, Monitoring, and Control (Ch. 10.6, PPT Slide 53) b. Issue Development Process (Ch. 10.6, PPT Slides 54–55) 10.8 Crisis Management (Ch. 10.7, PPT Slides 58–65) a. The Nature of Crises (Ch. 10.7, PPT Slides 59–60) 1. Type of Crises (Ch. 10.7, PPT Slide 61) b. Managing Business Crises (Ch. 10.8, PPT Slides 62–63) 1. First: Identifying Areas of Vulnerability (Ch. 10.8, PPT Slide 63) 2. Second: Developing a Plan for Dealing with Threats (Ch. 10.8, PPT Slide 63) 3. Third: Forming Crisis Teams (Ch. 10.8, PPT Slide 63) 4. Fourth: Simulating Crisis Drills (Ch. 10.8, PPT Slide 63) 5. Fifth: Learning from Experience (Ch. 10.8, PPT Slide 63) c. Crisis Communications (Ch. 10.8, PPT Slide 64) 10.9 Summary (PPT Slides 66–68) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class. ICEBREAKER: Identify a crisis that has occurred in your life or in the life of someone you know, and briefly explain it in terms of the four crisis stages: prodromal, acute, chronic, and resolution. 59. Discussion: The Four Levels of Strategy (pages 227–228, 10.2, PPT Slide 20) Duration 15 minutes. a. Question: Which of the four strategy levels is most concerned with social, ethical, or public issues? Discuss the characteristics of this level. I. Answer: The enterprise (or societal) level of strategy is the one most directly concerned with social, ethical, and public issues. This is the level that asks, and attempts to answer, what role the business plays in society and what the firm stands for. This level encompasses the strategic thinking that is necessary to address social, ethical, and public issues. Corporate governance is an important topic at this level, as boards of

124

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

directors should provide leadership for the firm’s enterprise-level strategy. This strategy often is manifested not only in a firm’s stated vision, mission, values statements and/or codes of conduct, but the implementation and effectiveness of such items. Furthermore, this strategy also includes the extent to which firms employ board and seniorlevel committees, including, among others, public policy/issues committees, ethics committees, governance committees, social audit committees, and corporate philanthropy committees. 60. Discussion: The Path to Strategic Management (pages 231–233, 10.3, PPT Slide 18) Duration 15 minutes. a. Question: Identify and explain the steps involved in the strategic management process. I. Answer: The textbook presents six steps in the strategic management process (which boards and top management are responsible for activating): (1) goal formulation, (2) strategy formulation, (3) strategy evaluation, (4) strategy implementation, (5) strategic control, and (6) environmental analysis. It is important to note that these steps are interactive and not sequential. Although listed last, environmental analysis provides ―raw material‖ for each of the other steps. 61. Discussion: Integrated Reporting vs Social Performance (pages 233–235, 10.3, PPT Slide 33) a. Question: What is the difference between integrated reporting and a social performance report? I. Answer: Integrated reporting represents the effort to measure a firm’s value creation and to spur integrated thinking that recognizes the interconnections of the range of business functions, as well as the multiple business bottom lines, which is the overall reporting system that measures areas of social reporting (social responsibility, social audits, etc.). While integrated reporting helps address all stakeholders, social performance is one part of the overall reporting structure. 62. Discussion: The Bottom of the Pyramid (pages 229–230, 10.1, PPT Slide 31) Duration 15 minutes. a. Question: What is social entrepreneurship and how is it related to the bottom of the pyramid (BOP)? I. Answer: The bottom of the pyramid is a term used to characterize the largest, poorest socioeconomic group of people, those billions who live on less than $2 a day. Social entrepreneurs can address a range of societal goals, including education, the environment, and poverty. Social entrepreneurs have surpassed large MNCs in addressing those goals. 63. Discussion: Integrated Reporting (page 233, 10.3, PPT Slide 32) a. Question: Why are integrated reports increasing in popularity? I. Answer: Integrated reporting is becoming popular due to the representation all the effort a firm is measuring for value creation. The integrated report helps capture the concern for society and the overall strategy process for the organization. 64. Discussion: Corporate Public Affairs (page 227, 10.1, PPT Slide 9) a. Question: Describe the corporate public affairs function today.

125

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Answer: Businesses encounter situations daily that involve highly visible public and ethical issues, including those that are subject to intensive public debate for specific periods before being institutionalized. Businesses want to publicly address any issues head on, there by combining government relations, media communications, issue management, corporate and social responsibility, information dissemination, and strategic communications advice they are able to capitalize on a balance between business versus government that is best for society.

65. Discussion: The Issue with Issue Management (pages 237–240, 10.6, PPT Slide 56) Duration 15 minutes. a. Question: Which of the major stages in the issue management process do you think is the most important? Why? I. Answer: Students will obviously differ in their selection of the ―most important‖ stage of issues management. Whichever stage they select, they should be able to provide a list of logical, relevant reasons for their selections. Better answers will recognize that all the stages are important to effective issues management. If there is a breakdown in any one of the stages, the whole process suffers. Many students may note that prioritization of issues is the most important stage, as corporate America can fail to have a successful issues management process if they get bogged down in all the possible issues that could confront the company. Effective use of corporate resources requires a company to rank those issues that are most likely to occur and have a major impact on the company. However, if a company fails to formulate and implement an appropriate response to specific issues, the entire company could face financial ruin. 66. Discussion Activity: Categorizing Issues (pages 237–240, 10.6, PPT Slide 54) Duration 15 minutes. i. Question: Following the approach presented in Figure 10-7, identify a new issue category not listed in Figure 10-7. Identify several examples of ―crises‖ that have occurred in recent years under each issue category. I. Answer: It should be interesting to see what types of issue categories students identify. Some that come to mind are environmental issues, natural disasters, technology, and terrorism. Some specific crises not listed include Toyota’s massive recall of certain automobiles or BP’s Deepwater Horizon oil spill. 67. Discussion Activity: Failures and Successes in Crisis Management (pages 241–245, 10.7, PPT Slide 65) Duration 15 minutes. a. Question: Identify several examples of ―crisis‖ that have occurred in recent years under each issue category. I. Answer: Research will be different for every student. They can focus on stories that show good or poor crisis management. In an area where hurricanes and bad weather are common, were businesses prepared for this type of natural disaster? Did they have measures in place to evacuate, store their goods, back up information, repair, and reopen their businesses? What did they learn from the experience? What would they do if it were to happen again? Walmart and Home Depot showed good

126

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

responsiveness in the face of a natural disaster. Were there other companies that did the same? [return to top]

Additional Activities and Assignments

1. Cases: In this chapter, instructors may utilize a combination of cases: 3- Chipotle’s Struggle with Food Safety: Back on Top Again? 4- The Theranos Story and Fake Blood Testing: Culture, Crime, and Hubris 6- The COVID-19 Pandemic: Herculean Challenges for Business and CSR 12- Family Business 15- The Rana Plaza Factory Collapse 16- Big Food, Big Problem: Nestlé in Brazil 17- The Dark Side of Going Green: Tesla’s Ethical Dilemma 20- Dark Money and Corporate Political Spending on Campaigns 21- Big Pharma’s Marketing Tactics 23- McDonald’s: The Coffee Spill Heard ’Round the World 24- Boeing’s Two Flight Crashes 25- Should States Woo Big Business with Tax Incentives? Amazon Thinks So! 27- Slow and Sustainable Fashion 28- The Perils of Student Loan Debt Ethics in Practice Cases: Crisis Management: When to Repent? When to Defend? Spotlight on Sustainability: Sustainable Corporations Shine in Financial Crisis

127

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

2. Group Activity: Divide students into groups of four to five students. Ask students to review the following: ―Imagine that you are a member of top management at Toyota. The company has been notified that problems with the gas pedals in certain vehicles could lead to sudden and unexpected acceleration. Government officials believe that approximately 90 people have died from unintended acceleration.‖ Students should prepare a written memo to the company’s CEO addressing how the company should handle the crisis. Specifically, students should address (1) corporate strategy with respect to any recall, (2) any product modifications, (3) corporate response to injured parties, and (4) the communications the company will use in connection with this event. The instructor may want to review outstanding ideas presented in the memos with the entire class. Further, the instructor may want to note how the company actually handled this crisis (specifically noting that the company quickly employed crisis communications and instituted a massive recall and system for repairs). 3. Group Activity: Divide students into groups of four to five students. Ask students to review the following: ―Imagine that you are a member of top management at a company that owns several rental properties along the Gulf shore in Louisiana and Alabama; you just learned that an oil drilling platform has exploded and that thousands of barrels of oil are spilling into the Gulf of Mexico. The company responsible has indicated that it could take several weeks to stop the leak.‖ Students should prepare a written memo addressing how the company should handle the crisis. Specifically, students should address how they will ensure the company’s ongoing viability and responsibilities to upcoming renters (if any). The instructor may want to review outstanding ideas presented in the memos with the entire class. Further, the instructor may want to note how Gulf Coast businesses handled the BP oil spill crisis (specifically noting that many companies filed claims with BP, their insurance companies, took out loans and/or instituted litigation against BP). 4. Individual Assignment: Distribute the following instructions to each student: Research how BP initially handled the Gulf oil spill when the Deepwater Horizon drilling platform exploded in April 2010. Specifically, note how the company dealt with the cleanup process, those directly impacted by the spill (individuals, businesses, local and state governments), the federal government, and its own shareholders and employees. Compare BP’s response to BusinessWeek’s five-step model for handling a crisis. Based on this comparison, evaluate BP’s crisis response. What did the company do right? What should it have done differently? What ongoing obligations does BP have to the environment as a stakeholder?

128

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

[return to top]

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

129

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 11: Employee Stakeholders and Workplace Issues

Table of Contents Purpose and Perspective of the Chapter .................................................................................132 Cengage Supplements............................................................................................................132 Chapter Objectives .................................................................................................................132 Complete List of Chapter Activities and Assessments .............................................................132 Key Terms ..............................................................................................................................133 What's New in This Chapter ....................................................................................................135 Chapter Outline .......................................................................................................................135 Discussion Questions .............................................................................................................136 Additional Activities and Assignments .....................................................................................138 Appendix .................................................................................................................................141 Generic Rubrics ..................................................................................................................................... 141

130

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric ........................................................................................................................ 141 Standard Discussion Rubric ................................................................................................................... 142

131

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to explore some of the changes occurring in the workplace and to the social contract, as well as the employee rights movement. Particular areas of interest include the right to not be fired without just cause, the right to due process and fair treatment, and the right to freedom of speech in the workplace. These employee stakeholder issues entail economic, legal, and ethical responsibilities.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 11.01

Discuss the implications of new workplace trends.

11.02

Outline the characteristics of the new social contract between employers and employees.

11.03

Explain the concept of employee engagement and the actions companies are taking to make the workplace friendlier.

11.04

Explain the employee rights movement and its underlying principles.

11.05

Describe what is entailed with the right not to be fired without cause and discuss the employment-at-will doctrine and its role in employee rights.

11.06

Discuss the right to due process and fair treatment.

11.07

Elaborate on the freedom-of-speech issue and whistle-blowing.

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 11.1 11.2

PPT Slide

Activity/Assessment

Duration

2 9

10 minutes 15 minutes

11.2 11.1 11.5 11.6 11.6

10 11 25 33 34

Icebreaker: Workplace Troubles Discussion: Major Themes in Workplace Changes Discussion: Gig Economy Discussion: New Workplace Discussion: Employment-at-Will Discussion: Due Process at Work Discussion: Alternative Dispute Resolutions

15 minutes 15 minutes 15 minutes 15 minutes 15 minutes

132

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

11.7 11.7

45 46

11.7

Discussion: Whistle-Blowing Discussion: How to Respond to Whistle-Blowing Discussion: The False Claims Act

15 minutes 15 minutes 15 minutes

[return to top]

Key Terms

1099 economy: referring to one of several tax forms used for reporting income other than wages to the Internal Revenue Service, the number refers to an economy dominated by the self-employed. 1978 Civil Service Reform Act: legal protection for federal employees who expose illegal, corrupt, or wasteful government activities Alternative dispute resolution (ADR): refers to ways of resolving disputes that avoid litigation Collective bargaining: the process in which working people, through their unions, negotiate contracts with their employers to determine their terms of employment Defend Trade Secrets Act: law that provides strong and much needed protections for corporate whistle-blowers, establishing clear procedures for immunity for employees who disclose trade secrets to the government as part of a whistle-blower case Due process: a requirement that legal matters be resolved according to established rules and principles Employee engagement: the level of an employee's commitment and connection to an organization Employee rights: the ability to receive fair treatment from employers Employment-at-will doctrine: an employer can terminate an employee at any time for any reason Enterprise rights: employer grants or promises False Claims Act (FCA): American federal law that imposes liability on persons and companies FBI Whistleblower Protection Enhancement Act: provides compensatory damages for whistle-blowers, expanding the scope of protected activity, ending bureaucratic delays in processing cases, and allowing for case review by independent administrative law judges Fissuring: avoiding the costs of full-time workers (healthcare benefits, retirement benefits) by using temporary workers Generation Z: about 17 million Americans born in 1997 or later Gig economy: an economy characterized by work consisting of a series of short-term jobs coordinated through a mobile app Good cause norm: the belief that employees should be discharged only for good reasons Good faith principle: the principle that employers may run the risk of losing lawsuits to former employees if they fail to show that employees had every reasonable opportunity to improve their performance before termination

133

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Grievance committee: a committee formed by a labor union or by employer and employees jointly to discuss and where possible eliminate grievances Hearing procedure: a proceeding before a magistrate subsequent to the inception of the case and without a jury Implied contract exception: an employee may have an expectation of a fixed term or even indefinite employment based on something the supervisor has done Mandatory arbitration: requires parties to resolve contract disputes before an arbitrator rather than through the court system Michigan’s Whistleblowers Protection Act of 1981: the first state law designed to protect any employee in private industry against unjust reprisals for reporting alleged violations of federal, state, or local laws to public authorities Millennials: anyone born between 1981 and 1996 Motor Vehicle Safety Whistleblower Act: provides incentives to bring to light safety-related problems National Labor Relations Act (NLRA): a law that guarantees the right to organize and to bargain collectively with their employers through representatives of their own choosing New workplace: a work environment that has evolved based on the effects of the 2020 global pandemic and changing societal conditions Ombuds/ombudsman/ombudsperson: a person who investigates, reports on, and helps settle complaints Open-door policy: an approach that typically relies on senior-level executives who assert that their ―door is always open‖ for those who think they have been treated unfairly Peer review panel: a problem-solving process where an employee takes a dispute to a group or panel of fellow employees and managers for a decision Private property: property owned by private parties Public policy exception: a common law remedy to the employment-at-will doctrine that has been created by the judicial system Social contract: the accepted conditions, rules of behavior, roles, and responsibilities of societal actor Statutory rights: a right granted under a statute, whether federal or state Whistle-blower: a person, usually an employee, who exposes information or activity within a private, public, or government organization that is deemed illegal, immoral, illicit, or unsafe Whistleblower Protection Act: a law that protects those who report illegal or unethical acts within an organization Work-life balance: establishing of a stable and sustainable way to work while maintaining health and general well-being [return to top]

134

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

What's New in This Chapter The following element is an improvement in this chapter from the previous edition:         

Chapter Learning Outcomes have been updated. ―Ethics in Practice Case; Walmart, Amazon, and the $15 minimum wage‖ is added. Figure 11-1 is updated. ―Ethics in Practice Case; The Neglectful Director‖ is updated. ―Spotlight on Sustainability‖ is revised. ―Ethics in Practice Case; Kindness in Fire‖ is added. ―Ethics in Practice Case; Whistle-Blower Waits for Years for Rewards‖ is added. The discussion questions have been updated. End notes have been updated.

[return to top]

Employee Engagement (Ch. 11.3, PPT Slides 12–13)

11.3 The Employee Rights Movement (Ch. 11.4, PPT Slides 14–17) f. The Meaning of Employee Rights (Ch. 11.4, PPT Slides 15–17) 11.4 The Right Not to Be Fired without Cause (Ch. 11.5, PPT Slides 18–25) a. Employment-at-Will Doctrine (Ch. 11.4 and 11.5, PPT Slides 19–20) 6. Legal Challenges to Employment-at-Will (Ch. 11.5, PPT Slide 21) 7. Moral and Managerial Challenges to Employment-at-Will (Ch. 11.5, PPT Slide 22) b. Dismissing an Employee with Care (Ch. 11.4, PPT Slides 23–24) 11.5 The Right to Due Process and Fair Treatment (Ch. 11.6, PPT Slides 26–34) a. Due Process (Ch. 11.4 and 11.5, PPT Slide 27) b. Alternative Dispute Resolution (Ch. 11.4 and 11.5, PPT Slides 29–32) 1. Common Approaches (Ch. 11.4 and 11.5, PPT Slide 29) 2. The Ombudsman (Ch. 11.4 and 11.5, PPT Slide 30) 3. The Peer Review Panel (Ch. 11.4 and 11.5, PPT Slide 31) 4. The Future of ADR (Ch. 11.4 and 11.5, PPT Slide 32) 11.6 Freedom of Speech in the Workplace (Ch. 11.7, PPT Slides 35–47) a. Whistle-Blowing (Ch. 11.7, PPT Slides 36–40) b. Consequences of Whistle-Blowing (Ch. 11.7, PPT Slide 41) c. Government’s Protection of Whistle-Blowers (Ch. 11.7, PPT Slides 42–43) d. False Claims Act (Ch. 11.7, PPT Slides 42–43) e. Management Responsiveness to Potential Whistle-Blowing Situations (Ch. 11.7, PPT Slide 44)

135

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

11.7 Summary (PPT Slides 48–50) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class. 68. Discussion: New Workplace (page 251, 11.1, PPT Slide 11) Duration 15 minutes. a. Question: What changes in employees in the workplace will be brought about by organizations becoming digital enterprises? What changes will be brought about as a result of the worldwide pandemic? i. Answer: Students answers will vary on changes brought about by the worldwide pandemic. A continued post-pandemic recovery, an influx of Generation Z talent, the growth of the ―sharing economy,‖ ―work-at-home‖ alternatives, and the expectation of a 24/7 work environment have created new challenges for employee engagement in the workforce. 69. Discussion: Major Themes in Workplace Changes (pages 251–254, 11.2, PPT Slide 9) Duration 15 minutes. a. Question: Rank the various changes that are occurring in the workplace in terms of their importance to the growth of the employee rights movement. Briefly explain your ranking. i. Answer: Technology and automation and globalization are two of the major forces impacting the employee rights movement. I rank technology first because it affects every business, and machines don’t demand rights. The worker rights movement is just one more reason that an employer faced with the opportunity to replace workers with machines would jump at the chance to do so. Globalization is second because workers in other countries (e.g., China or Vietnam) work for much less pay and expect fewer rights that American workers do (although recent events suggest that Chinese workers are beginning to demand additional employee rights). Further, as firms attempt to remain competitive and profitable during a global economic recession, they use both technology and workers in other countries to eliminate U.S. jobs and control fixed costs. 70. Discussion Activity: Employment-at-Will (pages 256–258, 11.5, PPT Slide 25) Duration 15 minutes. a. Question: Explain the employment-at-will doctrine and describe how it is being eroded. Do you think its existence is leading to a healthy or an unhealthy employment environment in the United States? Justify your reasoning. i. Answer: The employment-at-will doctrine means that either the employer or the employee can terminate the employment contract at any time, for any reason other than discrimination. It is being eroded because the courts are restricting the employer’s ability to fire employees through public policy exceptions, contractual exceptions, and breach of good faith actions. I think the one-sided erosion of employment-at-will (i.e., employers’ right to fire is being abridged) is a good thing. Employers and employees do not enter into the employment contract as equals. Employers hold much more power than do employees, so something that

136

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

helps equalize the balance of power is a good thing. Further, despite the willingness of courts to recognize limitations to the employment-at-will doctrine, companies eliminated countless U.S. employees during the global recession (illustrating the imbalance of power between employers and employees). 71. Discussion: Gig Economy (page 253, 11.2, PPT Slide 10) Duration 15 minutes. a. Question: Discuss the new gig economy and the implications for employee engagement. i. Answer: Gig economy is work consisting of a series of short-term jobs coordinated through a mobile application. Students’ answers from here will vary depending on the examples provided for employee engagement. However, with gig economy, employees tend to be in a free agent working a variety of different jobs in order to make a living. Social interactions of employees is limited. 72. Discussion Activity: Due Process at Work (page 259, 11.6, PPT Slide 33) Duration 15 minutes. j. Question: In your own words, explain the right to due process. What are some of the major ways management is attempting to ensure due process in the workplace? i. Answer: Due process is the right to receive an impartial review of one’s complaints and to be dealt with fairly. Employers utilize a variety of tactics to provide due process, including open door policies (for this to be effective, the employee must trust the manager and to be sure that his/her complaint will be dealt with fairly), some type of hearing procedures, providing an ombudsman, or granting decision-making authority to a peer review panel. 73. Discussion Activity: Alternative Dispute Resolutions (pages 259–260, 11.6, PPT Slide 34) Duration 15 minutes. a. Question: If you could choose only one, which form of alternative dispute resolution would be your choice as the most effective approach to employee due process? i. Answer: I would institute a peer-review panel, making sure that employees from every level of the company were represented on the panel. There are distinct class and power differences between managers and workers, and different levels of managers. This hierarchy often manifests itself in distrust among the different levels, so any process that relies solely on upper managers to adjudicate outcomes will be distrusted by a large percentage of the employees. A properly constructed peerreview panel would help overcome that obstacle. 74. Discussion Activity: Whistle-Blowing (pages 262–264, 11.7, PPT Slide 45) Duration 15 minutes a. Question: How do you feel about whistle-blowing now that you have read about it? Are you now more sympathetic or less sympathetic to whistle-blowers? Explain. i. Answer: I have always been sympathetic to whistle-blowers and still am. Organizations hold a great deal of power over their employees, and often expect the workers to do things that many consider unethical. People who are willing (and have sufficient moral courage) to defy the organization and

137

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

point out the wrongdoing should be praised and held in high esteem. Furthermore, many whistle-blowers undertake the task to report illegal and unethical conduct at the risk of losing their jobs, future livelihoods, and possibly even their friends and family. 75. Discussion Activity: The False Claims Act (page 266, 11.7, PPT Slide 47) Duration 15 minutes. a. Question: What is your assessment of the value of the False Claims Act? What is your assessment of the value of the whistle-blower protections under the Sarbanes-Oxley Act? i. Answer: The False Claims Act revived the civil war practice of sharing the monies recovered from reported fraud with the one reporting it, so it provides some recompense. Sarbanes-Oxley protections are limited to employees of public companies. Anything that can be done to provide incentive for whistle-blowers and to protect them is a step in the right direction. If someone is willing to risk their families, their jobs, maybe even their lives, they certainly should share in the financial recovery. Even if it is a large amount, it probably isn’t enough to compensate the whistle-blower for all s/he went through (see Connie Alderson’s comment in the textbook). In some cases, the amount may not compensate the whistle-blower for the potential loss of their livelihood. Further, as whistleblowers are often subjected to extortion and terrorist acts from their employers, the government should be doing all it can to protect the whistle-blower. 76. Activity: How to Respond to Whistle-Blowing (page 264, 11.7, PPT Slide 46) Duration 5 minutes. a. Question: What other steps can management take to be responsive to potential whistle-blowing situations? i. Answer: As the text states, listening and responding are the best deterrents to whistle-blowing. There are many initiatives outlined to help prevent whistle-blowing situations, including open communication, which is the most important. If a company has checks and balances in place to help regulate various departments and projects, there is more accountability and less likelihood of a situation arising that would lead to employee whistle-blowing. Employees are also less loyal to companies today. Implementing programs and incentives to give employees a reason to want to protect their companies will also help avoid whistleblowing. Employers that can offer legitimate job security, learning opportunities and training programs, team building projects, and evolving communications methods can help foster employee loyalty and deter whistle-blowers. [return to top]

Additional Activities and Assignments

138

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

11- Climate Change and Corporate Activism: Is It All Just Hot Air? 12- Family Business 13- What Makes a Good CEO? The Waiter Rule, Humility, and Amazon 15- The Rana Plaza Factory Collapse 17- The Dark Side of Going Green: Tesla’s Ethical Dilemma 18- Coke and Pepsi in India: Water, Issues, and Crisis Management 29- ―Dead Peasant‖ Life Insurance Policies 31- Two Vets, Two Dogs, and a Deadlock 32- Are Criminal Background Checks Discriminatory? 33- To Take or Not to Take Ethics in Practice Cases: Should I Say Something? The Pocketed Purse A Whistle-Blower’s Windfall The Serial Whistle-Blower: Have the Incentives Gone Too Far? Spotlight on Sustainability: Employees are Key to Sustainability 2. Group Activity: Divide students into groups of four to five students. Ask students in the class to bring in the employment manuals from their current jobs. Distribute the manuals among the groups. Each group should identify what rights workers have under the manual with regards to the following (1) termination, (2) due process and (3) freedom of speech in the workplace. Specifically, students should determine whether employees have contractual rights to employment under the policy, the procedures involved in a due process proceeding, and mechanisms employed by the company to encourage freedom of speech in the workplace. Students should summarize these issues in a memo. Instructors may want to attach the memos to the various manuals and allow the students to review these memos before, during and after class to obtain a sense of different strategies and approaches used by a variety of companies regarding these issues. 3. Individual Assignment: Ask students to categorize the following as a facilitating payment (grease payment), a bribe or neither of these under the Foreign Corrupt Practices Act. Students should explain why they chose a certain answer. (1) Jane Jones, who works for XYZ Corporation (a U.S. publicly traded company), has documents that she needs to clear customs in order to make it to an important business meeting on time. She decides to pay the customs official $500 in order to move to the front of the line.

139

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

(2) Same facts as above, but Jane decides to pay the customs official $5,000. (3) Jane gives a steel letter opener with XYZ Corporation imprinted on it to a foreign government official as a gift. (4) The country where a major foreign client is based was recently hit by a devastating earthquake. Competitors of XYZ Corporation are donating approximately $150,000 each to foreign relief efforts. XYZ Corporation also decides to donate a similar amount. [return to top]

140

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

141

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 12: Employee Stakeholders: Privacy, Health, Wellness, and Safety

Table of Contents Purpose and Perspective of the Chapter .................................................................................144 Cengage Supplements............................................................................................................144 Chapter Objectives .................................................................................................................144 Complete List of Chapter Activities and Assessments .............................................................144 Key Terms ..............................................................................................................................145 What's New in This Chapter ....................................................................................................147 Chapter Outline .......................................................................................................................147 Discussion Questions .............................................................................................................148 Additional Activities and Assignments .....................................................................................150 Appendix .................................................................................................................................155 Generic Rubrics ..................................................................................................................................... 155

142

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric ........................................................................................................................ 155 Standard Discussion Rubric ................................................................................................................... 156

143

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to explore employees’ rights in the workplace with particular emphasis on privacy, safety, and a healthy work environment. Managers must address these issues in order to meet employees’ needs and to treat them fairly as legitimate stakeholders of the firm.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 12.01

Articulate the issues in the new workplace that are changing traditional employer/employee relationships.

12.02

Understand concerns surrounding the employee’s right to privacy in the workplace, including the use of employee information.

12.03

Recognize the issues surrounding workplace monitoring, including concerns with data collection, technology, and the effects of being monitored.

12.04

Describe the issues related to integrity and drug testing in the workplace.

12.05

Elaborate on the right to health in the workplace, with particular reference to mental health in the workplace; work-life balance; and smoking, vaping, and opioid use in the workplace.

12.06

Understand safety issues, including violence in the workplace.

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 12.1 12.1 12.3 12.4 12.2 12.5 12.5 12.6 12.6

PPT Slide

Activity/Assessment

Duration

2 20 21 23 22 33 34 43 44

Icebreaker: Can I Have Some Privacy Discussion: Workplace Privacy Discussion: Integrity Test Discussion: Drug Testing Discussion: Privacy Guidelines Discussion: Work-Life Balance Discussion: Health and Wellness Discussion: Workplace Safety Discussion: Workplace Violence

10 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes

144

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

[return to top]

Key Terms

Americans with Disabilities Act (ADA): a federal civil rights law that prohibits discrimination against people with disabilities in everyday activities Background checks: a process a person or company uses to verify that a person is who they claim to be Ban-the-box: laws prohibit employers from asking about a person's criminal history on a job application Broad brush EAP: programs that address a wide spectrum of substance use, mental health, work-life balance, and other employee issues Burnout: when employees have exhausted their physical or emotional strength Chief privacy officers (CPOs): manage risk related to information privacy laws and compliance regulations Consumer reports: the official term for employment background checks Drug testing: any analysis of a biological specimen to determine whether it contains traces of illicit drugs Electronic Communication Privacy Act (ECPA) of 1986: a ban on the interception or unauthorized access of a wire, oral, or electronic communication where there is a reasonable expectation of privacy, unless there is a statutory exception Employee and Student Online Privacy Protection Act (ESOPPA): a law that prohibits employers and educational institutions from requiring employees or students to provide them with access to their accounts or to ―friend‖ the institution Employee Assistance Programs (EAPs): strategies undertaken by corporate America that extend into a variety of employee problem areas such as compulsive gambling, financial stress, emotional stress, marital difficulties, aging, legal problems, AIDS, and other psychological, emotional, and social difficulties Employee Polygraph Protection Act (EPPA): a ban on most uses in the private sector of the lie detector Equal Employment Opportunity Commission (EEOC): agency responsible for enforcing federal laws that make it illegal to discriminate against a job applicant Fair Chance to Compete for Jobs Act of 2019: a law that bans federal agencies and contractors from inquiring about a job applicant’s criminal history until the applicant receives a conditional job offer Fair Credit Reporting Act (FCRA): a law that requires employers to complete a number of steps with the individual before getting information relative to background checks Families First Coronavirus Response Act (FFCRA): a law that expanded paid sick leave or expanded family medical leave for certain COVID-19-related reasons

145

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Family and Medical Leave Act (FMLA): a labor law requiring employers of a certain size to provide employees with unpaid time off for serious family health issues or situations Family-friendly: one whose policies make it possible for employees to more easily balance family and work Federal Trade Commission (FTC): a government agency established in 1914 to prevent anticompetitive, deceptive, or unfair business practices Integrity tests (also known as honesty tests): a specific type of personality test designed to assess an applicant’s tendency to be honest, trustworthy, and dependable Occupational Safety and Health Administration (OSHA): a federal agency that oversees the federal laws requiring employers to provide employees with a workplace free from hazardous conditions Personality test: selection procedure measure the personality characteristics of applicants that are related to future job performance Polygraph: a lie detector Privacy Act of 1974: certain controls on the right of the government to collect, use, and share data about individuals Privacy in the workplace: the extent to which employers monitor and collect information on the activities, communications, and private lives of workers Right-to-know laws: a group of rules and regulations at the state and national levels that mandate that employers share scientific information with workers and local communities about the toxicity and other characteristics of chemicals and materials used in business processes Smoking in the workplace: the consumption off cigarettes and other smokable tobacco products in shared workspaces, a controversial behavior increasingly regulated after the 1980s Type 1 error: when an innocent person is found guilty Type 2 error: when a guilty person is found innocent USA Patriot Act: signed into law in 2001 in response to the terror attacks of 9/11, the law relaxed the privacy restrictions of the Privacy Act of 1974 Work-life balance: establishing of a stable and sustainable way to work while maintaining health and general well-being Workplace privacy: the extent to which employers monitor and collect information on the activities, communications, and private lives of workers Workplace violence: any act or threat of physical violence, harassment, intimidation, or other threatening disruptive behavior that occurs at the work site Zoom fatigue: the feeling of exhaustion that often occurs after attending a series of virtual video meetings [return to top]

146

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

What's New in This Chapter The following elements are improvements in this chapter from the previous edition:          

Title (A-head) ―Health in the workplace‖ is renamed to Title ―Health and Wellness in the workplace‖ ―Employee Stakeholders: privacy, safety, and health‖ is renamed to ―Employee Stakeholders: Privacy, Health, Wellness, and Safety.‖ Chapter Learning Outcomes have been updated. The order of titles (A-head) has been revised. ―Ethics in Practice Case; Big Data and Employee Health‖ is revised. The order of subtitles (B-Head) in the title ―Privacy in the workplace‖ has been revised. ―Ethics in Practice Case; Shaming Employees into Good Behavior at Amazon‖ is updated. 12-1 is revised. Discussion questions have been updated. End notes have been updated.

[return to top]

147

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

c. Smoking, Vaping, Drug, and Alcohol Use in the Workplace (Ch. 12.5, PPT Slide 31) 1. Drugs in the Workplace (Ch. 12.5, PPT Slide 31) 2. Alcohol in the Workplace (Ch. 12.5, PPT Slide 32) 3. Guidelines on the Issues of Smoking, Vaping, and Drug Use (Ch. 12.5, PPT Slide 32) 12.3 Workplace Safety (Ch. 12.6, PPT Slides 35–44) a. The Workplace Safety Problem (Ch. 12.6, PPT Slide 36) b. Workplace Safety Today (Ch. 12.6, PPT Slide 37) c. Right-to-Know Laws (Ch. 12.6, PPT Slides 38–39) d. Workplace Violence (Ch. 12.6, PPT Slide 40) 5. Who Is Affected? (Ch. 12.6, PPT Slide 41) 6. Prevention (Ch. 12.6, PPT Slide 42) 12.4 Summary (PPT Slides 45–47) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class.

77. Discussion Activity: Integrity Test (page 278, 12.3, PPT Slide 21) Duration 15 minutes. a. Question: Enumerate the strengths and weaknesses of integrity test as a management toll for decision making. Under what circumstances could management most legitimately argue that integrity testing is necessary? i. Answer: The polygraph’s strengths all depend on its accuracy, which is subject to some question. If the polygraph is accurate, it can solve an ageold problem—how to distinguish between the truth and a lie. This has obvious benefit to managers, who need to know the truth. The major weakness of the polygraph is that it is not 100 percent accurate. Some studies have reported a 50 percent error rate, which is completely unacceptable. If managers are relying on a polygraph to reveal ―the truth,‖ they will be basing their decisions on faulty assumptions. Because of problems inherent in use of the polygraph and the importance of decisions based on it, I don’t think it should be used at all. 78. Discussion: Drug Testing (page 279, 12.4, PPT Slide 23) Duration 15 minutes. a. Question: Should employers continue to do drug testing for things like marijuana, which continues to be controversial with varying state laws? Why or why not? i. Answer: 79. Discussion Activity: Privacy Guidelines (page 277, 12.2, PPT Slide 22) Duration 15 minutes. a. Question: Which two of the six guidelines on the issue of privacy presented in this chapter do you think are the most important? Why? i. Answer: The two most important privacy policy guidelines are first, to obtain informed consent from employees and applicants before acquiring information about them, and second, to set controls so as to avoid casual and unauthorized spread of information. Companies need to obtain 148

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

employee and applicant consent before gathering personal information, not because they are legally required to do so, but because it informs employees and applicants of employer expectations and protects the employer in the event that an employee or applicant contests the collection of personal information. Second, employers need to be sure that appropriate controls are in place regarding employee privacy because the unauthorized use of employee information could subject the company to legal liability and decrease employee morale. 80. Discussion Activity: Work-Life Balance (page 283, 12.5, PPT Slide 33) Duration 15 minutes. a. Question: Identify work-life balance issues that affect employees today. How has technology helped or hindered the balancing act? i. Answer: 81. Discussion: Health and Wellness (pages 287–288, 12.5, PPT Slide 34) Duration 15 minutes. a. Question: Describe some of the challenges for employers assisting with mental health issues in the workplace. How is this different from other health issues such as smoking, vaping, and drug use? Should employers provide comprehensive health and wellness assistance for all of these issues? i. Answer: The COVID-19 pandemic has changed the way businesses approach health and wellness in the workforce. From feelings of isolation to healthcare and childcare worries, employees have faced increasing levels of stress associated with their jobs. In fact, a recent American Psychological Association survey found that 70 percent of 3,000+ respondents said work was a ―significant source of stress in their lives‖ compared to 64 percent in 2019. In another survey of more than 300 organizations, 46 percent of employees said their work-life balance had decreased. And this is worse in the United States than in other countries, with a recent index showing that the United States ranks 30th out of 40 countries in terms of time devoted to leisure and personal care. Fortunately, companies in the United States have become increasingly more sensitive about health and wellness issues. Even before the pandemic struck, nine out of ten employers were planning to invest more in mental health to address issues of loneliness, burnout, Zoom fatigue, and work-life balance. Starbucks, for example, initiated a comprehensive training program called Mental Health Fundamentals for its employees, designed to address employee mental health issues before they get too severe. 82. Discussion: Workplace Safety (page 287, 12.6, PPT Slide 43) Duration 15 minutes. a. Question: What are some of the central issues affecting workplace safety today? i. Answer: 83. Discussion Activity: Workplace Violence (pages 287–288, 12.6, PPT Slide 44) Duration 15 minutes. a. Question: Identify the privacy, health, and due-process ramifications of violence in the workplace. i. Answer: With violence in the workplace, there seems to be less need for privacy, because the perpetrator is putting employees’ safety at risk. They should therefore be informed of the concerns. Violence is also a health

149

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

issue because employees’ physical and emotional conditions could be harmed. Finally, due process is an issue in workplace violence because the perpetrator’s story should be heard and investigated. Just because one person was violent does not necessarily mean that s/he is to blame or that someone else was not involved as well. Due process issues fall under the rubric of procedural justice, which is a basic human right, regardless of context. [return to top]

Additional Activities and Assignments

1. Cases: In this chapter, instructors may utilize a combination of cases: 5- Direct-to-Consumer Advertising for Pharmaceuticals: Is It Ethical? 6- The COVID-19 Pandemic: Herculean Challenges for Business and CSR 8- Payday Loans: A Needed Product or a Financial Scam? 11- Climate Change and Corporate Activism: Is It All Just Hot Air? 12- Family Business 13- What Makes a Good CEO? The Waiter Rule, Humility, and Amazon 15- The Rana Plaza Factory Collapse 17- The Dark Side of Going Green: Tesla’s Ethical Dilemma 18- Coke and Pepsi in India: Water, Issues, and Crisis Management 29- ―Dead Peasant‖ Life Insurance Policies 31- Two Vets, Two Dogs, and a Deadlock 32- Are Criminal Background Checks Discriminatory? 33- To Take or Not to Take Ethics in Practice Cases: Employee Health and the Use of Big Data Co-Workers versus Friendship Amazon: Using the Digital Bulletin Board to Shame Employees into Good Behavior Sick Day Snoops When External Stakeholders Attack Spotlight on Sustainability: It’s All Connected 2. Group Activity:

150

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Divide students into eight groups. Have all students read the background information for ABC Trucking Company below. Designate a committee assignment for each group. The various committees will address privacy, safety and health issues for ABC Trucking Company. Specifically, each committee should address the questions listed below their committee assignment. While each group is responsible for the questions listed under their assigned committee, the instructor should distribute the questions to be addressed by each committee to every student. Once the committees have addressed their assigned issues, they should share their ideas with the entire class. This will enable all students to review the major issues in the chapter. Background: ABC is a multi-regional trucking company. The company currently employs 3,843 linehaul drivers and 3,142 pickup and delivery drivers. The company ships many products, including hazardous materials. Committee 1 You have been asked to serve on ABC’s privacy committee. It is the committee’s responsibility to draft a privacy policy for the company. At this initial meeting, you need to decide the following: (1) Will you monitor your employees’ e-mails and telecommunications? (2) If the answer to number 1 is yes, for what purpose will you use the information? What type(s) of information do you think the company needs to know? (3) If the answer to number 1 is yes, do you have any concerns on how this might affect your employees? (4) Do you have any legal concerns? Specifically, does the Electronic Communication Privacy Act or the USA Patriot Act apply? Committee 2 You have been asked to serve on ABC’s privacy committee. It is the committee’s responsibility to decide whether it will use the polygraph and/or integrity testing in connection with its hiring process. At this initial meeting, you need to decide the following: (1) Will the company use a polygraph in its hiring process? If so, why? Can it do so under the Employee Polygraph Protection Act? (2) Will the company use an integrity test in its hiring process? If so, why? (3) If the answer(s) to number 1 and/or 2 is yes, what types of information do you think the company needs from the tests? (4) If the answer(s) to number 1 and/or 2 is yes, do you have any concerns about these tests? Committee 3 You have been asked to serve on ABC’s privacy committee. It is the committee’s responsibility to make decisions regarding the company’s drug testing policy. At this initial meeting, you need to decide the following: (1) Is the company required to conduct drug tests? (2) If the answer to number 1 is yes, do you have any concerns about drug testing in the company? (3) If the answer to number 1 is yes, what guidelines would you recommend for a company drug testing policy?

151

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

(4)

If the answer to number 1 is yes, are there any potential problems with the Americans with Disabilities Act?

Committee 4 You have been asked to serve on ABC’s safety committee. It is the committee’s responsibility to make sure the company is compliant with state and federal laws that protect the safety and health of its workers. At this initial meeting, you need to decide the following: (1) What type(s) of information, if any, is the company required to provide to its employees generally under state law(s)? (2) What type(s) of information, if any, is the company required to provide to its employees under federal law (OSHA)? (3) What rights and responsibilities do the employees have under federal law (OSHA)?

152

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Committee 5 You have been asked to serve on ABC’s safety committee. It is the committee’s responsibility to determine how the company should respond to issues of workplace violence. At this initial meeting, you need to decide the following: (1) Is the company at an increased risk for workplace violence? If so, why? (2) If the answer to number 1 is yes, what can this company specifically do to deter workplace violence? (3) Does the company need policies and procedures to address workplace violence? If so, what should be included in these policies and procedures? Committee 6 You have been asked to serve on ABC’s health committee. It is the committee’s responsibility to address issues related to employee health. The company has several smokers. At this initial meeting, you need to decide the following: (1) Does the company need a smoking policy? If so, why? (2) If the answer to number 1 is yes, what type of policy does the company need? What would the policy require? Committee 7 You have been asked to serve on ABC’s health committee. It is the committee’s responsibility to address issues related to serious health conditions that limit employee performance. At this initial meeting, you need to decide the following: (1) Is the company required to comply with the Family Medical Leave Act? (2) Does the company have to pay female employees during any maternity leave? Does the company have to provide health benefits for such employees? (3) Can truck drivers take leave to care for a sick child, spouse, or parent? (4) If the answers to 1, 2, and/or 3 are yes, does the company have to hold an employee’s job for the employee during the employee’s leave? Committee 8 You have been asked to serve on ABC’s work-life balance committee. It is the committee’s responsibility to address issues related to work-life balance. At this initial meeting, you need to decide the following: (1) What work-life balance issues, if any, does the company have? (2) What types of programs/benefits might the company adopt to address any work-life balance issues noted in question 1? (3) How will the programs/benefits listed in question 2 affect the company’s economic viability?

153

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

3. Individual Assignment: Distribute the following instructions to each student: Create a general social media policy that could be used by multiple companies. You should consider the following questions when developing the social media policy: Will these companies be allowed to monitor employee posts/pages on social media sites? What privacy concerns does this raise? How should companies deal with leaks of confidential information, material which could lead to an adverse employment decision, defamatory communications concerning a company, etc. that were obtained through monitoring an employee’s social media site? [return to top]

154

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

155

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 13: Employment Discrimination, Diversity, and Inclusion

Table of Contents Purpose and Perspective of the Chapter .................................................................................158 Cengage Supplements............................................................................................................158 Chapter Objectives .................................................................................................................158 Complete List of Chapter Activities and Assessments .............................................................158 Key Terms ..............................................................................................................................159 What's New in This Chapter ....................................................................................................161 Chapter Outline .......................................................................................................................161 Discussion Questions .............................................................................................................162 Additional Activities and Assignments .....................................................................................164 Appendix .................................................................................................................................167 Generic Rubrics ..................................................................................................................................... 167 Standard Writing Rubric ........................................................................................................................ 167

156

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric ................................................................................................................... 168

157

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to explore the current status of discrimination laws, the civil rights movement, and progress among marginalized employees. federal laws that protect against employment discrimination are also discussed, as are the meaning of discrimination, various issues related to employment discrimination, and affirmative action in the workplace.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 13.01

Discuss the concept of discrimination in the workforce and the evolution of its current paradigm.

13.02

Chronicle the U.S. civil rights movement and progress regarding protected employee groups in the past 50 years.

13.03

Outline the essentials of federal discrimination laws.

13.04

Define and provide examples of the expanded meanings of employment discrimination including disparate treatment and disparate impact and issues in employment discrimination relating to race, color, national origin, sex, age, religion, sexual orientation, genetic information, and disability.

13.05

Understand and discuss the concepts of diversity and inclusion in the workforce.

13.06

Discuss the concept of affirmative action and current issues related to diversity management.

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 13.1

PPT Slide

Activity/Assessment

Duration

10 minutes

13.1 13.1 13.1 13.3

9 10 11 22

13.4

Icebreaker: Witnessing Discrimination at the Workplace Discussion: Discrimination Discussion: Protected Groups Discussion: Diversity and Inclusion Discussion: Discrimination and the Law Discussion: Disability and Civil Rights

15 minutes 15 minutes 15 minutes 15 minutes 15 minutes

158

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

13.4

13.4 13,5 13.6

36 41 45

Discussion: The Rights to One’s own Genes Discussion: Pay Gaps Discussion: Social Movements Discussion: Affirmative Action or Diversity?

15 minutes 15 minutes 15 minutes 15 minutes

[return to top]

Key Terms

Affirmative action: introduced as the process of taking positive steps to hire and promote people from groups previously discriminated against Age Discrimination in Employment Act (ADEA): this law protects workers aged 40 years and older from arbitrary age discrimination in hiring, discharge, pay, promotions, fringe benefits, and other aspects of employment Americans with Disabilities Act (ADA): a federal civil rights law that prohibits discrimination against people with disabilities in everyday activities Bona fide occupational qualification (BFOQ): a qualification that might ordinarily be argued as being a basis for discrimination but for which a company can legitimately argue that age is job-related and necessary Civil Rights Act of 1991: law to provide increased financial damages and jury trials in cases of intentional discrimination relating to sex, religion, race, disability, and national origin Compensatory justice: whenever an injustice is done, just compensation or reparation is owed to the injured party or parties Disparate impact: discrimination that is unintentional, where the procedures are the same for everyone, but people in a protected class are negatively affected Disparate treatment: intentional discrimination, wherein people in a protected class are deliberately treated differently Diversity: the presence of differences within a given setting, including differences in race, ethnicity, gender, or any other number of characteristics Diversity fatigue: when companies fail to rethink their management styles and simply engage in ―box-ticking‖ Diversity management: assembling and then retaining workers from different backgrounds and experiences that together create a more innovative and productive workforce Equal Employment Opportunity Commission (EEOC): agency responsible for enforcing federal laws that make it illegal to discriminate against a job applicant Equal Pay Act of 1963: prohibits sex discrimination in payment of wages to women and men who perform substantially equal work in the same establishment Essential functions: basic job duties that an employee must be able to perform, with or without reasonable accommodation

159

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Ethical blindness: occurs when decision makers behave unethically without even being aware of it—a temporary inability to see the ethical dimension of a decision at stake Fetal protection policies: policy of barring women of childbearing age from working in sites in which they, and their developing fetuses, might be exposed to harm Four-fifths rule: if a member of a minority group does not have a success rate of at least 80 percent compared to the majority group, the practice may be considered to have an adverse impact Gender gap: systemic differences between the average wages or salaries of men and those of women Gender identity: a person's gender-related identity, appearance, or behavior Genetic Information Nondiscrimination Act (GINA): prohibits employers from requiring, requesting, purchasing, or disclosing employees’ genetic information Hostile work environment: a situation where nothing is given or received, but the employee perceives a hostile or offensive work environment by virtue of uninvited sexually oriented behaviors or materials being present in the workplace Implicit bias: when individuals act on the basis of prejudice and stereotypes without intending to do so Inclusion: the practice of ensuring that people feel a sense of belonging, respect, and support from the organization LGBT: an acronym for the lesbian, gay, bisexual, and transgender/transsexual (LGBT) community Pregnancy Discrimination Act of 1978: requires employers to treat pregnancy and pregnancy-related medical conditions in the same manner as any other medical disability with respect to all terms and conditions of employment, including employee health benefits Protected groups: groups who have federal legal protection from discrimination based on aspects such as race, color, religion, national origin, sex, age, disability, and genetic information Quid pro quo: a situation where something is given or received for something else Reasonable accommodations: a modification or adjustment to a job, the work environment, or the way things are usually done during the hiring process Retaliation: when an employer punishes an employee for engaging in legally protected activity Reverse discrimination: a type of discrimination wherein members of a majority or historically advantaged group (such as Caucasians or males) are discriminated against based on their race, gender, age, or other protected characteristic Sexual harassment: unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when submission to or rejection of this conduct explicitly or implicitly affects an individual’s employment, unreasonably interferes with an individual’s work performance, or creates an intimidating, hostile, or offensive work environment

160

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Sexual orientation: a person's identity in relation to the gender or genders to which they are sexually attracted Title VII of the Civil Rights Act of 1964: prohibits discrimination in hiring, promotion, discharge, pay, fringe benefits, and other aspects of employment on the basis of race, color, religion, sex, or national origin Undue hardship: an action requiring significant difficulty or expense when considered in light of a number of factors [return to top]

What's New in This Chapter The following elements are improvements in this chapter from the previous edition:         

―Employment Diversity and Discrimination‖ is renamed to ―Employment Discrimination, Diversity and Inclusion.‖ Chapter Learning Outcomes have been updated. Figure 13-3 is revised. ―Ethics in Practice Case; Better Check Your Old Yearbooks and Social Media Posts‖ is added. ―Ethics in Practice Case; Using DNA to Catch a Killer‖ is added. Sub-titles (B-head) of the title ―Issues in employment discrimination‖ have been merged and revised. The title ―Diversity and Inclusion in the Workplace‖ (A-head) has been added. Discussion questions have been updated. End notes have been updated.

[return to top]

161

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

13.3 Expanded Meanings of Employment Discrimination (Ch. 13.4, PPT Slides 25–27) a. Disparate Treatment (Ch. 13.4, PPT Slides 26–27) b. Disparate Impact (Ch. 13.4, PPT Slides 26–27) 13.4 Issues in Employment Discrimination (Ch. 13.1, PPT Slides 28–36) a. Race, Color, and Ethnicity (Ch. 13.1, PPT Slides 29–30) b. Gender (Ch. 13.1, PPT Slides 31–32) 1. Women in Professional/Managerial Positions (Ch. 13.1, PPT Slide 32) 2. Equal Pay and Promotion (Ch. 13.1, PPT Slide 32) 3. Sexual Harassment (Ch. 13.1, PPT Slides 32–33) c. Other Forms of Employment Discrimination (Ch. 13.1, PPT Slides 34–35) 1. Religious Discrimination (Ch. 13.1, PPT Slides 34–35) 2. Retaliation (Ch. 13.1, PPT Slides 34–35) 3. Sexual Orientation and Gender Identity Discrimination (Ch. 13.1, PPT Slides 34–35) 13.5 Diversity and Inclusion in the Workforce (Ch. 13.5, PPT Slides 37–41) 13.6 Affirmative Action in the Workforce (Ch. 13.6, PPT Slides 41–45) 13.7 The Future of Diversity Management (Ch. 13.6, PPT Slides 46–47) 13.8 Summary (PPT Slides 48–50) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class. 84. Discussion: Diversity and Inclusion (page 294, 13.1, PPT Slide 11) Duration 15 minutes. a. Question: Is it important for a company to promote diversity and inclusion in the workplace? Why or why not? i. Answer: This answer will vary with students. But companies that promote a diverse and inclusive environment are able to attacked diverse individuals and remain competitive in the marketplace. 85. Discussion: Discrimination and the Law (pages 296–302, 13.3. PPT Slide 22) Duration 15 minutes. a. Question: Identify the major federal discrimination laws and indicate what they prohibit. Which agency is primarily responsible for enforcing these laws? i. Answer: The major federal discrimination laws and what they prohibit are listed below: 1. Title VII of the Civil Rights Act of 1964 – race, color, religion, sex, or national origin 2. Age Discrimination in Employment Act of 1967 – age 40 years and older 3. Equal Pay Act of 1963 – sex 4. Rehabilitation Act of 1973, Section 503 - handicap 5. Americans with Disabilities Act of 1990 – physical or mental disabilities 6. Civil Rights Act of 1991 – sex, religion, race, disability, or national origin

162

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

7. The Equal Employment Opportunity Commission (EEOC) is primarily responsible for enforcing these laws. 86. Discussion: Discrimination (pages 294–295, 13.1, PPT Slide 9) Duration 15 minutes. a. Question: Give two different definitions of discrimination and provide an example of each. i. Answer: Disparate treatment refers to the act of treating people differently based on their race, color, religion, sex, national origin, or other prohibited reason. An example might be a corporation hiring a female receptionist without considering males for the position. Disparate impact means that a disproportionate number of a minority achieves a certain result or status than would be expected based on that minority’s numerical proportion of the total population. An example might be African American students receiving fewer scholarships that are based on standardized test scores than expected, based on the percentage of African American students to the population of all students. Case 35, ―Looksism at A&F,‖ where a firm’s policy of hiring attractive associates led to the exclusion of certain groups is a good case to explore the issue of disparate impact. 87. Discussion Activity: Social Movements (page 304, 13.5, PPT Slide 41) Duration 15 minutes. a. Question: How have social movements affected business’s approach to discrimination, diversity, and inclusion? i. Answer: Students’ answers will vary. Many companies often engage in activism to address social issues like racial discrimination. As companies work towards best practices of business ethics and stakeholder management in the end it is business and society that must work together to address the changing social issues around them. 88. Discussion Activity: Disability and Civil Rights (pages 298–299, 13.4, PPT Slide 23) Duration 15 minutes. k. Question: How has the Americans with Disabilities Act (ADA) evolved since its inception? i. Answer: Based on corporate executives’ level of support for the ADA, it would seem that the law is having little or no negative effect on business and may even have a positive effect. However, it certainly can be more difficult and costly for smaller firms to comply with the ADA than larger firms. Furthermore, provisions of the ADA can touch issues and areas which many people do not realize. For example, as noted in previous chapters, drug and alcohol abuse are recognized as disabilities under the ADA. Consequently, to the extent that companies conduct drug and alcohol testing on their applicants and employees, they must ensure that such practices are in compliance with the ADA. 89. Discussion: Pay Gaps (page 305, 13.4, PPT Slide 36) Duration 15 minutes. a. Question: How is it that women in business still face gender and pay gaps? i. Answer: Students answers will vary. Because there are still subtle forms of gender discrimination against women as well as overt discriminatory actions. 90. Discussion Activity: The Rights to One’s own Genes (pages 300–301, 13.4, PPT Slide 24)

163

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

a. Question: Do you agree with the Genetic Information Nondiscrimination Act? Do companies have a right to know and use genetic information about employees? Why or why not? i. Answer: Never has an antidiscrimination act been passed with such agreement, and before any significant amount of discrimination of that type has occurred. We seem to be of one mind regarding the protection of genetic information, and most people support it. Imagine if the law were otherwise. One might be rejected for employment, insurance, even education, based on genetic markers for conditions or diseases that have not yet manifested themselves, and may never manifest themselves, yet they would seal one’s fate before there was a chance to begin to live one’s life. 91. Discussion Activity: Affirmative Action or Diversity? (pages 308–309, 13.6, PPT Slide 45) Duration 15 minutes. a. Question: Have the concepts of diversity management, diversity, and inclusion supplanted the concept of affirmative action in leading companies today? i. Answer: Diversity programs have been adopted by a number of U.S. corporations because they realize that a diverse workforce is critical to success, especially in today’s global economy. Such programs not only seek to match the increasingly diverse world, but also draw upon an underutilized talent pool. While affirmative action was seen as a mandate, diversity is seen as a benefit. [return to top]

Additional Activities and Assignments

1. Cases: In this chapter, instructors may utilize a combination of cases: 5- Direct-to-Consumer Advertising for Pharmaceuticals: Is It Ethical? 6- The COVID-19 Pandemic: Herculean Challenges for Business and CSR 8- Payday Loans: A Needed Product or a Financial Scam? 11- Climate Change and Corporate Activism: Is It All Just Hot Air? 12- Family Business 13- What Makes a Good CEO? The Waiter Rule, Humility, and Amazon 15- The Rana Plaza Factory Collapse 17- The Dark Side of Going Green: Tesla’s Ethical Dilemma 18- Coke and Pepsi in India: Water, Issues, and Crisis Management 29- ―Dead Peasant‖ Life Insurance Policies 31- Two Vets, Two Dogs, and a Deadlock 32- Are Criminal Background Checks Discriminatory? 33- To Take or Not to Take Ethics in Practice Cases:

164

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

What Is Reasonable Accommodation for Pregnancy? Gentleman’s Club? Bigotry in the Bakery Spotlight on Sustainability: Are Sustainability Advocates a New Protected Class? 2. Group Activity: Divide students into groups of four to five students. Have each group develop the following training programs for a fictional company: interviewing and hiring techniques and sexual harassment training. Students should include procedures for interviewing and hiring new employees, noting questions and actions that would be in violation of federal law. They also should provide relevant information in the training session regarding antidiscrimination laws. Students also should prepare procedures for sexual harassment training. Specifically, students should provide instruction on what constitutes sexual harassment and the potential legal issues implicated by such actions. Further, students should note the fictional company’s policies on sexual harassment. After reviewing the training programs of the various groups, the instructor may want to select a few groups to conduct an actual training session for the entire class on these issues.

165

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

3. Individual Assignment: Visit the Newsroom at www.eeoc.gov. Review a recent press release which involves a harassment and/or discrimination claim. You should summarize the facts of the case, including the parties involved and the issues at hand. You also should note any federal laws which apply to the situation and what the outcome is/will be/should be based on the application of such laws to the case. Finally, using what you learn from the case, provide suggestions to management on how to handle a similar case in the future. [return to top]

166

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

167

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 14: Consumer Stakeholders: Information Issues

Table of Contents Purpose and Perspective of the Chapter .................................................................................170 Cengage Supplements............................................................................................................170 Chapter Objectives .................................................................................................................170 Complete List of Chapter Activities and Assessments .............................................................170 Key Terms ..............................................................................................................................171 What's New in This Chapter ....................................................................................................174 Chapter Outline .......................................................................................................................174 Discussion Questions .............................................................................................................175 Additional Activities and Assignments .....................................................................................178 Appendix .................................................................................................................................180 Generic Rubrics ..................................................................................................................................... 180

168

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric ........................................................................................................................ 180 Standard Discussion Rubric ................................................................................................................... 180

169

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to explore products and services, the heart of the relationship between business and consumers. This chapter focuses on the consumer movement and product information issues, particularly advertising, warranties, packaging, and labeling.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 14.01

Describe the consumer movement and identify the Consumer’s Magna Carta and explain its meaning.

14.02

Identify product information issues that are affected by business’s social and ethical responsibilities. Identify the major abuses of advertising and discuss specific controversial advertising issues.

14.03

Describe the role and functions of the Federal Trade Commission (FTC).

14.04

Explain important consumer-related legislation that has been passed—Credit Card Act (CARD) and the Consumer Financial Protection Bureau (CFPB).

14.05

Discuss the strengths and weaknesses of self-regulation of advertising. How does selfregulation vary from being socially responsible and ethical?

14.06

Identify the three moral models and their likely perspectives on consumer stakeholders.

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 14.3

PPT Slide 2

14.1

14.2

Activity/Assessment

Duration

Icebreaker: Ever Heard of the FTC? Discussion: Consumer Expectations Discussion: The Consumer Movement Discussion: Advertising and Its Abuses Discussion: Green Fatigue

10 minutes 15 minutes 15 minutes 15 minutes 15 minutes

170

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

14.3

Discussion: Do Consumers Need Protection?

15 minutes

[return to top]

Key Terms

Ad creep: the way that advertising has increasingly crept into everywhere one looks Age compression: the tendency in recent years for children to express more sophisticated tastes at younger ages for commodities Ambient advertising: placing ads on unusual objects or in unusual places where you wouldn't usually expect to have an advertisement Ambiguous advertising: something about the product or service is not made clear because it is stated in a way that may mean several different things Brand integration: allows a brand to reach out to the consumers by integrating the brand within the entertainment media content Children’s Television Act (CTA): law that prohibits the airing of commercials about products or characters during a show about those products or characters and limited the number of commercial minutes in children’s shows Comparative advertising: the practice of directly comparing a firm’s product or service with the product or service of a competitor Concealed facts: the practice of not telling the whole truth or deliberately not communicating information the consumer ought to have access to in making an informed choice Consumer Financial Protection Bureau (CFPB): agency established to protect consumers by implementing and enforcing federal consumer financial laws Consumerism: social movement seeking to augment the rights and powers of buyers in relation to sellers Consumer’s Magna Carta: the four basic consumer rights spelled out by President John F. Kennedy: the right to safety, the right to be informed, the right to choose, and the right to be heard Credit Card Act of 2009: law that addresses the multitude of questions and issues that consumers might have in connection with credit cards Customer engagement: the emotional connection companies are able to establish between their customers and the company Customer relationship management (CRM): the ability of an organization to effectively identify, acquire, foster, and retain loyal profitable customers Exaggerated claims: claims that simply cannot be substantiated by any kind of evidence Express warranty: explicitly offered at the time of the sale, these warranties can range from advertising claims to formal certificates, oral or written

171

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Extended warranties: service plans that lengthen the warranty period and are offered at an additional cost Full warranty: contractual promise that contains certain features, including repair within a reasonable time and without charge Green advertising: the type of advertising where the focus is to promote your product around the premises of environment or environmental situations Green fatigue: weariness of claims about environmentally sound products or companies Green Guides: guidelines intended to help marketers avoid making environmental claims that are misleading to consumers Green marketing: the type of marketing where the focus is to promote your product around the premises of environment or environmental situations Green watchdog: monitoring groups watching closely the health or eco-friendliness of products Guarantee: a commitment made by a business to honor the debts incurred Federal Trade Commission (FTC): a government agency established in 1914 to prevent anticompetitive, deceptive, or unfair business practices Implied warranty: an unspoken promise that there is nothing significantly wrong with the product and that the product can be used for the purposes intended Limited warranty: warranty limited to just the specified parts, certain types of defects, or other conditions Natural products: generally meant to be foods that are minimally processed and do not contain any hormones, antibiotics, or artificial flavors or colors Organic food: food that is ―Certified Organic‖ or carry the ―USDA Organic‖ label Plot placement: sponsors pay to make their products integrated into the plotline of a TV show Product information: any details or descriptions of products that relate to a particular product Product placement: embedded marketing, which is the practice of embedding products in movies and TV shows Psychological appeals: designed to persuade on the basis of human emotions and emotional needs rather than reason Puffery: euphemism for hyperbole or exaggeration that usually refers to the use of general superlatives Return fraud: occurs when consumers purchase a product, use it for some limited period of time, and then return it wanting their money back Returns policies: spells out the terms under which the merchant will accept returns and how that process should be handled

172

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Self-regulation: the control of business conduct and performance by the business itself, or business associations, rather than by government or by market forces Slack fill: the practice of companies putting less product in the package while often keeping the container size the same but raising the price Social media advertising: use of social media platforms to connect with your audience to build your brand, increase sales, and drive website traffic Social media bots: automated software that appear on platforms and use a set of algorithms that simulate human behavior Warranty: a written, contractual promise that attests to the quality or durability of a product purchased for a period of time Weasel words: inherently vague and the company could always claim it was not misleading the consumer [return to top]

173

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

What's New in This Chapter The following element is an improvement in this chapter from the previous edition:        

The topic under the heading ―14.1 The Consumer Movement‖ (A-Head) has been revised. The topic "13.1a Ralph Nader's Consumerism" (B-head) has been removed. FIGURE 13-1, Consumer Organizations Today, has been removed. "Ethics in Practice Case title "What Do We Tell the Customer?" has been renamed to "Can We Tell the Customer Anything to Make the Sale?". The heading "Marketing to the Poor." has been renamed to "Advertising to the Poor‖. The topic Ethics in Practice Case "Product Names and Racial Bias" has been added. The endnotes have been updated.

[return to top]

Chapter Outline In the outline below, each element includes references (in parentheses) to related content. “CH.##” refers to the chapter objective; “PPT Slide #” refers to the slide number in the PowerPoint deck for this chapter (provided in the PowerPoints section of the Instructor Resource Center); and, as applicable for each discipline, accreditation or certification standards (“BL 1.3.3”). Introduce the chapter and use the Ice Breaker in the PPT if desired, and if one is provided for this chapter. Review learning objectives for Chapter 14. (PPT Slides 1-4). 14.1 The Consumer Movement (Ch. 14.1, PPT Slides 5–24) a. Consumerism Today (Ch. 14.1, PPT Slides 10–11) b. Product/Service Information Issues (Ch. 14.2, PPT Slide 12) c. Advertising Issues (Ch. 14.2, PPT Slide 13) 1. Advertising Abuses (Ch. 14.2, PPT Slide 14) a. Ambiguous Advertising (Ch. 14.2, PPT Slide 14) b. Concealed Facts (Ch. 14.2, PPT Slide 14) c. Exaggerated Claims (Ch. 14.2, PPT Slide 14) d. Psychological Appeals (Ch. 14.2, PPT Slide 14) d. Specific Controversial Advertising Issues (Ch. 14.2, PPT Slides 15–16) 1. Comparative Advertising (Ch. 14.2, PPT Slide 15) 2. Use of Sex Appeal in Advertising (Ch. 14.2, PPT Slide 15) 3. Advertising to Children (Ch. 14.2, PPT Slide 15) 4. Advertising to the Poor (Ch. 14.2, PPT Slide 15) 5. Advertising Alcoholic Beverages (Ch. 14.2, PPT Slide 15) 6. Cigarette Advertising (Ch. 14.2, PPT Slide 16) 7. Health and Environmental Claims (Ch. 14.2, PPT Slide 16) 8. Social Media Advertising (Ch. 14.2, PPT Slide 16) e. Warranties and Guarantees (Ch. 14.2, PPT Slides 17–18) f. Packaging and Labeling (Ch. 14.2, PPT Slide 19) g. Other Product Information Issues (Ch. 14.2, PPT Slide 20) 14.2 The Federal Trade Commission (FTC) (Ch. 14.3, PPT Slides 25–28) 14.3 Consumer Financial Protection Bureau (CFPB) (Ch. 14.4, PPT Slides 29–31) 14.4 Self-Regulation in Advertising (Ch. 14.5, PPT Slides 32–33)

174

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

14.5 Moral Models and Consumer Stakeholders (Ch. 14.5, PPT Slides 34–36) 14.6 Summary (PPT Slides 37–39) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class. 92. Discussion: Consumer Expectations (pages 318–319, 14.1, PPT Slide 21) Duration 15 minutes. a. Question: In addition to the basic consumer rights expressed in the consumer’s Magna Carta, what other expectations or rights do you think consumer stakeholders have of business? Do consumers have some moral rights that have not yet been articulated in law? i. Answer: Two concerns that are relevant, but most consumers don’t consider, are the right of all consumers to an equitable distribution of goods and services, and the right to a sustainable economy. Many consumers in the United States are in the enviable position of being able to buy anything and everything they want (within certain economic constraints, of course). But they rarely, if ever, consider the plight of people living in poverty here, or inhabitants of Third World countries who struggle simply to get enough to eat. Related to the first concern is the need to consider the long-term effects our consumption patterns have on the sustainability of life on earth. E. F. Schumacher, in Small is Beautiful (New York: Harper & Row, 1973), points out that, even if we think we have solved the production problem (i.e., have the ability to produce enough to feed, clothe, and house everyone in the world), we are deluding ourselves. He does not argue that we are incapable of doing that, but he points out that in doing so we are depleting non-renewable resources without figuring out how to replace them or use renewable sources of energy.

175

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

93. Discussion Activity: The Consumer Movement (pages 318–319, 14.1, PPT Slide 22) Duration 15 minutes. a. Question: What is your opinion of the consumer movement? Is it ―alive and well‖ or is it fading away? Why has consumerism been such an enduring movement for so long? i. Answer: The consumer movement seems to be alive and well, in terms of advocating for quality goods and services. Most of the products we buy today work well and are reasonably safe. Furthermore, as the text notes, while the consumer movement still occurs at the grassroots level, individuals now have the power of the internet to rally the troops. Global companies now must manage their business with the expectation that their transgressions can, and will be, broadcast on the World Wide Web. What we have not accomplished is getting companies to provide good customer service. Regardless of the product or service involved, many consumers remained frustrated by the level of customer service they receive. Companies that outsource customer service functions often experience customer dissatisfaction with the level of customer service provided. Recently, I was on the phone with a satellite provider trying to arrange a hook-up. The provider had outsourced this function to another country, and it took me four hours to set up an appointment with a technician who lived 30 minutes away. Understandably, this was a frustrating process and almost influenced my decision to switch providers. The other shortcomings of the consumer movement are a result of the movement not focusing on them—those items mentioned in answer #1, equitable distribution of goods and services and a sustainable economy. 94. Discussion Activity: Advertising and its Abuses (pages 329–330, 14.2, PPT Slide 23) Duration 15 minutes. l. Question: Give an example of a major abuse of advertising via social media from your own observations and experiences. How do you feel about this as a consumer? i. Answer: Social media, such as Facebook, is able to track what you’re looking at while online. Ads can then be tailored to you, either through other Facebook pages that show up as ―suggested‖ products, or as side ads that, if clicked, will redirect you to another website looking to sell you something based on your Facebook and web browsing habits. This is concerning because it means your online actions are being watched, and because it gives advertisers one more space in our lives to invade with product placement. I also have concerns over the growing use of product placement for the following reasons: (1) individuals may be unable to make conscience decisions regarding the product and may be influenced by the implications of the placement of the product without realizing what is happening; (2) the constant bombardment of the placement of products in television and movies can ruin one’s enjoyment of the show or film; and (3) storylines of television and movies may be altered to accommodate the product of the highest bidder, resulting in a commercialization of artistic expression. 95. Discussion Activity: Green Fatigue (pages 328–329, 14.2, PPT Slide 24) Duration 15 minutes.

176

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

a. Question: Are companies genuinely interested in marketing sustainable products or is this just a marketing strategy that is popular today. Do you think ―green fatigue‖ has set in? If so, what should companies now do? i. Answer: Because health and environmental claims attract customers, many companies joined the rush to present ―environmentally-friendly‖ products even though in some cases, the products did not meet environmental needs or claims. One recent survey found that 63 percent of consumers believe that ―green‖ or ―eco‖ labels are misleading, indicating their frustration, and ―green fatigue.‖ In late 2012, the Federal Trade Commission issued new guidelines for ―eco-friendly‖ labeling, mandating that firms had better be able to back up their claims. 96. Discussion Activity: Do Consumers Need Protection? (page 335, 14.4, PPT Slide 31) Duration 15 minutes a. Question: Does the new Consumer Financial Protection Bureau make sense? How do you keep politics out of government agencies? In a free market, why shouldn’t consumers be left to fend for themselves with respect to consumer financial products? i. Answer: There has been a need for consumer financial products legislation for some time. 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. Consumers expect business to sell goods that are free from defects or extreme risk; many believe that providers of financial service products also should meet this expectation. Ideas about keeping politics out of government agencies will differ. It feels like today there can be no separating the two. Staying aware and continuing to bring to light instances when politics interfere with government agencies is the first step. [return to top]

177

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Additional Activities and Assignments

1. Cases: In this chapter, instructors may utilize a combination of cases: 1- Wal-Mart - The Main Street Merchant of Doom 2- Walmart’s Labor Practices 16- Big Food, Big Problem: Nestlé in Brazil 20- Dark Money and Corporate Political Spending on Campaigns 21- Big Pharma’s Marketing Tactics 22- Purdue Pharma, OxyContin, and the Opioid Crisis 23- McDonald’s: The Coffee Spill Heard ’Round the World 24- Boeing’s Two Flight Crashes 30- The Case of the Fired Waitress 34- Workplace Spying Ethics in Practice Cases: What Do We Tell the Customer? Should the Word Free Be Banned in Advertising? Do These ―Advertising Traps‖ Represent Ethical Advertising? Should Food Advertising to Children Be Banned? Return Fraud – A Growing Business Spotlight on Sustainability: Are Consumers Willing to Pay More for Sustainability?

2. Group Activity: Divide students into groups of four to five students. Have each student keep a journal where they log each television show or movie that they watch during a two- to threeweek period. Students should track each time they spot a product placement or a plot placement in a television show or movie. Once the two- to three-week period is over, students should meet in their group to discuss the various product placements and/or plot placements that they viewed. Students should discuss any ethical issues related to the product placement and/or plot placements associated with the programs and movies that they watched. Students should select the most controversial product placement and/or plot placement and present it to the class, including an analysis of the ethical issues involved. If possible, students should show a television or movie clip with the product placement and/or product placement for the other students to view. 3. Individual Assignment: Provide students with the following instructions:

178

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Go to www.goodguide.com (a website that provides consumers with information on the health, environmental and social impacts of certain products). Select a product that you use or would consider using. Click on ―Full Rating Details for This Product.‖ Identify the product in your typed response and answer the following questions: (1) What is the product’s overall score? What does this score mean? (2) Environment: What is the product’s score regarding environmental impact? What factors were considered in calculating this score? Why did the product earn this score? (3) Community (Society): What is the product’s score regarding society? What factors were considered in calculating this score? Why did the product earn this score? (4) Employees (Workers): What is the product’s score regarding workers? What factors were considered in calculating this score? Why did the product earn this score? (5) Consumers: What is the product’s score regarding consumers? What factors were considered in calculating this score? Why did the product earn this score? You should include a printed copy of the website with your typed response. [return to top]

179

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

Standard Discussion Rubric Criteria Participation

Contribution Quality

Needs Improvement Does not participate or submit discussion by the posted deadlines. Does not follow instructions for initial post and responses. 3 points Comments may not stay on task. Comments may

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion.

180

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

discussion topic. Comments motivate other students to respond. 20 points Etiquette

Maintains appropriate language. Offers criticism in a constructive manner. Provides both positive and negative feedback. 5 points

not add value to discussion topic. Comments may not motivate other students to respond. 10 points Does not always maintain appropriate language. Offers criticism in an offensive manner. Provides only negative feedback. 3 points

0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 15: Consumer Stakeholders: Product and Service Issues

Table of Contents Purpose and Perspective of the Chapter .................................................................................182 Cengage Supplements............................................................................................................182 Chapter Objectives .................................................................................................................182 Complete List of Chapter Activities and Assessments .............................................................182 Key Terms ..............................................................................................................................183 What's New in This Chapter ....................................................................................................184 Chapter Outline .......................................................................................................................184 Discussion Questions .............................................................................................................185 Additional Activities and Assignments .....................................................................................188 Appendix ...............................................................................................................................1900 Generic Rubrics ....................................................................................................................................... 10 Standard Writing Rubric .......................................................................................................................... 10 Standard Discussion Rubric ..................................................................................................................... 11

181

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to discuss two central issues in the business/consumer relationship—product quality and safety. Within the topic of safety, product liability and calls for tort reform are explored. Two government agencies that play important roles in product safety and quality are described.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 15.01

Describe and discuss the two major product and service issues: quality and safety. How are they both related?

15.02

With respect to product safety, what are the key laws and concepts governing them?

15.03

Explain the role and functions of the Consumer Product Safety Commission (CPSC). Provide an example of a recent action taken by the CPSC.

15.04

Explain the role and functions of the Food and Drug Administration (FDA). Provide an example of a recent action taken by the FDA.

15.05

Outline and describe business’s responses to consumer stakeholders, including customer service programs, and quality initiatives such as Total Quality Management (TQM), Six Sigma, Lean Six Sigma, Kaizen, and ISO 9000.

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 15.1

PPT Slide

Activity/Assessment

Duration

10 minutes

15.1 15.1 15.2 15.2 15.3 and 15.4 15.5 15.5

10 17 22 23 30

Icebreaker: What Products Make You Mad? Discussion: Another Dimension Discussion: Product Quality in Theory Discussion: Quality—It’s a Liability Discussion: Strict Liability Discussion: The Role of Agency Watchdogs Discussion: Is Business Handling It? Discussion: Sustainability

43 44

15 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes

182

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

[return to top]

Key Terms

Absolute liability: imposed upon a person or company engaged in a hazardous or potentially dangerous business Caveat emptor: the buyer assumes the risk that a product may fail to meet expectations or have defects Caveat venditor: goods are covered by an implied warranty of merchantability Caveat vendor: a supplier of a good or service is legally obliged to inform buyers of any defects in the product Consumer Product Safety Commission (CPSC): agency that protects the public from unreasonable risks of serious injury or death from thousands of types of consumer products Consumer Product Safety Improvement Act (CPSIA) of 2008: addresses, among other things, lead, phthalates, toy safety, third-party testing and certification, imports, ATVs, civil and criminal penalties Consumer stakeholder satisfaction model: depicts how product and service quality and safety lead to consumer satisfaction and the consequences for the firm’s profitability, reputation, and continued purchasing by consumers Contractual theory: focuses on the contractual agreement between the firm and the customer Doctrine of strict liability: a legal doctrine that holds a party responsible for their actions or products, without the plaintiff having to prove negligence or fault Due care theory: manufacturer is obligated to take all reasonable precautions to ensure that products are free of defects that could potentially cause harm to the consumer Food and Drug Administration (FDA): agency responsible for protecting the public health by ensuring the safety, efficacy, and security of human and veterinary drugs Food and Drugs Act of 1906: law that prohibits the sale of misbranded or adulterated food and drugs in interstate commerce and laid a foundation for the nation's first consumer protection agency Food Safety Modernization Act (FSMA): law that aims to ensure the U.S. food supply is safe by shifting the focus to preventing contamination of the food supply ISO standardization: International Standards Organization develops standards to ensure the quality, safety, and efficiency of products, services, and systems Kaizen: Japanese term meaning "change for the better" or "continuous improvement" Lean Six Sigma (LSS): a method that provides organizations tools to improve the capability of their business processes by focusing on removing waste Product extortion: when someone threatens to damage, destroy, or contaminate products in an effort to leverage ransom monies from the affected companies

183

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Product liability: the liability of any or all parties along the chain of manufacture of any product for damage caused by that product Product liability reform: states that a manufacturer or seller shall not be liable if the product is inherently unsafe and known to be unsafe by the ordinary consumer Product liability risk management program: program that transfer risk through management of suppliers, manage supplies and imported goods, builds safety into the product’s design, enable and review customer feedback Product tampering: any actual or threatened, intentional, malicious, and wrongful alteration or contamination of any goods or products manufactured Six Sigma: a method that provides organizations tools to improve the capability of their business processes Social costs theory: the socialized portion of the total costs of production Tort: civil (not criminal) wrongs or wrongful acts, whether intentional or accidental, that cause injury to another Tort law: law governing civil wrongs or wrongful acts that cause injury to another Tort reform: laws designed to reduce litigation Total Quality Management (TQM): a management approach to long-term success through customer satisfaction [return to top]

What's New in This Chapter The following element is an improvement in this chapter from the previous edition:      

Figure 15-1, ―Product Safety Best Practices,‖ has been revised. The topic Ethics in Practice Case ―Are Video Games a Harmful Product?‖ has been added. Figure 15-2, ―Food Safety Issues in the News,‖ has been revised. The topic Ethics in Practice Case: ―Sleep Tight and Don’t Let the Bedbugs Bite‖ has been added. Figure 15-4, ―U.S. Food and Drug Administration’s (FDA)—Mission‖ has been revised. Formerly Chapter 14, this revised chapter includes an extended section on food safety, updated illustrative examples, and a new section on service quality.

[return to top]

184

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

15.1 The Issue of Quality (Ch. 15.1, PPT Slides 5–10) 1. Service Quality (Ch. 15.1, PPT Slide 6) 2. Dimensions of Quality (Ch. 15.1, PPT Slide 7) 3. Ethical Underpinnings (Ch. 15.1, PPT Slide 8) 15.2 The Issue of Safety (Ch. 15.1, PPT Slides 11–17) 1. Food Safety (Ch. 15.1, PPT Slides 13–14) 2. Other Safety Issues (Ch. 15.1, PPT Slides 15–16) 15.3 Product Liability (Ch. 15.2, PPT Slides 18–23) 1. Reasons for Concern About Product Liability (Ch. 15.2, PPT Slide 19) 2. Doctrine of Strict Liability (Ch. 15.2, PPT Slide 19) 3. Extensions of Strict Liability Rule (Ch. 15.2, PPT Slide 20) 4. Product Tampering and Product Extortion (Ch. 15.2, PPT Slide 21) 5. Product Liability (or Tort) Reform (Ch. 15.2, PPT Slide 21) 15.4 Consumer Product Safety Commission (Ch. 15.3, PPT Slides 24–26) 15.5 Food and Drug Administration (Ch. 15.4, PPT Slides 27–30) 15.6 Business’s Response to Consumer Stakeholders (Ch. 15.5, PPT Slides 31–32) 15.7 Customer Service Programs (Ch. 15.5, PPT Slides 33–36) 15.8 Total Quality Management Programs (Ch. 15.5, PPT Slides 37–39) 15.9 Six Sigma Strategy and Other Processes (Ch. 15.5, PPT Slides 40–44) 15.10 Summary (PPT Slides 45–47) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class. 97. Discussion: Quality: Another Dimension (page 344, 15.1, PPT Slide 10) Duration 15 minutes. a. Question: Identify the major dimensions of quality. Give an example of a product or service in which each of these characteristics is important. i. Answer: As the text notes, quality means different things to different people. Consequently, students may differ on what they consider the major dimensions of quality. The eight dimensions of quality mentioned in the textbook (and examples of products or services in which each is important) are: (1) performance (a sports car or computer), (2) features (a video game), (3) reliability (a watch), (4) conformance (a software program, so that it can communicate with other programs), (5) durability (a lawn mower), (6) serviceability (an automobile), (7) aesthetics (an evening gown), and (8) perceived quality (the panache of a trendy restaurant). 98. Discussion Activity: Product Quality in Theory (pages 344–345, 15.1, PPT Slide 17) Duration 15 minutes.

185

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

a. Question: What ethical theories can help us to better understand the issue of quality? Discuss. i. Answer: Three ethical theories shape our understanding of quality: (1) the contractual theory, (2) the due-care theory, and (3) the social costs view. The contractual theory focuses on the terms of the sale between the company and the customer, emphasizing the terms of the sale, information provided to the customer, and avoiding some anti-friendly customer behaviors. The due-care theory provides that the customer is the more vulnerable party; consequently, the firm has a greater ethical responsibility to the customer. The contractual and due-care theories do little to inform us about quality because they take the product as a given. The provider knows more about the product than does the buyer, so these theories focus on fulfilling the seller’s duties and protecting the customer. The social costs view can help a businessperson to focus on quality issues because of the threat of additional costs. This theory says that if a product harms a customer, then the provider should bear the cost of that harm. With this sword hanging over their heads, providers may be more inclined to provide high quality, safe products to their customers. 99. Discussion Activity: Quality—It’s a Liability (pages 349–352, 15.2, PPT Slide 22) Duration 15 minutes. m. Question: Identify the principal reasons why we have a product liability crisis. Have any reasons been omitted? Discuss. i. Answer: The main reason we have a product liability crisis in the United States is our emphasis on litigation as the way to solve problems. If we have a problem, we sue someone, rather than try to find a reasonable resolution. Why we are so litigious is beyond the scope of this question, but the fact that we are does impact the state of product liability. Another reason is the growing size of financial awards given to plaintiffs. Again, we should go deeper into why this is occurring. Could it be that businesses bring this on themselves by their cavalier treatment of the customers who are now jurors? Finally, the doctrine of strict liability suggests that anyone in the value chain is liable for harm caused to users of the product in question if the product was defective and unreasonably dangerous. This opens wide the field of potential targets for product liability suits. Furthermore, while the text does not propose this as a contributing factor to the product liability crisis, the fact that the United States has more lawyers per capita than any other nation may impact the number of product liability lawsuits filed each year. Generally, more lawyers mean more individuals willing to take on product liability lawsuits, whether they are frivolous or not. 100. Discussion Activity: Strict Liability (pages 349–352, 15.2, PPT Slide 23) Duration 15 minutes. a. Question: Differentiate the doctrine of strict liability from the doctrines of absolute liability and market share liability. What implications do these views have for the business community and for future products and services that might be offered? i. Answer: The doctrine of strict liability holds that anyone in the value chain is liable for harm caused to users if the product as sold was defective and unreasonably dangerous. The use of the strict liability doctrine in U.S. courts is a primary reason for the litigious state of the nation. While some parties argue that strict liability increases product safety, others note that

186

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

the costs of these lawsuits ultimately are passed on to the consumer. Absolute liability goes beyond this to say that a firm is liable for damages even if it had no way of knowing that the product might cause a problem later. Under this principle, it does no good for a company to claim that it did its best at the time, given the prevailing state of the art. Market share liability further extends the concept to cover all companies that produced a certain product, regardless of if the plaintiff can prove that he/she used a specific company’s goods. Each company’s liability would be in proportion to the market share it held. This doctrine is not widely upheld at this point. These principles, taken together, point to a movement away from caveat emptor (buyer beware) to caveat vendor (let the seller take care). It is important to emphasize that the liability doctrine applicable to a specific case is largely dependent on state laws. Depending on whether a state is a strict liability, absolute liability, or market share liability state, this could, theoretically, impact businesses’ decisions to conduct business in a particular jurisdiction. 101. Discussion Activity: The Role of Agency Watchdogs (pages 352–354, 15.3 and 15.4, PPT Slide 30) Duration 15 minutes a. Question: Given the current business and consumer climate, what do you anticipate the future to be for the CPSC and the FDA? What role does politics play in your answer? i. Answer: Although business is, by far, the most powerful social institution in the United States, the consumer movement seems to be holding its own. In part this is because business is so competitive that firms cede some power to consumers in the hopes of capturing more business. With that climate as the backdrop, it is likely that the FDA and CPSC will continue much as they are now—going concerns with moderate successes and failures. Business will not be able to get rid of the agencies, nor will consumers be able to bring about their ascendance; however, as global trade increases and other countries import products that fail to meet U.S. safety standards, the role of the CPSC in product oversight may expand. Politics certainly plays a role in this tussle. This fact can be seen in the shifting focus of the CPSC from consumer focused to a more neutral stance. Because business has such influence over government, the fact that politics plays a role means that business has a great deal of control over the process. 102. Discussion: Is Business Handling It? (pages 354–357, 15.5, PPT Slide 43) Duration 15 minutes. a. Question: What is your assessment of business’s response to product and service quality and safety? Have they done enough? What is missing from their approaches? i. Answer: It seems that businesses have strived to improve the quality and safety of products and services over the last decade. Corporate focus on these issues is driven by businesses’ need to (1) retain a loyal consumer base despite increased competition, and (2) avoid costly litigation. Consequently, business, as a whole, seems devoted to meeting customer expectations with regards to quality and safety. One area with which companies still seem to struggle is customer service once a product has been purchased. Although the text notes that the ―key to customer retention

187

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

is customer service,‖ many companies seem to either lack sufficient resources to devote to post-sale service or are simply unwilling to divert such resources for this purpose. 103.

Discussion: Sustainability (pages 356–357, 15.5, PPT Slide 44) a. Question: How do consumers as well as society benefit from quality and safety initiatves in products and services? How are these related to sustainability? i. Answer: Consumers and society benefit from quality and safety in the products that they purchase for themselves and their families. Both benefit in the ease of knowing these products are at a certain standard. Research has demonstrated that quality-oriented practices have a positive and significant impact on corporate sustainability.

[return to top]

Additional Activities and Assignments

1. Cases: In this chapter, instructors may utilize a combination of cases: 1- Wal-Mart - The Main Street Merchant of Doom 2- Walmart’s Labor Practices 16- Big Food, Big Problem: Nestlé in Brazil 20- Dark Money and Corporate Political Spending on Campaigns 21- Big Pharma’s Marketing Tactics 22- Purdue Pharma, OxyContin, and the Opioid Crisis 23- McDonald’s: The Coffee Spill Heard ’Round the World 24- Boeing’s Two Flight Crashes 30- The Case of the Fired Waitress 34- Workplace Spying Ethics in Practice Cases: The Pirated Popcorn Was ―Pink Slime‖ a Victim of Social Media Frenzy? Spotlight on Sustainability: Sustainable Products Meet Long-Term Market Needs

2. Group Activity: Product Recalls Divide students into groups of four to five students. Assign each group to research a recent product recall. Students should determine why the product was recalled and whether the company could have taken steps in the production process to avoid the recall. Students should establish whether the firm in question embraces the contractual theory, the due-care theory or the social costs view. Finally, each group should draft a sample press release for the company addressing the recall and how the company intends to manage quality issues.

188

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Group Activity 2: Quality and Safety Movie Night Invite groups of students to watch the movie Supersize Me. This movie focuses on the fast food industry’s contribution to the growing obesity problem in the United States. Specifically, the subject consumes only McDonald’s food for breakfast, lunch, and supper for 30 days and monitors the impact to his health. Initially, students may not view this movie to be about product quality and safety, but the instructor should encourage students to explore the ethical dilemmas raised by the movie. What determines quality/safety in fast-food services? Who bears the responsibility for the impact of fast food on the American people: the consumers or the industry? Should the fast-food industry address product safety and quality differently? 3. Individual Assignment: Distribute the following instructions to each student: Research how Toyota handled complaints that it received from 2008–2010 regarding runaway acceleration problems. Specifically, note how the company dealt with the vehicle problem, those directly impacted by acceleration issues, and its own shareholders and employees. Compare Toyota’s response to Johnson & Johnson’s response to the Tylenol crisis. Based on this comparison, evaluate Toyota’s response. What did the company do right? What should it have done differently? How could a company that had been held out as an exemplar of product quality produce over 8 million vehicles with safety issues? [return to top]

189

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

190

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 16: Community Stakeholders and Corporate Philanthropy

Table of Contents Purpose and Perspective of the Chapter .................................................................................193 Cengage Supplements............................................................................................................193 Chapter Objectives .................................................................................................................193 Complete List of Chapter Activities and Assessments .............................................................193 Key Terms ..............................................................................................................................194 What's New in This Chapter ....................................................................................................195 Chapter Outline .......................................................................................................................195 Discussion Questions .............................................................................................................196 Additional Activities and Assignments .....................................................................................198 Additional Resources .................................................................. Error! Bookmark not defined.

191

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Appendix .................................................................................................................................201 Generic Rubrics ..................................................................................................................................... 201 Standard Writing Rubric ........................................................................................................................ 201 Standard Discussion Rubric ................................................................................................................... 202

192

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to examine the relationship between business and its surrounding community. This relationship can have both positive and negative effects. Within the positive realm, the chapter focuses on community involvement and corporate philanthropy. Companies also can do damage to their communities, especially by outsourcing jobs and/or closing facilities.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 16.01

Discuss reasons for community involvement, various types of community projects, and management of community stakeholders.

16.02

Explain the pros and cons of corporate philanthropy, provide a brief history of corporate philanthropy, and explain why and to whom companies give.

16.03

Differentiate between strategic philanthropy, cause-related marketing, and cause branding.

16.04

Characterize the detrimental impacts of business in the community, including the loss of jobs in the contexts of offshoring, reshoring, and plant closings.

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 16.1 16.1 16.2

PPT Slide 2 11 22

16.3 16.4 16.4

23 36 37

16.4

Activity/Assessment

Duration

Icebreaker: Feeling Generous? Discussion: The Principle of Giving Discussion: Philanthropy—Who Benefits? Discussion: Giving with a Plan Discussion: Offshore Trade-offs Discussion: The Ethics of ―Just Business‖ Discussion: Business and Plant Closing

10 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes 15 minutes

[return to top]

193

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Key Terms

Cause branding: a potentially profit-making initiative by a for-profit company or brand to raise awareness, money, or consumer engagement in a social or environmental issue Cause-related marketing: a potentially profit-making initiative by a for-profit company or brand to raise awareness, money, or consumer engagement in a social or environmental issue Chief Executives for Corporate Purpose (CECP): a CEO-led coalition that believes that a company's social strategy Community action program: matching the community needs to the resources the company has available Community engagement: a strategic approach to the relationships, communication, and interactions between community members and an organization to try to influence outcomes for both Community involvement: the power to bring positive, measurable change to both the communities in which you operate and to your business Community partnerships: when a for-profit business enters into a cooperative arrangement with a nonprofit organization for their mutual advantage Company-Wide Day of Service: where employees mobilize volunteers for a day Corporate philanthropy: the activities which companies voluntarily initiate that aim to manage their impact on society at large Dollars for Doers: contributions in recognition of a certain level of employee volunteer service Employee owned: any arrangement in which a company's employees own shares in their company or the right to the value of shares in their company Offshoring: the relocation of business processes to a different country Outsourcing: the relocation of business processes to a different company Paid Release Time: paid time off for particular purposes such as parental or sick leave Philanthropy: the desire to promote the welfare of others, expressed especially by the generous donation of money to good causes Philanthropy hackers: volunteer hackers with a belief in radical transparency, a nose for sniffing out vulnerabilities in systems, a desire to ―hack‖ complex problems using elegant technological and social solutions Reshoring: the returning of business processes to their original location Skills-Based Pro Bono Service: employees volunteering with their specific skills—like tax accountants from KPMG and Deloitte who volunteer to help seniors prepare tax returns Strategic philanthropy: practices through which companies align charitable activities such as donations and volunteerism with a social issue or cause that supports their business objectives Third sector: the nonprofit sector

194

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Worker Adjustment and Retraining Notification Act (WARN): the national advance-notice law requires employers to inform workers and communities of business- or plant-closing situations in advance [return to top]

What's New in This Chapter The following elements are improvements in this chapter from the previous edition:   

     

The chapter name has been renamed from ―Business and Community Stakeholders‖ to ―Community Stakeholders and Corporate Philanthropy‖. The title ―16.1 Community Involvement‖ (A-head) has been renamed as ―16.1 Community Involvement‖. The data and title of the topic ―FIGURE 16-3 Corporate Community Involvement: The Most Important Issues and the Most Common Methods of Addressing Them‖ have been revised to ―Figure 16-3 Giving Back Through Volunteerism on National Day of Service, 2021‖. The title ―16.2c Giving to the Third Sector: The Nonprofits‖ has been renamed to ―16.2c Giving to the Nonprofit Sector.‖ The heading ―To Whom Do Companies Give?‖ has been renamed to ―Giving Patterns.‖ The topics under the headings ―Health and Human Services‖, ―Education‖, ―Civic and Community Activities‖ and ―Culture and the Arts‖ have been removed. The topic spotlight on sustainability ―Corporate Philanthropy through Greening the Workforce‖ has been added. Key terms have been revised. Endnotes have been revised.

[return to top]

195

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

d. Managing Corporate Philanthropy (Ch. 16.3, PPT Slides 18–20) 1. Community Partnerships (Ch. 16.3, PPT Slide 18) 2. Strategic Philanthropy (Ch. 16.3, PPT Slide 19) a. Factor (Supply) Conditions (Ch. 16.3, PPT Slide 19) b. Demand Conditions (Ch. 16.3, PPT Slide 19) c. Context for Strategy and Rivalry (Ch. 16.3, PPT Slide 19) d. Related and Supporting Industries (Ch. 16.3, PPT Slide 19) 3. Cause-Related Marketing (Ch. 16.3, PPT Slide 21) 4. Global Philanthropy (Ch. 16.3, PPT Slide 21) 16.3 Detrimental Impacts on Communities (Ch. 16.4, PPT Slides 24–38) a. Offshoring and Reshoring (Ch. 16.4, PPT Slide 25) b. Business and Plant Closings (Ch. 16.4, PPT Slides 26–29) 1. Before the Decision to Close Is Made (Ch. 16.4, PPT Slide 27) i. Diversification (Ch. 16.4, PPT Slide 27) ii. New Ownership (Ch. 16.4, PPT Slide 27) iii. Employee Ownership (Ch. 16.4, PPT Slide 27) 2. After the Decision to Close Is Made (Ch. 16.4, PPT Slides 28–33) i. Community-Impact Analysis (Ch. 16.4, PPT Slide 30) ii. Advance Notice (Ch. 16.4, PPT Slides 31–32) iii. Transfer, Relocation, and Outplacement Benefits (Ch. 16.4, PPT Slide 33) iv. Gradual Phase-Outs (Ch. 16.4, PPT Slide 33) v. Helping to Attract Replacement Industry (Ch. 16.4, PPT Slide 33) 3. Survivors: The Forgotten Stakeholders (Ch. 16.4, PPT Slides 34–35) 16.4 Summary (PPT Slides 39–40) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class. 104. Discussion: The Principle of Giving (pages 362–366, 16.1, PPT Slide 11) Duration 15 minutes. a. Question: Have you participated in community involvement at work? What type of program did the company endorse? Outline what you experienced to be the benefits of employee volunteerism. i. Answer: Answers will vary depending on community involvement opportunities at workplaces. Many workplaces offer paid time off to participate in volunteer work. Some companies have volunteer days for their workers to help at food banks or shelters, even Habitat for Humanity building projects or similar programs. Many places of employment have food drives each year to benefit local food banks, or toy collection for needy children during the holidays. The benefits will be personalized to each student’s experience. 105. Discussion Activity: Philanthropy—Who Benefits? (pages 366–369, 16.2, PPT Slide 22) Duration 15 minutes. a. Question: Explain the pros and cons of corporate philanthropy, provide a brief history of corporate philanthropy, and explain why and to whom companies give.

196

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

i. Answer: Arguments for community involvement and philanthropy center on the fact that business has the resources and expertise to help meet social needs. Many also note that business should be responsible for the problems that it creates. In addition to these factors, it also is important to note that these activities also can help the firm and its employees through increased employee morale, better firm reputation, etc. Arguments against these programs emphasize the narrow profit motive of the firm. Activities that do not directly generate profits are outside the purview of the corporation and therefore illegitimate. Corporate philanthropy has been around since the early 20th century but blossomed in the 1960s. Corporations give for several reasons, including to do good both for themselves and for the community. Contributions go to health and human services, education, civic and community activities, the arts, and crisis areas. 106. Discussion Activity: Giving with a Plan (pages 369–373, 16.3, PPT Slide 23) Duration 15 minutes. n. Question: Differentiate among strategic philanthropy, cause-related marketing, and cause branding. Provide an example of each not discussed in the text. i. Answer: Strategic philanthropy is the process of tailoring a firm’s giving to best fit with its own mission and goals, by making contributions that hold the promise of helping the firm’s financial goals, giving to causes that align with corporate activities, and explicitly planning the giving process. An office supply store might make contributions to a school by donating discontinued supplies and equipment. Cause-related marketing is the direct linking of a business’s product or service to a specified charity. Each time a consumer uses the service or buys the product, a donation is given to the charity by the business. Some observers doubt that causerelated marketing is really philanthropy. Cause branding represents a longer-term commitment than cause marketing, and more directly links a firm’s line of business with its target audience. One example is Avon Products, who has become a recognized leader in cause marketing. It’s target market is women, and it has developed an array of programs to raise awareness of breast cancer, which primarily affects women. Avon sells products featuring the pink ribbon that represents breast cancer awareness, and then donates the proceeds from these products to nonprofit and university programs. 107. Discussion Activity: Offshore Trade-offs (pages 373–377, 16.4, PPT Slide 36) Duration 15 minutes. a. Question: Identify and discuss briefly what you think are the major trade-offs that firms face as they think about offshoring and reshoring. When substantial layoffs are involved, what are firms’ responsibilities to their employees and their communities? i. Answer: The major trade-off that most managers never address is the decision to increase profits, which primarily benefit shareholders and senior managers, at the expense of workers’ incomes. This trade-off is not addressed because the managers have effective control of the corporation and have a way to enrich themselves, and shareholders are a privileged class of stakeholder who are given preference over workers. The decision is presented in terms of the need to remain competitive, not

197

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

the stark trade-off mentioned above. In lieu of actually deciding to treat workers as equals to senior managers and shareholders, the firm should at the very least ameliorate the damages to workers and the community, along with providing outplacement benefits. Further, in certain cases, federal law requires companies to provide advanced notice in the event of mass layoffs. 108. Discussion Activity: Business and Plant Closing (pages 374–375, 16.4, PPT Slide 38) Duration 15 minutes. a. Question: How serious is the plant and business closing phenomenon? Are there responsibilities companies have to their communities that extend beyond those discussed in the chapter? Explain. i. Answer: This will vary based on student response. While business have a responsibility to their communities, they also have responsibilities to the rest of the company stakeholders (other employees, shareholders, suppliers, customers) not directly impacted by the closing of a plant. 109. Discussion Activity: The Ethics of ―Just Business‖ (pages 373–377, 16.4, PPT Slide 37) Duration 15 minutes. a. Question: In your opinion, why does a business have a responsibility to employees and community stakeholders in a business- or plant-closing decision? i. Answer: Businesses have a clear responsibility to workers and the community in the case of a plant closing because: (1) the company has received significant benefits from both, (2) business holds a significant power differential, and (3) it is simply the ―right‖ thing to do. All rights and privileges carry corresponding duties, and entities that have large privileges have large responsibilities. [return to top]

Additional Activities and Assignments

1. Cases: In this chapter, instructors may utilize a combination of cases: 1- Wal-Mart - The Main Street Merchant of Doom 2- Walmart’s Labor Practices 12- Family Business 14- Nike, Sweatshops, and Other Issues 16- Big Food, Big Problem: Nestlé in Brazil 18- Coke and Pepsi in India: Water, Issues, and Crisis Management 22- Purdue Pharma, OxyContin, and the Opioid Crisis 25- Should States Woo Big Business with Tax Incentives? Amazon Thinks So! 26- Everlane: Ethical Chic and Radical Transparency in Global Supply Chains 27- Slow and Sustainable Fashion 28- The Perils of Student Loan Debt

198

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

29- ―Dead Peasant‖ Life Insurance Policies 34- Workplace Spying Ethics in Practice Cases: Matters of Good Intentions Competition in the Nonprofit Workplace Spotlight on Sustainability: Corporate Philanthropy through Greening the Workforce 2. Group Activity: Group Activity 1: Community Action Programs Divide students into groups of four to five students. Assign each group a well-known company. Ask each group to develop a community action program for the assigned company. Students should assume that the assigned company operates in the community where your school is located and should develop the community action program based on that community. Students should present the community action program to the entire class. Groups should be prepared to answer questions about potential problems and/or issues with their respective plans. Group Activity 2: Outsourcing Movie Night Invite groups of students to watch the ―Outsourcing‖ episode of the FX reality series 30 Days (Season 2, Episode 2). In this episode, Christopher (Chris) Jopin, an unemployed computer programmer, travels to India where his job was outsourced. While in India, Chris lives with an Indian family who works in outsourced jobs, and he obtains an outsourced job. The episode examines American perceptions/attitudes regarding outsourcing, as well as the impact of outsourced jobs to India’s economy and culture. Students should explore the economic, legal, and ethical dilemmas that result from the outsourcing of jobs to less developed countries. Have students prepare a movie review where they express their opinion regarding the issues this movie raises. In their analysis, students should explore the economic, legal, and ethical impact that this practice has on both the United States and India.

199

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

3. Individual Assignment: Distribute the following instructions to each student: In 2010, Pepsi spent much time and money on its ―Pepsi Refresh‖ project, which donated funding to several worthy causes. But recently, the program was abandoned. http://www.mediapost.com/publications/article/186127/why-pepsi-canned-therefresh-project.html#axzz2gVRWnJUF Why do you think that happened? What could Pepsi have done differently? What impact on other similar programs do you see as a result of the Pepsi experience? [return to top]

200

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

201

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 17: Business, Government, and Regulation

Table of Contents Purpose and Perspective of the Chapter .................................................................................204 Cengage Supplements............................................................................................................204 Chapter Objectives .................................................................................................................204 Complete List of Chapter Activities and Assessments .............................................................204 Key Terms ..............................................................................................................................205 What's New in This Chapter ....................................................................................................206 Chapter Outline .......................................................................................................................206 Discussion Questions .............................................................................................................207 Additional Activities and Assignments .....................................................................................210 Appendix ...................................................................................................................................10 Generic Rubrics ....................................................................................................................................... 10

202

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric .......................................................................................................................... 10 Standard Discussion Rubric ..................................................................................................................... 11

203

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to examine the relationship between business and government, along with the general public, which also plays an important role. The central focus here is the government’s role in influencing business, although, as discussed in the next chapter, business also influences government.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 11.01

Articulate a brief history and changing nature of the government’s role in its relationship with business.

11.02

Appreciate the complex roles of government and business.

11.03

Identify the elements in the complex interactions among business, government, and the public.

11.04

Identify and describe the government’s nonregulatory influences, especially the concepts of industrial policy and privatization.

11.05

Identify and describe the government’s regulatory influences on business including the major reasons for regulation, the types of regulation, and issues arising out of deregulation.

Complete List of Chapter Activities and Assessments For additional guidance refer to the Teaching Online Guide. Chapter Objective 17.2 17.2 17.3 17.5 17.4

PPT Slide 2 10 16 23 32

Activity/Assessment Icebreaker: Are You Regulated? Discussion: Government and Business Discussion: The Place of the Public Discussion: The Challenges of Privatization Discussion: Regulation

Duration 10 minutes 15 minutes 15 minutes 15 minutes 15 minutes

204

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

17.4 17.5

33 37

Discussion: The Need for Government Discussion: Deregulation

15 minutes 15 minutes

[return to top]

Key Terms

Collectivistic ethic of government: subordination of individual goals and self-interest to group and group interests, maximizing the obligations assumed by the individual and discouraging self-interest Deregulation: the removal of regulations or restrictions, especially in a particular industry Direct costs: the costs of administering a regulatory agency or government program, such as the cost of paying personnel to enforce a particular rule Economic regulation: set of restrictions promulgated by government administrative agencies through rulemaking supported by a threat of sanction or a fine Federalization: the assumption of control or authority by a federal government Indirect costs: the costs to society that occur when people change their behavior in response to incentives created by the regulation Individualistic ethic of business: maximum concession to self-interest, minimizing the load of obligations society imposes on the individual, emphasizing inequalities of individuals Induced costs: induced effects of regulation that are diffuse and elusive but constitute some of the most powerful consequences of the regulatory process Industrial policy: every form of state intervention that affects industry as a distinct part of the economy Market failure: failure of the free enterprise system Natural monopoly: when the economies of scale are so great that the largest firm has the lowest costs and thus is able to drive out its competitors Negative externalities: when the production or consumption of a product results in a cost to a third party Privatization: the process of converting a public organization to private control or ownership Regulation: a rule or directive made and maintained by an authority Reregulation: the act or process of imposing regulations and restrictions on something that was previously deregulated Self-regulation: a regulatory process whereby an industry-level organization (such as a trade association or a professional society), as opposed to a governmental- or firm-level, organization sets and enforces rules and standards relating to the conduct of firms in the industry Social cost: any cost incurred by a social enterprise above and beyond ordinary business costs Social goals: the company's commitment to manage the impact of its business on social, environmental and economic factors

205

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Social regulation: the broad category of rules governing how any business or individual carries out its activities [return to top]

What's New in This Chapter The following elements are improvements in this chapter from the previous edition:       

The section ―The Pendulum of Government s Role in Business‖ have been revised. The Figure 11-1 in previous edition is renamed as Figure 17-1. The Figure 11-2 in previous edition is renamed as Figure 17-2. The Key Terms have been updated. Formerly Chapter 11, this chapter no longer includes a committed discussion on the differences and similarities between producing a product and producing a service. A new conclusion discussing the risks and merits of self-regulation has been added. Illustrative examples have been updated.

[return to top]

206

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

17.4 Government’s Nonregulatory Influence on Business (Ch. 17.4, PPT Slides 17–23) a. Industrial Policy (Ch. 17.4, PPT Slides 18–19) b. Privatization (Ch. 17.4, PPT Slide 20) 1. The Privatization Debate (Ch. 17.4, PPT Slide 21) c. Other Nonregulatory Governmental Influences on Business (Ch. 17.4, PPT Slide 22) 17.5 Government’s Regulatory Influences on Business (Ch. 17.5, PPT Slides 24–33) a. Regulation: What Does It Mean? (Ch. 17.5, PPT Slide 26) b. Reasons for Regulation (Ch. 17.5, PPT Slide 27) 1. Controlling Natural Monopolies (Ch. 17.5, PPT Slide 27) 2. Controlling Negative Externalities (Ch. 17.5, PPT Slide 27) 3. Achieving Social Goals (Ch. 17.5, PPT Slide 27) c. Types of Regulation (Ch. 17.5, PPT Slides 28–30) 1. Economic Regulation (Ch. 17.5, PPT Slides 28, 30) 2. Social Regulation (Ch. 17.5, PPT Slides 29–30) d. Issues Related to Regulation (Ch. 17.5, PPT Slide 31) 17.6 Deregulation (Ch. 17.5, PPT Slides 34–37) a. Purpose of Deregulation (Ch. 17.5, PPT Slide 35) b. The Changing World of Deregulation (Ch. 17.5, PPT Slide 36) 17.7 Self-Regulation as an Alternative? (Ch. 17.5, PPT Slides 38–39) 17.8 Summary (PPT Slides 40–41) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class. 110. Discussion: Government and Business—Clash of Titans (pages 384–386, 17.2, PPT Slide 10) Duration 15 minutes. a. Question: Briefly explain how business and government represent a clash of ethical systems (belief systems). With which do you find yourself identifying most? Explain. With which would most business students identify? Explain. I. Answer: As business historians often point out, corporate charters were first issued explicitly to serve a public good. In that sense, business has changed from a collectivist ethic, in which the good of the group is placed above the rights or good of individuals, to its current individualist ethic. Individualism seeks to place the rights of individuals above the good of the group, and thus supports the profit motive of current businesses. Government, especially a representative democracy as practiced in the United States, is formulated to promote the common good. Students will obviously be split in their preferences for these two ethics, but the prevailing sentiment will most likely be for the individualistic approach. This is by far the dominant mode of thinking among businesspeople. 111. Discussion Activity: The Place of the Public (pages 386–388, 17.3, PPT Slide 16) Duration 15 minutes.

207

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

a. Question: Explain why the public is treated as a separate group in the interactions among business, government, and the public. Doesn’t government represent the public’s interests? How should the public’s interests be manifested? I. Answer: Ideally, the public is represented by the government. However, this is an imperfect process. In addition, the public does not speak with a single voice—there are many minority views that, while important and relevant, may not be sufficiently widespread so they garner a voice in government. One of the most dangerous realities in the United States is the influence of money on the governing process. Michael Walzer, in Spheres of Justice, warns of the danger of goods from one sphere (e.g., money from the economic sphere) invading and influencing the goods of another sphere (e.g., power in the political sphere). Because big business has control of such vast amounts of money and uses a portion of that currency to influence political power, the public’s influence over the political process is severely diminished. The Supreme Court’s recent decision in Citizens United v. Federal Election Commission increased corporate influence in the political process when the Court ruled that the First Amendment protects a corporation’s right to fund independent political broadcasts. How to return significant influence over government to the public is a topic that is both timely and critical. Students may appreciate this issue even more if they visit the multitude of websites that disclose the funding sources for various federal and state candidates. 112. Discussion: The Challenges of Privatization (pages 388–390, 17.5, PPT Slide 23) Duration 15 minutes. a. Question: What are the trade-offs between privatization and federalization? When would one or the other be more appropriate? What problems might you foresee and what future events would merit a shift in the current mix? I. Answer: The privatization/federalization debate centers on the question of efficiency. Proponents of privatization contend that almost everything can be accomplished more efficiently in the private sector than through government control. Supporters of federalization contend that there are some functions that cannot be adequately handled by the private sector. What the two sides often miss is that efficiency may not be the right criterion upon which to make this decision. Is efficiency the most important factor in making decisions about the education of our young people? Students may like to debate whether Social Security should be privatized. This is a timely issue and one that garners the interest of a majority of students due to the applicability to their personal lives. On the other hand, students may like to debate the role that the government should play in health care. Given the current political climate regarding this issue, this topic should be the subject of a lively debate. 113. Discussion Activity: Regulation (pages 390–393, 17.4, PPT Slide 32) Duration 15 minutes. o. Question: What is regulation? Why does government see a need to regulate? Differentiate between economic and social regulation. What social regulations do you think are most important, and why? What social regulations ought to be eliminated? Explain.

208

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Answer: Regulation is the act of controlling the activities of others by means of rules, law, or constituted authority. Typically, government regulates to correct past wrongs, achieve social goals, control natural monopolies, or control negative externalities. These regulations fall into two general categories—economic regulations that control commerce and social regulations that seek to achieve some type of social objective. The needs for social regulations are numerous. Because of the complexity of our interactions, our society has the power to do great harm to people and the environment, to the extreme of ending all life. The unbridled quest for more, and the individualistic ethic have proven to do great harm to the common good, which is the purview of social regulations. In 2010, Congress passed the Patient Protection and Affordable Care Act, which extends health insurance to 32 million uninsured people in the United States. This Act has been the subject of considerable debate, and the social and economic impacts of the new law are still the subject of substantial discussion in the United States.

114. Discussion Activity: The Need for Government (pages 394–396, 17.4, PPT Slide 33) Duration 15 minutes. a. Question: Outline the major benefits and costs of government regulation. In general, do you think the benefits of government regulation exceed the costs? In what areas, if any, do you think the costs exceed the benefits? I. Answer: This question is left to the class instructor as time and events will have altered the information available at the time this is being written. While Russia, China and India are all countries with emerging economies, the textbook notes that these countries could do more do deter bribery and corruption. If these countries want to improve their TI rankings, they not only need to pass more stringent antibribery and anticorruption laws, they also need to make sure that the laws are enforced. The best way to accomplish this objective is for each country to make sure that all actions covered by the laws are subject to public scrutiny and that the officials in charge of implementing and following the laws are held accountable. 115. Discussion Activity: Deregulation (pages 396–397, 17.5, PPT Slide 37) Duration 15 minutes a. Question: What are deregulation and reregulation? Under what circumstances should each be considered? When might self-regulation be considered for business? I. Answer: Deregulation is the counterpart to regulation that can sometimes overlap due to a mix of economic and political decisions that is in a state of flux. Deregulation is used to remove certain industries from the old-line economic regulations of the past, to keep the economy in balance. Reregulation comes out of bad experiences after deregulating industries. Reregulation is used to help find the optimal mix of regulation and deregulation of industries. Deregulation should be considered to bring some industries up to date in response to the changing economy. Reregulation should be considered when the deregulation of industries caused negative effects rather than positive effects. [return to top]

209

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Additional Activities and Assignments

1. Cases: In this chapter, instructors may utilize a combination of cases: 18- Coke and Pepsi in India: Water, Issues, and Crisis Management 19- An Ethical Dilemma for Chiquita in Colombia 20- Dark Money and Corporate Political Spending on Campaigns 21- Big Pharma’s Marketing Tactics 22- Purdue Pharma, OxyContin, and the Opioid Crisis 25- Should States Woo Big Business with Tax Incentives? Amazon Thinks So! Ethics in Practice Cases: The Marijuana Regulatory Dilemma Banning the Big Gulp Spotlight on Sustainability: Utilities and the Costs of Going Green

2. Group Activity: Group Activity 1: The Regulatory Process While many students understand the concept of regulation, they do not understand the regulatory process. At a basic level, students should understand that Congress creates laws, various regulatory agencies create rules/regulations within the parameters of those laws, and that the public has an opportunity to comment on the proposed regulations. To help students understand this concept, instructors should divide students into groups of three to four students. Each group should then be assigned a law (preferably one that is studied in this textbook). The students should research when the law was passed and the regulatory agency responsible for implementing regulations under the law. They should summarize any regulations created by the appropriate regulatory agency under the law and note any public opposition or support that was generated during the comment period. Group Activity 2: Deregulation Divide students into groups of three to four students. Have students research (1) how Enron lobbied Congress to deregulate the wholesale electricity industry and (2) how the deregulation of the electricity industry has impacted consumers. Students should note any benefits or problems that have occurred as a result of the deregulation of this industry. Instructors may want to guide students to the situation that occurred in California as a result of the deregulation of this industry. 3. Individual Assignment: Ask students to research the Patient Protection and Affordable Care Act of 2010. As a starting point, instructors may want to guide students to the following website, which summarized the law:

210

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

https://www.healthcare.gov/glossary/patient-protection-and-affordable-care-act/ In connection with their research, students should prepare a type-written response to the following questions: (1) What are health insurance exchanges? (2) How will the law affect business? Specifically, what requirements does the law place on employers? (3) What is a public option? Why is it controversial? What role does the public option currently play in healthcare reform? (4) In your opinion, what role should the government play in health care? Explain. [return to top]

211

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

212

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

Instructor Manual Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 18: Business Influence on Government and Public Policy

Table of Contents Purpose and Perspective of the Chapter .................................................................................215 Cengage Supplements............................................................................................................215 Chapter Objectives .................................................................................................................215 Complete List of Chapter Activities and Assessments .............................................................215 Key Terms ..............................................................................................................................216 What's New in This Chapter ....................................................................................................217 Chapter Outline .......................................................................................................................218 Discussion Questions .............................................................................................................219 Additional Activities and Assignments .....................................................................................222 Appendix .................................................................................................................................224

213

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Generic Rubrics ..................................................................................................................................... 224 Standard Writing Rubric ........................................................................................................................ 224 Standard Discussion Rubric ................................................................................................................... 225

214

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Purpose and Perspective of the Chapter The purpose of this chapter is to focus on businesses’ attempts to influence government. They take a descriptive approach to the topic, seeking primarily to understand the various approaches businesses use, and to evaluate strengths and weaknesses, successes and failures. However, as the students read the chapter, they will undoubtedly be impressed with the tremendous power that businesses wield in the political realm, primarily through their application of money to the process. The question is whether they will be pleased with the situation or scared for our republic. As discussed in the previous chapter, government also influences businesses, and students should be reminded of this fact.

Instructor’s Manual Transition Guide Test Banks PowerPoint Slides Case Notes

Chapter Objectives The following objectives are addressed in this chapter: 18.01

Understand the many elements of political corporate social responsibility (PCSR).

18.02

Describe the three elements of corporate political participation, including the different levels at which business lobbying occurs.

18.03

Identify the different levels and types of business lobbying.

18.04

Define and discuss corporate social activism.

18.05

Discuss corporate political spending and the arguments for and against it.

18.06

Describe the different types of political action committees (PACs), in terms of their historical growth, and the magnitude of their activity.

18.07

Describe the agency issues involved with corporate political spending and some of the contexts where these might arise.

18.08

Discuss the issues of corporate political accountability and disclosure.

18.09

Outline the types of strategies for corporate political activity.

Complete List of Chapter Activities and Assessments For additional guidance, refer to the Teaching Online Guide. Chapter Objective 18.7

PPT Slide 2

18.2

Activity/Assessment

Duration

Icebreaker: Does Money Control Elections? Discussion: Lobbyists

10 minutes 15 minutes

215

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

18.6 18.5 18.8 18.9

25 26 31 35

18.3

Discussion: PACs Discussion: Citizens United Discussion: Accountability Discussion: The Limits of Corporate Political Strategy Discussion: Business Influence

15 minutes 15 minutes 15 minutes 15 minutes 15 minutes

[return to top]

Key Terms

501(c)(4)s: tax-exempt ―social welfare organizations‖ that are not required to disclose their donors 527 groups: tax-exempt groups organized under section 527 of the Internal Revenue Code to raise money for political activities Ad hoc coalitions: a very specific type of coalition of groups, one which forms for a single discrete issue fight Astro-turf lobbying: fake groups that appear to be grassroots but are largely created and funded by an organization or trade association Carey Committees: hybrid political actions committees not affiliated with a candidate that can operate both as a traditional PAC (contributing funds to a candidate’s committee) and as a super PAC Citizens United v. FEC: Supreme Court ruling that that corporations and labor unions could use the funds from their treasuries to support or oppose political candidates as long as the spending is independent, that is, not coordinated with, or donated directly to, a candidate Coalition: a group formed when two or more factions agree to work together in a partnership to achieve a common goal Company lobbying: companies lobbying on their own behalf rather than for organizations, industries, or sectors Corporate social activism: an advocacy position taken by a company to impact public policy for social change Cyberadvocacy: a computer-based form of grassroots campaigning Dark money: the political contributions from undisclosed donors Golden Rule of Politics: ―He who has the gold, rules.‖ Grassroots lobbying: an approach that separates itself from direct lobbying through the act of asking the general public to contact legislators and government officials concerning the issue at hand Hybrid PACs: also called Carey Committees, are political actions committees not affiliated with a candidate that can operate both as a traditional PAC (contributing funds to a candidate’s committee) and as a super PAC Lobbying: promoting or attempting to influence the awarding of a grant or contract with any department or agency of the executive, legislative, or judicial branch of state government

216

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Political accountability: when a politician makes choices on behalf of the people and the people have the ability to reward or sanction the politician Political action committee (PAC): organization that pools campaign contributions from members and donates those funds to campaigns for or against candidates, ballot initiatives, or legislation Political corporate social responsibility (PCSR): seriously considering the impact of the company’s actions on politics and political institutions Political involvement: participation in the formulation and execution of public policy at various levels of government Revolving door lobbyists: legislators becoming lobbyists for the industries they once regulated using the revolving door between the two sectors Shadow lobbying: when an individual engages in advocacy to influence public policy but does not register as a lobbyist Stealth lobbying: when an individual engages in advocacy to influence public policy but does not register as a lobbyist Speechnow v. FEC: Supreme Court case that clarified the implementation of Citizens United by ruling that any government restrictions on the amount corporations can spend would be unconstitutional Super PAC: type of political committee that can raise monies from corporations, unions, and individuals but cannot contribute to or coordinate directly with parties or candidates Trade association: voluntary association of business firms organized on a geographic or industrial basis to promote and develop commercial and industrial opportunities within its sphere of operation Transparency: being honest and open when communicating with stakeholders about matters related to the business Umbrella trade associations: represent the collective business interests of the United States [return to top]

What's New in This Chapter The following elements are improvements in this chapter from the previous edition:     

The sub header ―Agency Issues‖ under the ―Corporate Political Spending‖ has been updated. Formerly Chapter 12, this chapter no longer has a heavy emphasis on political action committees, and the topic has been integrated into the remaining text. A new section on corporate social activism has been included. The table on the biggest PACs has been updated and the impact of Citizens United has been elaborated on further. The Key Terms have been updated.

[return to top]

217

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

218

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

18.4 Corporate Political Spending (Ch. 18.5 and 18.6, PPT Slides 19–26) a. Arguments for Corporate Political Spending (Ch. 18.5 and 18.6, PPT Slide 20) b. Arguments against Corporate Political Spending (Ch. 18.5 and 18.6, PPT Slide 20) c. Agency Issues (Ch. 18.7, PPT Slide 24) 18.5 Political Accountability and Transparency (Ch. 18.8, PPT Slides 27–31) 18.6 Strategies for Corporate Political Activity (Ch. 18.9, PPT Slides 32–36) 18.7 Summary (PPT Slides 37–39) [return to top]

Discussion Questions You can assign these questions several ways: in a discussion forum in your LMS, as wholeclass discussions in person, or as a partner or group activity in class. 116. Discussion: Business Influence (page 411, 18.3, PPT Slide 36) Duration 15 minutes. a. Question: Explain the different ways that businesses can influence government. Which do you think is most effective? Why? i. Answer: Students’ answers will vary based on their selection of which they think is most effective and why. The answers should be in the following areas: corporate social activism, lobbying, or political spending. 117.

Discussion: Lobbyists (pages 403–407, 18.2, PPT Slide 18) Duration 15 minutes. a. Question: Explain lobbying in your own words. Describe the different levels at which lobbying takes place. Why is there a lack of unity among the umbrella organizations? i. Answer: Lobbying is the organized effort to influence government officials (elected and appointed) to pass or interpret laws and regulations that are beneficial to your organization. Lobbying can take place at the company level (addressing issues specific to a single company), at the grassroots level (mobilizing individual citizens affected by legislation), through trade associations (groups of companies in a single industry or line of business), and through umbrella organizations (representing the ―business interests‖ of the country). Umbrella organizations are subject to division because they represent such a broad range of firms and interests. Just as we saw in Chapter 11 that the broad ―public interest‖ makes finding consensus difficult, so it is with umbrella organizations. A gun manufacturer and a bank might both belong to the Chamber of Commerce but have very different political agendas.

219

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

118. Discussion Activity: PACs (pages 408–409, 18.6, PPT Slide 25) Duration 15 minutes. a. Question: What is a PAC? How is it different from a Super PAC? What are the major arguments in favor of PACs? What are the major types of PACs and how do they differ? In your opinion, are PACs a good way for business to influence the public policy process? What changes would you recommend for PACs? i. Answer: Political action committees (PACs) are organizations of likeminded individuals who raise money and donate it to political candidates. The recent Supreme Court decisions in Citizens United v. Federal Election Commission and Speechnow v. FEC altered the landscape for how a corporation may participate in the political process, created Super PACs which may raise unlimited amounts of money to support or oppose political candidates. Both PACs and Super PACs are likely to remain an effective way of raising money and supporting the organization’s special interests (since the restrictions on direct corporate contributions to candidates remain intact). Because democracy can be viewed as a ―competition‖ among special interests, PACs are vehicles through which that competition can be strengthened. The business community and many members of Congress view PACs as a viable way in which not only business, but other special-interest groups such as labor, education, etc., can organize their contribution efforts and participate in the political process. The major drawback to PACs is their reliance on one form of power, money, to dominate other forms of persuasion, such as religious beliefs or simply numbers of voters. Many feel that there is an implication that the money provided by PACs is used to buy votes; whether or not this is accurate, the implication itself is enough to cause concern over the process. While there are issues with PACs, they are one workable way in which business can participate in the political process. Many note that money pollutes the political process, and since business is the institution with the most money, business dominates politics as well. However, since PAC contributions are regulated by the Federal Election Commission, voters have public access to information regarding PAC contributions to candidates and can make informed decisions regarding how such donations may or may not impact a candidate’s voting record. Arguably, this process enables business to participate in the political process, which is their right as a legal ―person‖ under the law, but creates checks by which the voter can determine the legitimacy of this process. A connected PAC is associated with a specific group or organization and can only raise money for that group. A nonconnected PAC can accept funds from any individual or organization, as well as from a connected PAC, as long as those contributions are legal. Leadership PACs are nonconnected PACs formed by political leaders to support other candidates for office. Answers will differ concerning opinion of, and changes to, PACs. 119. Discussion Activity: Citizens United (page 409, 18.5, PPT Slide 26) Duration 15 minutes. p. Question: Discuss Citizens United and Speechnow and their effect on future elections. What, if any, reforms would you recommend? i. Answer: While the Bipartisan Campaign Reform Act was designed to limit the influence of soft money and the use of ―issue ads‖ in political campaigns, the Supreme Court recently determined that these provisions

220

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

were unconstitutional. In 2010, in the case of Citizens United v. Federal Election Commission, the Supreme Court ruled that provisions of the Bipartisan Campaign Reform Act that restricted a corporation’s independent political expenditures violated the First Amendment (although prohibitions on direct corporate contributions to candidates remain intact). Consequently, the impact of the Act on future elections is questionable. Furthermore, even after the Act was initially adopted, its impact was severely limited by the use of 527s. Having the benefit of writing this after the most recent presidential elections, it is clear that the attempts to limit the influence of money on the election process failed. More money was raised and spent in these campaigns than ever before, by a wide margin. Further, in Speechnow v. Federal Election Commission, also decided in 2010, the Supreme Court further clarified the implementation of Citizens United by ruling that any government restrictions on the amount corporations can spend would be unconstitutional. These two rulings resulted in the creation of Super PACs, officially known as independent expenditure-only committees. They may raise unlimited amounts of money to support or oppose political candidates. While the rule is that they may not coordinate with or donate directly to a political candidate, their actual independence has been questioned. Typically, Super PACs are headed by associates who know the candidate so well that there is no need to confer to know what the candidate would like. While many believe that the success of the Bipartisan Campaign Reform Act has been limited, it is important for legislators to continue to examine potential ways to regulate the influence of money on the political process. The key to success in campaign financing is to balance an individual’s free speech rights with the concern that financial contributions can determine the outcome of an election. The fact remains that it has become more and more expensive to run a successful election campaign. To be competitive, candidates must have access to significant funds, especially now that most of our elections are determined in the media. Consequently, funds must be expended on the political process; however, our society needs to continue to examine the process by which such funding occurs and the laws related to this process to ensure that we do not effectively create a system where the candidate with the most money wins. In light of the recent Supreme Court decision, many argue that corporate special-interest groups will do just that—buy elections. 120. Discussion Activity: Accountability (page 410, 18.8, PPT Slide 31) Duration 15 minutes. a. Question: What does corporate accountability mean to you? How important is corporate political transparency? i. Answer: Circumvention of government regulations is suspect at best, and most of the time highly unethical. Rules, laws, and regulations cannot anticipate all possible actions, so there will always be loopholes to exploit. Companies have the advantage of having a set of rules laid out, which then allows the firms to figure out ways to get around them. Lawmakers, on the other hand, must look to past activities and try to conceptualize future possibilities when they craft the rules. Because of this relationship, individuals and corporations will always be able to figure out ways to get

221

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

around laws and through loopholes if that is their goal. The only way to prevent circumvention is for the actors to police themselves and follow the spirit of the law, regardless of the opportunities to exploit loopholes 121. Discussion Activity: The Limits of Corporate Political Strategy (page 411, 18.9, PPT Slide 35) Duration 15 minutes. a. Question: What are the limits of corporate political strategy? Are there lines that companies should not cross? i. Answer: In Citizens United, and in Speechnow, the Supreme Court ruled that corporations, labor unions, and other entities have a constitutional right to run advertisements or distribute mailings either supporting or opposing candidates, as long as such expenditures are not coordinated with the candidates. While the ruling allows independent expenditures, such groups are still prohibited from directly contributing to a federal candidate. We may predict that most corporations will exercise their political powers to the extent they are permitted to do so. The ongoing impact of these rulings is left to the class instructor as time and events will have altered the facts available at the time this is being written. I do not agree with the Court’s rulings in Citizens United and Speechnow. In this day and age, campaigns are largely conducted through various forms of media. Access to television spots are very costly; the Court’s ruling potentially creates a situation where the group that has the most money to spend will determine who is elected. These elected officials become indebted to the groups that supported them, making it difficult for them to look out for the best interests of their various constituencies. [return to top]

Additional Activities and Assignments

1. Cases: In this chapter, instructors may utilize a combination of cases: 18- Coke and Pepsi in India: Water, Issues, and Crisis Management 19- An Ethical Dilemma for Chiquita in Colombia 20- Dark Money and Corporate Political Spending on Campaigns 21- Big Pharma’s Marketing Tactics 22- Purdue Pharma, OxyContin, and the Opioid Crisis 25- Should States Woo Big Business with Tax Incentives? Amazon Thinks So! Ethics in Practice Cases: The NRA and the CDC Double Irish with a Dutch Sandwich Spotlight on Sustainability: What Green Rankings Don’t Tell You

2. Group Activity:

222

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Divide students into groups of four to five students. Assign each group a federal candidate for president or for congressional office. Students should track the political contributions to their assigned federal candidate. Specifically, students should track individual contributions (and their affiliations) as well as PAC donations to determine the various groups that may eventually have political pull with certain candidates. Students may begin their search at www.opensecrets.org, but instructors should encourage the students to use other resources to research their assigned candidate. Each group should prepare a brochure for the rest of the class detailing the following information regarding their respective candidate (1) funds raised to date, (2) the source(s) of various political contributions, (3) the impact of the political contributions on the contender’s candidacy, (4) the candidate’s use of the funds to date, and (5) a comparison of the candidate’s financial resources with his or her closest competitors’ financial resources. Instructors may vary this project by having students complete the same assignment for state candidates. 3. Individual Assignment: Distribute the following instructions to each student: Select a corporation, labor union or other group that actively advertised for or against a federal candidate in the last election cycle. Prepare a written response that addresses the following questions: (1) Who did the group support? (2) Why did the group support this candidate? (3) What type of advertising did the group use? (4) What was the nature of the advertisement? (5) Was the advertisement consistent with the campaign strategy of the candidate? (6) What was the ultimate outcome of the election? (7) What impact will this spending have on a candidate’s future decisions? [return to top]

223

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Writing Rubric Criteria Content

Research

The assignment is based upon appropriate and adequate academic literature, including peerreviewed journals and other scholarly work. 5 points

Research

The assignment follows the required citation guidelines. 5 points The assignment has two or fewer grammatical and spelling errors. 5 points

The assignment follows some of the required citation guidelines. 3 points The assignment has three to five grammatical and spelling errors. 3 points

Organization and Clarity

Grammar and Spelling

224

Instructor Manual: Carroll/Brown, Business & Society: Ethics, Sustainability & Stakeholder Management, 11e, 9780357718629; Chapter 1: The Business, Society, and Responsibility

Standard Discussion Rubric Criteria Participation

Contribution Quality

Etiquette

Incomplete Does not participate in discussion. 0 points

Does not participate in discussion. 0 points

225