171781924 Ghillyer EthicsNow Notes Ch04 CSR

8/17/2019 171781924 Ghillyer EthicsNow Notes Ch04 CSR

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CHAPTER 4

Corporate Social Responsibility

Table of Contents

Chapter Summary and Learning Outcomes.................................................................................2

Frontline Focus: A Stocking Error Questions..............................................................................3

Learning Outcomes......................................................................................................................

Li!e Skills..................................................................................................................................."#

$rogress Check Questions.........................................................................................................."#

Ethical %ilemma Case ." & 'lo(al Oil....................................................................................."

Ethical %ilemma Case .2 & )anning the *eal +hing...............................................................",

Frontline Focus: A Stocking Error-Claire akes a %ecision Questions................................."/

0ey +erms.................................................................................................................................."1

*eie Questions......................................................................................................................"4

*eie E5ercises.......................................................................................................................2#

6nternet E5ercises.......................................................................................................................2"

+eam E5ercises...........................................................................................................................2"

+hinking Critically E5ercises.....................................................................................................2,

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Chapter Summary

+his chapter e5amines the topic o! Corporate Social *esponsi(ility 8CS*9 here e change the

internal perspectie o! the organiation to an e5ternal one and look at ho an organiation

should interact ith its stakeholders in an ethical manner. +his chapter (egins ith a de!inition o!

CS* and discusses the di!!erent ethical perspecties. 6n addition; this chapter coers and e5plains

the !ie ma


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!rontline !ocus

A Stoc"ing Error #uestions

". ega%rug adertises that it is a socially responsi(le organiation that puts its stakeholders

!irst. 6s +ony (eing ethically responsi(le to his customers here@ *ead the de!inition o! ethicalcorporate social responsi(ility 8CS*9 on page // !or more details.

According to the de!inition on page //; ethical CS* organiations pursue a clearly de!ined

sense o! social conscience in managing their !inancial responsi(ilities to shareholders; their

legal responsi(ilities to their local community and society as a hole; and their ethical

responsi(ilities to =do the right thing> !or all their stakeholders. +ony is not !olloing the

ethical responsi(ilities to all stakeholders (ecause the name (rand suppliers are stakeholders

as ell; and not stocking the sheles ith their product is unethical.

2. +ony ould rather hae one or to customers complain a(out an unaaila(le item than lose

pro!ita(le sales o! ega%rugs on (rand. 6s denying customers a choice o! products a alid

solution@

6! someone really did make a mistake and didnt !ill the order reBuisition correctly; then

haing an unaaila(le item may (e


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Learning Outcome $% &escribe an Explain Corporate Social Responsibility 'CSR()

• +he opening Frontline Focus case shos ho a ne employee !aces an ethical decision o!

restocking only the store (rand name products rather than the (rand name products (ecause

o! higher pro!it margins.

o Corporate Social Responsibility can (e de!ined as the actions o! an organiation that are

targeted toard achieing a social (ene!it oer and a(oe ma5imiing pro!its !or its

shareholders and meeting all its legal o(ligations.

+his de!inition assumes that the corporation is operating in a competitie

enironment and that the managers o! the corporation are committed to an

aggressie groth strategy hile complying ith all !ederal; state; and local legal

o(ligations; including:

o +a5 payments related to pro!ita(le (usiness operations.

o $ayment o! all employer contri(utions !or its ork!orce.

o Compliance ith all legal industry standards in operating a sa!e orking

enironment !or its employees.

o %eliering sa!e products to consumers.

o Corporate citi*enship is an alternatie term !or corporate social responsi(ility; implying

that the organiation is a responsi(le citien in meeting all its o(ligations.

o Corporate conscience is another alternatie term !or corporate social responsi(ility;

implying that the organiation is run ith an aareness o! its o(ligations to society.

o $orter and Cramer pointed out that the groing prominence o! CS* has come at the

e5pense o! organiations that !ound themseles !acing (oycotts and !ocused media

attention on issues that preiously ere not considered as part o! a traditional strategic

plan:

?ike !aced an e5tensie consumer (oycott a!ter The New York Times and other

media outlets reported a(usie la(or practices at suppliers in 6ndonesia in the early

"#s.

Shell Oils decision to sing the )rent Spar; an o(solete oil rig; in the ?orth Sea

resulted in 'reenpeace protests in ",.

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$harmaceutical companies discoered they ere e5pected to respond to the A6%S

pandemic in A!rica een though it had (een remoed !rom their primary product

lines and markets.

Fast !ood and packaged !ood companies are no (eing held responsi(le !or poornutrition.

Learning Outcome +% &istinguish ,et-een Instrumental an Social Contract Approaches to

CSR)

• +he instrumental approach is the perspectie that the only o(ligation o! a corporation is to

ma5imie pro!its !or its shareholders in proiding goods and serices that meet the needs o!

its customers.

o +he most !amous adocate o! this =classic> model is the ?o(el $rie7inning economist

ilton Friedman.

o Friedman argues it ould (e unethical !or a corporation to do anything other than delier

the pro!its !or hich its inestors hae entrusted it ith their !unds in the purchase o!

shares in the corporation.

o Friedman also argues that; as an employee o! the corporation; the manager has an ethical

o(ligation to !ul!ill his role in deliering on the e5pectations o! his employers.

• +he social contract approach is the perspectie that a corporation has an o(ligation to

society oer and a(oe the e5pectations o! its shareholders.

o Originally; the primary !ocus o! the social contract as an economic one; assuming that

continued economic groth ould (ring an eBual adancement in the Buality o! li!e.

o +he modern social contract approach argues that since the corporation depends on society

!or its e5istence and continued groth; there is an o(ligation !or the corporation to meetthe demands o! that society rather than


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o 6n "/; enry Ford; 66 recognied that industry and society ere changing.

o Change included sering a ider range o! human alues.

o Change also included accepting an o(ligation to noncustomers in the community

and to the general pu(lic.

o +he actions that companies implement impact:

Customers

Suppliers

Communities

o Actions hae (oth positie and negatie outcomes.

Corporations that operate ithout pro!it in a competitie market cant raise pro!its

to increase pro!its.

Corporations loer costs to increase pro!its and layo!! its employees.

Loss o! %oing hats in the (est long7term interest o! the customer is ultimately doing

hats (est !or the company.

=%oing good !or the customer is

Learning Outcome 4% Summari*e the !i3e &ri3ing !orces ,ehin CSR)

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• oseph F. 0ee!e o! ?eCircle Communications asserts that there are !ie ma o! the trend.

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o Ethical CSR represents the purest or most legitimate type o! CS* in hich organiations

pursue a clearly de!ined sense o! social conscience in managing their !inancial

responsi(ilities to shareholders; their legal responsi(ilities to their local community and

society as a hole; and their ethical responsi(ilities to do the right thing !or all their

stakeholders.

o Altruistic CSR takes a philanthropic approach (y underriting speci!ic initiaties to

gie (ack to the companys local community or to designated national or international

programs.

Critics argue this type o! CS* is immoral since it represents a iolation o!

shareholder rights i! they are not gien the opportunity to ote on the initiaties

launched in the name o! corporate social responsi(ility.

+he relatie legitimacy o! altruistic CS* is (ased on the argument that the

philanthropic initiaties are authoried ithout concern !or the corporations

oerall pro!ita(ility.

o Strategic CSR is a type o! philanthropic actiity hich targets programs that ill

generate the most positie pu(licity or goodill !or the organiation.

o )y supporting these programs; companies can claim to (e doing the right thing and they

also can meet their !iduciary o(ligations to their shareholders.

Critics can argue that strategic CS* is ethically commenda(le (ecause these

initiaties (ene!it stakeholders hile meeting !iduciary o(ligations to the

companys shareholders.

,eing socially responsible

+his Li!e Skills (o5 discusses ho important ones (elie!s are hen !aced ith decisions dealing

ith corporate social responsi(ility and sustaina(ility. 6t proposes Buestions pertaining to the

damages done (y companies ho simply proide products at the loest possi(le price. 6t also

discusses the importance o! !inding a


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". %e!ine corporate social responsibility.

Corporate social responsibility is de!ined as the actions o! an organiation that are targeted

toard achieing a social (ene!it oer and a(oe ma5imiing pro!its !or its shareholders and meeting

all its legal o(ligations.

2. ?ame to other terms that may (e used !or socially aare corporate (ehaior.

+o other terms that may (e used !or socially aare corporate (ehaior are corporate citienship and

corporate conscience. Corporate citienship is an alternatie term !or corporate social responsi(ility;

implying that the organiation is a responsi(le citien in meeting all its o(ligations. Corporate

conscience is another alternatie term !or corporate social responsi(ility; implying that the

organiation is run ith an aareness o! its o(ligations to society.

3. 'ie !our e5amples o! a corporations legal o(ligations.

anagers o! corporations are committed to an aggressie groth strategy hile complying ith all

!ederal; state; and local legal o(ligations. +hese o(ligations include payment o! all ta5es related to the

pro!ita(le operation o! the (usiness; payment o! all employer contri(utions !or its ork!orce; and

compliance ith all legal industry standards in operating sa!e orking enironment !or its employees

and deliering sa!e products to its customers.

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. %o inestors alays inest money in companies to make a pro!it@

6nestors inest money in companies to proide capital to gro and pursue corporate strategies. 6t is

in the (est interest o! the inestors !or the company to (e socially responsi(le and understand that

they ill not alays pro!it; especially short7term; (ut that they ill reap pro!its oer the long7term

,. Dhat is the instrumental approach model o! corporate management@

+he instrumental approach to corporate management is the perspectie that the only

o(ligation o! a corporation is to ma5imie pro!its !or its shareholders in proiding goods and

serices that meet the needs o! its customers.

/. Dhat is the social contract approach model o! corporate management@

+he social contract approach to corporate management is the perspectie that a corporation

has an o(ligation to society oer and a(oe the e5pectations o! its shareholders

1. *ead Friedmans article-hat are the assumptions o! his argument@

Student responses ill ary (ased on their perception o! the article.

4. %o you agree or disagree ith the social contract approach model@ Dhy@

Students ansers ill ary. +he social contract approach places society at a higher priority

o! o(ligation than the oners o! the corporation. +he organiation should (e committed to

society and its shareholders; not simply one or the other.

. List the !ie ma


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"#. Dhich one do you think is the most important@ Dhy@

All !ie trends are important. Students must present an argument as to hy they think one is

more important than the others.

"". E5plain hy organiations are struggling to adopt CS* initiaties.

Organiations are struggling to adopt CS* initiaties not (ecause the ethical action itsel!

causes a pro(lem; (ut (ecause it is di!!icult to promote these actions as proo! o! a ne

corporate conscience ithout seeming manipulatie or as simply trying generate press

coerage !or policies-policies that could easily (e dismissed as !eel7good initiaties that are


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",. E5plain the term altruistic C!.

Altruistic CS* takes a philanthropic approach (y underriting speci!ic initiaties to gie

(ack to the companys local community or to designated national or international programs.

"/. E5plain the term strate"ic C!.

Strategic CSR runs the greatest risk o! (eing perceied as sel!7sering (ehaior on the part

o! the organiation. +his type o! philanthropic actiity targets programs that ill generate the

most positie pu(licity or goodill !or the organiation.

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Ethical &ilemma

Case 4)$ 7 1lobal Oil

". %id 'lo(al Oil commit any ethical iolations here@ Dhy or hy not@

Students responses ill ary. 'lo(al Oil (rought many (ene!its to the Odone people and

improed their el!are. oeer; despite all o! those (ene!its; they also (rought many

negaties. 'lo(al e5perienced seeral oil spills that damaged the coastal aters o! the region;

and there ere increasing reports o! accidents and threats to any employees ho considered

discussing 'lo(als (usiness actiities ith local suddenly (ecome =the corporate (ully>@

Students responses ill ary. on )ennett as popular ith the Odone people as a result o!

the positie !actors associated ith 'lo(al Oil in the community. +he Odone people

e5perienced an increase in dissatis!action (ecause the positie outcomes o! the company

ere outeighed (y the negatie !actors. One o! the ma !or the

community and people rather than !ocus on the positie press that ould (e generated. +he

positie press should hae only (een a (onus !or implementing these strategies. Also; 'lo(al

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Oil should hae addressed the negatie press and picketers concerns immediately ith an

initiatie that had a time!rame; rather than simply to eliminate the negatie spotlight that as

(eing cast on them.

Case 4)+ 7 ,anning the Real Thing

". Dhich ethical standards are (eing iolated here@

Student responses ill ary. Coca7Cola is iolating the pre!erential standards prescri(ed (y

the Gendor Code o! Conduct. O! the pre!erential standards; Coca7Cola has (een allegedly

polluting the enironment in 6ndia; destroying the lielihood o! !armers; and contaminating

the Coca7Cola products in 6ndia.

2. 6s the uniersity (eing unreasona(le in the high standards demanded in its Gendor Code o!

Conduct@

Student responses ill ary. +he Hniersity set standards that students !elt as necessary !or

corporations to maintain. +he Hniersity een gae Coca7Cola a pro(ationary period and the

situation orsened. +hese standards are not too highI they are hat is e5pected o!

organiations and must (e en!orced.

3. %o you think the uniersity ould hae deeloped the Gendor Code o! Conduct ithout the

aggressie campaign put !orard (y SOLE@

Student responses ill ary. +he aggressie campaign put !orard (y SOLE certainly put the

Code o! Conduct initiatie into motion. +he uniersity pro(a(ly ould not hae had as

thorough or as high standards as pushed !or (y SOLE.

. o should Coca7Cola respond in order to keep the Hniersity o! ichigan contracts@

Student responses ill ary. Coca7Cola needs to address the human rights iolations and

reporting the progress o! their (usiness practices to the Hniersity o! ichigan. Once Coca7

Cola demonstrates they meet the standards set (y the uniersity and SOLE; then they should

pursue another contract ith the Hniersity o! ichigan.

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!rontline !ocus

A Stoc"ing Error8Claire 6a"es a &ecision #uestions

". %id enni!er do the right thing here@

enni!er made a good decision in this situation. istakes happenI there!ore; customers ould

(e more understanding i! they ere o!!ered rain checks as opposed to receiing a simple

apology !rom enni!er. Also; enni!er e5pressed her opinion o! the situation regarding a

(alance (eteen the stores on7la(eled products and the name (rand items.

2. Dhat ould the conseBuences hae (een !or ega%rug i! enni!er had not done this@

Student ansers ill ary. any consumers are (rand conscience; especially hen dealing

ith medicines. 6! enni!er had not issued rain checks; ega%rug may hae lost numerous

customers and; conseBuently; potential reenue.

3. Dhat do you think +ony ill do hen he !inds out@

Student ansers ill ary. +ony needs to understand that a lot o! customers are (rand loyal

and need to hae (oth (rand name and generic choices aaila(le. Employees can alays

promote the stores on la(el products; (ut the aaila(ility o! name (rands is also important

in order to satis!y customers and keep them coming (ack. +here!ore; +ony should recogniethat enni!er did the right thing (y catering to the customers and keeping them satis!ied until

the ordering mistake could (e cleared up.

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9ey Terms

Altruistic CSR% Organiations take a philanthropic approach (y underriting speci!ic

initiaties to gie (ack to the companys local community or to designated national or

international programs.

Corporate Citi*enship% An alternatie term !or corporate social responsi(ility; implying that

the organiation is a responsi(le citien in meeting all its o(ligations.

Corporate Conscience% An alternatie term !or corporate social responsi(ility; implying that

the organiation is a responsi(le citien in meeting all its o(ligations.

Corporate Social Responsibility% +he actions o! an organiation that are targeted toard

achieing a social (ene!it oer and a(oe ma5imiing pro!its !or its shareholders and meeting all

its legal o(ligations.

Ethical CSR% Organiations pursue a clearly de!ined sense o! social conscience in managing

their !inancial responsi(ilities to shareholders; their legal responsi(ilities to their local

community and society as a hole; and their ethical responsi(ilities to =do the right thing> !or all

their stakeholders.

:nstrumental Approach% +he perspectie that the only o(ligations o! a corporation is to

ma5imie pro!its !or its shareholders in proiding goods and serices that meet the needs o! itscustomers.

Social Contract Approach% +he perspectie that a corporation has an o(ligation to society oer

and a(oe the e5pectations o! its shareholders.

Strategic CSR% $hilanthropic actiities are targeted toard programs that ill generate the most

positie pu(licity or goodill !or the organiation.

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Re3ie- #uestions

?O+E: Some Buestions allo !or a num(er o! di!!erent ansers. )elo are some suggestions.

". Dould organiations really (e paying attention to CS* i! customers and !ederal and state

agencies erent !orcing them to@ Dhy or hy not@

Student responses ill ary. 6t is hope!ul that organiations ould adhere to corporate social

responsi(ility and proide the good serice and products that consumers desere. Some

organiations ould adhere to it and other organiations ould not adhere to it. +his is hy

there are (oth state and !ederal agencies.

2. Dould the CS* policies o! an organiation in!luence your decision to use their products or

serices@ Dhy or hy not@Student responses ill ary. any people are aare o! and respond to an organiations

decision to act in a socially responsi(le manner (y patroniing it. Consumers ho are

conscience o! a corporations charita(le donations or enironmentally !riendly practices

likely hae a positie impression o! the company and purchase items !rom it. On the other

hand; some consumers simply care a(out the loest possi(le price.

3. Dhich is more ethical: altruistic CS* or strategic CS*@ $roide e5amples to e5plain your

anser.

Student responses ill ary. Students should recall that altruistic CS* takes a philanthropic

approach and centers itsel! in the charita(le giing o! a corporation. +he organiation

chooses the charity and could (e considered less ethical i! the organiation iolates

shareholders rights (y denying shareholders the chance to ote on the choice o! charity.

Strategic CS* has a greater risk o! (eing perceied as sel!7sering (ehaior on the part o! the

organiation.

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. o ould you measure your car(on !ootprint@

Student responses ill ary. Students can isit the De( site

http:JJ.nature.orgJinitiatiesJclimatechangeJcalculatorJ and calculate the car(on dio5ide

emissions !rom their home; car and air trael; and then calculate their total emissions on anannual (asis. +he result o! the analysis is an indiiduals !ootprint o! the.

,. 6! a car(on o!!set pro Consider the use o! the credits oer and a(oe pro!its. +he

0yoto $rotocol is an agreement (eteen "/# countries that (ecame e!!ectie in 2##, and it

reBuires deeloped nations to reduce their greenhouse gas emissions. A company that has an

a(undance o! credits to !acilitate the trading o! those credits so that those organiations ith

high emissions and a larger demand !or o!!set credits can purchase those credits in larger

olumes than most indiidual pro


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Re3ie- Exercises

". +he $'E$J$ayatas pro


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:nternet Exercises

". *eie the CS* policies o! a Fortune "## company o! your choice. Dould you classi!y their

policies as ethical; altruistic; strategic; or a com(ination o! all three@ $roide e5amples to

support your anser.

Students responses ill ary. +he students ill reie the CS* policies at a Fortune "##

company and classi!y their policies as ethical; altruistic; or strategic and proide e5amples to

support their classi!ication.

2. *eie the annual report o! a Fortune "## company o! your choice. Dhat eidence can you

!ind o! triple (ottom7line reporting in the report@ $roide e5amples to support your anser.

Students responses ill ary. +he students ill reie an annual report o! a Fortune "##

company and discuss the eidence that the company uses a triple (ottom7line reporting in

their report and proide e5amples to support their research.

Team Exercises

". :nstrumental or social contract;

%iide into to teams. One team must prepare a presentation adocating !or the instrumental

approach model o! corporate management. +he other team must prepare a presentation

arguing !or the social contract model o! corporate management.

Student responses ill ary. +he instrumental approach is the perspectie that the only

o(ligation o! a corporation is to ma5imie pro!its !or its shareholders in proiding goods and

serices that meet the needs o! its customers. +his approach !ocuses on generating pro!its !or

the oners ho hae already inested money in the company through customer satis!action.

+he social contract approach is the perspectie that a corporation has an o(ligation to society

oer and a(oe the e5pectations o! its shareholders. Adocates o! this model may point out

that this approach is going a(oe and (eyond simply making pro!its !or the oners o! the

corporation and satis!ying customers.

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2. Ethical< altruistic< or strategic;

%iide into three groups. Each group must select one o! the !olloing types o! CS*: ethical

CS*; altruistic CS*; or strategic CS*. $repare a presentation arguing !or the respectie

merits o! each approach and o!!er e5amples o! initiaties that your company could engage in

to adopt this strategy.

Student responses ill ary. Ethical CS* represents the purest or most legitimate type o!

CS* in hich organiations pursue a clearly de!ined sense o! social conscience in managing

their !inancial responsi(ilities to shareholders; their legal responsi(ilities to their local

community and society as a hole; and their ethical responsi(ilities to do the right thing !or

all their stakeholders. Organiations in this category hae typically incorporated their (elie!s

into their core operating philosophies.

Altruistic CS* takes a philanthropic approach (y underriting speci!ic initiaties to gie

(ack to the companys local community or to designated national or international programs.

Critics hae argued that; !rom an ethical perspectie; this type o! CS* is immoral since it

represents a iolation o! shareholder rights i! they are not gien the opportunity to ote on the

initiaties launched in the name o! corporate social responsi(ility. +he relatie legitimacy o!

altruistic CS* is (ased on the argument that the philanthropic initiaties are authoried

ithout concern !or the corporations oerall pro!ita(ility.

Strategic CS* runs the greatest risk o! (eing perceied as sel!7sering (ehaior on the part o!

the organiation. +his type o! philanthropic actiity targets programs that ill generate the

most positie pu(licity or goodill !or the organiation. Companies supporting these

programs can achiee the (est o! (oth orlds: they can claim to (e doing the right thing and;

on the assumption that good pu(licity (rings more sales; they also can meet their !iduciary

o(ligations to their shareholders.

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3. Closing o-n a factory.

%iide into to groups and prepare arguments for and a"ainst the !olloing (ehaior: Your

company is mana"in" to maintain a "oo# profit mar"in on the computer parts you

manufacture in a $ery tou"h economy% !ecently& an opportunity has come alon" to mo$e your

pro#uction capacity o$erseas% The mo$e will re#uce manufacturin" costs si"nificantly as a

result of ta' incenti$es an# lower labor costs& resultin" in an anticipate# 1( percent increase

in profits for the company% )owe$er& the costs associate# with shuttin" #own your *nite#

tates+base# operations woul# mean that you woul#n,t see those increase# profits for a

minimum of three years% Your *%% factory is the lar"est employer in the surroun#in" town&

an# shuttin" it #own will result in the loss of o$er .. /obs% The loss of those /obs is e'pecte#

to #e$astate the economy of the local community%

Student responses ill ary. +he (ene!its !or moing the production capacity oerseas ould

strictly (e (ased on reducing manu!acturing costs (ecause o! ta5 incenties and loer la(or

costs. +hese ta5 (reaks and loer la(or costs may also reduce the price o! the computer parts

to consumers. On the other hand; there are numerous arguments !or keeping the production

capacity in the Hnited States. First; the !irm is already maintaining a good pro!it margin in a

tough economy. Second; i! the production capacity ere to (e moed; the community in

hich the current operations are held ould drastically (e a!!ected (y putting oer 4##

employees out o! ork. +his !irm has an o(ligation to its stakeholders; including all its

employees; and it ould (e unethical to disrupt and destroy the relationship the !irm has

deeloped ith all its employees and the community.

. A limite campaign.

%iide into to groups and prepare arguments for and a"ainst the !olloing (ehaior: You

work in the marketin" #epartment of a lar"e #airy pro#ucts company% The company has

launche# a 0re$olutionary yo"urt pro#uct with in"re#ients that promote healthy #i"estion%

s a promotion to launch the new pro#uct& the company is offerin" to #onate 1. cents to the

merican )eart ssociation 3)4 for e$ery foil top from the yo"urt pots that is returne# to

the manufacturer% To support this campai"n& the company has in$este# millions of #ollars in

a broa# 0me#ia spen# on tele$ision& ra#io& 5eb& an# print outlets& as well as the pro#uct

packa"in" itself% 6n $ery small print on the packa"in" an# a#$ertisin" is a clarification

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sentence that specifies that the ma'imum #onation for the campai"n will be 71.&...% Your

marketin" analyst collea"ues ha$e forecast that first-year sales of this new pro#uct will

reach 1. million units& with an anticipate# participation of 2 million units in the pot-top

return campai"n 3a potential #onation of 72..&... without the 71.&... limit4% Focus "roups

that were teste# about the new pro#uct in#icate# clearly that participants in the pot-top

return campai"n attach positi$e feelin"s about their purchase to the a##e# bonus of the

#onation to the )%

Student responses ill ary. Arguments !or the pot7top promotion include that the !irm is still

donating K"#;### to the AA; and een though it is printed in small print; the !irm still

speci!ies that the ma5imum donation !or the campaign is K"#;###. $lacing a ceiling or

ma5imum o! K"#;### proides an outlet !or the !irm to potentially donate less to the AA

hile still gaining positie pu(licity. Arguments against this campaign includes the ethical

perspectie that many consumers ill participate ithout reading or (eing aare that only a

ma5imum o! K"#;### ill (e donated to AA hen sales in the !irst year are pro


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Thin"ing Critically 7 Exercise 4)$

0almart

". o ould you descri(e the managerial philosophy o! Dalmart@ Dhat principles are

inoled@ Dhat are the oerriding aims; alues; and goals o! Dalmart@

Students responses ill ary. +he managerial philosophy o! Dalmart is (ased solely around

o!!ering lo prices to its customers and proiding the ma5imum !inancial (ene!its to its

shareholders. Also; the employees (ene!it !rom haing +he culture o! Dalmart is (ased on three (asic

(elie!s: respect !or indiiduals; serice to customers; and striing !or e5cellence.

2. Ealuate the management philosophy o! Dalmart !rom the point o! ie o! stockholders;

employees; customers; the local community; and suppliers.

Students responses ill ary. Stockholders hae (een receiing signi!icant !inancial (ene!its

due to the management philosophy o! Dalmart. 6! these stockholders disagreed ith the

philosophy o! the company or the operations; then they ould not hae inested. +he

employees point o! ie could (e seen as haing a


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3. Should (usiness management alays seek the loest prices !or its customers and the highest

rate o! return on inestment@ Dhat reasons might there (e !or seeking something less !or

customers and stockholders@

Students responses ill ary. anagement o!ten looks at the short7term goals ando( marketing strategy@ Dho pays the costs o! Dalmarts lo

prices@

Students responses ill ary. )ecause o! Dalmarts sie and product ariety; it is a(le to

purchase its products !rom suppliers in larger Buantities at loer prices. Hltimately; the

suppliers may (e receiing a loer pro!it margin on items sold to Dalmart; (ut Dalmart is

most likely the largest seller o! its items. +he =eeryday lo price> strategy may cost

Dalmart in terms o! its pro!it margin on di!!erent products; (ut the increased amount o! !oot

tra!!ic or lure o! customers allos !or other purchases and results in more sales.

,. Dalmarts ages are a(oe the legally reBuired minimum age; and health (ene!its are not

legally mandated. Are there reasons !or a (usiness to take actions not reBuired (y la that

might reduce pro!its@

Students responses ill ary. +he reasons !or a (usiness to e5ceed the minimum legal

reBuirements; such as higher ages and o!!ering health (ene!its; are to promote satis!ied

employees and demonstrate the concern !or stakeholders. +he employees o! a !irm ultimately

proide the serice and customer serice; hich directly a!!ects the customers opinion o! a

(usiness and their satis!action.

72,


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/. %oes Dalmart hae any responsi(ilities to its suppliers other than those speci!ied in their

contracts@

Students responses ill ary. Dalmart; as ell as other (usinesses; has an o(ligation to all

stakeholders. Dalmart is success!ul (ecause o! its stakeholders 8employees; customers;suppliers; shareholders; etc.9. Dalmart needs to satis!y its suppliers (y continuing to proide

shel! space !or their products; stocking their products regularly; and continuously reordering.

6t is important to maintain a relationship ith suppliers to ensure satis!action and to receie

Buality items.

Thin"ing Critically 7 Exercise 4)+

Corporate Social :rresponsibility

". Dhy ould companies choose to in!late the image o! their corporate citienship@

Students responses ill ary. Companies are in!lating the image o! their corporate

citienship to proide positie press releases and a positie image among their inestors and

potential inestors. Companies are spending more time promoting and adertising their

corporate citienship (ecause they !eel that haing a positie corporate image ill generate

more sales.

2. 6s it ethical to direct company donations to =nonpro!it groups closely aligned ith the

interests o! the corporations employees; communities; and (usiness o(@ Dhy or

hy not@

Students responses ill ary. Company donations to nonpro!it groups closely aligned ith

the interests o! the corporations employees; communities; and (usiness o(


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3. 6s it ethical to direct company donations to support =pet pro@ Dhy or hy not@

Students responses ill ary. Company donations to support pet pro


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Thin"ing Critically 7 Exercise 4).

The Pesticie &&T

1. %id the ontrose Chemical Corporation iolate any ethical standards in manu!acturing and

selling %%+ to the pu(lic@

Students responses ill ary. Ethical standards not only pertain to the ell7(eing o! human

(eings; (ut also to the enironment. 6! ontrose Chemical Corporation as aare o! the

e!!ects o! %%+ on the enironment and ildli!e; then it needed to discontinue its

manu!acturing; rather than aiting until the nes as made pu(lic in a (ook. Also; een

hen the e!!ects ere made pu(lic and the Hnited States (anned the use o! the product;

ontrose continued to manu!acture and sell %%+ to other countries a(road.

2. Dhat should they hae done di!!erently@

Students responses ill ary. ontrose Chemical Corporation should hae taken into

consideration the e!!ects o! the product not only on human (eings; (ut also on the

enironment. Once in!ormation on the e!!ects o! %%+ (ecame pu(lic; ontrose needed to

discontinue its manu!acturing in all international regions; not simply those here it as

(anned. +his ould hae shon that the !irm cared !or the ell7(eing o! the people in those

regions; as ell as the enironment.

3. Das it ethical to manu!acture and sell %%+ to other countries a!ter the Enironmental

$rotection Agency 8E$A9 (anned its use in the Hnited States due to its harm!ul e!!ects@

Students responses ill ary. Once the E$A (anned the use o! %%+ in the Hnited States

(ecause o! its harm!ul e!!ects; ontrose needed to discontinue manu!acturing this product

completely. +his ould hae shon its dedication; commitment; and !eelings toard the

people and enironment in hich they operate.

4. %id the E$A make the right decision hen it (anned %%+@

Students responses ill ary. +he E$A made the right decision (y (anning %%+ (ecause it

as looking out !or the people and the enironment; due to the harm!ul e!!ects o! the

product.

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5. Should ullers ?o(el $rie (e taken aay no that %%+ has (een !ound to (e harm!ul@

Students responses ill ary. At the time o! %%+s discoery; the harm!ul e!!ects o! the

product ere not knon. uller as not aare o! the harm!ul e!!ects o! the product and

there!ore; at the time the ?o(el $rie as aarded; it as thought (y all to (e a discoery

that ould help mankind. +he aard should not (e taken aay; (ut !uture aards should (e

(ased on the criteria that research e5amines possi(le harm!ul e!!ects.

6. 6s the a(ility to sae lies orth the risk to the enironment@

Students responses ill ary. +he a(ility to sae lies is important; (ut it does not

171781924 Ghillyer EthicsNow Notes Ch04 CSR

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