SOLUTION: BM 327 Monmouth University Corporate Responsibility Executive Summary

1
BM 327
Lecture 2
Chapter 2
Stakeholder Relationships, Social
Responsibility, And Corporate Governance
© 2019 Cengage. All rights reserved.
2
Learning Objectives (1 of 2)




Identify stakeholders’ roles in business ethics
Define social responsibility
Examine the relationship between stakeholder
orientation and social responsibility
Delineate a stakeholder orientation in creating
corporate social responsibility
© 2019 Cengage. All rights reserved.
3
Learning Objectives (2 of 2)


Explore the role of corporate governance in
structuring ethics and social responsibility in
business
List the steps involved in implementing a
stakeholder perspective in social responsibility
and business ethics
© 2019 Cengage. All rights reserved.
4
Relationships and Business (1 of 2)

Relationships are associated with both
organizational success and misconduct.

Businesses exist because of organizational
relationships between employees, customers,
shareholders, and the community.
© 2019 Cengage. All rights reserved.
5
Relationships and Business (2 of 2)

Stakeholder framework identifies the internal and
external stakeholders who agree, collaborate,
and engage in confrontations on ethical issues.

Allows organizations to identify, monitor, and
respond to the needs and expectations of
stakeholder groups.
© 2019 Cengage. All rights reserved.
6
Stakeholders Define Ethical
Issues in Business (1 of 3)

Approaches to stakeholder theory:
1. Normative: Identifies ethical guidelines that dictate
how firms should treat stakeholders.
2. Descriptive: Focuses on the firm’s behavior;
addresses how decisions are made for
stakeholder relationships.
3. Instrumental: Describes what happens if firms
behave in a particular way.
© 2019 Cengage. All rights reserved.
7
Stakeholders Define Ethical
Issues in Business (2 of 3)

Primary stakeholders


Those whose continued association and
resources are absolutely necessary for a firm’s
survival (customers, shareholders, employees,
suppliers).
Secondary stakeholders

Those who are not typically engaged directly in
transactions with a company and are therefore not
essential to its survival (government agencies and
communities).
© 2019 Cengage. All rights reserved.
8
Stakeholders Define Ethical
Issues in Business (3 of 3)

Other stakeholders

Others who have a “stake” or claim in some
aspect of a company’s products, operations,
markets, industry, and outcomes are known as
stakeholders.
© 2019 Cengage. All rights reserved.
9
Stakeholder Interaction Model


Reciprocal relationships between the firm and a
host of stakeholders.
Recognizes other stakeholders; explicitly
acknowledges dialogue exists between a firm’s
internal and external environments.
© 2019 Cengage. All rights reserved.
10
Stakeholder Orientation (1 of 2)

Activities to address stakeholder demands:
1. Organization-wide generation of data about
stakeholder groups and assessment of the firm’s
effects on these groups;
2. Distribution of this information throughout the firm;
and
3. Responsiveness of the organization as a whole to
this information.
© 2019 Cengage. All rights reserved.
11
Stakeholder Orientation (2 of 2)

Can be viewed as a continuum.


To gauge a firm’s stakeholder orientation:


Firms likely to adopt the concept to varying
degrees.
Evaluate the extent the firm adopts behaviors that
typify the generation.
An organization may generate and disseminate
more intelligence about some stakeholder
communities than others.
© 2019 Cengage. All rights reserved.
12
Social Responsibility and
Business Ethics


Social responsibility: An organization’s obligation
to maximize its positive impact on stakeholders
and minimize its negative impact.
Four levels of social responsibility:
1.
2.
3.
4.
Economic
Legal
Ethical
Philanthropic
© 2019 Cengage. All rights reserved.
13
Corporate Citizenship


The extent to which businesses strategically meet the
economic, legal, ethical, and philanthropic responsibilities
placed on them by various stakeholders.
Four interrelated dimensions:
1.
2.
3.
4.
Strong sustained economic performance.
Rigorous compliance.
Ethical actions beyond what the law requires.
Voluntary contributions that advance the reputation and
stakeholder commitment of the organization.

Reputation is one of an organization’s greatest intangible
assets with tangible value.
© 2019 Cengage. All rights reserved.
14
Corporate Governance Provides Formalized
Responsibility to Stakeholders



The stakeholder model places the board of
directors in the position of balancing the interests
and conflicts of a company’s various
constituencies.
External control of the corporation resides not
only with government regulators but also with key
stakeholders which exert pressure for
responsible conduct.
Social responsibility activities have a positive
impact on consumer identification.
© 2019 Cengage. All rights reserved.
15
Views of Corporate Governance

Classic agency problem: Ownership (investors)
and control (managers) are separate.



Managers act as agents for investors, whose
primary goal is increasing the value of the stock.
Investors and managers are distinct parties with
unique insights, goals, and values.
Corporate governance mechanisms are needed
to align investor and management interests.
© 2019 Cengage. All rights reserved.
16
Board of Director
Responsibilities (1 of 3)


Greater demands for accountability and
transparency. Ensure the corporations are run in
an ethical manner.
Duty of loyalty. All decisions should be in the best
interests of the corporation.

Knowledge about the investments, business
ventures, and stock market information of a
company creates issues that could violate their
duty of loyalty.
© 2019 Cengage. All rights reserved.
17
Board of Director
Responsibilities (2 of 3)



Executive compensation. Avoid the opportunity to
vote for others’ compensation in return for their
own increased compensation.
Organizational ethics. Receive training to
increase competency in ethics program
development.
Audit committee. Address issues such as whistleblower claims, cyber security, and bribery.
© 2019 Cengage. All rights reserved.
18
Board of Director
Responsibilities (3 of 3)

Accountability. Oversight for system of checks
and balances that limit employees’ and
managers’ opportunities to deviate from policies
and strategies aimed at preventing unethical and
illegal activities.
© 2019 Cengage. All rights reserved.
19
Demand for Accountability and
Transparency

Directors chosen for expertise, competence, and
ability to bring diverse perspectives.


Outside directors do not have vested interest.
Interlocking directorate: Board members linked
to more than one company.

Legal unless it involves a direct competitor.
© 2019 Cengage. All rights reserved.
20
Executive Compensation



Compensation paid to top executives of the
company.
Ratio of the salaries of the highest-paid
executives to the median employee wage should
be less.
Stakeholders support high level of compensation
only when it is linked to strong company
performance.
© 2019 Cengage. All rights reserved.
21
Implementing a Stakeholder
Perspective (1 of 4)
Step 1: Assessing the Corporate Culture
• Identify the organizational mission, values,
norms, and behavior likely to have implications
for social responsibility.
Step 2: Identifying Stakeholder Groups
• Recognize stakeholder needs, wants, and
desires.
Step 3: Identifying Stakeholder Issues
© 2019 Cengage. All rights reserved.
22
Implementing a Stakeholder
Perspective (2 of 4)
Step 4: Assessing Organizational Commitment to
Stakeholders and Social Responsibility
• Used to evaluate current practices and to select
concrete social responsibility initiatives.
• Social responsibility disclosures in company
annual reports are directly related to the quality
of corporate governance.
© 2019 Cengage. All rights reserved.
23
Implementing a Stakeholder
Perspective (3 of 4)
Step 5: Identifying Resources and Determining
Urgency
• Two main criteria: Level of financial and
organizational investments required by different
actions and urgency when prioritizing social
responsibility challenges.
• When the challenge under consideration is
viewed as significant and stakeholder pressures
on the issue can be expected, the challenge is
considered urgent.
© 2019 Cengage. All rights reserved.
24
Implementing a Stakeholder
Perspective (4 of 4)
Step 6: Gaining Stakeholder Feedback
• General assessment of a firm and its practices
can be obtained through satisfaction or
reputation surveys.
• To gauge stakeholders’ perceptions of a firm’s
contributions to specific issues, stakeholdergenerated media such as blogs, websites,
podcasts, and newsletters can be assessed.
• Formal research may be conducted using focus
groups, observation, and surveys.
© 2019 Cengage. All rights reserved.
25
Corporate Governance
• Group 1: DISNEY
https://thewaltdisneycompany.com/app/uploads/2020/
02/Corporate-Governance-Guidelines-2020.pdf
• Group 2: Apple
http://www.snl.com/interactive/ir/4004205/corp_gov_gu
id.pdf
• Group 3: JP Morgan
https://institute.jpmorganchase.com/about/governance
/corporate-governance-principles#board-composition
© 2019 Cengage. All rights reserved.
26
Board of Directors
• Group 1: Disney
https://thewaltdisneycompany.com/about/
• Group 2: Apple
https://investor.apple.com/leadership-and-governance/default.aspx
• Group 3: JP Morgan
https://institute.jpmorganchase.com/about/ourleadership
How to Create a Better Board of Directors [Video]
https://www.gsb.stanford.edu/insights/how-createbetter-board-directors
© 2019 Cengage. All rights reserved.
27
Current Topics in Governance







Executive compensation
Board composition and structure
CEO selection, termination, and succession
plans
Compliance with government regulation and
reform
Organizational ethics programs
Transparency
Social Responsibility
© 2019 Cengage. All rights reserved.

Purchase answer to see full
attachment

Order a unique copy of this paper
(550 words)

Approximate price: $22

Our Basic features
  • Free title page and bibliography
  • Plagiarism-free guarantee
  • Unlimited revisions
  • Money-back guarantee
  • 24/7 support
Our Options
  • Writer’s samples
  • Expert Proofreading
  • Overnight delivery
  • Part-by-part delivery
  • Copies of used sources
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

AcademicWritingCompany guarantees

Our customer is the center of what we do and thus we offer 100% original essays..
By ordering our essays, you are guaranteed the best quality through our qualified experts.All your information and everything that you do on our website is kept completely confidential.

Money-back guarantee

Academicwritingcompany.com always strives to give you the best of its services. As a custom essay writing service, we are 100% sure of our services. That is why we ensure that our guarantee of money-back stands, always

Read more

Zero-plagiarism tolerance guarantee

The paper that you order at academicwritingcompany.com is 100% original. We ensure that regardless of the position you are, be it with urgent deadlines or hard essays, we give you a paper that is free of plagiarism. We even check our orders with the most advanced anti-plagiarism software in the industry.

Read more

Free-revision guarantee

The Academicwritingcompany.com thrives on excellence and thus we help ensure the Customer’s total satisfaction with the completed Order.To do so, we provide a Free Revision policy as a courtesy service. To receive free revision the Academic writing Company requires that the you provide the request within Fifteen (14) days since the completion date and within a period of thirty (30) days for dissertations and research papers.

Read more

Privacy and Security policy

With Academicwritingcompan.com, your privacy is the most important aspect. First, the academic writing company will never resell your personal information, which include credit cards, to any third party. Not even your lecturer on institution will know that you bought an essay from our academic writing company.

Read more

Adherence to requirements guarantee

The academic writing company writers know that following essay instructions is the most important part of academic writing. The expert writers will, therefore, work extra hard to ensure that they cooperate with all the requirements without fail. We also count on you to help us provide a better academic paper.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2020 at 10:52 AM
Total price:
$26
The price is based on these factors:
Customer Academic level
Number of pages required
Urgency of paper