BUS 101 FINAL

What is the performance-expectation gap?

gap between what the firm wants to do or is doing and what stakeholders expect the firm to do (example?)

Discussion case: Stop Online Piracy Act What is SOPA?

gives owners of film, music, and other property new tools to protect themselves from online piracy or theft

Discussion case: Fidelity and Citizen What was the value created for Fidelity?

good feelings/community relations between Fidelity and the community

political power

government legislation, regulation, or lawsuits

Discussion case: JP Morgan What was JP Morgan's Crisis?

huge losses from derivatives, then drop in stock prices

iron law of responsibility

in the long run, those who do not use power in ways that society considers responsible with tend to lose it

Discussion case: digging gold What alternative policy approaches would best deal with the major environmental concerns?

increase regulation, especially in countries with little environmental policies and enforcement

environmental analysis

method managers use to gather information about external issues and trends so they can develop an organizational strategy that minimizes threats and takes advantage of new opportunities

National Highway Traffic Safety Admin.

motor vehicle safety standards

Example of economic leverage:

occurs when a business uses its economic power to threaten to leave a city, state, or country unless a desired political action is taken (The Rams leaving St. Louis)

Discussion case: Adelphia What are some things that this company should have done differently?

outside auditing, more variety on the board

Discussion Case: Pink Slime Who are the key stakeholders?

owners, consumers, other businesses

Discussion Case: Conflict Coltan Who are the stakeholders?

owners, customers

Discussion case: Citigroup Who are the relevant stakeholders?

owners, customers

Discussion case: JP Morgan Who are the primary stakeholders in this case?

owners, customers, economy

Discussion Case: Timberland Who are the relevant stakeholders in this case?

owners, employees, community

Discussion case: Fidelity and Citizen Who are the stakeholders?

owners, employees, community

Discussion case: Malden Mills Who are the stakeholders?

owners, employees, community

Discussion case: Stop Online Piracy Act Who are the stakeholders in this case?

owners, media, customers/internet users

What is his position regarding ownership vs. stakeholder theory?

ownership theory

institutions

pensions, mutual funds, insurance companies, and university endowments

Non-market stakeholders

people and groups who, though not in direct economic exchange with the firm, are affected by or can affect the firm's actions

Discussion Case: Clean Cooking Who are the stakeholders?

people of impoverished countries, emvironment

individual stockholders

people who directly own shares of stock issued by companies

Fiduciary

person who exercises power on behalf of another, acting as the other's agent

Stakeholder

persons and groups that affect or are affected by an organization's decisions, policies, or operations

Discussion case: digging gold What's the major environmental concern in this case?

pollution of water, land, and air

What is the Sherman antitrust law and what is its purpose?

preserves competition in the United States

corporate governance

process by which a company is controlled or governed

What is stakeholder engagement?

process of ongoing relationship building between a business and its stakeholders

Who is Milton Friedman?

professor at Chicago, Nobel Prize in Economics, adviser to Reagan

Discussion case: Fidelity and Citizen In what ways did Fidelity give to the school?

provided employees to teach children valuable money skills

How does government regulate business?

public policies and laws

What type of discrimination does the law prohibit?

race, color, religion, sex, national origin, disability, and age

social responsibility shareholder resolutions

resolutions on an issue of corporate social responsibility placed before stockholders for a vote at the company's annual meeting

Food and Drug Administration

safety of drugs, foods, cosmetics, and medical devices

Consumer product safety commision

safety standards for consumer products, flammable fabrics

What are the different areas of a business that may deal with ethical issues?

-Accounting -Financial -Marketing -Information technology

What are the stages of moral development and ethical reasoning?

-Childhood- punishment avoidance -Adolescence- reward seeking, self-interest -Early adulthood- social groups, friends, school -Adulthood- society at large, traditions and laws -Mature adulthood- principle centered -Mature adulthood- universal principles, justice, fairness

Discussion case: Chiquita Brands What are the relevant facts?

-Chiquita pays terrorist group to protect workers safety -actions became illegal when US passed the U.S. terrorism laws -could have pulled out of Columbia, but didn't -sued for causing terrorism attacks due to funding of terrorist groups

Discussion case: Coca Cola What are the relevant facts in this case?

-Coca Cola uses too much water in areas that don't have enough access to clean drinking water -Move to reduce, reuse, and recycle

Discussion case: Mickey's Backyard What are the relevant facts in this case?

-Employees unable to afford good housing without long commute -new condos in resort district are affordable, but must be voted on by city council -development backed by employees, unions, and some environmental groups (also would decrease amount of traffic) -Disney: "for resorts only -> will lead to chain reaction of residential buildings in resort district"

Discussion case: Ford and Firestone How did Firestone and Ford respond differently to the crisis?

-Firestone late to react and always attempting to blame Ford -Ford immediately replaced tires and shut down assembly line

Discussion case: Ford and Firestone What was this case about?

-Firestone tires on Fords Explorers were exploding, leading to a recall -neither company wanted to take the blame

Discussion Case: No Smoking Allowed What are the relevant facts in this case?

-Health industry not hiring smokers to promote culture of wellness

What are the major international trade institutions and what do they do?

-World Bank: provides economic development loans to its member nations -International Monetary fund: to make currency exchange easier for member countries so they can participate in global trade -World Trade Organization: establishes the ground rules for trade among nations

What are some things companies can do to prevent discrimination and harassment?

-affirmative action programs -articulate clear diversity goals, set quantitative objectives, and hold managers accountable -spread a wide net in recruitment to find the most diverse pool of qualified candidates -identify promising women and persons of color, and provide them with mentors and other kings of support -set up diversity councils to monitor the company's goals and progress toward them

Discussion case: Citigroup What are the relevant facts in this case?

-breach in credit card information systems -took bank 3 weeks to alert customers -poor security, took efforts to increase security, but similar scam occurred 3 months later

Discussion case: Adelphia What was this case about?

-cable company run by family (held a majority of votes) -$3 billion of unreported loans

What are the major threats to the earth's ecosystem?

-depletion of nonrenewable resources -air and water pollution -degradation of fertile land

What are the components of ethical climates?

-egoism: self-centered approach -benevolence: concern for others approach -principle: integrity approach

Discussion Case: Pink Slime What the the relevant facts in this case?

-extras from meat added to hamburgers and other prepared foods -concern about nutrition of "pink slime" leads to dropping pink slime from super markets, fast food chains, and school lunches -meat with pink slime safer for human consumption (less bacteria)

Discussion case: digging gold What are the relevant facts in this case?

-gold mining most environmentally destructive industries in the world -gold mine produced toxic waste that contaminated drinking water for over 2.5 million people and killed many birds and fish

Discussion Case: Alcoa's Core Values What are the relevant facts in this case?

-importance of health and safety in the workplace -deteriorated safety conditions at a Mexican facility -fired manager (in spite of stellar record)

What are the three political strategies for businesses?

-information -financial incentives -constituency building

How is a company's social investment measured?

-inputs: the resources companies provide -outputs: measures the activities that took place (people and communities served) -impacts: the differences the program made (actual benefits) -value creation- benefits to the business of the program

What three components make up the supply chain?

-internal functions -downstream customers -upstream suppliers

Costs of globalization

-job loss -reduce environmental and labor standards -erode national cultures

What are some of the political action tactics?

-lobbying -direct communications -expert witness testimony -political contributions -economic leverage -political consulting -stakeholder coalitions -advocacy advertising -public relations -legal challenges

What are the common forms of corporate giving?

-money -products or services -time (volunteering)

What are some workforce diversity trends?

-more women -immigration -increasing ethnic and racial diversity -workforce continues to age -millennials starting to enter the workforce

What does the Dodd Frank Act require in terms of compensation of executives?

-must disclose the ratio of their CEO's compensation to the median compensation of all their employee's -say-on-pay: public companies must hold shareholder votes on executive compensation at least once every 3 years

According to "Reconciling Capitalism and Democracy," what is the relationship between democracy and capitalism?

-not a democratic society because businesses use their power to do what they want to do and society has no say -not pure capitalistic because we are highly regulated by they government (people vote for government officials, but government doesn't regulate every aspect of business) -democracy and capitalism are fundamentally at odds despite century-long attempt by the US to reconcile them -lingering question is how capitalism, with its focus on efficiency and profit, can be reconciled with out fundamental views of political democracy -Stakeholders theory- collaborative approach that encompasses both capitalism and democracy by including all relevant players in a business decision, but this requires commitment from the global market, political resolve, and a realization that our democratic principles are the bedrock of our society

Why do ethical problems occur in business?

-personal gain or selfish interest (ethical egoist) -competitive pressures on profits (make unsafe goods because it's cheaper) -conflicts of interest (can hurt a company's integrity) -cross-cultural contradictions (other countries may not have the same morals/ethics as the US)

What are the stages of environmental responsibility?

-pollution prevention -product stewardship -clean technology

Benefits to globalization

-potentially end poverty -spread innovation -reduce prices for customers

What is the Foreign Corrupt Practices Act?

-prohibits US companies from paying bribes to foreign government officials, political parties, or political candidates -US companies with foreign operations must adopt accounting practices that ensure full disclosure of the company's transactions

How are stakeholders identified or analyzed?

-relevant vs. irrelevant -by their interests or concerns -by their powers -by their coalitions: temporary alliances to pursue a common interest

Inland Case: What are the relevant facts in this case?

-reorganization of banks makes economic sense, but may harm communities involved -Branch 1: needed lots of renovation, last bank in town, next closest branch was 10 min. away and located on a bus route -Branch 2: eliminate jobs, poor community, thoughts of replacing bank with ATM -picketers and angry phone calls regarding possible branch closings

What does the Dodd-Frank say about whistle blowing?

-requires the government to pay a reward to whistle-blowers who voluntarily provide information that leads to successful prosecutions for violations of federal securities laws -prohibits retaliation against employees

How does being a "green" company give a competitive advantage?

-save money overtime -attracts green customers -promotes innovation -reduces the company's regulatory risk -develops skills in strategic planning

What are some principles of good governance?

-select outside directors -hold open elections for board members -appoint an independent chairman of the board -align director compensation with corporate performance -evaluate the board's performance on regular basis

How does the issue of bribery come into play with ethical dilemmas?

-significant economic consequences -found in nearly every sector of the global marketplace -more likely in countries with low per capita income, low salaries for government officials, and less variation in income distribution

Why has globalization taken off in the last few decades?

-technological innovation -transportation systems -rise of major transnational corporations -social and political reforms

Why should businesses be ethical?

-to meet the demands of business stakeholders -to enhance business performance -to comply with legal requirements -to prevent or minimize harm -to promote personal morality

Discussion case: Big Fat Liability What are the relevant facts in this case?

-to what extent should the food industry be held accountable for the growing problems of obesity in America? -fast food companies not liable

What are the two market based approaches to achieve environmental goals?

1. Cap and Trade 2. Green taxes (Describe)

What are the stages of corporate citizenship?

1. Elementary 2. Engaged 3. Innovative 4. Integrated 5. Transforming

What are the rights of consumers?

1. Right to be informed 2. Right to safety 3. Right to choose 4. Right to be heard 5. Right to privacy

What are some major rights of employees?

1. Right to organize and bargain collectively (labor unions) 2. Right to a safe and healthy workplace (OSHA and ergonomics) 3. Right to a secure job (employment at will has some exceptions)

What are the pros for CSR?

1. balances power with responsibility 2. discourages government regulation 3. promotes long term profits for business 4. improves stakeholder relationships 5. enhances business reputation (descriptions)

What is the stakeholder relationship for each?

1. communication with stakeholders is one way: from the company to the stakeholder 2. begin to interact with and listen to stakeholders, although engagement occurs mainly through established departments 3. begin reporting efforts to stakeholders 4. enter into ongoing partnerships with stakeholders 5. partner extensively with other organizations and individuals across business, industry, and national borders to address broad social problems and reach undeserved markets

What are the four market reasons for using the stakeholder theory for business decision making?

1. coping strategy- businesses should do what they can to meet society's expectations thereby keeping government regulation at bay 2. self-interest- collaboration with other stakeholders serves the business' self-interest 3. social contract- contract among society, government, and business (an exchange of promises) to keep government at bay and meet societal expectation and business agreeing to do good 4. fundamental fairness- fairness to all relevant stakeholders

What two areas does the SEC regulate?

1. fraudulent financial accounting 2. unfair trading by insiders

What is the issue management process for public issues?

1. identify issue 2. analyze issue 3. generate options 4. take action 5. evaluate results (insert descriptions of steps)

What are the stages of engagement?

1. inactive companies 2. reactive companies 3. proactive companies 4. interactive companies (insert descriptions)

Discussion Case: Alcoa's Core Values What are three points from this case?

1. integrity ethical work climate 2. The CEO is a person of integrity and the ethical influence was apparent from the top down 3. Strong value based culture

What are the cons for CSR?

1. lowers economic efficiency and profits 2. imposes unequal costs among competitors 3. imposes hidden costs passed on to stakeholders 4. requires skills business may lack 5. places responsibility on business rather than individuals (describe each)

Four conditions for an employee to blow the whistle

1. organization is doing something that will seriously harm others 2. employee has tried and failed to solve the problem internally 3. reporting the problem will stop/prevent harm 4. harm is serious enough to justify costs of disclosure

What three factors have contributed to the ecological problems?

1. population growth 2. income inequality 3. rapid economic development in many parts of the world

What are the four most common types of business formats??

1. sole proprietorship- one owner, personal liability 2. partnerships- joint venture of 2 or more people. General partners make the decisions and are personally liable for the firm. Limited partners don't make decisions and don't have personal liability. Only liable for the amount of their investment in the firm 3. Corporations- no personal liability, board of directors, S-corporations, C-corporations 4. limited liability companies- in between partnership and corporation but can have limited liability like a C-corporation

What are the four lenses and their core values?

1.rights/responsibilities- rational (head) and autonomous (individual): I am responsible 2. Results- sensibility (head) and autonomous (individual): I make choices that are good for everyone 3. Relationship- rational (head) and equality (community): I am fair 4. Reputation- sensibility (head) and equality (community): I make virtuous choices

Discussion Case: Timberland What are the arguments for and against Timberland's CSR initiatives?

Against: economic reasons, such as the amount of paid volunteer/community service time For: environmental sustainment, community relations

Discussion case: Apple's Supplier Code of Conduct What is this case about?

Apple's suppliers violated their code of conduct, essentially running sweat shops

Business ethics- what are they?

Applying general ethical ideas to business behavior and decisions

What is the relationship between business and society?

As a set of organizations created by humans, business is clearly a part of society. At the same time, it is also a distinct entity, separated from the rest of society by clear boundaries. Business and society are highly interdependent.

Discussion case: Chiquita Brands Is this an ethical or legal dilemma or both?

Both- started as an ethical issue, but became illegal when the government passed a law against giving these particular groups payment and Chiquita did it anyway

Discussion case: Chipotle What is the main issue of the case?

Chipotle hired many illegal immigrant employees

Discussion case: Coca Cola How was the stakeholder engagement used in this case?

Coca Cola changed its behavior (though not illegal) to help those in the communities they were located, even though it was cheaper to pollute

Discussion case: Coca Cola What is the public issue in this case?

Coca Cola was using too much water and was not returning water in the cleanest state

Discussion case: Coca Cola Who are the relevant stakeholders?

Coca Cola, society/communities/people

Discussion Case: Conflict Coltan What are the relevant facts?

Coltan, used in batteries for technology, mined and traded by violent, warring groups in Africa

What is the federal agency that enforces employment equality?

Equal Employment Opportunity Commission

Ethical Lens Inventory- What was the purpose of this exercise?

Ethical self-awareness: to be ware of what motivates us in making decisions when there are no rules

Discussion case: Online Privacy What federal agency deals with online privacy issues?

FTC

What are the major federal consumer protection agencies?

FTC, FDA, Consumer product Safety Commission, National Highway Traffic Safety Admin., Department of justice, National transportation safety board, Consumer financial protection bureau

Discussion case: Apple's Supplier Code of Conduct What type of audit did Apple use?

Fair Labor Association audit

Discussion case: Fidelity and Citizen What is the case about?

Fidelity sent employees to Citizen schools to teach children about personal finance

Discussion case: Stop Online Piracy Act Who is for it and who is against it?

For: Motion Picture Association, Recording Industry of America, U.S. Chamber of Commerce (old media) Against: AOL, Google, Facebook, Twitter, Yahoo!, Ebay, etc. (New Media)

Discussion case: Citigroup What are the arguments for and against the proposed compensation package?

For: they had enough information to calm customers by knowing the breach was over Against: they took too long, the security breach was simple and should have been noticed almost immediately

Discussion case: JP Morgan Why did the government get involved? Is this considered arm's length or collaborative?

Government began regulating derivatives, arm's length because JP Morgan didn't want them there (?)

What are white collar crimes?

Illegal acts committed by individuals, employees, or business professionals such as fraud, insider trading, embezzlement, or computer crime

Inland Case: Who are the relevant stakeholders?

Inland Bank, employees, and the citizens of the two towns

Discussion case: Malden Mills What did the company do well in its response to the crisis?

Kept relations with employees (even though it was not economically sensible)

Discussion case: Malden Mills What is the case about?

Malden Mills burnt down. Rather than firing all employees, moving the company, or selling out, the company decided to continue paying employees wages until the factory was rebuilt

What are the different kinds of stakeholders?

Market, non-market, internal, and external

Discussion Case: Pink Slime Should pink slime be banned? Why or why not?

No, because they haven't proved anything wrong with it and it actually helps in providing safe meat

Discussion case: Big Fat Liability What is the public issue?

Obesity

Discussion case: digging gold Who are the stakeholders?

Owners, communities, environment

Discussion Case: Pink Slime What are their interests?

Owners: to continue making a profit by producing pink slime Consumers: to receive better meats quality, especially for school children Other businesses: maintain cheap meat prices, but also have a healthy image to consumers

RCRA (Resource Conservation and Recovery Act)

Regulated hazardous materials from production and disposal

What is the major government agency protecting shareholders' interests?

SEC (Securities and Exchange Commission)

What legislation came about as a result of Enron?

Sarbanes-Oxley Act

Discussion case: Ford and Firestone What should they have done differently, if anything?

Should have taken more concern for customers, especially because this was a dangerous situation

Discussion Case: Timberland What are the relevant facts in this case?

Timberland very socially responsible company, bought by VF (North face, etc.) and question whether company would remain socially responsible

Example of company being socially responsible:

Timberland, Malden Mills, Coca Cola

What is an ethical climate of a business?

Unspoken understanding about what is or is not acceptable behavior

Discussion case: Online Privacy What is the case about?

Websites using data/cookies to provide targeted advertising

Discussion case: Chiquita Brands What was the main dilemma in the case?

Whether Chiquita should continue to pay off the terrorist group

Discussion case: Citigroup What's the main issue in this case?

Whether or not Citigroup acted appropriately once learning of the hacking

Inland Case: What is the dilemma in this case?

Whether or not to close the bank branches: though it makes economic sense, the communities may be harmed

Are mission statements important? why or why not?

Yes: define the attitude and goals of the company

informational power

access to valuable data facts (can be used to mobilize or threaten)

environmental intelligence

acquisition of information gained from analyzing the multiple environments affecting organizations

Discussion case: Mickey's Backyard What is the main issue in this case?

affordable housing for employees with decrease in value of resort district

National transportation safety board

airline safety

Supply Chain

all activities associated with the flow and transformation of goods from the raw materials stage through the end user and the associated information flows

What are collaborative partnerships?

alliance among businesses, government, and organizations that draw on the unique capabilities of each to address complex social problems

What are public or social issues?

any issue that is of mutual concern to an organization and one or more of its stakeholders

What can companies do to comply with the SEC?

be transparent and share information with the stockholders

economic power

boycotts, unions, suppliers refuse to fill orders, etc.

What are his argument to support his position?

businesses can't have responsibilities, only people can; social responsibility of business is to increase profits

Example of legal challenges:

businesses seek to overturn a law after it has been passed or threaten to challenge the legal legitimacy of the new regulation in the courts (smoking prevention ban smoking ads within a certain sight distance of schools and playgrounds)

Corporate power

capability of corporations to influence government, the economy, and society based on their organizational resources

Discussion Case: Clean Cooking How would the widespread use of clean cook stoves address environmental issues or support sustainable development?

cause less smoke => improve overall air quality

Triple Bottom Line

companies report to stakeholders their financial results as well as their environmental and social impacts to be transparent

Corporate social reporting

company publicizes information collected in a social audit to be transparent

Are there any ethical issues involved with environmental analysis, environmental intelligence, or competitive intelligence? What are they?

competitive intelligence: -theft of trade secrets or other information

Federal Trade commission (FTC)

competitive pricing, packaging, and labeling

Discussion case: Big Fat Liability Who are the relevant stakeholders?

consumers, managers, stockholders

corporate social responsibility

corporation should act in a way that enhances society and its people and be held accountable for any of its actions that affect people, their communities, and their environment

stakeholder theory of the firm

corporations serve a broad public purpose: to create value for society

Post Enron Article: What are the key points from this article?

creative accounting issues

Discussion case: Ford and Firestone Who are the relevant stakeholders?

customers, owners, other people on the road

Sustainable development

development that meets the needs of the present without compromising the ability of future generations to meet their own needs

What is the pay gap?

difference in the average level of wages received by two groups

Who is Edward Freeman?

economist

Who are the board of directors of a company?

elected group of individuals who have a legal duty to establish corporate objectives, develop board policies

whistle blowing

employee's disclosure of alleged organizational misconduct to the media or appropriate government agencies

Discussion case: Mickey's Backyard Who are the relevant stakeholders?

employees, Disney, Orange County, SunCal (building company), resort district, politicians

Discussion case: Chipotle Who are the stakeholders?

employees, owners

Discussion Case: No Smoking Allowed Who are the primary stakeholders?

employers, owners

CERCLA (Comprehensive Environmental Response Compensation and Liability Act [Superfund])

established Superfund and procedures to clean up hazardous waste sites

Clean Air Act

established air quality standards and timetables; amendments revised air standards and required cuts in smog, acid rain, and greenhouse gas emissions and promoted alternative fuels

Clean Water Act

established national goals and timetables for clean waterways; amendments authorized funds for sewage treatment plants and waterways cleanup

Social audits

evaluation of an organization's social, ethical, and environmental performance

Dept. of Justice

fair competition, consumer civil rights

Consumer financial protection bureau

fairness and transparency in consumer financial products and services

Discussion Case: Pink Slime What are the financial, legal, and ethical issues?

financial: losing business due to more people stating it's unhealthy nature legal: none Ethical: is it ethical to feed people the scraps from meats?

What are the possible consequences for violating the Sherman antitrust law?

fine, structural remedy, conduct remedy

Discussion case: Chipotle How should businesses handle this issue?

fire illegal employees, increase background/visa checks before hiring employees

Ownership theory of the firm

firm is seen as the property of its owners

What is globalization?

increasing movement of goods, services, and capital across international borders

Discussion case: Online Privacy Who should be responsible for protecting internet user's personal information? Government? Businesses? Individuals?

individuals: they can block ads and cookies government: they can prohibit businesses from taking this data and protect individuals who don't know how to protect themselves

What is occupational segregation?

inequitable concentration of a group in particular job categories (i.e. women secretaries)

Supply Chain Management

integration of these activities through improved supply chain relationships to achieve a sustainable competitive advantage

Discussion Case: Conflict Coltan What is the major issue?

is it ethical to use minerals mined in such conditions?

Discussion Case: No Smoking Allowed What is the main tension in this case?

is it legal/ethical for businesses to discriminate against people who smoke, even when they aren't at work?

What does the Sarbanes-Oxley Act say about whistle blowing?

it's illegal for employers to retaliate in any way against whistle-blowers who report information that could have an impact on the value of the company's shares

Pure Capitalism

laissez faire- no government regulation, highly competitive

stockholder lawsuits

lawsuit initiated by one or more stockholders to recover damages suffered due to alleged actions of the company's management

stockholders

legal owners of business corporations

Discussion case: Stop Online Piracy Act What political action tactics were used in this case by the "new media" groups?

site-wide blackouts to combat SOPA, letter writing, e-mails, telephone calls to Congress

Voting power

stakeholder has a legitimate right to cast a vote (usually proportionate to percentage of ownership)

What is his position regarding ownership vs. stakeholder theory?

stakeholder theory

market stakeholders

stakeholders that engage in economic transactions with the company

How are executives paid?

stock options, based on performance, sometimes it's excessive

Discussion Case: Clean Cooking What are the relevant facts in this case?

stoves in impoverished countries cause pollution and harm the health of those in the house, specifically women and children

legal power

suit against a company for damages

What is the most important job of managers in supply chain management?

supply chain relationships

competitive intelligence

systematic and continuous process of gathering, analyzing, and managing external information about the organization's competitors that can affect the organization's plans, decisions, and operations

What are his arguments to support his position?

taking care of the environment makes the world better, engages employees, managers bear fiduciary duties to stakeholders

Why does it matter if the gap increases?

the larger the gap, the greater the risk of stakeholder backlash

Discussion case: Apple's Supplier Code of Conduct What are the advantage and disadvantages to Apple using this type of audit?

the suppliers' bad behavior is exposed, but this causes apple to lose profits in bad publicity

internal stakeholders

those employed by the firm

external stakeholders

those who, though they may have important transactions with the firm, are not directly employed by it

social investment

use of stock ownership as a strategy for promoting social objects

stock screening

used by mutual funds and pension funds to select companies in which to invest, weeding out ones that pollute, overpay their executives, or do business in countries with poor human rights histories

Stakeholder powers:

voting, economic, political, legal, and informational

Discussion Case: Conflict Coltan Which group is hurt most by the trade in conflict coltan?

warring groups would probably continue their habits, so the companies are hurt the most due to publicity and reputation

Discussion Case: No Smoking Allowed Can employers ban smoking on the job?

yes