BA 342

International Ombudsman Association Website

Standards of Practice and a Code of Ethics for Organizational Ombudspersons (both founded on the idea that they are confidential neutral/impartial, informal and independent).

ADM Archer Daniels Midiem

- ADM and Price fixing. - 90s Price fixing scandal with Mark Whitaker, divided the profits between US, Japan and South Korea. Informant Trailer. - Pat Wertz became CEO to change corporate culture. - Mark Whitaker's credit for helping FBI was overshadowed by his embezzlement during the process. - ADM produced ingredients that go into eating.

Walmart's Social Awareness Campaigns

"Buy American" - only bought domestically to restore jobs to Americans. "Environmental Awareness" - commitment to preserve the quality of the land. Main goals to be 100% supplied by renewable energy, create zero waste, and sell products that sustain people and the environment.

Hershey Foods Website Social Responsibility

"Doing well by doing good." Shared Goodness. - Good Business: environment, workplace, responsible sourcing, integrity and governance. - Better Life: global giving, community engagement, volunteerism - Bright Future: creating opportunities through education and nutrition. Committed to certified cocoa, reducing waste to zero, building a better workplace, improving farmer livelihood, learning alliances and supporting well-being.

Which answer is not part of the new social contract?

Stable job security

Magna Carta of Rights of Consumers

Laws under which businesses are expected to operate. Reflect CODIFIED ETHICS by articulating basic notions of fair practices.

ADR Examples

- Open Door Policy: relies on a senior-level executive who assets that her or his "door is always open" for those who think they have been treated unfairly. - Arbitration/Mediation: process where a neutral party resolves a dispute and the resolution is binding. - Ombudsman (rep): refers to one who investigates reported complaints and helps to achieve equitable settlements, officially neutral and promises confidentiality. - Peer Review Panel

**New Holland Case

Stakeholders impacted.

4 Key Stakeholders

- Employees - Consumers - Community - Government and non-government *employees and consumers are the most important

Google, Europe and Privacy

- Freedom of speech vs. right to be forgotten - Europeans more intense on privacy - Google lost

Employee Privacy Bill of Rights

- Informed Consent before information collection - Disclosure of nature of surveillance - Set controls on information access - Limit collection/use of medical/health data - Require reasonable cause before drug tests - Respect boundary between work and home

Legal Employee Rights

- Statutory (discrimination) - collective (unions, 6.7% in private sector, 35% in public sector) - contractual (CEO) - employment (HR)

Privacy Laws

- Surveillance and monitoring - Electronic communication privacy act - Background check: Blanket no-hire policies based on criminal records or negative credit scores - Integrity Interviews - Fair credit reporting act - EEOC Law: Employers may not deny a person employment based solely on criminal record; instead they must factor in business necessity, seriousness of the offense, how long ago it occurred. - Drug testing: drug/alcohol testing for suspected employee substance abuse - Americans with disabilities Act

Iceberg

- Top 5%. - 45% complaint to front line agent. - 50% have problem but don't complain.

Business Issues Behind Shooting Threat

- Worker safety - Security expenses - Student safety - Future students - Reputation - Damages - Protocol if happens - Businesses in HUB - #1: Safety of 70,000 people

History of CSR

1700s - Economics 1800s - Legal 1850s - Social 1950+ - Stakeholder

CSR and IBM

-CSR was a compliance/regulatory issue. --> Now a business issue/revenue opportunity. -Use CSR in a way to drive profits higher and have greater customer loyalty. -Internet adds greater visibility for customers and for companies to share information more openly. -Stakeholders: customers, shareholders and employees. -"Green" Movement

CSR and Duke

-How do you measure social performance? Does being good mean you do well financially? -Cut down on metrics and agree on standard measurements. Use of metrics should have more control. -Positive social and positive financial need to be interrelated to be successful.

2013 Ethics Resource Center

41% witness misconduct 63% report misconduct Of those who report, 21% experience retaliation Misconduct had been down from 2011. 60% of misconduct is by managers 24% by senior managers

National Whistle Blower Center

43% Fraud uncovered by whistle blowers

Customer Care Measurement and Consulting

45% had serious issues last year 60-70% Enraged by management of issue 45% CEOs felt they hadn't earned customer loyalty

Tracy Morgan and Walmart

5,000 lawsuits a day

States of Citizen Development

1. Elementary (gain credibility) 2. Engaged 3. Innovative 4. Integrated 5. Transforming

Laws for Whistle Blowers

1. False Claims Act: provisions that allow employees to blow the whistle about contractor fraud and share with the government in any financial recoveries realized by their efforts. 2. Sarbanes/Oxley 2. Dodd/Frank 4. IRS

Big 6 Reasons Companies Are Heavily Invested

1. Innovation - new business 2. Cost Savings - save money and mangage risk 3. Brand Differentiation - differentiation form competitors/improve reputation 4. LT Thinking - access to investment and funding opportunities/generate positive PR and media opportunities due to media interest in ethical activities. 5. Customer Engagement - develop/enhance relationships, increase retention. 6. Employee Engagement - attract, retain and maintain a happy workforce.

Big 6 Safety Data Categories (Question)

1. Transportation 2. Assaults and violent acts 3. Contact with objects 4. Falls 5. Harmful substance exposure 6. Fire and explosions

Socially Responsible Activities (13)

1. make safe products 2. no pollution/waste reduction/energy conservation 3. obeys laws with no past record 4. promotes honest/ethical employee behavior 5. safe workplace ethics 6. does not use misleading advertising 7. no discrimination 8. "environmentally friendly" packaging 9. protects employees from sexual harassment 10. responds to customer problems quickly 11. provides medical costs 12. gives money to charity 13. tries to continuously improve quality

IOA Mission

Advance the profession of organizational ombudsman and ensure practitioners are able to work to the highest standards.

Managerial View

Began to see responsibilities towards other major constituent groups as essential to be successful.

3 Stakeholder Questions

Can you manage money? Can you manage people? What have you done under social responsibility?

Which is not an ADM resolution?

Civil Action

Employee Rights

Civil, minority, women, disabled, older, religious, employee, privacy, smokers, non-smokers, animal, due process, appearance.

Most dangerous job?

Commercial fishing

Biggest Stakeholders?

Community and government.

Stakeholder Model

Community, government, employees, consumers and owners.

Pros and Cons of CSR

Cons - Classical economics (social issues are not the concern of business people), business not equipped (oriented towards finance and operations), dilutes business purpose, too much power already and global competitiveness. Pros - Enlightened self interest, warding off government regulations, resources available, pro-action better than reaction, and public support.

Consumers

Consumer activists, and product liability.

Cheryl audits and notices a group of managers are manipulating accounts, what should she do?

Contact Ethics Compliance Department

Emerging Approach to Whistle-Blowing

Corporate <-- Employee --> Public

OSHA 40 Years Commercial

Created in 1970 by Congressional Act. Assure safe and healthful working conditions for men, and women by settling and enforcing standards and by providing training, outreach, education and assistance.

**Responses to CSR pressure

Defensive (garments), Cost/Benefit (Dupont), Innovation (Tesla), Strategic (Siemens).

Lead Paint Recall Players

Designer, manufactures, customers, government, employees and kids - "what do we owe consumer stakeholders?" - started as amoral, transformed into moral

CSR 4 Part Definition

Economic, legal, ethical and discretionary/philanthropic expectations that society has of organizations.

Adam Smith

Economics thinker, moral philosopher and free market capitalist. Invisible Hand Concept: society can best determine its needs and wants through the marketplace. Transforms self-interest into societal interest. Wrote Wealth of Nations: talked about free market and how you must conduct yourself in a high ethical way.

Ethical Responsibilities

Embody norms, standards, values and expectations that reflect what consumers, employees, shareholders and the community regards as fair, just and consistent.

Moral Management and Employee Stakeholders

Employees are a human resource, should treat with dignity. Alta Gracia (DR town) - Living Wage Model: workers earn money they need to raise a family, housing, healthcare and education. Takes CSR into play and moral treament of workers. Firestone - Brought all 88,000 onto plantation and protected them from Ebola.

Basic Right #1 Fired for Cause

Employment at Will: US labor contract system means that a worker can accept an offer at anytime and is not forced to stay AND employer can let you go at any time for any reason.

Health Family and Medical Leave Act

Entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave.

Philanthropic Responsibilities

Fulfilling expectation that the company will "give back."

Sustainability

Environment

3 Kinds of Human Capital

Financial and building/machine/human

Dismissing Employees with Care

Fire in private space Be mindful of employees logistics Preserve employees' dignity Choreograph the notification in advance Use transparent criteria for layoffs

Moral Employee Rights

Fired with cause shared, due process for treatment, freedom of speech, respect and dignity.

Big 3 Employee Rights

Good Cause (firing), Due process, Freedom of Speech.

Iron Law of Responsibility

In the LR, those who do not use power in a manner which society considers responsible will tend to lose it.

Good Citizen (multiple select)

Law abiding, volunteering, honest, respectful, productive, giving to charity, environmental, pay taxes and voting.

License to Operate

Showing initiatives in sustainability and ethics if you don't you won't succeed.

Government

Local, federal and state.

Traditional Approach to Whistle-Blowing

Loyalty --> Obedience --> Confidentiality

Dutch Boy Lead Paint Brand

Mike Mozart: paint puppet. - lead recognized to kills kids because lead in pair was toxic. - lead caused disabilities, brain damage, organ failure, coma, death, ADD, low IQ, brain swelling, hyperactive/antisocial behavior

Stakeholder View

Not only those that management thinks have some stake in the firm but also those who think they have a stake in the firm.

Experience with Product/Service

Number of customers that say something bad is twice the amount that say something good.

Safety in the workplace is managed by what agency?

OSHA

Immoral Management

Sees employees as factors of production and exploit them. UN Child Labor 2016 Goals - Worst forms of child labor - 166 mill under 17 yrs - 250 mill impacted in 2006 - 200+ mill still impacted in 2014

CSR

Social

Stockholders

Owners stakeholders = interests.

Production View

Owners thought of stakeholders as only those individuals/groups that supplied resources or bought products/services.

US Employee Social Contract

Past (dependent) - stable job security, lifetime with one employer, stable assignments, loyalty to employer, employer responsibility, individual work focus. Present (independent) - declining job security, norm of changing jobs, temporary assignments, loyalty to career, personal responsibility, team/project focus.

Social Progression and Employees

Personnel --> human resources --> human capital

Joint Legal/Moral Employee Rights

Privacy/safety/health.

Owners

Private, corporate, and institution.

Economic Responsibilities

Produce goods/services that people WANT and sell at a FAIR PRICE.

Views of Firm

Production, managerial, stakeholder

Health Americans with Disabilities Act

Prohibits discrimination against people with mental or physical abilities in employment, transportation, public accommodation, communications and governmental activities.

**Fairness Standard

Pros - free enterprise concept, employees can get training, knowledge and skills, develop relationships while with one employer, freely choose to leaver and take "soft" assets. Employment-at-will is not to protect harsh employers but to protect good employers from having every decision go to litigation. Cons - US is only country with this, arbitrary nature, laws against, employees rights, trust expectations broken, broken culture, reduce claims, respect - moral. Exceptions - public policy, implied contracts, good faith principle, discrimination law.

Expectations of Privacy, Safety and Health (Yik Yak)

Pros: connects people, can post quality content, safe place to spill your soul, anonymity and proximity. Cons: Terroristic threats, bullying, sexual harassment, bomb threats

Walmart Case Study

Pros: disaster center, fast response, cheap, many customers, community help, located everywhere, job opportunities, large product selection, distribution networking, diverse workforce, sustainability drivers, largest company, saved gulf. Cons: "Buy American then Buy Chinese," from green to pavement, Mexican bribery scandal, legal issues, workforce issues, consumerism, "mom and pops shop" decline, suppliers use sweatshops, unclean, long lines, low wages, bad employer relations.

Community

Public and environmental groups.

Safety Ebola Case

Question directed on stakeholders: - spread - death - isolation - reputation - media - prevention - containment - families of employees - mass hysteria - pandemic - staffing - employee safety - public transportation

Naked Brand Documentary

Reality behind ads, companies can no longer just say they are great, they need to BE great and provide proof.

Alternative Dispute Resolution

Resolving disputes with litigation. 36 Companies spent $4.1 billion (Duke Law Survey) Tort System in US spent over $800 billion (Coke settles racial suit with $192.5 million deal).

Corporate Citizenship

Responsibility, performance and responsiveness.

Basic Right #3 Freedom of Speech

Right to express US opinions without censorship, restrain or retaliation (bounded).

Basic Right #2 Due Process

Right to receive impartial review of one's complaints and to be dealt with fairly (class conflicts, cheating) EX: Compliance directors and ethics officers

Coca-Cola Ombudsmen

Strives to create work environment where everyone is treated with dignity, respect, honesty and fairness. Believes in putting people first and in resolving issues and concerns at earliest possible stage. Ombuds Office was created as alternate channel of communication for employees to discuss/seek guidance about workplace concerns. Confidential/neutral/independent and no workplace retaliation.

Better Business Bureau Leader

Top 3: Banking, Advertising, Automotive - not meeting expectations - timing - bad treatment from employees - phone service - cable - food service - retail

Amoral Management

Treats employees as law requires. Investment Banking Employee Social Contract - First Year Analyst: 22 yrs old, 85-115 hrs/wk, $80k +$50 bonus - Second Year Associates: 28 yrs old, 55-105 hrs/wk, $100K + $150K bonus

Employees

Union, minority, activists and women/older.

Statistics

Violent Acts: - 1993: 2,100,000 - 2009: 572,000 Deaths - 1993: 1,068 - 2009: 521

Hurricane Katrina Case Study

Walmart saved New Orleans before the government. Helped people, operations and community.

**Bloomberg Article

Whistle while you work

Stakeholder Management 5 Key Questions

Who are they? What are their stakes? What opportunities/challenges do they present? What responsibilities does the firm have towards them? What strategies/actions should the firm take to best address them?

Responsibility

ability/authority to act or decide without supervision.

Social Contract

between employer and employee (social relationship).

Magna Carta of Rights of Consumers

right to safety, right to be informed, right to choose, right to be heard

Loyalty to career does not mean...

disloyalty.

Whistle Blowing

former/current employee discloses improper actions by member of the org. with the goal to effect change.

Apple and Social Contract

iFactory and Foxconn --> huge company in China electronics contract manufacturer. Long hours, pressures low pay ($2/hr 60 hrs/week), suicide nets. Apple joined Fair Labor Association.

Health Smoking

restriction of smoking in the workplace due to the anti-smoking sentiment in society in general

Privacy

right to keep personal affairs to oneself and to know how information about you is being used.