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M G M T 3 1 4 | W E E K 7 Community Outreach and Respect
For organizations that strive to be stewards of good ethics, community outreach is important. Such organizations have a keen sense of social responsibility, and they make an effort to be involved in the community. This includes being philanthropic and encouraging employees to practice volunteerism. Such activities help organizations develop a good reputation that includes being perceived as ethical. This lesson will discuss this in more detail and provide information about the various options that organizations have as ways to practice community outreach.
As part of this, organizations have to consider the advantages and disadvantages of working with sweatshops and outsourced labor. While these may be attractive options as ways to accomplish an organization’s work, they also raise issues and concerns, and may be an unethical way to conduct business. This lesson will consider sweatshops and outsourced labor in more detail.
LEARNING OBJECTIVES:
Analyze examples and case scenarios of modern business life.
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Social Responsibilities – Do Businesses Have Them?
Social responsibility is the idea that individuals and organizations have an obligation to conduct their business in a way that promotes the best interests of the environments where they function as well as the best interests of society in general. Individuals and organizations are expected to welcome their social responsibilities and not focus entirely on achieving their organization's’ goals and objectives, such as maximizing profits.
To operate effectively, organizations need to have a positive relationship with their outside environment and society in general. One way they can foster this is by being socially responsible. Ways to practice social responsibility are explained later in this lesson. When organizations take these obligations seriously, it enhances their reputation and promotes their image as a good neighbor practicing ethical behavior. Being socially responsible can help organizations succeed as they attract both investors and customers who value social responsibility. In this way, social responsibility has the potential to bolster profits, even though the point of being socially responsible is not to maximize profits.
In addition, being socially responsible can make an organization more attractive to potential employees who value community outreach and strive to be good citizens in their personal lives. Such employees tend to be more ethical people and prefer to work for organizations with a reputation for being socially responsible. This can help an organization hire and retain ethical employees.
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Four Aspects of Social Responsibility
Social responsibility has four aspects—economic, legal, ethical, and philanthropic responsibilities. Each of these are discussed below.
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Before an organization can fulfill its legal, ethical, and philanthropic responsibilities, it must first meet its economic responsibilities. It must generate profits and manage budgets well so it can provide jobs to employees and help strengthen the economy. If it does not do this, it will not stay in business. As such, there will be no need for it to be concerned about the other responsibilities because they will not exist.
Effect on Employees
How does an organization’s efforts to meet these four social responsibilities affect employees? Employees must strive to help an organization do the best possible work so it can meet its economic responsibilities. As they do this, each individual employee must ensure that he or she meets legal requirements, doing the work in accordance with the law. As this course has repeatedly emphasized, employees must strive to be ethical, helping an organization develop an ethical organizational culture that meets its ethical responsibilities. And finally, employees should assist the organization as it engages in philanthropic activities to meet its philanthropic responsibilities. This includes participating in activities such as food drives and fundraisers for charities.
As they strive to meet each of these responsibilities, it is important that employees maintain an appropriate life/work balance. Juggling these responsibilities and completing all of the activities required to meet them can be time consuming. Employees should ensure they have a suitable balance between the time spent at work compared to the time they spend on activities in their personal lives. The management of their organization should support them in these efforts. back to top
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Some companies and businesses have made the decision to work with sweatshops and outsourced labor. These can be defined as follows:
Sweatshops – “Work environments that possess three major characteristics—long hours, low pay, and unsafe or unhealthy working conditions. Sweatshops may also have policies that severely restrict workers' freedoms, including limiting bathroom breaks and even conversations with fellow workers. At its worst, violence is used against sweatshop workers” (Encyclopedia.com).
Sweatshops and Outsourced Labor
WHAT ARE THEY? WHY DO BUSINESSES USE THEM? ARE THEY ETHICAL?
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Outsourced Labor or Outsourcing – “Outsourcing is a practice used by different companies to reduce costs by transferring portions of work to outside suppliers rather than completing it internally” (Investopedia.com).
United Nations Global Compact Principles
In response to problems with U.S. companies that hire workers in foreign countries, the United Nations developed the Global Compact, a voluntary initiative intended to encourage businesses to operate overseas in a socially responsible manner. As the United Nation’s website states,
Responsible businesses enact the same values and principles wherever they have a presence, and know that good practices in one area do not offset harm in another. By incorporating the Global Compact principles into strategies, policies and procedures, and establishing a culture of integrity, companies are not only upholding their basic responsibilities to people and planet, but also setting the stage for long-term success” (United Nations).
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The Compact has ten principles that fall under four categories—human rights, labor, environment, and anti- corruption. These principles are listed below:
HUMAN RIGHTS
LABOR
ENVIRONMENT
ANTICORRUPTION
Strategies for Giving to the Community back to top
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When individuals and organizations give to the community, they have two options for how to accomplish this. They can engage in philanthropy, which is “the practice of giving money and time to help make life better for other people” (Merriam-Webster Dictionary). They also can participate in volunteerism, which is “the act or practice of doing volunteer work in community service” (Merriam-Webster Dictionary). A volunteer is “a person who does work without getting paid to do it” (Merriam-Webster Dictionary).
Volunteerism is performed both formally and informally. Formal volunteerism is work done in an organization, such as a nonprofit agency. Informal volunteerism is more personal and typically benefits an individual or group who has a personal connection with the volunteer. For example, a volunteer may practice informal volunteerism by regularly assisting an elderly neighbor who needs services such as transportation. Informal volunteerism is also known as social support or helping behavior.
Some informal volunteerism benefits an individual’s colleagues or employer. For example, an individual may participate in a company-sponsored food drive to boost the amount of food the company donates. This, in turn, helps the company generate recognition and publicity for its good deed. When individuals do volunteerism such as this, it is called organizational citizenship behavior.
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Money – To operate and provide goods and services, nonprofit organizations and charities rely on donations of money to ensure they have sufficient cash flows. Donating money to nonprofits and charities is an important way that companies and their employees can give back to the community and practice social responsibility.
Ways to Engage in Philanthropy and Volunteerism
Generally, philanthropy and volunteerism can be practiced in one of four ways.
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Tracking Philanthropy and Volunteerism
TRACKING PHILANTHROPY TRACKING VOLUNTEERISM
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The National Philanthropic Trust tracks philanthropy in the United States. The Trust’s data shows that charitable giving in the United States was at an all-time high in 2014 when Americans donated $358.38 billion, which was a 7.1 percent increase over donations made in 2013. Most of this amount—$258.51 billion or 72 percent of the total—was donated by individuals. Donations by foundations accounted for $53.97 billion, or 15 percent of the total. Bequests comprised eight percent of the total at $28.13 billion. The remaining five percent, or $17.77 billion, was donated by corporations.
Lesson Overview Organizations tend to be powerful and can make a profound impact on the community. They should give back to the community whether in the form of
money, time, or resources. Employees should also be involved but managers must be aware of maintaining their employees’ work and life
balance.
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Knowledge Check
Renita is concerned that her company is not taking all aspects of its social responsibility seriously enough. She has noticed that her company makes it a priority to maximize profits and ensure that it does not have to lay anyone off. The company has an ethics code, and employees are provided with training to help them understand what behavior the company expects from them as they do their jobs. The company tries to pay employees a fair wage and do other things that are regarded as ethical behavior. The company also participates in an annual food drive and encourages employees to donate to charities through United Way. But she also has noticed that the accounting department tends to cut corners and does not always comply with generally accepted accounting principles (GAAP). In addition, she has heard rumors that some of the managers have participated in insider trading. Which aspect of social responsibility does it appear that Renita’s company is not upholding?
Economic Responsibilities
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Jonathan owns a small company that makes custom leather jackets. Each jacket is one-of-a-kind and Jonathan’s customers tend to be wealthy individuals who want unique clothing that they can wear as a status symbol. Jonathan made a nice profit until recently, when the economy entered a recession. He has lost several customers and since his jackets are expensive, he has not been able to attract new customers. Economists are forecasting that the recession will last at least another year, and Jonathan does not think that his company will be able to withstand another year of reduced revenues. He is weighing his options for the best way to address the situation, cutting his costs while continuing to operate his business in an ethical and socially responsible manner. Which of the following is his best option to achieve this?
Kayla is an activist fighting against the use of child labor both in the United States and around the world. She is struggling to get attention from companies that she suspects use child labor in their operations. She has decided to approach the United Nations for assistance. She knows they have an initiative that recommends businesses decline from using child labor in their operations. What is the name of this initiative?
Ethical Responsibilities
Legal Responsibilities
Philanthropic Responsibilities
Sweatshops
Outsourcing
Informal Volunteerism
Organizational Citizenship Behavior
Organizational Citizenship Behavior back to top
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Larry is spending his weekend helping his company with its annual food drive. Next month, he will participate in a golf tournament sponsored by his company with the proceeds set to be donated to charity. Later in the year, he will spend a weekend with co-workers participating in a Habitat for Humanity event sponsored by his company. When Larry does these type activities, what he is practicing?
David is an accountant who wants to be socially responsible and do community outreach. He has a limited income so he cannot afford to make donations to charities. He has no products or services available to him that he can donate, and he is not an employer so he cannot hire people such as veterans who need a job to allow them to reenter society. David is disappointed because he does not feel that he has anything to offer that charities and similar organizations need. Then he talks with a colleague who informs him that a local charity is struggling to maintain financial records. David decides that he can help with this. By doing this, David will be practicing philanthropy by providing which of the following to the local charity?
Social Responsibility
Global Compact
Philanthropic Responsibilities
Organizational Citizenship Behavior
Ethical Responsibilities
Formal Volunteerism
Social Responsibility
Informal Volunteerism
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Key Terms:
ECONOMIC RESPONSIBILITIES
ETHICAL RESPONSIBILITIES
FORMAL VOLUNTEERISM
GLOBAL COMPACT
INFORMAL VOLUNTEERISM
LEGAL RESPONSIBILITIES
ORGANIZATIONAL CITIZENSHIP BEHAVIOR
OUTSOURCED LABOR OR OUTSOURCING
PHILANTHROPIC RESPONSIBILITIES
PHILANTHROPY
SOCIAL RESPONSIBILITY
SWEATSHOPS
VOLUNTEER
Outsourced Labor or Outsourcing
Economic Responsibilities
Skills
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VOLUNTEERISM
Sources:
Corporation for National and Community Service. 2014. The State of Volunteering in America. Report accessed on- line at http://www.volunteeringinamerica.gov/infographic.cfm.
Encyclopedia.com. 2009. “Sweatshops.” Accessed on-line June 10, 2016, at http://www.encyclopedia.com/topic/Sweatshops.aspx.
Investopedia.com. “Outsourcing.” Accessed on-line June 10, 2016, at http://www.investopedia.com/terms/o/outsourcing.asp
Merriam-Webster Dictionary. Accessed on-line June 10, 2016, at http://www.merriam-webster.com/dictionary.
National Philanthropic Trust. 2014. Charitable Giving Statistics. Report accessed on-line at http://www.nptrust.org/philanthropic-resources/charitable-giving-statistics/.
Scilly, M. Demand Media. “Four Types of Corporate Social Responsibility.” Chron. Accessed on-line June 10, 2016, at http://smallbusiness.chron.com/four-types-corporate-social-responsibility-54662.html.
United Nations. “The Ten Principles of the UN Global Compact.” Accessed on-line June 11, 2016, at https://www.unglobalcompact.org/what-is-gc/mission/principles.
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