Lecture Notes

Lesson 8 combines Chapter 16 – Managing a Diverse Workforce, Chapter 17,

Business and Its Suppliers, and Chapter 18, The Community and the
Corporation.
Chapter 16, Managing a Diverse Workforce
The workforce in the United States is more diverse than it has ever been,
reflecting the entry of women into the workforce, immigration from other
countries, the aging of the population, and shifting patterns of work and
retirement. Equal opportunity laws and changing societal expectations have
challenged corporations to manage workforce diversity effectively. Full
workplace parity for women and persons of color has not yet been reached.
However, businesses have made great strides in reforming policies and
practices in order to draw on the skills and contributions of their increasingly
varied employees.
Preview Case: Marriott International
The opening example, Marriott International, highlights the benefits and
challenges of a highly diverse, global workforce.
Key Challenges for Chapter 16
Knowing in what ways the workforce of the United States is diverse, and
evaluating how it might change in the future. The U.S. workforce is as diverse
as it has ever been and is becoming more so. More women are working than
ever before, many immigrants have entered the labor force, ethnic and racial
diversity is increasing, the workforce is aging, and millennials are entering the
workplace.
Understanding where women and persons of color work, how much they are
paid, and what roles they play as managers and business owners. Women
and persons of color have made great strides in entering all occupations, but
they continue to be underrepresented in many business management roles,
especially at top levels. Both groups face a continuing pay gap. The number
of women owned businesses has increased sharply, and many minorities,
especially immigrants, also own their own businesses.
Identifying the role government plays in securing equal employment
opportunity for historically disadvantaged groups, and debating whether or not
affirmative action is an effective strategy for promoting equal
opportunity. Under U.S. law, businesses are required to provide equal
opportunity to all, without regard to race, color, religion, sex, national origin,
disability, or age. Sexual and racial harassment are illegal. Affirmative action
plans remain legal, but only if they are temporary and flexible, designed to
correct past discrimination, and do not result in reverse discrimination.
Assessing the ways in which diversity confers a competitive
advantage. Companies that manage diversity effectively have a strategic
advantage because they are able to foster innovation, serve a diverse
customer base, and avoid expensive lawsuits and public embarrassment.
Formulating how companies can best manage workforce diversity, making the
workplace welcoming, fair, and accommodating to all employees. Successful
diversity and inclusion management includes articulating goals and measuring
progress, recruiting widely, mentoring promising women and persons of color,
and establishing mechanisms for assessing progress.
Understanding what corporate policies and practices are most effective in
helping today’s employees manage the complex, multiple demands of work
and family obligations. Many businesses have helped employees balance the
complex demands of work and family obligations by providing support
programs such as child care and elder care, flexible work schedules, domestic
partner benefits, and telecommuting options.
Chapter 17, Business and Its Suppliers
Corporations have complex relationships with their suppliers, other firms that
provide them with goods and services and in some cases manufacture their
products. In today’s interconnected world, many firms are embedded in
complex, global supply chain networks. Increasingly, managers are
responsible for social, ethical, and environmental issues that arise in supplier
firms. A failure to manage these issues proactively can lead to reputational
and financial losses; conversely, success in doing so can yield benefits. Many
companies have adopted supplier codes of conduct, carried out audits, and
remediated failures. A growing trend is for lead firms to work collaboratively
with their suppliers to build capabilities and create shared value.
Preview Cases: (1.) The Gap Returns to Burma; (2.) General Motors and Tier-
2 Supplier Issues in China, and (3.) Patagonia Commits to Social and
Environmental Conservation in Argentina.
The opening examples highlight the complexity of the business to supplier
relationship. The Gap case asks to what lengths a company should go to
assure that the rights of workers in supplier factories halfway around the world
are protected. The General Motors example raises the question: who should
be responsible when something goes wrong in a multi-tiered supply chain
several steps removed from the company? And the Patagonia example
probes whether or not firms should accept responsibility for social and
environmental impacts across their global supply chain.
Key Challenges for Chapter 17
Understand what suppliers are, the nature of suppliers’ interests and power,
and the scope of the global supply chain. A supplier is an organization that
provides goods or services to another organization. Suppliers are important
market stakeholders, since they provide critical inputs and often manufacture
branded products. Although suppliers are diverse, they share a common
interest in building long-term, stable relationships with buyers. Suppliers that
provide unique skills, resources, or capabilities tend to have more power. As
globalization has increased, supply chains have become increasingly
complex.
Examine the social, ethical, and environmental issues that arise in global
supply chains and how they can affect a company’s reputation and bottom
line. Many social, ethical, and environmental issues arise in global supply
chains. These include low wages, unsafe conditions, child and forced labor,
unethical sourcing from conflict areas, and adverse environmental impacts of
resource extraction, production, and transportation. Companies that do not
manage supply chain risks effectively can suffer financial and reputational
damage; conversely, those that manage these risks well can benefit.
Describe contemporary trends in the private regulation of supply chain
practices and analyze the reasons for the emergence of company and
industry-wide codes of conduct. Private regulation refers to non-governmental
institutions that establish rules in global supply chains. It generally takes the
form of company and industry-wide codes of conduct with which suppliers
must comply. Private regulation tends to arise in situations where public
regulation is weak, and lead firms carry significant reputational risk because of
strong consumer brands.
Understand the various methods businesses and nonprofit organizations use
to audit global supply chains for compliance with codes of conduct and other
standards. Lead firms and groups of firms use several methods to audit
compliance with supply chain codes of conduct. These include internal audit,
third-party (external) audits, and crowd-sourced audits. Increasingly,
companies are working together to audit major suppliers and to share results,
often on cloud-based platforms.
Analyze the reasons for and benefits of engaging collaboratively with
suppliers to build capability and create shared value and the conditions under
which such initiatives are likely to succeed. A growing trend is for companies
to engage collaboratively with suppliers to build capability. This benefits both
the firm and supplier, creating shared value. Suppliers are more likely to
engage with lead firms with which they have stable, long-term relationships.
Chapter 18: The Community and the Corporation
A strong relationship benefits both business and its community. Communities
look to businesses for civic leadership and for help in coping with local
problems, while businesses expect to be treated in fair and supportive ways
by the community. As companies expand their operations, they develop a
wider set of community relationships. Community relations programs,
including corporate giving, are an important way for a business to express its
commitment to corporate citizenship.
Preview Cases: (1) Salesforce.com; (2.) ING: (3.) Whole Foods Markets.
As you ponder the cases, consider these questions: Why do businesses as
diverse as Salesforce.com, ING, and Whole Foods Market, invest in
community organizations, projects, and charities? Why do they contribute their
money, resources, and time to help others? What benefits do they gain from
such activities? What does it mean to be a good corporate neighbor? What is
the business case for being a good corporate neighbor?
Key Challenges for Chapter 18
Defining a community, and understanding the interdependencies between
companies and the communities in which they operate. The community refers
to an organization’s area of local influence, as well as more broadly to other
groups that are affected by its actions. Businesses and their communities are
mutually dependent. Business relies on the community for services and
infrastructure, and the community relies on business for support of various
civic activities.
Analyzing why it is in the interest of business to respond to community
problems and needs. Addressing a community’s needs in a positive way helps
business by enhancing its reputation, building trust, and winning support for
company actions. Like other forms of corporate social responsibility,
community involvement helps cement the loyalty of employees, customers,
and the public.
Knowing the major responsibilities of community relations managers. Many
corporations have established community relations departments that respond
to local needs and community groups, coordinate corporate giving, and
develop strategies for creating win-win approaches to solving civic problems.
Examining how different forms of corporate giving contribute to building strong
relationships between businesses and communities. Corporate giving
comprises gifts of cash, property, and employee time. Donations currently
average about 0.8 percent of pretax profits. Philanthropic contributions both
improve a company’s reputation and sustain vital community institutions.
Evaluating how companies can direct their giving strategically, to further their
own business objectives. Many companies have adopted a strategic approach
to philanthropy, linking their giving to business goals. Corporate giving is most
effective when it draws on the unique competencies of the business and is
aligned with the core values of the firm and with employee interests.
Increasingly, companies are measuring the return on their social investment
for both recipients and themselves.
Analyzing how collaborative partnerships between businesses and
communities can address today’s pressing social problems. The development
of collaborative partnerships has proven to be effective in addressing
problems in education and other civic concerns. Partnerships offer an
effective model of shared responsibility in which businesses and the public
and nonprofit sectors can draw on their unique skills to address complex
social problems.
Summarychapter 16

 The U.S. workforce is as diverse as it has ever been and is becoming more so.
More women are working than ever before, many immigrants have entered the
labor force, ethnic and racial diversity is increasing, the workforce is aging, and
millennials are entering the workplace.
 Women and persons of color have made great strides in entering all occupations,
but they continue to be underrepresented in many business management roles,
especially at top levels. Both groups face a continuing pay gap. The number of
women-owned businesses has increased sharply, and many minorities, especially
immigrants, also own their own businesses.
 Under U.S. law, businesses are required to provide equal opportunity to all, without
regard to race, color, religion, sex, national origin, disability, or age. Sexual and
racial harassment are illegal. Affirmative action plans remain legal, but only if they
are temporary and flexible, designed to correct past discrimination, and do not
result in reverse discrimination.
 Companies that manage diversity effectively have a strategic advantage because
they are able to foster innovation, serve a diverse customer base, and avoid
expensive lawsuits and public embarrassment.
 Successful diversity and inclusion management includes articulating goals and
measuring progress, recruiting widely, mentoring promising women and persons of
color, and establishing mechanisms for assessing progress.
 Many businesses have helped employees balance the complex demands of work
and family obligations by providing support programs such as child and elder care,
flexible work schedules, domestic partner benefits, and telecommuting options.
Summarychapter 17

 A supplier is an organization that provides goods or services to another

organization. Suppliers are important market stakeholders, since they provide
critical inputs and often manufacture branded products. Although suppliers are
diverse, they share a common interest in building long-term, stable relationships
with buyers. Suppliers that provide unique skills, resources, or capabilities tend to
have more power. As globalization has increased, supply chains have become
increasingly complex.
 Many social, ethical, and environmental issues arise in global supply chains. These
include low wages, unsafe conditions, child and forced labor, unethical sourcing
from conflict areas, and adverse environmental impacts of resource extraction,
production, and transportation. Companies that do not manage supply chain risks
effectively can suffer financial and reputational damage; conversely, those that
manage these risks well can benefit.
 Private regulation refers to nongovernmental institutions that establish rules in
global supply chains. It generally takes the form of company and industrywide
codes of conduct with which suppliers must comply. Private regulation tends to
arise in situations where public regulation is weak, and lead firms carry significant
reputational risk because of strong consumer brands.
 Lead firms and groups of firms use several methods to audit compliance with
supply chain codes of conduct. These include internal audit, third-party (external)
audits, and crowd-sourced audits. Increasingly, companies are working together to
audit major suppliers and to share results, often on cloud-based platforms.
 A growing trend is for companies to engage collaboratively with suppliers to build
capability. This benefits both the firm and supplier, creating shared value.
Suppliers are more likely to engage with lead firms with which they have stable,
long-term relationships.
Summarychapter 18

 The community refers to an organization’s area of local influence, as well as more

broadly to other groups that are impacted by its actions. Businesses and their
communities are mutually dependent. Business relies on the community for
services and infrastructure, and the community relies on business for support of
various civic activities.
 Addressing a community’s needs in a positive way helps business by enhancing its
reputation, building trust, and winning support for company actions. Like other
forms of corporate social responsibility, community involvement helps cement the
loyalty of employees, customers, and the public.
 Many corporations have established community relations departments that respond
to local needs and community groups, coordinate corporate giving, and develop
strategies for creating win-win approaches to solving civic problems.
 Corporate giving comprises gifts of cash, property, and employee time. Donations
currently average about 0.8 percent of pretax profits. Philanthropic contributions
both improve a company’s reputation and sustain vital community institutions.
 Many companies have adopted a strategic approach to philanthropy, linking their
giving to business goals. Corporate giving is most effective when it draws on the
unique competencies of the business and is aligned with the core values of the firm
and with employee interests. Increasingly, companies are measuring the return on
their social investment for both recipients and themselves.
 The development of collaborative partnerships has proven to be effective in
addressing problems in education and other civic concerns. Partnerships offer an
effective model of shared responsibility in which businesses and the public and
nonprofit sectors can draw on their unique skills to address complex social
problems.