An overlooked but important benefit of CSR is to insure a firm against a decline in reputation in the face of adverse events. Through a case study and a multi-year analysis of stock price responses for S&P 500 companies following product recalls, we find that firms that have high CSR ratings fare better than those that do not. Furthermore, a firm that is exceptional in both doing good and avoiding harm suffers virtually no reputational damage following negative media publicity. Using the results of this study, we offer a guide to managers for determining the appropriate amount and mix of CSR activities.
When Chris Knox, a top salesperson at Specialty Fleet Services, volunteers to go after the business of Armadillo Gas & Power, he decides to try a new approach. After all, no one else from SFS has succeeded with Dale Landry, Armadillo's CFO. Knox shows up at Landry's ranch, asks to photograph his beloved bull, presents the photo as a gift to Landry's wife, and engineers several other encounters before Landry learns that Knox is anything more than a charming young man. Not long after he reveals his position at SFS, Knox wins the account. Sales VP Jeremy Silva emails the sales team, praising Knox's maneuvers. But the human resources vice president thinks that Knox breached the company's ethics code. Does Knox deserve a reprimand? Four experts comment on this fictional case study in R0905B and R0905Z. Kirk O. Hanson, the executive director of the Markkula Center for Applied Ethics, believes that Knox went astray not by trying to share a potential client's passion but by treating the Landrys as a means to an end - deceiving them and violating their personal space along the way. There's a big difference between deceiving competitors and deceiving customers, explain consultants Don Peppers and Martha Rogers. SFS needs to clarify this difference in its ethics code, apologize to Landry, and fire Silva, who demonstrated in hitting the "send" button that he does not understand the policies and behaviors that build shareholder value. James Borg, a business psychologist and author, argues that Knox didn't coerce Landry into buying SFS's services but instead simply got the CFO's attention and let his persuasive techniques do the rest. Whereas coercion and manipulation satisfy the needs of only one party, persuasion is about achieving a positive outcome all around - exactly what Knox accomplished. Armadillo got a superior product, and SFS won a new customer.
When Chris Knox, a top salesperson at Specialty Fleet Services, volunteers to go after the business of Armadillo Gas & Power, he decides to try a new approach. After all, no one else from SFS has succeeded with Dale Landry, Armadillo's CFO. Knox shows up at Landry's ranch, asks to photograph his beloved bull, presents the photo as a gift to Landry's wife, and engineers several other encounters before Landry learns that Knox is anything more than a charming young man. Not long after he reveals his position at SFS, Knox wins the account. Sales VP Jeremy Silva emails the sales team, praising Knox's maneuvers. But the human resources vice president thinks that Knox breached the company's ethics code. Does Knox deserve a reprimand? Kirk O. Hanson, the executive director of the Markkula Center for Applied Ethics, believes that Knox went astray not by trying to share a potential client's passion but by treating the Landrys as a means to an end - deceiving them and violating their personal space along the way. There's a big difference between deceiving competitors and deceiving customers, explain consultants Don Peppers and Martha Rogers. SFS needs to clarify this difference in its ethics code, apologize to Landry, and fire Silva, who demonstrated in hitting the "send" button that he does not understand the policies and behaviors that build shareholder value. James Borg, a business psychologist and author, argues that Knox didn't coerce Landry into buying SFS's services but instead simply got the CFO's attention and let his persuasive techniques do the rest. Whereas coercion and manipulation satisfy the needs of only one party, persuasion is about achieving a positive outcome all around - exactly what Knox accomplished. Armadillo got a superior product, and SFS won a new customer.
A successful woman executive attempts to integrate women into the construction trade in Chicago. Julia Stasch rose from office assistant to president and then chief operating officer of a major Chicago real estate firm, Stein & Co. This case describes her campaign to create expanded opportunities for women and minority-owned businesses as suppliers to construction projects and for women and minority workers on construction sites. It discusses entrenched discrimination in a particular industry and the creative change strategies implemented by one executive. The case may be used in Human Resources, Organizational Behavior, Ethics, and Diversity courses.
This case describes Jack Stack's efforts to revive a diesel engine remanufacturing plant owned by International Harvester. Stack engineers a leveraged buyout of the factory by its managers. He then implements a radical system for managing the company, through which every employee is trained to read complete financial reports of the company and given weekly operating data. In this way, they can see in detail how the company is progressing. The case may be used in Human Resources, Organizational Behavior, Strategic Management, and Entrepreneurship courses.
A long-time community development worker creates hundreds of jobs for low-income women and minorities by forming a for-profit home health care cooperative, Cooperative Home Care Associates. May be used in Entrepreneurship, Strategic Management, Organizational Behavior, Human Resources Management, and Ethics courses to help students explore: 1) the motives of an entrepreneur starting a venture to meet a tangible social need--the "social entrepreneur;" 2) the concept of worker-ownership and its potential consequences; 3) how to simultaneously serve the needs of various groups in an economically deprived area; and 4) the creation of jobs for individuals many dismiss as "unemployable" (single mothers on welfare, etc.).
Four minority employees at Inland Steel encourage their company to initiate more aggressive affirmative action and diversity efforts. The "gang of four," as they call themselves, challenge a white general manager to join them in promoting increased opportunities for minorities and women. This case focuses on diversity, strategies for social change in organizations, and how senior managers can respond to grassroots campaigns. It can be used in Organizational Behavior and Ethics courses
Researchers at Merck & Co. believe that a drug they had developed for animals might be an effective treatment for human river blindness, a debilitating illness that affects hundreds of thousands of poor people in the Third World. The process of development and testing, however, will be enormously costly. Should the company devote critical resources to developing the drug, knowing that, even if it were medically successful, it would yield little financial return? The case presents background on economic and scientific constraints that shape the pharmaceutical industry. It provides a framework for discussing ethical aspects of product innovation and the risks and benefits of investments in research. It may be used in Strategic Management, Business and Society, and Ethics courses.