2292 final

Leadership is not only about: Personal style Learned, developed competencies, but also: __ Ethics issues __ (all around us) leadership & business decisions Leaders must be self-aware and know who they are to ethically resolve these challenges

Visualizing Core Values and Ethics

Ethical Role Models

"Touchstones" - Core Value Legacies -Secular legacy examples: -Religious: -Work:

About your Integrity role models:

-Honesty, Integrity, Courage, Trust, Fairness (Justice), Excellence, Duty, Virtue, Self-Control (Temperance) -Authentic, Steadfast, Accountable, Respectful, Credible, Inspirational, Encouraging, Wise, Self-Deprecating, Fun?

Lead, Stand Up, Speak Out, Take Action, Set High Standards Listen, but Say No (comment from one of your peers about her Mom)

Definitions vary - Our working definitions: -Our personal compass of core values/principles -Rules or system governing conduct; Shared community values/principles

Our definition: (Profs' Hartman and DesJardinis, for ex.) Application of values within a business context Process of responsible decision making

Interesting/insightful perspective on business ethics: -The authenticity and integrity of the enterprise -Taking a tough line or decisional stand in a muddle of ambiguity (making ethical decision when you don't know all the facts...very murky) What... do you think that means?

Good people do not need laws to tell them to act justly, while bad people will find a way around the laws.

__ is public policy, but only a baseline of societal expectation __ is a floor limiting action, not a ceiling of integrity

Law often addresses __events; has a hard time anticipating future misconduct or unusual circumstances Criminal law is designed to __ the worst of conduct Law does serve as a barrier to misconduct and one standard of __ for corruption Always remember though, if you disregard law, __ at your own risk, and face the consequences

Principled Leadership/Integrity is the combination of:

What do you want __ Ethics to be? What __ of leader do you want to be? What do you want to be __ for by those you care about?

where do business leaders rank for honesty/ethics?

Business/Leadership ethical challenges pervade the __

What ethical "test" might some say our image in challenging articles on the front page of Sports Illustrated, or the WSJ or NY Times might be considered an example of?

On the other hand, society doesn't give as much attention to __ among us

__ courageous blogging against the Taliban set her apart from other 14-year-old Pakistani girls. Growing up in a region once dominated by the Islamic extremists, she knew the fear associated with the word Taliban. One of her fears came to pass Tuesday, when gunmen sought her out and opened fire on her school van, leaving her seriously wounded along with two other classmates. 14-year-old girl wins Pakistan's __ The Pakistani Taliban claimed responsibility for the attack, Taliban spokesman __ told CNN. Ishan blamed the shooting on Malala's activist blogging.

-ELI and EthicsGame Creator "...all of us seem to have a desire to be ethical and/or to be perceived as ethical." Citing the work of Norma Haan, et al, University of California, Berkeley, psychologist, and the book, On Moral Grounds: The Search for Practical Reality

Why do you think we all want to be ethical or seen as being ethical? Why do you think ethics might be important to leadership?

Prof. Rucci (author of your article) and I would ask you to consider the answer to this question:

According to __, A true business leader is: An individual that someone would __ to follow and support even if not required to do so Causes one to __ to be a part of what they're doing Makes one wish to __ to what the leader is doing

According to Prof Rucci, a true business leader also: Evokes support for a vision based upon 3 things:

Prof Rucci contends that Exceptional business leaders have in common: Who they are: What does Prof Rucci describe as the 3 P's of who business leaders are in his article?

Have a personal __ for what they do. They'd continue to do it if they were independently wealthy. They'd also continue to do it if they were compensated very little.

As much as they enjoy winning, they hate losing even more. They keep score, they set high standards, and they hold themselves and their people accountable, and are tough-minded.

Cheating in order to win doesn't count. When faced with a decision that puts profit ahead of __, __ will always win.

In contrast, Prof Rucci identifies why Some Business Executives Fail:

Don't possess the necessary skills to move to the Executive level

Rely on traditional behaviors when new ones are required

Lack of fit w/ in the culture/values of the organization

Traits they possess: 1. Balanced judgment of business tactics and their implications 2. Service, quality and customer satisfaction at core 3. Persistent bias for action 4. Anticipate and construct successful strategy 5. Desire to achieve goal rather than fear failing 6. Uncompromising standards and fair play -Business Ethics not an oxymoron to them -Articulate and enforce core values 7. "Other"-oriented -Respect; brings out best

Key Practices of Exceptional Leaders: 1. Clear line of sight to their purpose 2. Evaluate and develop people obsessively 3. Reward results; share in $'s and success 4. Share information widely/listen (Transparent) 5. Promote innovation/risk taking; resource allocation

Still according to Rucci, the best business leaders...create __ 1. Create __ 2. Reinforce __ 3. Treat people with __ 4. Achieve __ against a broader definition of value creation

Values in the Business Landscape - Value Shift by __ Article summary: Businesses have shifted dramatically in recent decades in several significant ways:

The "Value Shift" according to Paine: "Business Ethics" was viewed skeptically __. Companies significantly shifted, in part, because: Established co.'s - __ their reputation/brand Entrepreneurial co.'s - __ their reputation/brand

Ethics/Values increasingly viewed as significant in business: Some want to avoid the "60 Minutes" syndrome - what's that?

What were 5 of the reasons that Paine cites for a "Shift" in Business Values? 1. Avoid negative economic results of unethical activity Avoid negative impact upon Stakeholders 2. Increases quality and commitment of Employees and Customers - "Intangible value" concepts 3. Research shows it is Good for Business on final review power point!

Estimated Financial Costs of Unethical Business Practices:

Direct costs never more _ 1. __ in workplace misconduct in times of economic challenge 2. __ in annual revenues due to Fraud (= to __ of 2008 US GDP) Est. 5%+ of revenue for typical company 3. Specific ex.'s of the costs of unethical acts/investigation

Compliance impacts ROI: 1. Superior governance practices generate 20% greater profit 2. strong sense of cultural integrity boosts shareholder return by 16% 3. organizations in compliance avoid up to 95% of fines & penalties 4. every $1 spent saves $5.21 in liability, brand damage, and lost productivity

Organizational Functioning/Stability: 1. __ consider firm's Ethics as critical to employment choice 2. __ willing to trade off lower pay to work for firm with Ethical business practices 3. Est. __ of US workers have walked off the job on the basis of ethics issues (some say more)

Employees comfort level in sharing honest feedback correlates w/ strong business __: integrity capital...shareholder returns:

Importance to Customers - one Survey 1. __ Behavior towards customers and communities influential when making a purchase 2. __ Want to know more about company behavior before buying 3. __ Awareness of company ethics affects their decision-making towards company 4. __ Knowing that "the company donates a percentage of profits to charity and good causes" influential when considering a purchase Age and gender split - more under-30s ranking "ethical brand values" as a 5.__ when spending, compared to older consumers. Social responsibility a higher priority for 6.__ than men

In Paine's words, for us as leaders, the Q's are:

Let's compare these to Prof Rodek's: Hierarchy of Co. statements: 1. Why we exist 2. What we believe in and how we will behave 3. What we want to be 4. What our competitive game plan will be 5. How we will monitor and implement that plan

Remember Prof Rodek's - Steps to Build a Core Ideology and Vision: Employees relate to and take pride in a __ 1. __: the glue that holds an organization together a. __ (purpose): Why do we exist? I. __ (strategies may change, mission should not) II. __ b. __: What do we stand for? How do we conduct ourselves?

Prof Rodek's Mission examples...why do we exist? 1. Disney: ooperate theme parks.....__ 2. Wal-Mart: sell merchandise.....__ 3. Patagonia: sell wilderness goods...__ 4. Whole Foods: sell groceries.....__ 5. I'd add as an example: Google search engine/everything eventually?....__

Prof. Rodek's Ex.'s of Corporate Core values... Disney P&G Nordstrom There is no universally __ set of core values. The key is not what core values an organization has, but that it has core values __.

Summary - Where we are and where we're going Ethics/Integrity exist at the __ of excellence Key fundamentals of leadership and business __ Can be routinely challenged in enterprise __ But can also reduce risk, improve enterprises, positioning and communities, and aspirationally, __

Trick is learning essential steps to acting with greater ethical consistency How we do more __ decide the best ethical alternatives for ourselves and our enterprises? What do we want our leadership integrity to be? How do our core values __ with what we do?

"...the world that we live in, our view of it and the values we attach to it, is shaped by what we know. And when what we know changes, the world changes and with it, everything."

Our core principles and values: Often begin with our role models, our family, our culture, our roots, the society in which we live and work, our Touchstones Directly affect our leadership and entrepreneurship But as Burke suggests, we continue to develop, __ our core values as we move through life

we also need to answer these Q's:

Purpose of Ethical Appreciation

Create Foundation for Self-Knowledge: 1. What are my core principles and commitments? What behaviors count as living those values? 2. What are the commitments of my community? What are the company's values and compliance duties? What actions count? 3. Which values should take priority? How do I resolve any differences?

ethic lens overview (compass): top: bottom: left: right:

building blocks of the four lenses: top: bottom: left: right:

mix of rationality & autonomy (top left): mix of rationality & equality (top right): mix of sensibility & equality (bottom right): mix of sensibility & autonomy (bottom left):

1. The ELI is not suggesting you change your __ or that your 'lens' is unequal to others 2. The ELI allows you to __ and appreciate the way you tend to view an ethical challenge, -and, compare/ contrast your lens to __ in analyzing a complex ethical challenge. 3. The ELI gives us a better understanding of the strengths and __ in our view or 'lens' -that we can use in __ for achieving the best possible ethical decision and leadership action.

Fulfill responsibilities andrights of ethical actor Act is done with care and concern for others I am responsible

Create a fair system Include all members andcommunity institutions I am fair

Act is consistent with a good character I make virtuous choices

Create greatest good forgreatest number I make choices that aregood for everyone

The vast majority of human beings believe that they are ethical as they make choices within their own belief systems. As we make decisions about what actions count as ethical, each ethical lens has a slightly different take on what is __ for ethical behavior.

Those whose preferred lens is the Rights Lens define being ethical by doing their duty and following the rules. Thus, being responsible is important.

Those whose preferred lens is the Relationship Lens define being ethical by making sure that people are treated the same and have equal opportunities. Thus, being fair is important.

Those whose preferred lens is the Results Lens define being ethical by making people happy and finding "win-win" solutions that respect everyone. Thus, making choices that are good for everyone is important.

Those whose preferred lens is the Reputation Lens define being ethical as making hard choices with courage and wisdom. Thus, making choices that demonstrate the key virtues of their role is important.

You can tell what lens is someone's preferred lens by listening to how they describe themselves and __ the choices that were made in difficult situations. You can also learn about yourself by listening to how you explain why a particular course of action is the best.

Some blind spots & risks: 1. Believe that the motivejustifies method Being autocratic (bossy) 2. Overconfident in process Being authoritarian 3. Have unrealistic role expectation Self-righteous 4. Satisfied with too little good Reducing decisions to cost-benefit analysis

Each lens also has a blind spot. Just like our cars have a very predictable blind spot, when we know which lens is our preferred lens, we know where we need to check with someone from another lens to make sure that we aren't going to unwittingly __ our own ethical values.

Excused: People who favor this lens will find ways that they are excused from following the rules. They know that the rule, the duty, is there but some very good reason exists that gives them permission to not follow the rules. Sometimes the excuse involves shifting responsibility: if you don't follow the rules, I don't have to. These rules are violated on a one time basis.

Exempt: People who favor this lens will find that the rules don't apply to them - only others. People in leadership fall into the trap of limiting internet access, demanding drug testing, or not providing health care - for everyone else except them. Those who exempt themselves don't think of themselves being excused from the rule - the rule never applied to them at all.

Expedience: People who favor this will have a tendency to cut corners to make people happy. As people focus on short-term results rather than long-term goals, they will do what is needed to get ahead and say that they had no choice.

Entitled: People who favor this lens believe that they are entitled to certain perks - often at the expense of others. Whether padding an expense report or taking advantage of a corporate jet or car, organizational executives tend to forget that they are employees, just like everyone else.

Do you know your blind spots? What strategies do you have in place to make sure you have a colleague with a different perspective who can look at the road for you. The value of a trusted friend or community is to provide perspective for difficult (or sometimes just everyday) __.

Where do you think Coach Tressel would fit in the 'lens' analysis when he initially learned of OSU players behavior in "Tatoo-gate?" What do you think is the best ethical 'lens' (perspective) of his actions/ inactions?

Where do you think Edward Snowden fits within the lenses when he decided to take highly confidential, top secret data, against a sworn oath he gave, from the NSA, and disclose it to the world?

What about GM CEO Mary Barra when she announced a new culture of 'safety first' for GM and a fund to pay potential victims of past GM car ignition switch failures?

(Deontological Theories) Immanuel Kant

(Justice Theories) John Rawls

(Virtue Theories) Aristotle and Alasdair Macintyre

(Consequentialist Theories) John Stuart Mill

Guardians of the lenses 1. Legal Department/Lawyers Finance team/CPAs Board of Directors 2. Human resources Quality assurance teams Training and Development Leadership team 3. CEO Marketing and consultative sales Investor relations Public relations 4. Sales Manufacturing/R & D Project Management Investors/Owners

The final layer is noticing that different sets of folks have the responsibility to be the guardians of the lenses. Their job is to assure that the values of the lenses as well as the results of their job descriptions are accomplished. Many ethical conflicts arise because the guardians vigorously advocate for their position without considering the positions of __.

lawyers and accountants: Their job is to assure that we both know the rules as well as the consequences for not following them. Arthur-Anderson got into trouble because they did not fulfill their guardian function and became complicit in breaking the accounting rules.

human resources/quality assurance: The HR team assures that everyone in the company is treated fairly and the rules are applied to everyone equally. These two groups also care about systems, which embody the values of this lens. Results Lens - sales/R&D: These two groups may seem like odd suite-mates, but each of them is responsible for forwarding the goals of the organization. Without good products, the company cannot flourish. Unless someone sells the good products, the company cannot thrive. .

marketing/leadership: These two groups are responsible for assuring that the external community has a favorable but accurate view of the company. In times of difficulty, often senior leadership is asked to make the statements to the press to contextualize the situation.

Unless all four lenses are represented and present in the conversation, __ decisions are made. Respecting those whose role includes articulating the values of the lenses is important. Also important is making sure that all positions are articulated in the conversation

How do we practically apply the 'lens' analysis? 1. Understand and appreciate our __ perspective 2. Our "__" (instinct, 'sensibility') may alert us: -Our visceral instincts and past experiences - often 'sound' ethical issues; highly reliable in instant circumstances -But alone, may be insufficient and we may be __ by rationalizations/self-interest in routinely making best ethical decisions in difficult/ complex decision-making 3. Appreciate the importance the ethical 'lenses' others may bring to our __ 4. What steps can we take or 'framework' can we use to discover and make the best decision most __?

Paine's Differences in Common Approaches When It Comes to Ethical Decision Making: Issue: Financial, legal, competiveness, market issues and challenges View: __

issue: ethics quandary view: __

Difficulty is that the research shows we often use __, rather than reason, to resolve ethical issues. If we use reason, often it is to attempt to justify our action after the fact.

Begin discussion of Prof. Payne's - Basic Ethics "Framework" to address complex ethical dilemmas:

Others may or may not share our exact lens But, other 'lenses' may help us because of our own 'Blind Spots', 'Risks', or __ The trick is figuring out strategic steps to make ethical choices more consistently

Tale of 2 stories: Babson Prof Gentile

At the center of your being you have the answer; you know who you are and you know what you want.

Some Giving V to V's "Starting Assumptions":

All shareholders are stakeholders But not all stakeholders are __ Stakeholder: includes public

Leadership qualities sought: 1. Passion - "fire in the belly" 2. Intellect - "think analytically, creatively and strategically" "If you don't have the intellectual horsepower, it's going to be hard for people to follow you." 3. Mentor - "pattern of" developing other people in the co. 4. Communicate - inspire others; in an "easy, informal" manner 5. Integrity - "values"; "tell the truth" & "stand up for what is right" "It starts with Integrity, which is really the grease of commerce." Sound familiar to Prof Rucci's 3P's? By the way, latest stock value of his 8200 employee, 12.65 $B co., 98.21 yesterday - reached all time 31 yr. high

Our "gut"; "instinct" -Research supports that our __ response may accurately measure our sense in what is "wrong" in the potential ethical problem we face Instinct may well be based in part upon prior experience To extent we face instantaneous/ non-complex responses, following our sensibilities, appears generally __ Larger challenge is when we face __ or complex issue that requires us to consider a course of action: Ex.'s of start-up; technology breakthrough; new business model; complex financial restructuring; employee action Might again use Google as an ex.

If you were facing a critical ethical issue what steps would you take?

What was Prof Paine's Ethics Framework article about?

What four Q's does the author propose one consider in facing an ethical challenge?

Requirement to act or not to act toward others Basic moral __ in law or codes What would be an example of a __ in the context of Edward Snowden's actions?

Requirement in others to behave in a certain fashion toward you - also often in law or codes Converse of duty What might be considered a Right for some stakeholders in the context of GM's ignition switch recall on their cars?

Secular Example West Point - Three Rules of Thumb

Principles or standards of excellence (ethics codes, voluntary standards) Ideals, values, aspirations Can you think of any enterprise __? Anyone interned/worked in Health Care?

Self-chosen or subjective moral convictions (principles, core values, standards of integrity) "You can make money without doing evil" -- one of Google's "What We Believe" statements Another one...

A culture of dotting the i's and crossing the t's...Of doing the right things and doing things right...A culture of growth — individual and as a company.It's who we are. It's because of who we are.It's a result of living our Basic Beliefs...Our Commitment to Each Other. To our consumers and to our customers... Market cap 10.5 $B; 4775 employees; 115 yr. old co.; 103.03 /share, just off recent high Does it echo touchstones or the lenses?

What are some basic steps Prof Paine suggests to work through in serious ethical challenges?

Anyone who can affect, or Anyone who is affected by a decision

Paine "frames" ethics challenges into a decision- making process consisting of four steps:

Prof. Paine's CODEX: Paine also supports her discussion of standards by the compilation of 8 principles found through leading ethical codes: 1. Act in company's best interest 2. Respect property & others property rights 3. Keep your commitments 4. Conduct business openly and truthfully 5. Respect dignity of all people 6. Treat everyone fairly 7. Act as responsible community members 8. Be responsive to legitimate claims/concerns

-Emotion can derail objectivity -Trust "gut" to alert you to issue, but critically examine facts and issues -Appreciate the difficulty and potential bias in fact gathering, in data - facts can be fluid -Be careful to exercise critical thinking and ask Q's to assure the accuracy of data -Often not the answer to a given Q that's going to provide the ethical response , but the failure to ask needed questions to identify the ethical answer

-Those affected or can affect decisions Who's making the decision? Ethical issues may not be self-evident

Lenses may suggest ethical alternatives Law and Code of Ethics, Mission CODEX principles May be more than one ethical answer

Rationalizations can create hurdles to objectivity Conflicts of Interest can threaten our impartiality "Inappropriate" self-interest Some suggested solutions/strategies Voicing our Core Values Transparency

Some Rationalizations and Hurdles:

Bandura's Moral Disengagement: Moral justification Euphemistic language Advantageous comparison Displacement of responsibility Diffusion of responsibility Distortion of consequences Attribution of blame Dehumanization

Underlying values and standards that potential actions are judged against

Why do we not always voice our values?

Malden Mills What was your reaction to reading this case? Why do you think we have MM in your ethics leadership and decision making course?

What were the critical Facts in Ethical Hero or Failed Businessman (MM)?

What are the Ethical Issues?

Would it have been ethical for F to take the insurance payout and not rebuild? Did he have a duty to pay the workers even while the factory was rebuilt? Did workers have an ethical need to continue to get paid?

Who are the Stakeholders?

What are the Ethical values in tension here for the decision maker - F?

What were Feurerstein's Touchstones?

What do you believe F's lens (perspective) as the decision making stakeholder to be?

What Ethical Standards apply here?

If F had responded to Paine's 4 Q's, which do you think would have the highest ethical priority for him? Duties? Rights of others? Best practice? Actor's own deeply held Commitments ("core values")?

What were some of the hurdles / challenges F faced in his Impartiality / Objectivity in making the best ethical decision for MM?

Some Rationalizations and Hurdles:

Why is Self-Interest critical to a discussion of business ethics?

Evolutionary notions of self-interest:

Recognizing "Inappropriate" Self-Interest: 3 questions

Diversity of Stakeholders' Lenses What alternatives or options do the stakeholders present to the diversity of F's lens?

Another Potential Solution - Bend the Rules What was the story he told to illustrate his concept? What was Prof Badaracco trying to suggest about 'quiet leaders'?

Creative Ethical Alternatives and "Entrepreneurial Ethics"

Today social responsibility and environmental sustainability are core business competencies, not fringe activities...how well and how quickly businesses respond to this [sustainability and corporate responsibility] agenda will determine which companies succeed and which will fail in the next few decades.

Paine's - Basic Ethics Framework (Adapted):

Prof Gentile's "To-Do" List (7 Pillars): 1. Develop your own 'story'; 'align' it with who you are 2. Define (own/share) your __ 3. Recognize and appeal to "shared" __ of others Ex.'s of Duty, fairness, stakeholder consequences, reputational risk 4. Expect conflicts and don't overreact 5. Anticipate and practice your response 6. Learn and practice __ing your own values 7. Choose to act and enable others to do so Know what has and not worked in the past; no choice is a decision Courage may be required, and outcomes are not guaranteed

Knowledge & Skills: Being Successful: What you know: vs. How you do things

Our Starting Assumptions

Some simplistic ethical tests:

Ethics and integrity pyramid

We judge ourselves by our intention, but we are judged by our last worst act.

Those are my principles, and if you don't like them...I have others.

Be able to identify the four stages of team and group dynamics and have a perspective for your team. Bruce Tuckman's (1965) forming storming norming performing model.

High dependence on the leader for guidance and direction. • Little agreement on team goals other than received from leader. • Individual roles and responsibilities are very unclear. • Leader and other members of the team must prepare to answer questions about the team's purpose, objectives and external relationships. • Processes are often ignored. Members of the team act independently.

Decisions don't come easily within group. • Team members vie for position as they attempt to establish themselves in relation to other team members and possibly the leader, who might receive challenges from team members. • The clarity of purpose for the team increases, but uncertainties persist. Cliques and factions form and there may be power struggles. • The team needs to be focused on its goals to avoid becoming distracted by relationships and emotional issues. The team may even have to compromise to enable progress.

Agreement and consensus begins to happen within the team. • Roles and responsibilities are clear and accepted. Big decisions are made by group agreement. We begin to work together. • Smaller decisions may be delegated to individuals or small teams within group. Commitment and unity is strong. • The team may engage in fun and social activities. The team discusses and develops its processes and working style. There is general respect for the leader and some of leadership is more shared by other team members.

The team is more aware of performance, they know clearly why it is doing what it is doing. • The team has a shared vision and is able to stand on its own feet with no interference. There is minimal participation from the leader. • There is a focus on over-achieving goals, and the team makes most of the decisions against criteria agreed with the leader. • The team has a high degree of autonomy. Disagreements occur but now they are resolved within the team positively with changes to processes and structure made by the team.

The team works towards achieving the goal, and attends to relationships, style and process issues along the way. • The team requires delegated tasks and projects from the leader. • The team does not need to be instructed or assisted. • Team members might ask for assistance from the leader with personal and interpersonal development.

Analyzing the problem, defining your purposes, and analyzing the audience Gathering the information you need

Putting words on paper or on a screen. Writing can be lists, fragmentary notes or a formal draft.

Evaluating your work and measuring it against your goals Getting feedback from someone else Editing the draft to see that it satisfies the requirements of standard English Proofreading the final copy to see that it's free from typographical errors

The activities do not have to come in this __. You do not have to finish one activity to __ another.

You may do an activity __ times, not just once. Most writers do not use __ activities for all the documents they write.

Does it matter what process I use?

Have several different strategies to choose from. Use rules flexibly. Edit after the draft is __.

I don't have much time. How should I use it?

Spend another third __ what you've said, revising the draft(s) to meet your purposes and the needs of the audience and the organization, editing a late draft to remove any errors in grammar and mechanics, and proofreading the final typed copy.

what planning should I do before I begin writing or speaking

clustering helps generate __

making changes that will better satisfy your purposes and your audience. making surface-level changes that make the document grammatically correct. checking to be sure the document is free from typographical errors.

Light Revision checklist

Can a grammar checker do my editing for me?

I spell-check. Do I still need to proofread?

How can I get better feedback? process of drafting, getting feedback, revising, and getting more feedback

a prewritten fill-in-the-blank letter designed for routine situations language—sentences, paragraphs, even pages—from a previous document that a writer includes in a new document.

Revising After Feedback

When you get feedback that you don't agree with

How can I overcome writer's block and procrastination?

Set a regular time to write. Develop a ritual for writing. Try freewriting. Write down the thoughts and fears you have as you write. __ that keeps you from writing. Set modest goals and reward yourself for reaching them.

Milton Friedman believed overriding purpose of a corporation is to "maximize shareholder wealth". •Sharing internal profits is a waste of shareholders' money and potentially immoral because of stealing from owners. •Business operates in a "free market" and has no obligation to support socialism.

Fisher NewCo

stakeholder theory

-employees, manager, owners -suppliers, society, govt., creditors, shareholders, customers

Business take responsibility for the impact of their activities on customers, suppliers, employees, shareholders, communities and other stakeholders, as well as the environment.

History of Corporate Social Responsibility Reporting •In 1953, __ published his book, Social Responsibilities of the Businessman, and is largely credited with coining the phrase 'corporate social responsibility' and is perhaps the Father of CSR. •In the 1960s and 1970s, the civil rights movement, consumerism, and environmentalism affected society's expectations of business. •In the 1990s, CSR as an accepted part of the business world with new models including business ethics and corporate citizenship. •In the 2000's, two popular methodologies developed for cause marketing and venture philanthropy.

Influencers of Corporate Social Responsibility 1. Public perception of the corporation impacts revenue, attracting employees, overall reputation and consumer's purchasing attitudes. 2. Accessible and affordable communication technologies have increased transparency of corporation's actions. 3. Increased wealth and expansion of multinational corporations has led to questions on cultural differences and acceptable behaviors and ethics. 4. Concerns over pollution, waste, natural resource depletion, and climate change

Carroll's pyramid of corporate social responsibility: top: be a good corporate citizen; contribute resources to the community; improve quality of life 2nd highest: be __; obligation to do what is right, just and fair; avoid harm 2nd lowest: obey the law; law is society's codification of right & wrong; play by the rules of the game lowest: be profitable; the foundation upon which all others rest

There are 3 key ways that co. can create shared value opportunities: every firm should look at decisions and opportunities through the lens of shared value. this will lead to new approaches that generate greater innovation and growth for co. and also greater benefits for society

Creating Shared Value -General Electric Value Problem: •Women in developing countries lack accessible equipment to monitor the child during pregnancy. •Ultrasound devices can weigh hundreds of pounds and cost over $200,000.

Value: doing good Citizenship, philanthropy, sustainability Discretionary or in response to external pressure Separate from profit maximization Agenda is determined by external reporting and personal preferences Impact limited by corporate footprint and CSR budget ex. Fair Trade Purchasing

Value: economicand societal benefits relative to cost Joint company and community value creation Integral to competing Integral to profit maximization Agenda is company specific and internally generated Realigns the entire company budget Ex: transforming procurement to increase quality and yield...on final review

C-Corporation Structure Investors who provide capital (money, property, or services) in exchange for a share of ownership. •Ownership/control via per share voting rights Oversee the corporation's affairs and vision; establish rules of governance •Hire and coach the CEO and approve compensation for executive officers •Have final say over major proposals by executive officers •Have a fiduciary responsibility to shareholders via duties of care & loyalty

History of C-Corps with Social Concerns "A business corporation is organized and carried on primarily for the profit of the stockholders. The powers of the directors are to be employed for that end. The discretion of directors is to be exercised in the choice of means to attain that end, and does not extend to a change in the end itself, to the reduction of profits, or to the non-distribution of profits among stockholders in order to devote them to other purposes."

legally obligated to pursue a public benefit and return profits to shareholders. offer: •Clear market differentiation •Broad legal protection to directors and officers •Expanded shareholder rights •Greater access to capital than traditional legal forms •Legislation has since been passed in 27 states, pending in 14 states. In 2010, Maryland became the 1st state to allow organizations to incorporate as __

Charities raised more than $358-million last year from businesses that offered shoppers a chance to give at the checkout counter, according to a study ....Chronicles of Philanthropy (didn't gain or lose anything from business)

__ created a campaign with Alex's Lemonade Stand. The eight-week fundraising campaign raised $1.9 million, and public relations generated nearly 1 million viewers across print and social media.

__ donates $250 for every new vehicle sold or leased. Customers selected one of five charities to receive the donation. The program has donated $25 million in the past five years.

From Reading: "The Hidden Cost of Cause Marketing" by Angela Eikenberry Explain the benefits to Nonprofits in Cause Marketing •Explain the benefits to Business in Cause Marketing •What are the arguments against Cause Marketingby the author?

The Hidden cost of cause marketing: pros:

Cons of cause marketing: know for exam!

In 1996, Life magazine carried an article about Nike's child labor in Pakistan •BBC documentary on a Cambodian factory where girls worked seven days a week, often 16 hours a day •It costs $5.00 to make the shoes which is sold for $125.00 in the United States •Students nationwide demand universities drop partnership with Nike

A "material, positive impact on society and the environment, taken as a whole, as assessed against a third-party standard, from the business and operations of a Benefit Corporation." 20

A Benefit Corporation may also adopt a specific public benefit for ''any other particular benefit on society or the environment' such as:

__ are not required to give priority to the interests of any particular person or group (including shareholders) referred to in the statute over any other person or group. Rather, it only requires thoughtful consideration of all stakeholder interests.

are not required to give priority to the interests of any particular person or group (including shareholders) referred to in the statute over any other person or group. Rather, it only requires thoughtful consideration of all stakeholder interests.

Other Macro Trends Affecting Nonprofits -Cause Marketing

Nespresso coffee is usually sourced from rural farmers in Africa and Latin America who struggle with low productivity, poor quality and environmental degradation. •Nestle built out agricultural, technical, financial, and logistical firms and capabilities in each coffee region, strengthening a cluster of organizations that impact its own ability to thrive. •This included giving farmers access to plant stock, fertilizers and irrigation equipment; helping local farmer co-ops by financing shared wet-milling facilities, supporting an extension program to advise all farmers on growing techniques, and worked with Rainforest Alliance to teach farmers sustainable growing practices.

In the United States, a charitable organization is an organization that is organized and operated for purposes that are beneficial to the public interest.

Nonprofit Charitable Organization by many names...know for exam 1. third" after business and government. •2. Civil Society Organizations, i.e., the formally organized part of civil society. •3. Non-Governmental Organizations (often referring to international aid and development groups that are supported in one country and operate —non-governmentally —in another). •4. An abbreviation for nonprofit organizations. •5. Some people use this term to refer to all nonprofits, though legally and importantly there are lots of nonprofits that are not in any sense charitable (business leagues, social clubs, cooperatives, etc....).

Nonprofits accounted for __ of all wages and salaries paid in the United States •Nonprofit Share of GDP was __ •Public charities reported over __ in total revenues and$1.45 trillion in total expenses •The Nonprofit sector employs __ of the US workforce

A for-profit organization exists primarily to generate a profit and a nonprofit organization exist to create "greater good" Similarities to For-Profit Organizations on exam!

•No equity or shareholders to the corporation -owned by the community •Profits can not be distributed to any person •Can provide a tax deduction to anyone who donates money •Tax exempt on income and corporate property

billions donated in U.S. ... becoming wealthier so we give more philanthropy follows __

International giving has grown b/c more transparent due to internet & how far you can spread the __

The blend of Philanthropy, Entrepreneurship and Nonprofit Services

Social Enterprise -Combining Business with Charity Two characteristics distinguish a social enterprise from other types of businesses, nonprofits and government agencies: know for exam!

__ would say that they create social value because they make people's lives better or easier in some way. They would like to achieve financial success AND make social impact. __ are different in that they achieve financial success BY making a social impact. It isn't so much of a choice between the two because they are interlinked and one is not achieved without the other.

Ben & Jerry's & Greyston (who hires anyone who walks in)

The following are key financing challenges that face social entrepreneurs:

is a developing and dynamic field that is forming to address and overcome these challenges, so that nonprofits and social enterprises can gain access to the financing they need to strengthen and grow their organizations and, consequently, their impact.

social enterprise: mission vs. profit 1. 100% mission motivation...nonprofit 2. social enterprise 3. 100% profit motivation...traditional for-profit

investments made into nonprofits, for profit social ventures with the intention to generate measurable social and environmental impact alongside a financial return.

Traditional foundation operations: beginning of year 1...5% payout as grant but then poof by end of year for endowment growth beginning of year 1 95% endowment that is invested so end of year same percent

the 5% and 95% impact: overall financial return:

vs. 50% social payout returned 50% endowment impact: overall financial return:

this example achieves...

A foundation who uses its endowment to fund social investments are able to dramatically increase its mission fulfillment and its impact on the community with only a __ compromise on the its growth in investments.

The Role of Foundations in Social Impact Investments

Mission Investing is expected to increase by 19% to $12.7 billion in 2014 and the number of deals in 2014 is expected to increase by 31% from 4,914 to 6,419. From 2012 to 2013 the capital committed grew by 10% and the number of investments grew by __

"A New Approach to Funding Social Enterprise" -Harvard Business Review Funding Social Enterprise

"In Search of the Hybrid Ideal" -Stanford Social Innovation Review 2 questions on exam about reading so read it!

dsconnex ▪Investment:$500,000 Equity ▪Structure :Joint Venture L3C between the Wells Foundation, Down Syndrome Association of Central Ohio and Ground Work group

Framework for Analyzing Malden Mills and Ethical Dilemmas

bend the rules

shareholder theory vs stakeholder theory