CH-11-12 Human Resources: HR-RM Symbiosis – Principles of Responsible Management: Global Sustainability, Responsibility, and Ethics : Book Guide

This Document Contains Chapters 11 to 12 CHAPTER 11 HUMAN RESOURCES: HR-RM SYMBIOSIS GET IN TOUCH! This instructor’s manual can only cover a small initial selection of relevant advice. Please visit the website of the Center for Responsible Management Education www.responsiblemanagement.net or write to Oliver Laasch through [email protected] to share your ideas for new contents, experiences in teaching with the book, constructive criticism, and, of course, questions. The textbook is a snapshot of a quickly developing field that aims to educate responsible managers, and to create responsible businesses, which requires constant updating. We invite you to become part of a growing community of academics and practitioners taking on this task. THE INSTRUCTOR’S MANUAL This Instructor’s Manual contains a brief chapter introduction, a listing of chapter objectives, an expanded outline, chapter summary, teaching points, answers to end of chapter questions and exercises, and test questions. INTRODUCTION This chapter centers on Responsible Human Resources Management. We distinguish between traditional human resources, emphasizing internal outcomes in the organization related to efficiency and growth, and responsible human resources management, which emphasizes the outcomes of HR decisions on people, society, and the environment. While traditional HR seeks more efficient management, organizational development, and economic growth, responsible human resources management (HRM) seeks these same goals, but differs because it also integrates sustainability, responsibility, and ethics throughout all aspects of HR. We maintain that HR leadership must drive responsible HR practices. Throughout the chapter, we weave together five mainstream topics of (1) recruitment, (2) training and development, (3) performance management, (4) compensation and benefits, and (5) employee relations and communications with responsible HRM. We will show how responsible HRM delivers enhanced value for business, employees, and society in general. The key term “HR-RM Symbiosis” refers to the mutually reinforcing relationship in which responsible management (RM) requires employees’ engagement in responsible business. Human resources, as stakeholders, benefit from responsible management activities. CHAPTER OBJECTIVES After reading this chapter, students should be able to…  …understand how five major areas of human resources relate to responsible management.  …understand the tools needed for responsible human resources management.  …conduct human resources from a sustainability, responsibility, and ethics perspective.  …understand the role of the HR function for responsible business. CHAPTER OUTLINE I. Human Resources and Responsible Management: The opening case illustrates responsible human resources management of The ABB Group, headquartered in Switzerland. The company operates in more than 100 countries, employs approximately 145,000 people, is a leader in power and automation technologies, and takes a responsible approach to business management. The case mentions diversity and inclusion, sustainability leaders training, responsible HR process, and ethical issues. Contrast with Responsible HR: Responsible human resource management seeks the same goals of the traditional perspective, but differs because it also integrates responsibility management, sustainability principles, and ethical conduct throughout all aspects of HR. The result is a visible demonstration of responsible and sustainable business practices in all HR functions. II. The Goal of HR-RM Symbiosis: Responsible HRM integrates with five mainstream topics of (1) recruitment, (2) training and development, (3) performance management, (4) compensation and benefits, and (5) employee relations and communications. HR-RM symbiosis refers to the mutually reinforcing relationship in which responsible management (RM) needs employees´ engagement in responsible business. Likewise, human resources benefits from its responsible management activities as stakeholders. III. Phase 0: Understanding HR-RM Interdependent Relationships: The key role of HR is to work in partnership with business leaders to embed a culture and practice of CSR. HR has a responsibility to be proactive in forming a responsible-business-enabled culture by transforming HRM into responsible HR. A. Difference Between HRM and Responsible HRM: Conventional and responsible human resources management overlap on many points, but deserve distinct definitions. • Human Resources - “The function of dealing with the management of people employed within the organization.” • Responsible HRM - the responsibility to manage the employee stakeholder, and to manage HR’s contribution to responsible business performance. Various norms serve as orientation for responsible HRM practices globally. • ILO – International Labor Organization (ILO) “Declaration on Fundamental Principles and Rights at Work” • SAI – Social Accountability International (SAI) SA8000 • GPTW – Great Place to Work (GPTW) • QLB – Quality of Life in the Business of the ESR Certification B. The Business Case for Responsible HRM Many cases show how responsible HRM makes business sense. Examples mentioned in the chapter relate to advancing diversity, going green, employee well-being, and human rights. C. The New Skills for Responsible HRM In developing a responsible-management-enabled organizational culture, HR managers need to learn new skills about what social and environmental responsibility means for HRM. D. Responsible HRM Leadership and HRM Stakeholders: The way in which HR leadership determines and manages such processes builds or destroys business value through the impacts on a wide range of stakeholders in a “ripple effect” of decisions made in the organization that affect what happens outside the organization. E. The Role of the HR Manager in Advancing Responsible Business: HR managers´ work affects and is affected by responsible management practices throughout the core processes or phases of HRM, relevant to any organization of any size: • Phase 1: Recruitment • Phase 2: Training and Development • Phase 3: Performance Management • Phase 4: Compensation, Benefits, and Employee Well-Being • Phase 5: Employee Relations and Communication IV. PHASE 1: RECRUITMENT: Recruitment refers to a primary function of HRM that develops and manages the process for recruiting, screening, and hiring employees who have both the knowledge and skills to perform the intended roles. The hiring process must lead to sustainable development, ensuring a positive triple bottom line by protecting, creating, and sustaining social, environmental, and economic business value. The hiring process also must be ethical, where decisions are morally desirable in both its process and its outcome. A. The Traditional Recruitment Process: In stage one, the job description is developed; the knowledge, skills, attitudes (KSAs) are defined; and a typical candidate profile will be agreed upon, which is the benchmark against which all subsequent parts of the recruitment process are measured. B. Developing the Responsible Job Description: The responsible HRM recruitment process starts with awareness and training for business managers in the business value of diversity in recruitment and the need for managers to be ready and willing to embrace all forms of candidates representing the full ranges of diversity dimensions. C. Obtaining Candidates in a Responsible Way: A responsible approach to recruitment demands that HRM seek out potential candidates through developing a broad range of recruitment channels and retaining some flexibility about educational and experience preconditions. D. The Selection Process: In the responsible selection process, HRM must make sure that the “fit” is present by ensuring that the candidate’s abilities and values are carefully explored and that HR has a clear understanding of the candidate’s preferences and aspirations. E. Hiring in the Responsible Organization: The process of recruitment, selection, and hiring moves to the final stage after interviews and all other forms of assessment are completed. Openness and transparency must exist throughout the process so that candidates may make balanced decisions. V. PHASE 2: TRAINING & DEVELOPMENT: Training and development is a core HRM process. The responsible HRM approach seeks to ensure employees are well versed in additional organizational aspects such as values and ethical conduct, corporate responsibility as a business approach, and managing, measuring, and tracking social and environmental impacts. This section is organized into the three categories of orientation, training, and development, an approach used by Ivancevich, who emphasizes that the desired end results of orientation is to have (1) socially responsible and ethical practices; (2) competitive, high-quality product(s); and (3) competitive, high-quality service(s). A. New Employee Orientation: Employee orientation is the process of introducing new employees into an organization. Employee orientation should also direct and guide employees toward socially responsible and ethical practices and to understand the sustainable mission or areas of work, ¬firm, and colleagues. Typical goals of a good employee orientation program include reducing newcomer anxiety, reducing turnover, saving time, and developing realistic expectations. B. A Model for Orientation and Socialization: The orientation and socialization transition occurs in three phases: anticipatory assimilation, encounter, and metamorphosis. 1. Anticipatory socialization may begin years before the employee begins work at the organization. 2. Encounter. This “sense-making” stage occurs when a new employee enters the organization: The newcomer must let go of old roles and values in adapting to the expectations of the new organization. 3. Metamorphosis. The state reached at the “completion” of the socialization process: The new employee is now accepted as an organizational insider C. Training: Training is a process of changing the performance of employees to better achieve organizational goals and objectives. A roadmap of responsible HRM training recommends integrating responsible business principles into human resources departments. While the roadmap displays training and communications in two separate areas, the two are part of the same whole. Effective communication of responsible business principles throughout the training process results in the strongest impact in HR. D. Employee Development: Employee Development is the process of planning and implementing activities to develop employees’ competencies in the medium and long run. Companies may use a variety of tools to develop employees, which include on-the-job training and off-the-job training. Most companies conduct employee development on-the-job because of costs and time related to distance education, and because an experiential approach is often more effective. Employee development involves employee volunteering in the community. E. Employability: Employability is part of development and describes how well a person is qualified to work. It can refer to the ability of a person who is not employed or never has been employed to enter the job market for the first time, such as graduates or people from disadvantaged groups in the community. Employability can be something a person acquired while working. Employability also has inherent advantages for society, because more qualified and skilled people are able to make positive contributions to local economies through maintaining their relevance in the marketplace. VI. PHASE 3: PERFORMANCE MANAGEMENT: Creating processes and tools for evaluating the performance of employees, and ensuring the embedding of such processes and tools in the organization is a third major function of human resources management. Ivancevich identifies this task as performance management and defines it as “the process by which executives, managers, and supervisors work to align employee performance with the firm’s goals.” A. Performance Evaluation: Performance management is the process of monitoring and improving employees´ work performance. Performance management tools often include some form of performance evaluation. As a process, the performance evaluation contributes to business sustainability as it focuses on performance improvement and alignment of contribution, and reinforces sustainable behaviors. B. Core Competencies: Many companies develop a set of core competencies that must be demonstrated at different levels of management. These core competencies are management or leadership behaviors that are often rooted in corporate values. Team working, for example, may be a competency. Effective listening may be a core competency. Ethical conduct may be a competency. C. Community Involvement and Environmental Stewardship: Activities that had not traditionally been on the HRM radar can provide valuable tools for people development. Many of these benefits can be quantified, such as employee job satisfaction, recruitment effectiveness, and employee skill-building, volunteering and going green. D. Offboarding (Slide 36): Offboarding refers to the process that is adopted to manage the way employees leave the company. Offboarding includes outplacement programs that support employees' reentry into the job market by providing practical tools. VII. PHASE 4: COMPENSATION, BENEFITS, AND EMPLOYEE WELL-BEING: Compensation is the remuneration received by an employee for the work done. It can be either financial or nonfinancial. • Financial compensation includes wages and salaries, and it takes the form of any monetary return to the employee, such as bonuses, commissions, or non-salary benefits, which are valued as part of the overall compensation package. • Non-financial compensation may include flexible work schedules, recognition for certain tasks, or company events for employees. A. Driving Principles of a Communication System: Cohen’s eight driving principles of a compensation system should be incorporated into any responsible compensation plan. These policies may be applied globally to businesses. B. Living Wage: Living wage describes the minimum hourly wage necessary for an individual in full-time employment to meet basic needs, including housing, food, utilities, transport, health care, and education. HRM has a responsibility to lead with responsible compensation practices in business for the long term benefit of all. C. Employee Well-Being: Responsible HR managers should accept a responsibility to advance employee well-being. This typically means addressing work-life balance issues such as flexible working hours, telecommuting options, child care leave and support, and other support services. HR policies that help employees to manage their own well-being deliver an ROI in reduced absenteeism, reduced health care costs, higher productivity, and longer job tenure. VIII. PHASE 5: EMPLOYEE RELATIONS AND COMMUNICATION: Employee relations are often associated with a structured approach to freedom of association and unionization. Employee relations refers to any organized group of employees that work together collectively to promote the interests of their group. Labor unions, for example, are groups that engage in collective bargaining to accomplish member goals and provide a vehicle for employees to ensure their rights are upheld in the workplace. A. Union Busting: Union-busting refers to efforts by employers to disrupt or prevent the formation or expansion of trade unions. B. Employee Communications: Traditionally, employee communications has been a one-way route—pushing out information that management requires employees to know so that they can do their jobs better. Today’s employees want to be engaged. Employee communications needs to move from push to pull, from delivering messages to encouraging dialogue, from a communiqué to a conversation. PRINCIPLES OF HUMAN RESOURCES: HR-RM SYMBIOSIS I. Responsible HRM includes the responsibility to manage the employee stakeholder, and to manage HR’s contribution to responsible business performance. II. The goal of responsible human resources management is an HR-RM symbiosis, which refers to the mutually reinforcing relationship in which responsible management (RM) needs employees’ engagement in responsible business and, in turn, human resources (HR) will benefit from responsible management activities as stakeholders. III. For understanding the human resources-responsible management relationship, one should consider the main norms for responsible human resources management (HRM), the business case for responsible HRM, employee skills for responsible business, and the role of the HR manager. IV. Recruitment in responsible business involves including employee skills for responsible business in job descriptions, acquiring the adequate candidates with such skills, and selecting them based on the skills. V. Training and development begins with new employee orientation and continues with ongoing training for responsible business performance, and the development of employees and close external stakeholders with the underlying goal of increasing trained peoples’ employability. VI. Performance management includes the evaluation of employees’ responsible business performance and core competencies for responsible business. VII. Compensation, benefits, and employee well-being are based on a sustainable, responsible and ethical compensation system that pays at least a decent living wage, and which together with other benefits contributes to employee well-being. VIII. Employee relations and communications include the relationship to labor unions and highlights the importance of effective internal communication channels. TEACHING POINTS 1. Bottom line message: Responsible human resources (HR) performance differs from traditional perspectives of HR because of its focus on outcomes of HR decisions on people, society, and the environment, and not just on internal outcomes related to efficiency and growth. 2. Motivational value of chapter structure: We examine five traditional core HR processes (see Figure 11.1) of Recruitment, Training & Development, Performance Management, Compensation & Benefits, and Employee Relations and Communication, to show how enhanced value for business, employees, and society in general is delivered through a responsible HRM approach. The chapter is organized according to these five processes. We have experienced that students are often motivated by the vision of a company dealing responsibly with “them” as future employees and where they, at the same time, can contribute to social, environmental, ethical, and economic goals. 3. Moving toward responsible human resource management: Responsible HRM implies a term we use, “HR-RM symbiosis,” which refers to the mutually reinforcing relationship in which responsible management (RM) needs employees’ engagement in responsible business. Human resources, as stakeholders, benefit from responsible management activities. 4. Inspirational interviews: The end-of-chapter pioneer interviews provide insights into responsible human resource management with practitioners. Liz Maw, CEO of Net Impact, runs a global nonprofit that empowers a new generation of leaders to drive positive social and environmental change. Her network of more than 30,000 students and practitioners shows how business students can bring about global change in responsible management. The second interview features Erika Guzman, Human Resources Director of Innovation Packaging & Process. The company is a contract manufacturer providing co-packing solutions for the food and beverage industry. Erika’s interview highlights the role of sustainability, responsibility, and ethics in the HR director position. ANSWERS TO END-OF-CHAPTER QUESTIONS AND EXERCISES A. Remember and Understand A.1. Explain the symbiosis and relationship between human resources and responsible management in a responsible business. HR-RM Symbiosis refers to the mutually reinforcing relationship in which responsible management (RM) requires employees´ engagement in responsible business. Likewise, human resources benefits from its responsible management activities of stakeholders. A.2. Explain and interrelate the following terms: employability, offboarding, core competencies, and KSAs. Employability means enabling employees to grow and develop so that they will be better able to contribute not only in their current organization but also in any organization for which they may work in the future. Offboarding refers to the process that is adopted to manage the way employees leave the company. Core competencies are management or leadership behaviors that are rooted in corporate values, such as team working, effective listening, and ethical conduct. KSAs stand for Knowledge, Skills, and Abilities of employees and define the basic recruitment profile for new candidates, referring to the attributes of employees required to perform the job. KSAs are important parts of an employee´s competency portfolio, which is a crucial factor in defining a person´s ability to succeed in the job market (her/his employability), and which is of crucial importance when it comes to offboarding. A.3. Briefly explain the stages of the employee socialization process and how they are interrelated. Orientation and socialization involves the three phases of (1) anticipatory assimilation, which occurs before entry into the organization, (2) encounter, the sense-making stage which occurs when a new employee begins working in the organization, and (3) metamorphosis, the state reached at the “completion” of the socialization process when the employee becomes an insider. Each of these three stages integrates closely together into responsible management and illustrates the end-to-end commitment an organization must have to the employee. B. Apply and Experience B.4. Interview one person about her or his employer’s human resources practices and ask for a statement from this person regarding the degree of responsibility achieved by the employer. Ask what she or he would improve. If you assign this “experience” question to students, they could use similar questions appearing in the pioneer interview at the end of the chapter with Liz Maw, CEO of Net Impact, to develop their interview. Student questions, for example, could be worded: (1) Is there development in your company toward a responsible management profession? (2) How do sustainability, responsibility, and ethics play a role in your job? (3) Are universities doing a good job of preparing students for responsible human resource management? Recommend to students that interviews last 30 minutes and interview guides should contain at least 10 open-ended questions. B.5. Familiarize yourself with the human resources practices of the Brazilian company SEMCO and the U.S. American SAS software company. Would you say the companies apply responsible human resources management? Which company would you consider the more responsible one in the HR relationship? Have students first re-read the SEMCO case appearing at the beginning of Chapter 8. Ask them to check the SEMCO Partner’s website in Brazil: http://www.semco.com.br. An English translation of the site is available at the top of the page. This information should help them answer the question. SAS has been awarded as the globally “best place to work” in 2011: http://www.greatplacetowork.com/best-companies/worlds-best-multinationals/profiles-of-the-winners. Reading through the justification for this ranking and through the SAS employee section will provide students with the necessary background for this analysis. B.6. Briefly describe the five core processes of human resources management and search for two real-life examples of each process, one of a responsible and one of an irresponsible management practice. Recruitment refers to refers to the attracting, screening, and selecting personnel. Training and development refers to educational activities within an organization that purpose to increase the fulfillment and performance of employees. Performance management is the process of monitoring and improving employees´ work performance. Compensation is the remuneration received by an employee for the work done and can be either financial or nonfinancial. Employee relations relates to any organized group of employees that work together collectively to promote the interests of their group. For real-life examples of responsible HRM, students can begin with two good sources: the Dow Jones Sustainability Index http://www.sustainability-indices.com/ and the FTSE4Good Index Series http://www.ftse.com/Indices/FTSE4Good_Index_Series/index.jsp . Each source lists responsible companies by different sectors and students can check if HR meets responsibility standards. For examples of irresponsible management practices, students should check companies with which they are personally familiar or check other sources online, such as www.theguardian.com and www.greenbiz.com to answer this question. Direct students to ask if HR areas are strictly traditionally focused. They should ask if the company has made steps toward responsible management. C. Analyze and Evaluate C.7. Compare the subjects of the four responsible human resources norms illustrated in Table 11.1 and explain the differences in the topics covered. Should an organization apply all norms simultaneously, or is compliance with one norm sufficient to create responsible human resources management? In Table 11.1 we illustrate the International Labor Organization (ILO) “Declaration on Fundamental Principles and Rights at Work” (recognizes rights to collective bargaining and promotes elimination of discrimination and forces labor); the Social Accountability International (SAI) SA8000 (focuses on child labor and working conditions); the Great Place to Work (GPTW) (examines credibility of management and camaraderie among coworkers); and the “Quality of Life in the Business” (section of Latin American focuses on employability, social dialogue, and security and health). When students try to answer whether an organization should apply all norms simultaneously, help them avoid “It depends …” answers. Progress toward responsible management and sustainable development are the goals. Ideally, the organization would apply all four norms simultaneously, but each of the norms might apply more strongly to one organization than to another. For instance, the great-place-to work and “Quality of Life in the Business” focus on employees of the company, while the ILO declaration and SA8000 are more tuned to work conditions in supplier companies. C.8. Look up the sustainability report of a company of your choice, and find examples for at least two of the following responsible human resources practices: volunteering, green teams, sustainability and ethics trainings, employee sustainability objectives, and diversity management. A good place to start with this activity would be to illustrate with company examples provided in the chapter. For instance, SAMSUNG’s community service teams become involved in professional community “share-care programs” and they volunteer for various social services and activities. Or use the example from the In-practice box (page 336) of Nike’s Employee Well-Being programs started in 2007. For a good “green team” example, see Wells Fargo's program (greenbiz.com 2011). It is also recommended that students directly look up the employee section of a GRI report of a company they are interested in. C.9. Discuss whether responsible human resources management should apply different standards for the home company and suppliers, for developed countries and developing countries, and for large companies and small and medium-sized enterprises. The discussion of this question should best begin with a case study of different standards across international boundaries. Apple supplier Foxconn Technology in Shenzhen, China, could be used. Foxconn doubled its wages for workers in 2012 because of internal and external stakeholder pressures. Details about this case can be found with a search of Greenbiz.com. We also suggest using the chapter example of Nike and how the company followed minimum wage and child labor laws in its Indonesian manufacturing plants, but erred for not maintaining stricter standards. The discussion around company size may touch on the greater possibility of big corporations to create infrastructure for responsible HRM, such as employee gymnasiums, flexible work arrangements, etc. Another point to discuss might be the often more direct relationship between the employee and the company as an organization and the resulting positive and negative consequences. D. Change and Create D.10. Based on your analysis in question C.8, propose one measure to improve the company’s responsible human resources activities. Send your proposal to the contact mail address mentioned in the report. Asking students to write a “real live” message to an HR manager in a company may produce anxiety. Encourage them to do so, however, and give direction on the actual email message. The email should address a specific person and include a salutation such as “Dear Mr. Tolhurst.” The message should be well written and have a positive tone. The content of the letter could be suggested: Would you please assist me with an assignment I am working on as a student in ____ University? My professor asked me to examine your company’s responsible human resources activities as one of our class projects. Based upon what I found on your website, I noticed your company has not developed volunteer programs in the local community. These activities promote various social services and activities for people and serve a firm’s overall sustainability efforts well. Have you considered such programs? If not may I suggest you consider one? Students should then suggest a volunteer plan, based on their website research. They could close the email on a positive note and thank the HR manager for his or her efforts. TEST QUESTIONS 1. Which statement best characterizes the HR-RM Symbiosis? a. HRM has a responsibility to be proactive in leading the establishment of a responsible-business-enabled culture. b. A mutually reinforcing relationship in which responsible management requires employees’ engagement in responsible business c. The function of dealing with the management of people employed within the organization d. Leadership has a responsibility, both professionally and organizationally, to drive responsible HR practices. Answer: b 2. Which statement best explains the difference between traditional HRM and responsible HRM? a. Responsible HRM goes beyond the traditional roles of HRM in supporting business value and adopts a broad approach that includes the responsibility to manage the employee stakeholder and HR’s contribution to responsible business performance. b. Traditional HRM has always maintained a moral and ethical responsibility for the way HRM is delivered in any organization c. Responsible HRM is “the function of dealing with the management of people employed within the organization.” d. HRM traditionally supports sustaining social legitimacy (the “license to operate”). Answer: a 3. The responsible stakeholder approach to HR leadership requires the leader to think beyond traditional performance objectives by a. focusing efforts on meeting narrowly defined internal objectives. b. promoting efficient management and development of resources and economic growth. c. measuring the HRM contribution through recruitment costs and effectiveness, hours of training provided, and number of employees trained. d. tracking and measuring the social and environmental benefits of human resources activities as part of the overall corporate strategy requirements. Answer: d 4. Recruitment refers to a. directing and guiding employees toward socially responsible and ethical practices. b. preparing ethical individuals for the future. c. attracting, screening, and selecting new personnel. d. developing the ability of a person who is not employed or never has been employed to enter the job market for the first time. Answer: c 5. To obtain candidates in a responsible way means a. developing job descriptions unilaterally determined by management’s needs. b. presenting employment contracts that represent the primary interests of the company. c. advertising through a broad range of recruitment channels, including minority publications, while retaining some flexibility about educational and experience preconditions. d. advertising positions only through traditional channels. Answer: c 6. Training and Development refers to a. educating employees within an organization to increase their fulfillment and performance. b. attracting, screening, and selecting personnel. c. creating processes and tools for evaluating the performance of employees. d. maintaining openness and transparency throughout the management process. Answer: a 7. Anticipatory Socialization a. occurs when a new employee enters the organization. b. may begin years before the employee begins work at the organization. c. is reached when the new employee is accepted as an organizational insider. d. ensures continued engagement of the employee in corporate responsibility activities. Answer: b 8. The Responsible Management in Action case about Samsung a. illustrated how the company emphasizes sustainability performance throughout the training and development process b. stated that it has doubled the growth of its Human Resources Development Center (HRDC). c. showed it was the first company to develop a responsible Supplier Code of Conduct. d. specified how management sharpened its HRDC solely on the “sustainability expertise” of future-oriented employees. Answer: a 9. Metamorphosis a. occurs when a new employee enters the organization. b. is reached when the new employee is accepted as an organizational insider. c. may begin years before the employee begins work at the organization. d. ensures continued engagement of the employee in corporate responsibility activities. Answer: b 10. Training and communications in a company a. should be considered together in a roadmap as two parts of the same whole. b. principally focus on employee rights from a human rights perspective. c. suggest using social media primarily for recruiting. d. expand on the Labor Principles of the United Nations Global Compact. Answer: a 11. Employability a. refers to crucial abilities. b. describes how well a person is qualified to work. c. is involvement in the community that motivates employees and drives higher loyalty and commitment. d. refers to the process that is adopted to manage the way employees leave the company. Answer: b 12. Off-boarding a. refers to crucial abilities that are ways of working that require integrity and that build trust, which are essential ingredients in any sustainable organization. b. describes how well a person is qualified to work. c. is involvement in the community that motivates employees and drives higher loyalty and commitment d. refers to the process that is adopted to manage the way employees leave the company. Answer: d 13. Performance evaluations a. have as their main purpose to provide a measure of how the employee sees the supervisor´s performance. b. deliver quantifiable information back to the employee from the manager. c. are best considered as a dialogue between an employee and the manager that ensures alignment around shared mission, objectives, and goals. d. offer support to the employee primarily in the form of 360-degree appraisals. Answer: c 14. You hear a politician in a public speech say that companies have to assure the work-life balance of their employees. Which of the following topics is most related to this statement? a. Offboarding. b. Employability. c. Living Wage. d. Employee well-being Answer: d 15. Non-financial compensation takes the form of a. flexible work schedules, recognition for certain tasks, or company events for employees. b. long-term benefits that may provide retirement plans, stock options, or profit sharing plans. c. bonuses and commissions. d. wages and salaries. Answer: a 16. A friend of yours tells you that his employing company has just begun to offer funding for any of degree program, helping her to be more qualified. To which of the following areas is this activity most related? a. Offboarding. b. Employability. c. Living Wage. d. Employee well-being Answer: b 17. A living wage is best described by which statement? a. It describes a compensation packaged that is renewed frequently, almost weekly. b. It describes the minimum hourly wage necessary for an individual in full-time employment to meet basic needs. c. It is what Cohen called a present-day wage adapted to a sustainable company. d. It represents the remuneration received by an employee for the work done. Answer: b 18. Union busting is considered a. a right afforded by law for employees to organize and engage in collective bargaining. b. restrictive, possibly obstructive to the decision-making process, and a risk for escalation of employee costs. c. a negotiation for terms and conditions on a collective basis for employees. d. efforts by employers to disrupt or prevent the formation or expansion of trade unions. Answer: d 19. ABB is a company headquartered in Switzerland and has been presented in this chapter as a role model for Responsible Human Resources Management in a. sustainable leaders training. b. living wages. c. sustainable compensation plans. d. exemplary performance appraisals. Answer: a 20. A Responsible Management in Action box highlighted employment practices at Deutsche Telekom (T-Mobile). Which statement best characterizes the central issue in this case? a. Strong public criticism for CEO actions hindering sustainability performance. b. Joining the Global Union Alliance to advance collective bargaining with employees. c. Scathing criticism of Deutsche Telekom’s union-busting practices. d. Advances made in responsible HR that management can contribute to doing better business. Answer: c CHAPTER 12 MARKETING AND COMMUNICATION: STAKEHOLDER GOODWILL GET IN TOUCH! This instructor’s manual can only cover a small initial selection of relevant advice. Please visit the website of the Center for Responsible Management Education www.responsiblemanagement.net or write to Oliver Laasch through [email protected] to share your ideas for new contents, experiences in teaching with the book, constructive criticism, and, of course, questions. The textbook is a snapshot of a quickly developing field that aims to educate responsible managers, and to create responsible businesses, which requires constant updating. We invite you to become part of a growing community of academics and practitioners taking on this task. THE INSTRUCTOR’S MANUAL This Instructor’s Manual contains a brief chapter introduction, a listing of chapter objectives, an expanded outline, chapter summary, teaching points, answers to end of chapter questions and exercises, and test questions. INTRODUCTION This chapter discusses how effective marketing and communication of social and environmental business performance can make or break a business. Greenwashing accusations, for example, which reveal the imbalance between a company’s responsible business performance and communication activities, can destroy reputations or even businesses in a short period of time. A single imprudent framing of a company’s responsible management issues can cost millions of dollars in stock value. While the risk of ineffective communication is significant, the opportunities of effective marketing and communication are even more important. The essential stakeholders of an organization have shown drastically heightened interested in learning about the organization’s responsible management activities and often reward such information in very tangible ways. Customers often pay a premium price for sustainable products that they learned about through a cause-related marketing campaign. Communication and marketing are the business case catalyst. While “walking the talk” may help a company avoid accusations of greenwashing and evade reputational loss, “talking the walk” communicates good responsible business performance to stakeholders in order to achieve manifold advantages. This chapter describes how to do both. CHAPTER OBJECTIVES After reading this chapter, students should be able to…  …create goodwill toward the company among stakeholders.  …effectively communicate and market responsible management activities.  …design and manage a portfolio of stakeholder communication activities. CHAPTER OUTLINE I. Marketing, Communication, and Responsible Management: Effective marketing and communication of social and environmental business performance can make or break a business. Greenwashing accusations can destroy reputations, or even businesses, in a short period of time. While the risk of ineffective communication is significant, the opportunities of effective marketing and communication are even more important. II. The Goal: Stakeholder Goodwill: Stakeholder Goodwill is the value created for an organization when its stakeholders adopt a positive attitude toward its responsible business performance. Stakeholder goodwill may be achieved through stakeholder communication, which is an ongoing dialog with a stakeholder with the intent to build goodwill with any group or individual who can affect or is affected by the achievement of the organization’s objectives. It must be highlighted that stakeholder goodwill is only the ultimate consequence of effective integrated marketing and stakeholder communication in responsible business. Effective communication in responsible business is important in at least two stages previous to the creation of goodwill. In a first process, the focus is on defining a vision of the responsible business that should be created after a transformation process. This definition process requires an extensive, democratic communication process, involving all main stakeholders of the organization. In a second process, the goal is to achieve support in the implementation and transformation process toward becoming the responsible business envisioned. It is only in the ultimate, third process that the goal is to share achievements and to be rewarded with goodwill. III. Phase 1: Ensuring Effective Integrated Marketing Communication: Integrated marketing communication (IMC) is essentially pure stakeholder communication. IMC is the process of using an organization´s full range of communication and marketing tools in an interconnected manner for building stakeholder goodwill, and connects all explicit and implicit communication activities of the organization. To successfully reach stakeholders, the company must use its full communication potential in a connected and integrated manner, involving its highly interrelated network of internal and external stakeholders. A successful example of IMC responsible management can be illustrated by the movie theater chain Cinépolis, and its campaign “Del amor nace la vista,” which translated reads “Love gives birth to eyesight.” A. Understanding Effective Communication: Effective communication occurs when messages are shared and understood. The communication process requires the following basic components: 1. Sender - the person with whom the message originates. 2. Receiver - the person who receives the original message. 3. Message - the unique words and symbols including tone and style. 4. Channels - the physical medium though which the message moves. 5. Barriers - are any internal or external factors that interfere with the message 6. Encoding - are any internal or external factors that interfere with accurate understanding of the message 7. Decoding - the process in the receiver of interpreting the words and symbols in the message. 8. Feedback - verbal and nonverbal responses exchanged between sender and receiver. When we consider the communication process as ongoing, dynamic, and relational, we move toward effective communication. Several time-tested principles of business communication serve as a foundation or basis for shaping the message in effective CSR communication. 1. Adapt to your audience. 2. Clarify Your Purpose. 3. State your message clearly. 4. Stay on topic. 5. Be complete and accurate. 6. Establish goodwill. 7. Communicate with credibility Greenwashing refers to the usage of marketing and communication means to create a misleading impression of a company´s stakeholder value creation. Such a situation where the organization is not “walking the talk” bears high potential to create immense reputational damage and reduce stakeholder goodwill. Greenwashing contrasts with the goal of effective responsible management communication and marketing. Responsibly managed companies usually display a high stakeholder value creation and a justified high activity in communicating this performance, a so called “high-balance” situation. B. Marketing Responsible Business Performance: The newest American Marketing Association (AMA) definition of marketing reflects a customer orientation and includes a component of social responsibility by emphasizing value for consumers in society at large. The marketing mix is the backbone of the marketing management process. It is also called the four Ps: • Product or service. • Place. • Price. • Promotion. In order to achieve responsible marketing management the four Ps may be used as a conceptual structure to integrate sustainability, responsibility, and ethics in each of them. IV. Phase 2: Applying Responsible Management Marketing and Communication Tools. A. Spheres of Application of Responsible Management Communication Tools: Responsible management marketing and communication tools are applied toward internal and external stakeholders, which largely reflect the three spheres or types of organizational communication. 1. Internal operational communication consists of the structured communication within the organization that directly relates to achieving the organization’s work goals. 2. External operational communication occurs when employees communicate with people and groups outside the organization to achieve the organization’s work goals. 3. Personal communication is all the non-business-related exchanges of information and feelings in which human beings engage whenever they come together. B. Responsible Management Communication Tools: These tools are characterized by different intended outcomes of the marketing and communication process. The intended outcome of social marketing, for instance, is a change in a stakeholder’s behavior; cause-related marketing usually aims at increasing sales revenues; a code of ethics aims at assuring morally right behavior; and reports aim at extensive and factual information on the organization´s responsible business performance. III. Phase 3: Customizing Stakeholder Communication. A. Stakeholder Communication Model: The seven communication principles referred to in the first part of this chapter apply to all stakeholders. According to Freeman (2010), a stakeholder is anyone who makes a difference in the organization. Morsing and Schultz offer a model by which we may incorporate and apply the preceding communication principles. Integrating Weick’s “sense-making” concepts, Morsing and Schultz observe businesses as having three communication strategies with stakeholders. 1. The stakeholder information strategy is essentially a one-way communication process. Communication is viewed by a company as “telling, not listening,” and may be persuasive in nature. 2. The stakeholder response strategy is a two-way communication process identified by communication flowing to and from the public. The company listens to comments or feedback about its responsible activities and even changes or modifies its activities as a result. 3. The stakeholder involvement strategy is a dialogue or relationship with stakeholders. The company and stakeholders engage in “sense making” and co-construction of ideas, activities, and behaviors. B. Stakeholder Audience Analysis: When you choose to follow the communication strategy of stakeholder involvement, you will begin a dialog and build a relationship with stakeholders. To analyze your audience of stakeholders, Freeman (2010) developed a new “filing system” of stakeholder groups that helps us understand the different categories. 1. Primary stakeholder is the one your company most wants to develop a relationship with, influence the most, or the one with whom the company can achieve its goal or purpose. 2. Secondary stakeholders might read your communication or learn about the information, but are not the ones to whom the original message was directed. 3. Intermediate stakeholders are those that simply forward the message to others. PRINCIPLES OF CHAPTER 12 Marketing Communication: Stakeholder Goodwill I. The goal of responsible marketing communication management is to help define the vision of a responsible business, to then support the implementation process, and to finally create stakeholder goodwill, which translates into tangible business benefits. II. Stakeholder goodwill can be achieved by activities of integrated marketing communication, which serves to craft a multifaceted, but congruently connected, message about organizations’ responsible management performance to the various stakeholder groups. III. Effective responsible management communication is summed up in the seven principles of audience adaptation, purpose clarification, message clarity, topical conciseness, completeness and accuracy, goodwill creation, and credibility. IV. Effective marketing of responsible management activities depends on the successful integration of responsible management activities into the four Ps—product, price, place, and promotion—comprising the marketing mix. V. Successfully communicating responsible management activities requires the usage of specific responsible management communication tools. The main tools proposed in this chapter are cause-related marketing, social marketing, issues and crisis communication, formal reporting, codes of conduct, and mission and vision statements. Each tool serves a different communication purpose, from increase in sales to behavior change and the assurance of ethical compliance. VI. Stakeholder communication types can be classified into three levels. Higher levels mean there is higher intensity in the communication activity. Level one is stakeholder information, two is response, and three is stakeholder involvement. VII. In order to customize the stakeholder communication tools to a specific audience, a thorough stakeholder analysis has to ensure the appropriateness of communications for distinct stakeholder groups. TEACHING POINTS 1. Bottom line message: Effective marketing and communication of social and environmental business performance can make or break a business. “Walking the talk” may help a company avoid accusations of greenwashing and evade reputational loss, and “talking the walk” communicates good responsible business performance to stakeholders. 2. Underlying chapter structure: We examine three primary marketing and communication processes (see Figure 12.1) that enable businesses to “walk the talk” and “talk the walk.” First, we outline the basic processes and rules of integrated marketing communication (IMC) to ensure effective marketing and communication activities. Next, we select specialized responsible business communication tools that are most adequate for creating stakeholder goodwill. Finally, we examine how to analyze different stakeholder audiences with the objective of understanding their basic characteristics and creating customized communication activities. 3. Stakeholder goodwill as ultimate goal? The goal of effective marketing and communication is to develop stakeholder goodwill, a term we have identified for the value created when stakeholders believe the communication about sustainable activities from an organization is credible and trustworthy. Stakeholder goodwill as the ultimate goal is questionable, as it might be understood as a very instrumental perspective of marketing and communication as, in the worst case, stakeholder manipulation tools. We understand stakeholder goodwill creation in this context as a natural consequence of a company´s responsible business performance and stakeholders´ knowledge about it. Also, focusing on the ultimate outcome of stakeholder goodwill should not distract from the important goals of stakeholder communication for the definition of responsible business goals and activities and in their implementation. 4. The emotional topic of greenwashing: The topic of greenwashing is an excellent basis for discussion. Sometimes students get outright angry about what they perceive as “companies lying to them.” We have often brought real-life examples of greenwashing to the classroom in order to spark often exciting discussions. 5. From stakeholder communication to involvement: Most companies today view stakeholder communication strategies as a one-way process. That is, communication about responsible management practices, sustainability performance, and ethical values is viewed as ‘telling, not listening’ and may be persuasive in nature. Other companies vary this strategy and view stakeholder messages as a limited two-way communication process, listening to stakeholder comments and making changes, but true stakeholder engagement and interchange are not realized. A third strategy, stakeholder involvement, reflects ongoing dialogue or relationship. Ideally, the company is engaged in “sense making” and co-construction of ideas, activities, and behaviors about responsible management. Stakeholders then can help shape the organization’s responsible management practices, sustainability performance, and ethical values. By applying the stakeholder involvement strategy, companies can avoid the ‘telling, not listening’ approach and the limited two-way communication process. A good exercise might be to ask students to evaluate real companies´ stakeholder communication activities and let them analyze which of the three communication strategies is applied, and how the communication could be changed to reach a stakeholder involvement level of communication. ANSWERS TO END-OF-CHAPTER QUESTIONS AND EXERCISES A. Remember and Understand A.1. Paraphrase the seven rules of effective communication The seven time-tested principles of business communication serve as foundation for effective CSR communication. • Adapt to your audience. The communicator should ask what the primary interests of my stakeholders are and what their level of understanding is. • Clarify Your Purpose. Determine the main idea and focus on one topic instead of many topics in a message. • State your message clearly. Use words so that the message intended will be the message the audience receives. State your message transparently and understandably. • Stay on topic. Stay away from unrelated or loosely related subjects that just happen to be on your mind. Communicate just one idea. • Be complete and accurate. Make sure all facts in the message are as accurate as possible. Ensure the message is free from errors. • Establish goodwill. The goodwill Message involves a “selfless” tone, one that focuses on the receiver instead of the sender. • Communicate with credibility. This principle is fundamentally the most important of the communication principles. Trustworthiness and knowledge are essential to credibility. A.2. Describe greenwashing. How does it relate to effective communication? Greenwashing is best identified as a communication effort that evokes a negatively misleading impression of a company’s responsible business performance. Responsible business performance must be balanced with just the right amount of communication. A company learns how to walk the talk and talk the walk. A.3. Define the terms effective communication, stakeholder communication, and integrated marketing communication, and explain how they are interrelated. Effective communication occurs when messages are shared and understood. Stakeholder communication is an ongoing dialog with a stakeholder that intends to build goodwill with anyone who affects or is affected by achievement of the organization’s objectives. Integrated marketing communication is multifaceted and congruently connected messages about organizations’ responsible management performance to various stakeholder groups. Essentially, these three terms form the centerpiece of building goodwill with stakeholders. The model that emerges is the stakeholder involvement strategy discussed in the chapter and summarized in the next answer A.4. To achieve “good” stakeholder communication, the principles of effective communication should be applied so that integrated marketing communication is adequate to communicate consistent messages through various channels to all stakeholders. A.4. Mention the three levels of stakeholder involvement and describe their operational characteristics. There are three levels of stakeholder involvement: (1) stakeholder information, (2) stakeholder response, and (3) stakeholder involvement. Stakeholder information occurs when most companies view stakeholder messages as a one-way process or ‘telling, not listening.’ Stakeholder response occurs when companies view stakeholder messages as limited two-way communication process directed primarily toward the stakeholder. Stakeholder involvement occurs when the company maintains an ongoing dialogue or relationship about responsible management performance. B. Apply and Experience B.5. Sketch the communication process as described in Figure 12.3, graphically integrating how responsible management activities play a role in the process. When students answer this question, have them focus on practical barriers that may impede the communication process. Barriers include biases against the company’s responsible management efforts, or inaccurate, incomplete, or partial messages. Communication may lack transparency or truthfulness. Responsible managers must overcome these barriers before they obtain effective communication. Suggest students start with adding potential barriers in the communication diagram in Figure 12.3. They can show the circular process of a Communicator “A” encoding a message and sending it through various responsibility channels to Communicator “B,” who decodes the message and responds with feedback to the sender. The entire process may be engulfed with “noise” or barriers the message encounters. Different management activities can be sketched into the process to show how barriers impede the message. B.6. Look up the responsible business website of a multinational corporation online and find one example for each of the six communication tools highlighted in this chapter. We suggest using the opening case about Nike as an illustration if you assign students this activity. Point to communication tools Nike has used on its website. The company has published a code of conduct on the Web. Nike conforms to Global Reporting Initiative (GRI) standards that are communicated through its Corporate Responsibility Report. The company highlights its Nike Foundation as a social marketing tool. Nike’s mission and vision statements for sustainable business are also communicated on the web site, such as “addressing impacts throughout our supply chain” and “striving for the best, creating value for the business and innovating for a better world.” Each of these tools can be illustrated for students on the Nike web site. Then request they choose a different multinational corporation website and find similar examples of communication tools. B.7. Prepare a conceptual plan for a social marketing campaign for a desired behavior change of your choice. Students may begin this experience activity by examining Procter & Gamble’s “Future Friendly Platform,” a social marketing platform targeted toward environmental education The conceptual plan for P&G’s campaign may first be illustrated with the mission statement on the website: “Future Friendly is a partnership between trusted P&G brands and leading sustainability experts aimed at inspiring us to reduce waste in our lives. The goal is to show consumers - in a very achievable way - how to save water, waste and energy at home with trusted brands like Pampers, Ariel, Flash, Fairy, Duracell and Iams.” The program was launched in the UK in 2007 and proved to be highly successful at changing public behavior. P&G has partnered with other companies such as Energy Saving Trust, Waste Watch, and Water Wise. A conceptual plan formed by the students should outline such partnerships or alliances in a campaign. Another form of approaching this exercise is to start from a desired behavior change that is aimed to be realized through the social marketing campaign (e.g. people should stop using disposable batteries) and to start planning a campaign from this starting point, using the four Ps as illustrated in Figure 12.8. C. Analyze and Evaluate C.8. Identify two cause-related marketing campaigns of your choice and evaluate the congruence between stakeholder value and communication effectiveness using Figure 12.5. Review with students the concept of cause-related marketing as the promotion of a product by linking its sales with the contribution to a good cause. The American Express campaign may be used as an example and is highlighted by Philip Kotler (see Pioneer Interview at chapter end). The company donates money to help rebuild the Statue of Liberty in New York City by giving a “proportion to how much people charged their American Express card instead of competitors’ credit cards in paying for their purchases.” American Express has balanced stakeholder value and communication effectiveness by branding the renovation project with the cause. High stakeholder value is coupled with high communication effectiveness at American Express. A similar campaign can be illustrated with TOMS shoe company, One-for-One, a campaign that donates a pair of shoes (or eyewear) every time somebody buys a pair http://www.toms.com. Direct students to the bio of Blake Mycoskie, TOM’s founder, to illustrate how effective communication about the customer value of a free pair of shoes aligned with growth of the business. C.9. Identify one responsible marketing and communication management activity of a company of your choice. Then use the seven principles of effective communication to check how the campaign could increase its effectiveness.. Students may review any of the companies identified in the chapter to stimulate ideas for a choice of company. Mentioning BP, Canada’s Maple Leaf Foods, Pari- based Danone, Volkswagen’s Fun Theory, or the FLOW market, each of which represents a different industry, may help with ideas. Students can then apply the seven principles of effective communication to their choice of company. C.10. Review the matrix displayed in Figure 12.11 and assume no numbers exist in the boxes. Choose a company with a prominent responsible management activity. Add numbers to the matrix by rating the appropriateness of the company’s communications with example stakeholders listed at the top of the matrix. Fill in each box. Figure 12.11 represents a matrix of categories of stakeholders along the horizontal or top dimension and various sustainability tools along the side. A legend at the bottom of the matrix rates the appropriateness of each marketing tool and general communication tool with stakeholder categories. We suggest you reproduce this chart without the numbers and distribute to students. To assure that students are familiarized with the company, suggest they choose the same company from Question B.6 to rate in the matrix. D. Change and Create D.11. Write a code of ethics for one of the following cases: (a) the sales department of a weapons producer, (b) investors on Wall Street, (c) the marketing department of an international beer producer. To establish a benchmark for an ethics code, students could begin by comparing examples listed on two multinational sites such as Walmart website and BMW. Walmart’s code of ethics, for instance, addresses alcohol & drug abuse, harassment, inappropriate conduct, non-retaliation, and non-discrimination, while BMW’s addresses areas of honesty and integrity. BMW established an independent agency, Ethics Point, as an anonymous and confidential method for employees to report misconduct. Edmunds.com rates BMW as one of the top ethical companies. If students choose investment banking, ethical issues can be difficult to detect. Bankers can use confidential information from one client to benefit another or fail to fully outline the drawbacks of a particular transaction to guarantee a big payday. If students choose beer production, moral issues may come into play. In Australia and New Zealand, for example, the Alcohol Beverages and Advertising Code set advertising standards that do not encourage under-age drinking or appeal to children or adolescents. Advertisements must promote responsible behavior among consumers. Weapons production is a bit more difficult. Students could begin by questioning the assumption that weapons producers should even have codes of ethics. Cross-cultural barriers come into play and a code may damage the producer’s reputation. The discussion of a code of ethics for Wall Street investors might start with considering the types of potential ethical misconduct in the investment industry and of the consequences. D.12. Browse through the responsible management webpages of companies that you are a customer of with a special focus on transparency. Detect what information of interest for customers is not provided. Then contact the company and request that it make this information available to you. Transparency in this question could focus on the clothing industry. Ask students what they know about the supply chains of clothing they are wearing, such as Nike shoes. If a shirt, blouse, or jeans, where was the clothing made, especially if it is a luxury brand? Students can research specific brands and check if companies are transparent about supply chains. After the collapse in April 2013 of a Bangladeshi factory used to make brand clothes, this ethical issue has again emerged at the forefront. If supply chain information is not available, require students to write the company and ask for sustainable information. Encourage them to do so with the appropriate tone and voice, however, and give direction on the actual email message. TEST QUESTIONS 1. In the opening case about communication and responsible business performance at Nike, which statement best describes Nike’s response to the steep decline in its public image related to outsourcing issues? a. Nike addressed from the beginning the sweatshop issue and human rights issues. b. The company applied several important crisis communication tools to counter the intensive attacks on its reputation. c. CEO Phil Knight renamed the company after the winged goddess of victory in Greek mythology to counter the criticism. d. Nike shifted most of its resources from manufacturing to marketing and outsourced operations. Answer: b 2. What is considered the ultimate goal of the responsible marketing and communication management process? a. stakeholder goodwill b. effective use of crisis communication tools c. an integrated marketing campaign d. balanced communication Answer: a 3. Stakeholder goodwill is best described as a. effective communication, which occurs when messages are shared and understood. b. the activity and processes for creating, communicating, delivering, and exchanging offerings for customers, clients, partners, and society at large. c. the interpretative process of analyzing the audience and organizing the message. d. the value created for an organization when its stakeholders adopt a positive image of the organization. Answer: d 4. Maple Leaf Foods, a major Canadian food processing company, demonstrated effective communication during a dangerous food contamination crisis in 2008. What did CEO Michael McCain do to effectively communicate in response to the listeria outbreak? a. The CEO stated what happened exactly and apologized to Canadians publicly. b. The CEO opted to stop all stock options and trade until the crisis passed. c. The CEO minimized the contamination problem in the Toronto plant and gave no apologizes. d. The CEO presented Maple Leaf in the best way, focusing on what the company is doing best. Answer: a 5. Time-tested principles of business communication include a. product, promotion, price, and place. b. preparing ethical documents for the future, writing ethical emails, leaving appropriate voice messages. c. adapting to your audience, clarifying your purpose, and stating the message clearly. d. attracting, screening, and selecting of personnel. Answer: c 6. Greenwashing refers to a. balanced communication about a company’s sustainable performance activities. b. excellent performance but underachieving due to weak communication quality. c. marketing and communication that creates a misleading impression of a company´s socio-environmental stakeholder value creation. d. truthful messages of excellent stakeholder performance that are understood flawlessly. Answer: c 7. Successful responsibility communication refers to a. weak performance while effectively communicating misleading messages. b. excellent performance but underachieving due to weak communication quality. c. marketing and communication that creates a misleading impression of a company´s socio-environmental stakeholder value creation. d. truthful messages of excellent stakeholder performance that are understood flawlessly. Answer: d 8. Promotion, as part of responsible management in the general marketing mix, implies a. elimination of products with unacceptable responsible business performance. b. messages exchanged between the seller and the ultimate consumer, including non-personal advertising, personal selling, and public relations and publicity. c. the process of getting materials to customers, such as through paperless communication. d. producing eco-friendly and biodegradable package designs that can position a product at the top of a market. Answer: b 9. Internal-Operational Communication a. consists of the structured communication within the organization that directly relates to achieving the organization’s work goals. b. occurs when employees communicate with people and groups outside the organization and achieve the organization’s work goals.. c. is all the non-business-related exchange of information and feelings in which human beings engage whenever they come together. d. refers to virtual communication over the company network that focuses on operations. Answer: a 10. Cause-related marketing refers to a. a change in a stakeholder’s behavior. b. marketing communication that occurs in any situation threatening to the company. c. standards that govern relationships with various stakeholders. d. the promotion of a product by linking its sales with contribution to a good cause. Answer: d 11. Behavior standards agreed to by a company that govern relationships with various stakeholder are a. crucial abilities. b. codes of conduct. c. mission and vision. d. values and ethics. Answer: b 12. Social marketing is ultimately directed toward a. awareness only. b. consideration of new responsible consumer patterns. c. acceptance and agreement with a new responsible behavior. d. actual change in a stakeholder’s behavior. Answer: d 13. Formal sustainability reports of social and environmental business performance a. were first given birth during the Doha Round in the 1980s. b. are rare today among most Fortune 500 multinational corporations. c. focus on the factual, concise, and extensive description of an organization’s social and environmental business performance. d. have to appear in paper as published documents and cover topics of sustainability, citizenship, or responsibility. Answer: c 14. Documents that serve as strategic communication tools and provide guidance for all actions and behaviors of the company and its employees are termed a. corporate social responsibility reports. b. formal sustainability reports. c. codes of ethics. d. mission and vision statements. Answer: d 15. When customizing communication to stakeholders, which strategy involves the most advanced approach? a. the stakeholder involvement strategy, which implies that “managers can manage not the stakeholders themselves, but relationships with stakeholders.” b. the stakeholder response strategy, which is a two-way communication process identified by communication flowing to and from the public. c. the stakeholder information strategy, which is essentially a one-way communication process as “telling, not listening.” d. the stakeholder value strategy, which essentially means sustainable values are communicated, not learned. Answer: a 16. Which statement best describes dialogue with stakeholders? a. Communicating frequent and pro-active messages that involve stakeholders in creation of corporate messages. b. Publishing clear, strong mission and value statements integrated with responsibility. c. Developing departments or specialized individuals who focus solely on communication with stakeholders. d. Integrating responsible management throughout the organization first because actions speak louder than words to stakeholders. Answer: a 17. When you choose to follow the communication strategy of stakeholder involvement, a. you will begin with intermediate and secondary stakeholders. b. you will begin a dialog and build a relationship with all stakeholder groups. c. you will begin with external stakeholders only. d. you will begin with primary stakeholders only. Answer: b 18. A level 3 of stakeholder communication means a. releasing information about CSR activities to the public and informing about CSR activities. b. listening to comments or feedback from stakeholders about responsible activities and even making changes or modifications of activities. c. practicing at level 3 by at least 50 percent of all companies. d. developing a joint agenda and becoming involved with stakeholders. Answer: d 19. The “In Practice” box that describes Coca Cola’s “Secret Recipe” for effective stakeholder communication recommends which of the following? a. Listen, learn from, and take into account stakeholder feedback. b. Release information about CSR activities to the public and inform about CSR activities. c. Rely on internal sources of information exclusively when communicating. d. Reveal the secret recipe of Coca Cola to primary stakeholders only. Answer: a 20. Which statement best characterizes the most advanced form of stakeholder communication as promoted by this chapter? a. Be as transparent and open as possible with stakeholders about sustainability activities. b. Develop responsible marketing communication in products, price, place, and promotion. c. Create an ongoing dialog with stakeholders with the intent to build relationships to create goodwill. d. Request continuous comments from stakeholders about responsible management and sustainable performance. Answer: c Solution Manual for Principles of Responsible Management: Global Sustainability, Responsibility, and Ethics Roger N. Conaway, Oliver Laasch 9781285080260, 9789387994904