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Chapter 13 Consumer Stakeholders: Information Issues and Responses LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Recite the consumer’s Magna Carta and explain its meaning. 2. Chronicle the evolution of the consumer movement, highlighting Ralph Nader’s role. 3. Identify the major abuses of advertising and discuss specific controversial advertising issues. 4. Enumerate and discuss other product information issues that present problems for consumer stakeholders. 5. Describe the role and functions of the FTC. 6. Explain recent consumer-related legislation that has been passed. 7. Discuss the strengths and weaknesses of regulation and self-regulation of advertising and proposed consumer financial protection regulations. TEACHING SUGGESTIONS INTRODUCTION – The relationship between business and consumers is at the heart of business’s role in society. Because the products and services that a business produces are the primary reason for interaction between business and consumer, the ways in which that exchange takes place is of central importance. In this chapter, the authors focus on the consumer movement and product information issues, particularly advertising, warranties and labeling. KEY TALKING POINTS – This chapter should be an easy one to discuss with students. Having been immersed in a consumer society for all of their lives, and having been inundated with advertising, they will be aware of many of the issues raised here. The authors describe four types of advertising abuses: ambiguous advertising, concealed facts, exaggerated claims and psychological appeals. One way to introduce this topic is to play commercials that illustrate a particular advertising abuse and ask the students to identify the abusive tactic (applicable commercials can be found on Youtube). Specifically, instructors can use commercials for health or weight loss supplements (e.g., Dexatrim) to illustrate ambiguous advertising and Budweiser “King of Beers” and “9/11 Salute” advertisements to demonstrate exaggerated claims and psychological appeals, respectively. The interesting question will be if students are able to recognize the ethical issues inherent with the use of these types of advertising abuses or if they accept the message so completely that they see little problems with it. Neil Postman wrote an interesting book, Amusing Ourselves to Death (New York: Viking, 1985), over two decades ago that still contains a strong message about the potential ills of subjecting ourselves to extensive television viewing. Although his central concern is not television advertising per se, he does acknowledge the dangers it poses for our abilities to think critically. Since Postman wrote the book, the number of hours spent watching television has increased. The textbook states that children watch an average of 28 hours of television each week, and may see as many as 20,000 commercials in a year. Exposure to this many ads has to make some impression on children, underscoring the need for us to carefully consider the ethical issues involved in advertising. Malcolm Gladwell, in The Tipping Point (New York: Little, Brown and Company, 2002), reports on extremely interesting research that Sesame Street performed on young children’s attention patterns while watching television. This information is also relevant to the concerns about advertising to children. PBS’s show Frontline aired a segment called “The Persuaders” in 2004 that does an excellent job of exploring many of these issues. It was particularly good in its discussions of psychological appeals and their use in product advertising and political campaigns. This video is well suited to supplementing discussions of these issues. Furthermore, the impact of TIVO has forced companies to find creative ways to market their product. Specifically, TIVO has increased the use of product placement and/or plot placement to advertise consumer goods. It also has encouraged companies to seek other avenues for advertising their products. More and more companies are expanding their advertising efforts into social media outlets, which can create new legal and ethical issues. Students will have strong and varied perceptions on the ethical issues related to product placement and/or plot placements, as well as ethical issues associated with social media advertising. PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of: Cases: Wal-Mart: The Main Street Merchant of Doom The Body Shop: Pursuing Social and Environmental Change The Travel Billing Expense Controversy and the False Claims Act DTC: The Pill Pushing Debate Big Pharma’s Marketing Tactics Ethics in Practice Cases: Where Are My Slippers? Should Toy Giveaways Be Banned? Who is Responsible for Children’s Health? The “Lifetime” of a Backpack Spotlight on Sustainability: How Consumers View Sustainability Power Point slides: Visit http://academic.cengage.com/management/carroll for slides related to this and other chapters. LECTURE OUTLINE I. THE CONSUMER MOVEMENT A. Ralph Nader’s Consumerism B. Consumerism in the Twenty-First Century II. PRODUCT INFORMATION ISSUES A. Advertising Issues 1. Advertising Abuses a. Ambiguous Advertising b. Concealed Facts c. Exaggerated Claims d. Psychological Appeals 2. Specific Controversial Advertising Issues a. Comparative Advertising b. Use of Sex in Advertising c. Advertising to Children d. Marketing to the Poor e. Advertising of Alcoholic Beverages f. Cigarette Advertising g. Health and Environmental Claims h. Ad Creep B. Warranties C. Packaging and Labeling D. Other Product Information Issues III. THE FEDERAL TRADE COMMISSION (FTC) A. Early Years of the FTC B. The FTC Reasserts Itself in the 1990s C. The FTC in the Twenty-First Century IV. RECENT CONSUMER LEGISLATION A. Credit Card Act of 2009 B. Consumer Financial Protection Agency V. SELF-REGULATION IN ADVERTISING A. Types of Self-Regulation B. The National Advertising Division’s Program VI. SUMMARY Chapter 14 Consumer Stakeholders: Product and Service Issues LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Describe and discuss the two major product issues-quality and safety. 2. Explain the role and functions of the Consumer Product Safety Commission and the Food and Drug Administration. 3. Enumerate and discuss the reasons for the concern about product liability and differentiate strict liability, absolute liability, and market share liability. 4. Outline business’s responses to consumer stakeholders, including customer service, Total Quality Management (TQM) programs, and Six Sigma. TEACHING SUGGESTIONS INTRODUCTION – In this chapter, the authors discuss two central issues in the business/ consumer relationship—product quality and safety. Within the topic of safety, product liability and calls for tort reform are explored. Two government agencies that play important roles in product safety and quality are described, and finally, businesses’ responses to the consumer stakeholder issues introduced in Chapters 13 and 14 are reviewed. KEY TALKING POINTS – For many people, the most important elements of business ethics and corporate social responsibility are the products and services provided. Products hold a central position because these are (1) the items on which consumers spend their money and (2) the primary interface between business and consumer. What businesses say about their products (the topic of Chapter 13) is important, but not as dear as the performance of the actual goods and services. The two central issues related to products and services are quality and safety—not cost, which may be surprising to poverty-stricken college students. The classic product safety case is probably the Ford Pinto. Produced in the early 1970s, this subcompact car had a design defect that caused the gasoline tank to rupture and catch on fire when hit from the rear end, even at relatively low speeds. Ford engineers knew of the problem before going into production and had even identified a cheap way to fix the problem ($11 per vehicle). However, Ford executives decided to forego the cure and sell the cars to an unsuspecting public. Dennis Gioia, who worked for Ford at the time this was occurring, has written an excellent review of the circumstances and attempts to understand how such a blatantly unethical decision could have been made (Gioia, D. A. 1992. Pinto Fires and Personal Ethics: A Script Analysis of Missed Opportunities. Journal of Business Ethics. 11(5/6), 379-389). What Gioia doesn’t mention is that Ford used the exact same design, called a “drop-in gas tank,” in its early Mustangs. As documented in the 60 Minutes segment “A Classic Cover-Up?” Ford had the same problem with explosive fires resulting from rear-end collisions some seven years before the Pinto was introduced. By that time, Ford had discontinued the design in the Mustang because of the dangers involved. Why Ford used the failed design in another model, why Dr. Gioia doesn’t mention the connection, and why 60 Minutes chose not to discuss the similarities between the Mustang and the Pinto is not clear, but it does seem suspicious. Even though the Pinto case is dated, it provides a clear example of product safety issues. It becomes an eye-opening experience for the students when, at the conclusion of the Pinto discussion, the 60 Minutes video is shown and students are asked to explain why neither source mentions the other problem. Finally, the instructor also may want to touch on the more recent situation involving Toyota’s recalls of its vehicles due to runaway acceleration problems. Prior to the recalls, Toyota enjoyed a reputation for high quality vehicles. The company’s image was quickly tarnished by the sheer volume of vehicles with safety and quality issues and its failure to act quickly when it became aware of problems. The other major issue related to products and services is the idea of quality. Much like U. S. Supreme Court Justice Potter Stewart said about pornography in 1964, “I shall not today attempt further to define the kinds of material I understand to be embraced . . . [b]ut I know it when I see it,” quality defies precise definition. Total Quality Management (TQM) and Six Sigma are often criticized because they do not define quality, but the critics are silent on the question of how to define the term. Robert Pirsig describes his frustrations with this exercise in his famous book Zen and the Art of Motorcycle Maintenance. His conclusion is much like Justice Stewart’s—that we all know quality when we see it, but it is impossible to define. Using these concepts as examples, students may be engaged in a discussion about how companies can effectively design products for quality when their employees and customers can’t define what it is. PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of: Cases: Wal-Mart: The Main Street Merchant of Doom The High Cost of High Tech Foods Coke and Pepsi in India: Issues, Ethics, and Crisis Management Firestone and Ford: The Tire Tread Separation Tragedy McDonald’s: The Coffee Spill Heard ‘Round the World The Betaseron Decision (A) The BP Oil Spill and Mental Health Ethics in Practice Cases: To Check or Not to Check the Chicken? The Pirated Popcorn Spotlight on Sustainability: Sustainable Product Development is Here to Stay Power Point slides: Visit http://academic.cengage.com/management/carroll for slides related to this and other chapters. LECTURE OUTLINE I. TWO CENTRAL ISSUES: QUALITY AND SAFETY A. The Issue of Quality 1. Service Quality 2. Dimensions of Quality 3. Ethical Underpinnings B. The Issue of Safety 1. Product Liability a. Reasons for Concern About Product Liability b. Doctrine of Strict Liability c. Extensions of Strict Liability Rule 2. Product Tampering and Product Extortion 3. Product Liability Reform II. CONSUMER PRODUCT SAFETY COMMISSION III. FOOD AND DRUG ADMINISTRATION IV. BUSINESS’S RESPONSE TO CONSUMER STAKEHOLDERS A. Customer Service Programs B. Total Quality Management Programs C. Six Sigma Strategy and Process V. SUMMARY Chapter 15 The Natural Environment as Stakeholder LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Discuss the concept of sustainability. 2. Describe ten major natural environment issues. 3. Describe the NIMBY environmental problem. 4. Discuss the roles that business and government play in environmental issues. 5. Explain the concept of environmental ethics. TEACHING SUGGESTIONS INTRODUCTION – This chapter identifies what is meant by the term environment and why it has become one of the most significant issues in our lives. As background for the discussion, the authors describe some of the major environmental issues facing us. They then focus on the variety of responses the government and organizations have developed to address these issues. Two themes are emphasized—that humans are part of the natural environment and that environmental issues are extremely complex. KEY TALKING POINTS – If nothing else, this chapter should scare the students into realizing that environmental issues are critically important and that the environment is a critical business stakeholder. The authors certainly do not use “scare tactics,” nor do they need to do so. The facts alone are more than sufficient to get the message across—we need to do something about the environmental crises now. Business will have to be a key player in the effort, precisely because it is a major contributor to the problem. There is a tremendous amount of information available to supplement this chapter. Depending on the instructor’s and students’ particular interests, the discussion could center on existing problems, individual business’s efforts to alleviate environmental impacts, more general approaches to solutions, or public policy questions such as economic growth versus sustainable development. Two broad questions that might generate spirited discussion are: (1) the consequences of using a short-term outlook (e.g., quarterly financial results) to address long-term problems like environmental degradation, and (2) the performance of the current administration in environmental matters. Some books that are very informative and may be of interest include: Carson, R. 1962. Silent Spring. Boston: Houghton Mifflin. This is the book, that for many people, alerted them to the pending ecological disaster. Unfortunately, more than forty years after publication, it is still highly relevant. Schumacher, E. F. 1975. Small is Beautiful. New York: Harper & Row Publishers. Trained as an economist, Dr. Schumacher nonetheless took a very different approach to the dismal science. Two short essays are particularly relevant to this chapter—“The Problem of Production” and “Buddhist Economics.” Hawken, P. 1993. The Ecology of Commerce. New York: HarperBusiness. This book is mentioned in the chapter as an inspiration for Paul Dolan, former president of Fetzer Vineyards. It also spurred Ray Anderson at Interface Carpets (http://www.interfaceinc.com/) to reorganize his firm to a sustainable operations model. Anderson, R. 1998. Mid-Course Correction. Atlanta: Peregrinzilla Press. Mr. Anderson calls his reading of Hawken’s book a personal epiphany that awakened him to what he and others of his generation were doing to the planet, and how that would affect his grandchildren’s lives. Diamond, Jared. 2005. Collapse: How Societies Choose to Fail or Succeed. New York: Viking Books. Mr. Diamond examines the role that various ecological factors played in the success or failure of different historical societies. In addition, the documentary, An Inconvenient Truth, addresses the issue of climate change and some potential problems related to this environmental issue as well as potential solutions. While students may view climate change from a politically-charged perspective, it is important to get students to have an educated discourse on the science behind this issue and the United States’ involvement in global efforts to address this issue. Finally, two videos aired on PBS stations address the question of over consumption, its effects on our lives, and its effects on the planet. Affluenza and Escape from Affluenza may appear visually dated to students, but its message is still instructive. These videos are well suited to discussions about the social and environmental costs exacted by continued economic growth. PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of: Cases: The Body Shop: Pursuing Social and Environmental Change The High Cost of High Tech Foods Something’s Rotten in Hondo Coke and Pepsi in India: Issues, Ethics and Crisis Management The Hudson River Cleanup and GE The BP Oil Spill and Mental Health New Belgium Brewery: Building a Business on Sustainability Safety? What Safety? Ethics in Practice Cases: Going Down the Drain Spotlight on Sustainability: There’s an App for That Power Point slides: Visit http://academic.cengage.com/management/carroll for slides related to this and other chapters. LECTURE OUTLINE I. THE SUSTAINABILITY IMPERATIVE II. A BRIEF INTRODUCTION TO THE NATURAL ENVIRONMENT III. THE IMPACT OF BUSINESS UPON THE NATURAL ENVIRONMENT A. Climate Change B. Energy C. Water D. Biodiversity and Land Use E. Chemicals, Toxics, and Heavy Metals F. Air Pollution G. Waste Management H. Ozone Depletion I. Oceans and Fisheries J. Deforestation IV. RESPONSIBILITY FOR ENVIRONMENTAL ISSUES A. Environmental Ethics B. The NIMBY Problem V. THE ROLE OF GOVERNMENTS IN ENVIRONMENTAL ISSUES A. Responses of Governments in the United States 1. Air Quality Legislation 2. Water Quality Legislation 3. Land-Related Legislation 4. Endangered Species B. International Government Environmental Responses VI. OTHER ENVIRONMENTAL STAKEHOLDERS A. Environmental Interest Groups B. Green Consumers C. Green Employees D. Green Investors VII. BUSINESS ENVIRONMENTALISM A. Patagonia B. 3M Company C. The Business Case for Sustainability 1. Cost-Benefit Analysis 2. Triple Bottom Line D. Business and Environmental Activist Partnerships E. Systematic Business Responses to the Environmental Challenge VIII. THE FUTURE OF BUSINESS: GREENING AND/OR GROWING? IX. SUMMARY Chapter 16 Business and Community Stakeholders LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Identify and discuss two basic ways of business giving. 2. Discuss reasons for community involvement, various types of community projects, and management of community stakeholders. 3. Explain the pros and cons of corporate philanthropy, provide a brief history of corporate philanthropy, and explain why and to whom companies give. 4. Differentiate between strategic philanthropy, cause-related marketing, and cause branding. 5. Characterize the nature of, magnitude of, reasons for, and impacts of offshore outsourcing and business or plant closings. 6. Address steps that a business or plant might take before a decision to close is made. 7. Identify strategies that a business or plant might employ after a decision to close has been made. TEACHING SUGGESTIONS INTRODUCTION – This chapter examines the relationship between business and its surrounding community. This relationship can have both positive and negative effects. Within the positive realm, the authors focus on community involvement and corporate philanthropy. Companies also can do damage to their communities, especially by outsourcing jobs and/or closing facilities. In both instances, the authors focus on ways to manage the process and interact ethically with the community. KEY TALKING POINTS – As good corporate citizens, companies try to maximize the benefits of their resources for themselves and their communities. In broad terms, their resources consist of (wo)manpower and money. Sharing these resources with the community thus fall into the categories of community involvement (i.e., sharing time and effort resources with the community) and corporate philanthropy (giving money to community organizations). Both of these have become much more sophisticated processes over the last decade (e.g., PepsiCo recently designed a creative way to engage in corporate philanthropy by having members of the community vote for causes to be funded by the company through its Pepsi Refresh Project). Because current economic conditions are bleak for many workers in the United States, the negative side of the business/community relationship may be of more immediate concern to students. Offshore outsourcing and facilities closings have become important facts of life for many blue and white collar workers. This situation is due to two other trends—globalization and advances in technology. Globalization provides easy access to cheap labor, vastly reducing expenses. Technology provides the means to substitute machines for human labor. These trends have become so pronounced that the Bureau of Labor Statistics tracks mass layoffs on a monthly basis. Private firms, such as the outplacement firm Challenger, Gray, and Christmas, also track layoff statistics as well as provide services to the newly unemployed. While we all want corporations to provide philanthropic support to society, we also want them to provide meaningful employment opportunities. To the extent that they fail to do the second function (especially if the impetus is primarily to enrich shareholders at the expense of employees), corporate reputations suffer in the eyes of society. PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of: Cases: Wal-Mart: The Main Street Merchant of Doom The Benefit Corporation: Making a Difference while Making Money Something’s Rotten in Hondo Coke and Pepsi in India: Issues, Ethics and Crisis Management The Hudson River Cleanup and GE The BP Oil Spill and Mental Health Felony Franks: Home of the Misdemeanor Weiner Goodbye, Indiana- Hello Mexico: The Whirlpool Plant Closing Ethics in Practice Cases: Tugging the Heart or Twisting the Arm? Giving Back the Google Way Spotlight on Sustainability: Greening the Workforce Power Point slides: Visit http://academic.cengage.com/management/carroll for slides related to this and other chapters. LECTURE OUTLINE I. COMMUNITY INVOLVEMENT A. Volunteer Programs B. Managing Community Involvement 1. Business Stake in the Community 2. Developing a Community Action Program a. Step One: Knowing the Community b. Step Two: Knowing the Company’s Resources c. Step Three: Selecting Projects to Support d. Step Four: Monitoring Projects II. CORPORATE PHILANTHROPY OR BUSINESS GIVING A. A Brief History of Corporate Philanthropy B. A Call for Transparency in Corporate Philanthropy C. Giving to the “Third Sector”: The Nonprofits 1. Why Do Companies Give? 2. To Whom Do Companies Give? a. Health and Human Services b. Education c. Civic and Community Activities d. Culture and the Arts e. Giving in Times of Crisis 3. Managing Corporate Philanthropy a. Community Partnerships b. Strategic Philanthropy c. Cause-Related Marketing d. Global Philanthropy III. THE LOSS OF JOBS A. Offshore Outsourcing B. Business and Plant Closings 1. Before the Decision to Close Is Made a. Diversification b. New Ownership c. Employee Ownership 2. After the Decision to Close Is Made a. Community-Impact Analysis b. Advance Notice c. Transfer, Relocation, and Outplacement Benefits d. Gradual Phase-Outs e. Helping to Attract Replacement Industry 3. Survivors—The Forgotten Stakeholders IV. SUMMARY Chapter 17 Employee Stakeholders and Workplace Issues LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Identify the major changes that are occurring in the workforce today. 2. Outline the characteristics of the new social contract between employers and employees. 3. Explain the employee rights movement and its underlying principles. 4. Describe and discuss the employment-at-will doctrine and its role in the employee’s right to not be fired. 5. Discuss the right to due process and fair treatment. 6. Describe the actions companies are taking to make the workplace friendlier. 7. Elaborate on the freedom-of-speech issue and whistle-blowing. TEACHING SUGGESTIONS INTRODUCTION – The employer/employee relationship is central to business’s role in society. The authors devote two chapters to the subject, with this being the first. They discuss some of the changes occurring in the workplace and to the social contract, as well as the employee rights movement. Particular areas of interest include the right to not be fired without just cause, the right to due process and fair treatment, and the right to freedom of speech in the workplace. These employee stakeholder issues entail economic, legal, and ethical responsibilities. KEY TALKING POINTS – The issues discussed in this chapter should be highly relevant to the students, because they hope to be employees of companies in the near future, if they are not already. The doctrine of employment-at-will has the potential to affect each of them, both directly and significantly, especially as companies expand internationally and navigate their way through a global economic recession. Employers that outsource jobs to cheap labor locales rely on employment-at-will to allow them to terminate employees as they see fit, without any legal consequences. Of course, this same doctrine is what allows an employee to change jobs quickly and easily. Students are often surprised that at its most basic level, the employment-at-will doctrine permits employers to terminate employees as long as the decision is not based on discrimination. After studying the basic rule, students are eager to learn the exceptions to this concept. Much has been written about employee rights and due process in the workplace. As pointed out in the textbook, employees have routinely been expected to forego their civil liberties when they enter the workplace. Organizational theorists might question an organization’s ability to operate efficiently without a command-and-control bureaucratic structure, but employees are increasingly demanding the right to be treated fairly and as something more than a machine part. Marjorie Kelly addresses the need for democratic principles in the governance of corporations in her book The Divine Right of Capital (San Francisco: Berrett-Koehler Publishers, Inc., 2003). Students usually are willing to open up and discuss their ideas regarding due process in the workplace and will describe their current employer’s due process procedures when questioned. The most dramatic topic in this chapter is the question of freedom of speech, particularly that of whistle-blowing. As the textbook mentions in Figure 17-5, several movies have been made about true-life whistle-blowers. Although several of them are now dated, students can view graphic representations of some of the very real hazards whistle-blowers encounter. In addition to informing a discussion of employees’ right to free speech, these movies are also excellent vehicles with which to approach the concept of moral courage. After viewing one or more of the movies listed in Figure 17-5, students quickly grasp the concept of moral courage and why it is a relevant topic in a business and society class. These movies depict dramatic situations that students may never encounter. But they will encounter situations where they will be asked to do something they consider unethical, and that is when moral courage becomes a precious commodity. Instructors also may want to point students to other examples of whistle-blowing. In 2002, Time Magazine recognized Sharon Watkins, Cynthia Cooper and Coleen Roley as its persons of the year for blowing the whistle on illegal and unethical practices at Enron, Worldcom and the FBI, respectively. PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of: Cases: The Waiter Rule: What Makes for a Good CEO? To Hire or Not to Hire The Travel Expense Billing Controversy and the False Claims Act Family Business Should Business Hire Undocumented Workers? Nike, Inc. and Sweatshops Felony Franks: Home of the Misdemeanor Weiner Goodbye, Indiana- Hello, Mexico: The Whirlpool Plant Closing A Moral Dilemma: Head versus Heart Wal-Mart and Its Associates: Efficient Operator or Neglectful Employer The Case of the Fired Waitress After-Effects or After-Hours Activities: The Case of Peter Oiler Is Hiring on the Basis of “Looks” Discriminatory? The Case of Judy Ethics in Practice Cases: Manager’s Makeshift Rowdy Recruiting Spotlight on Sustainability: Employees are Key to Sustainability Power Point slides: Visit http://academic.cengage.com/management/carroll for slides related to this and other chapters. LECTURE OUTLINE I. THE NEW SOCIAL CONTRACT II. THE EMPLOYEE RIGHTS MOVEMENT A. The Meaning of Employee Rights III. THE RIGHT NOT TO BE FIRED WITHOUT CAUSE A. Employment-at-Will Doctrine 1. Legal Challenges to Employment-At-Will a. Public Policy Exceptions b. Contractual Actions c. Breach of Good Faith Actions B. Moral and Managerial Challenges to Employment-at-Will C. Terminating an Employee with Care IV. THE RIGHT TO DUE PROCESS AND FAIR TREATMENT A. Due Process B. Alternative Dispute Resolution 1. Common Approaches 2. The Ombudsman 3. The Peer Review Panel V. FREEDOM OF SPEECH IN THE WORKPLACE A. Whistle-Blowing B. Consequences of Whistle-Blowing C. Government’s Protection of Whistle-Blowers D. Sarbanes-Oxley Whistle-Blower Protections E. False Claims Act F. Management Responsiveness to Potential Whistle-Blowing Situations VI. SUMMARY Chapter 18 Employee Stakeholders: Privacy, Safety, and Health LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Articulate the concerns surrounding the employee’s right to privacy in the workplace. 2. Identify the advantages and disadvantages of polygraphs, integrity tests, and drug testing as management instruments for decision making. 3. Discuss the right to safety and the right to know, and summarize the role and responsibilities of OSHA. 4. Elaborate on the right to health and safety in the workplace, with particular reference to violence in the workplace, smoke-free workplaces, and family-friendly workplaces. TEACHING SUGGESTIONS INTRODUCTION – This chapter continues the discussion of employees’ rights in the workplace with particular emphasis on privacy, safety, and a healthy work environment. Managers must address these issues in order to meet employees’ needs and to treat them fairly as legitimate stakeholders of the firm. KEY TALKING POINTS – Historically, employees have often been treated as secondary stakeholders, behind owners, senior managers, and customers. As the stakeholder perspective of management gains footing and managers recognize the looming shortage of qualified workers (due to impending retirement of the baby boom generation), this attitude is changing to some extent. Although managers are seeing the need to treat workers fairly and to address many of the issues that workers find important, the global recession has slowed the progress that employees were making in this area. This chapter addresses three important employee issues—the rights to privacy, safety, and health. As discussed earlier in Chapter 9, “Business Ethics and Technology,” employees’ right to privacy is severely restricted in the workplace. Advances in technology have made monitoring employees’ locations and behaviors much easier and cheaper. Balancing the employees’ right to (or at least desire for) privacy and the employer’s right to (1) know what workers are doing and (2) supervise those activities will be an on-going dilemma for managers. The workplace is often a dangerous place for employees, due to aspects of the work itself (e.g. exposure to chemicals or operation of machinery) and risks imposed by other workers. Add to these risks the dangers of external threats such as criminal activities and terrorist threats, and managers can understand why workers have legitimate concerns about their safety. Americans are extraordinarily concerned with their health. As a country, we spend more money and a greater percentage of our gross domestic product on health care than any other nation. This general concern extends into the workplace, with employees demanding freedom from exposure to health-damaging agents such as smoke and contagious diseases. Although the authors do not highlight concerns over employees’ mental health, they are also demanding ways to reduce stress, have access to mental health professionals, and balance their work and personal lives. Work/life balance is becoming an increasingly important issue for employees and their managers, and students often identify with this concern. Many students are trying to balance school, work, extracurricular activities, and family life—they are well aware of the pressures of trying to “have it all.” Cynthia Thompson, at Baruch College, has published a work/life balance exercise that may be useful for students, Managing the Work-Life Balancing Act: An Introductory Exercise (Journal of Management Education, April 2002, Vol 26, No 2, pp. 205- 220). PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of: Cases: Nike, Inc. and Sweatshops Chiquita: An Excruciating Dilemma Between Life and Law After-Effects of After-Hours Activities: The Case of Peter Oiler Ethics in Practice Cases: Give Me What I Want or I’ll Tell the President! How Ethical Values Vary Spotlight on Sustainability: It’s All Connected Power Point slides: Visit http://academic.cengage.com/management/carroll for slides related to this and other chapters. LECTURE OUTLINE I. RIGHT TO PRIVACY IN THE WORKPLACE A. Collection and Use of Employee Information by Employers B. Integrity Tests C. Drug Testing 1. Arguments for Drug Testing 2. Arguments against Drug Testing 3. Guidelines for Drug Testing 4. State and Federal Legislation 5. Employee Assistance Programs D. Monitoring Employees on the Job 1. What Can Be Monitored? 2. Effects of Being Monitored E. Policy Guidelines on the Issue of Privacy II. WORKPLACE SAFETY A. The Workplace Safety Problem B. Right-to-Know Laws C. The History of OSHA 1. Nitpicking Rules 2. Spotty Record 3. A Rejuvenated OSHA 4. The Future of OSHA D. Workplace Violence 1. Who Is Affected? 2. Prevention III. THE RIGHT TO HEALTH IN THE WORKPLACE A. Smoking in the Workplace 1. Corporate Responses B. The Family-Friendly Workplace 1. Family and Medical Leave Act IV. SUMMARY Chapter 19 Employment Discrimination and Affirmative Action LEARNING OUTCOMES After studying this chapter, you should be able to: 1. Chronicle the U. S. civil rights movement and minority progress for the past 50 years. 2. Outline the essentials of the federal discrimination laws. 3. Provide two different meanings of discrimination and give examples of how each might be committed. 4. Elaborate on issues in employment discrimination relating to race, color, national origin, sex, age, religion, sexual orientation and disability. 5. Identify different postures with respect to affirmative action, explain the concept of reverse discrimination, and provide an overview of the Supreme Court’s decisions on affirmative action. TEACHING SUGGESTIONS INTRODUCTION – In the previous two chapters the authors considered employee rights that affected virtually everyone in the workplace. In this chapter, they concentrate on a subset of employee stakeholders whose rights are protected by discrimination laws. A chart which summarizes the application of these laws to certain protected groups and issues related to the discrimination of those groups appears at the end of this chapter. To explore the current status of discrimination laws, the authors delve into the civil rights movement and minority progress, federal laws that protect against employment discrimination, the meaning of discrimination, various issues related to employment discrimination, and affirmative action in the workplace. KEY TALKING POINTS – Although American business and society have made many strides toward ending discrimination, much remains to be done. However, in my discussions with traditional-aged college students on the topic of discrimination and affirmative action, the vast majority believe that their generation has basically ended discrimination and affirmative action is no longer needed. To them, discrimination is an anachronism of previous generations that may have required affirmative action measures to resolve, but those times are behind us. It is not until we start talking about current demographics and statistics that the students (especially women, when we talk about pay inequities) begin to see that there may still be some work to do in this area. It is important for students to grasp the current climate regarding these issues, because it can affect them initially as entry-level employees and later as managers who make hiring decisions. The authors do a very good job in this chapter of presenting a brief history of racial inequalities and various legal attempts to rectify the problem. Their discussion of affirmative action is especially informative, which is particularly helpful. As the authors point out, there is a great deal of confusion about the exact goals of affirmative action, precisely because the government was never exact in its interpretation. Another topic that instructors may want to explore is how technology can impact discrimination issues. Most households today have two working adults. In connection with developing work/life balance programs, many firms advertise that they will work with employees to utilize technology to enable the employees to take advantage of alternative working arrangements. However, many males argue that these policies are really intended for female employees, noting that they have met resistance when they try to take advantage of these policies due to traditional notions of male/female roles. On the other hand, many women note that when they take advantage of these policies, they are often given less challenging work and fewer responsibilities. If the instructor desires to go beyond a discussion of statistics, case law, and public policy, an interesting topic to explore is why discrimination is so prevalent in society. Although students invariably pronounce human equality a desirable goal or even a reality, it doesn’t take them long to realize how often and easily we all discriminate. In fact, I am nearly convinced that discrimination is part of human nature—we all distinguish people based on certain characteristics and then ascribe certain traits to them, based on stereotypes and preconceptions. Still, we typically espouse the virtue of equality and even take steps to bring it about. Two very different approaches are described in the following readings. In the short story “Harrison Bergeron,” Kurt Vonnegut depicts a society where everyone is made equal by use of handicaps to bring the more talented back in line with the less talented. Jonathan Kellerman’s novel Survival of the Fittest tells a story about a group who believe in eugenics (the study of hereditary improvement of the human race by controlled selective breeding), and act on their belief by killing people of color who also have some physical or mental “defect.” In one particularly chilling segment of the book, the protagonist, who is trying to solve the murder cases, researches the history of the eugenics movement and cites numerous recent examples in the United States of eugenics experiments being carried out. Students typically become extremely uncomfortable when they learn that it wasn’t just Hitler who thought he could make a better society by eliminating the “unfit.” A discussion about the human propensity to discriminate will likely be an uncomfortable one for many students, but it is also one that will promote critical thinking. PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of: Cases: Family Business Wal-Mart and Its Associates: Efficient Operator or Neglectful Employer? After-Effects of After-Hours Activities: The Case of Peter Oiler Is Hiring on the Basis of ‘Looks’ Discriminatory? The Case of Judy Ethics in Practice Cases: Matters of the Heart Workplace Training or Religious Discrimination? Spotlight on Sustainability: Are Sustainability Advocates a New Protected Class? Power Point slides: Visit http://academic.cengage.com/management/carroll for slides related to this and other chapters. LECTURE OUTLINE I. THE CIVIL RIGHTS MOVEMENT AND MINORITY PROGRESS A. Civil Rights in the 1950s and 1960s B. The 1970s: The Women’s Movement Begins C. The 1980s: Gains Are Made D. The 1990s: Some Progress, But Problems Remain E. The 21st Century: New Challenges Arise While Old Problems Remain II. FEDERAL LAWS PROHIBITING DISCRIMINATION A. Title VII of the Civil Rights Act of 1964 B. Age Discrimination in Employment Act of 1967 C. Equal Pay Act of 1963 D. Rehabilitation Act of 1973, Section 503 E. Americans with Disabilities Act of 1990 F. Civil Rights Act of 1991 G. Equal Employment Opportunity Commission III. EXPANDED MEANINGS OF EMPLOYMENT DISCRIMINATION A. Disparate Treatment B. Disparate Impact IV. ISSUES IN EMPLOYMENT DISCRIMINATION A. Issues of Racial Discrimination 1. African Americans in Corporate America 2. The Case of Hispanics 3. Asian Image of Model Minority B. Issues of Sex Discrimination 1. Women in Professional/Managerial Positions 2. Pay Equity 3. Sexual Harassment a. Meritor Savings Bank v. Vinson b. Harris v. Forklift Systems c. Title IX and Sexual Harassment 4. The Courts 5. Pregnancy Discrimination 6. Fetal Protection Policies 7. A Historic Class Action C. Other Forms of Employment Discrimination 1. Age Discrimination 2. Religious Discrimination 3. Color Bias 4. Sexual Orientation and Transgender Discrimination V. AFFIRMATIVE ACTION IN THE WORKPLACE A. The Range of Affirmative Action Postures B. The Concept of Preferential Treatment C. The Concept of Reverse Discrimination D. The Adarand Decision and Strict Scrutiny E. The Future of Affirmative Action VI. SUMMARY Instructor Manual for Business and Society: Ethics, Sustainability, and Stakeholder Management Archie B. Carroll, Ann K. Buchholtz 9780538453165
