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Module 1: Stakeholder…OverviewThis module begins with an introduction to business, government, and society as a system. Bysystem, we mean a group of individuals and entities that both influence and are influenced by each other. Whether you are a manager, employee, entrepreneur, customer, client, community-member, activist, investor, or all of the above, you are part of an interrelated system of business, government, and society. You are a stakeholder.Who are stakeholders? According to the textbook authors,stakeholdersare any individual or group that “affect, or are affected by, an organization’s decisions, policies, or operations” (Lawrence & Weber, 2014, p. 7).As you progress through this module, we encourage you to reflect on your own stakeholder roles and relationships. Consider your influence on various systems in business and society, and the roles and influences of other stakeholders around you.TopicsThis module covers four topics:Topic 1: Business-Government-Society: An Interdependent SystemTopic 2: Forces Influencing Business-Government-Society RelationsTopic 3: Government’s Role in Business and SocietyTopic 4: Managing Stakeholder Relationships—Public Issues and the MediaTopic 1 explores the broad conceptual relationships between business or the economy, government or politics, and society or culture.Topic 2 introduces the forces in the macroenvironment that influence business and society. These include economic, social, technological, and environmental forces.Topic 3 focuses on government as a force in society. In particular, you will examine policies and regulations and their impacts on business and society.Topic 4 introduces management of stakeholder relationships. You will look at the gap between an organization’s actual performance and the expectations of its stakeholders, as well as the potential influences of public issues on organizations and society. You will also investigate the media’s role in influencing stakeholder opinion and the lifecycle of public issues. You are encouraged to challenge your use of media and consider the influence of media on us as individuals, as employees, owners or managers of a business, and as members of society.OutcomesBy the end of this module, you will be able to:Identify stakeholder relationships.Analyze impacts (or potential impacts) of various organizational stakeholder relationships.Describe government’s role as a stakeholder influencing businesses and other organizations in society.Describe media’s role in influencing stakeholder opinions and relationships.Identify broad forces influencing stakeholders in business and society.A Word on Wording:Modules for this course draw on readings from the course textbook,Business and Society(Lawrence & Weber, 2014), the focus of which is principally on large corporations and their relationship with society. Nevertheless, many of the relationships and forces influencing corporations or large for-profit businesses are similar to those of small businesses, not-for-profit organizations, government agencies, and other institutions and organizations.Please pay attention to relevant ideas, even when the authors’ wording may seem to address dissimilar organizations to your own. Use of the words “business” and “company” in the course modules is consistent with the textbook and is usually applicable to other small and large organizations as well.Note:Remember that your Major Project accounts for 40% of your course mark. This assessment will evaluate your knowledge of the information presented throughout the course and draw on activities and assignments completed in Modules 1 through 4. Review the Major Project instructions before starting each module. As you read through the module and the textbook, make notes on any information you think will help you with your Major Project. With the help of your notes, you should be able, at the end of the course, to quickly complete your Major Project.ResourcesModule content is drawn from the following resources, as well as from those cited in the references listed at the end of each topic. You may be interested in reading the following books and/or articles in part or in their entirety. You can find some of them in TRU Library. Use Summon at search across the Library’s content. Also, see TRU Library’s business research guide at, M. (Ed.). (1998).The corporation and its stakeholders: Classic and contemporary readings.Toronto, ON: University of Toronto Press.Logsdon, J., Wood, D., & Benson, L. (2000).Research in stakeholder theory 1997–1998: The Sloan Foundation minigrant project.Toronto, ON: Clarkson Centre for Business Ethics.Lawrence, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence, A., & Weber, J. (2014).Business and society: Stakeholders, ethics, public policy(14th ed.). New York, NY: McGraw-Hill Higher Education.Post, J., Preston, L., & Sachs, S. (2002).Redefining the corporation: Stakeholder management and organizational wealth.Stanford, CA: Stanford University Press.Schumacher, E. (1999).Small is beautiful: Economics as if people mattered(25th anniversary edition with commentaries). London, UK: Hartley & Marks.Senge, P. M. (1990).The fifth discipline: The art and practice of the learning organization.New York, NY: Doubleday Dell Publishing Group.Module 1: Stakeholder…Topic 1: Business-Government-Society: An Interdependent SystemTopicTopic 1 explores the broad conceptual relationships between business or the economy, government or politics, and society or culture.Business, government, and society exist as an interdependent system that influences and is influenced by economics, politics, and culture. The work that we do (our business) influences the way in which we exist for many reasons. It will affect the amount of money we have to spend or how we spend our time. This, in turn, may influence our lifestyle.Our culture or community influences our personal and professional interests, values, and perceptions, and our profession or work priorities may affect our opinions of certain government policies or reactions to political actions. Conversely, governmental policies and regulations impact our livelihoods, our standard of living, and our quality of life, as well as the success of the organizations with which we work.Business, government, and society are part of a large entity. We are all individuals within it, but our existence depends on our interaction, and thus we are interdependent.When we view business, government, and society as a system that is interrelated we begin to see both the forest and the trees.What is a System?Asystemis an entity made up of parts that are interconnected, or relationships that are mutually dependent.The primary focus of your textbook,Business and Society, is to describe government and society in relation to business and to present ideas to help businesses succeed through developing and managing healthy relationships with individuals, organizations, and various segments of government and society. Throughout this course, we encourage you to consider these relationships from different perspectives—not just that of business. Nevertheless, much of your learning will centre on the role of business in managing relationships with stakeholders within society and government as well as with other businesses or organizations.Businesses are affected by economic, social, and political or governmental interactions and influences—intended and unintended. There are primary and secondary involvements, and thus, primary and secondary stakeholder individuals or groups who possess an interest in each organization’s performance. Stakeholders hold individual and collective power that can benefit or hinder an organization, and their actions may, to one extent or another, influence the business or organization and, perhaps, government and society as well.It is easy to think of significant events in Canada that demonstrate the interconnection of business, government, and society. Recall the closure of cod fisheries on Canada’s east coast and restrictions on salmon fishing on the west coast. What were the impacts on the communities that relied on fishing and fish processing for direct or indirect employment and business opportunities?The economic impact of these government actions cannot be considered without also recognizing the large social impact on thousands of individuals on both coasts. Job loss and plant closures threatened the way of life and the culture that has existed in coastal communities for generations. (For more information, search on the Internet for “Canadian fisheries industry.”)Canadian fisheries closures are glaring examples of the interrelationship of business, government, and society. We may overlook more subtle interconnections, but they exist.Stop for a moment and consider some of the activities in which you have engaged this week. Imagine the influence or chain of influence your decisions and actions may be creating, some significant, some small. For example, perhaps you hired or fired an employee, selected a new supplier to serve your company, ate dinner in a local restaurant, voted in an election, signed a petition, donated to charity, or chose to switch brands of toothpaste.Who are the stakeholders directly affected by your actions? Are there other stakeholders indirectly influenced? Was the influence of your actions powerful or small? In some significant or insignificant way, did your actions influence business or government or society—or all three entities?Primary and Secondary StakeholdersConsider an organization with which you are very familiar. It can be your church or place of worship, your community group or a professional association, your university, your place of work, your favourite restaurant, or the place you buy groceries. Who are the stakeholders who influence this organization?First, there are primary stakeholders. These are the individuals or groups in society with which the organization has direct relationships in order to perform its major mission. Primary stakeholders are critical to an organization’s existence and activities.Primary stakeholders for businesses may include employees, customers, suppliers, distributors, creditors and shareholders (calledstockholdersin your textbook). Rather than customers, a school or university will have students among their primary stakeholders. An organization, such as a Rotary Club, would not have shareholders, but it will have members; some small not-for-profit organizations may have volunteers instead of employees. The types of primary stakeholder groups may vary, but their commonality is the direct influence they can exert on the organization or business.For a business, primary stakeholders are themarket stakeholders, the businesses, organizations and individuals that “engage in economic transactions with the company as it carries out its purpose of providing society with goods and services” (Lawrence & Weber, 2014, p. 8). Can a business be successful without market stakeholders? Are there other stakeholders that influence business?In addition to primary or market stakeholders, consider the stakeholders or stakeholder groups with secondary involvement with the business or organization with which you are familiar. These stakeholders are the people or groups in society affected, directly or indirectly, by the organization’s activities. Figure 1.2 on page 9 inBusiness and Societylists some of the primary, or market, stakeholders and secondary, or nonmarket, stakeholders associated with business.The authors of your textbook,Business and Society, use the termsmarket stakeholdersandnonmarket stakeholders. Like most other authors, we will use the termsprimary stakeholdersandsecondary stakeholdersso that you can examine stakeholder influences in the context of not-for-profit, governmental, and other non-business organizations, as well as in the corporate context.Are there other secondary stakeholder groups that have not been identified here? The list of secondary stakeholders can be quite extensive, ranging from dozens to hundreds of organizations or other businesses, and from a few to millions of individuals. Consider a transnational business or organization and all the people and groups who are affected by their activities. Larger corporations may directly or indirectly impact millions of secondary stakeholders. There may also be many, many nonmarket stakeholders that, in turn, influence the transnational business and its success.Can you think of any businesses that have been impacted by media, government, or activist groups? How do you think the recognition of this interrelationship with nonmarket stakeholders influences the actions of leaders and managers?Sometimes, it is difficult to discern primary and secondary stakeholders. This, however, is not as important as recognizing that, because we are interdependent, the policies, decisions, and actions (or inactions) of organizations are not without direct and indirect consequence and influence on business as well as on society.In considering secondary stakeholders, reflect on whether or not they influence the business or organization or if the organization influences them. For example, perhaps the government provided funding in the form of a grant or tax break to the organization. This resulted in expansion of activities and, in turn, an increase in employees.Thus, a line may extend from government to employees showing the indirect impact on the employees of the government grant. Iflocal communityis one of the primary or secondary stakeholder groups listed in a circle, perhaps there are obvious benefits to the community by the increase in local employment. This is a result of expanded operations, which, in turn, is a result of the government funding. You can see a chain of cause and effect demonstrating the interdependencies of business, government, and society.Business and other human endeavours are . . . systems. They . . . are bound by invisible fabrics of interrelated actions, which often take years to fully play out their effects on each other. Since we are part of that lacework ourselves, it’s doubly hard to see the whole pattern of change. (Senge, 1990, p. 7)The interaction between the stakeholders is what creates the system. If you apply systems thinking, you may see the patterns of interrelationships, and this may help you make better decisions in business and in society. As noted by Senge, “Most of us have had a lifetime of training in breaking complex problems apart, focusing on the part we know best, and in ‘fixing’ problem symptoms, usually with little understanding of deeper causes” (1990, p. xix).The goal of this course is to help you see the interconnections between stakeholders and understand how the decisions or actions of one stakeholder group or individual may influence others. As effective leaders and managers, it is important to develop the ability to make decisions with awareness and consideration of the direct and indirect consequences of one’s decisions on all stakeholders involved.Cause and Effect, and Who’s Influencing WhomBusiness influences society, and so, too, can society influence business. These influences can be powerful or weak. For example, one individual’s decision to avoid a particular product may not impact a corporation’s share value, but shifts in consumer preferences can mean the end of yoyos, bean-bag chairs, and Red Cap ale.Did McDonald’s first-time-ever losses reported for the fourth quarter of 2002 indicate the end of a fast food nation? (see “McDonald’s Posts First-Ever Loss,” 2003). Apparently not, but the pressure continues as individuals and class action lawsuits in the United States target McDonald’s for the negative health impacts of what has been called the “Big Mac diet.” Society has spoken, and the multinational corporation is listening. Veggie burger, anyone?Successful companies pay close attention to societal trends and consumer interests, and they invest huge amounts of money trying to convince entire target markets that their jeans or their T-shirts are the right fit for people of a particular demographic. In addition to tracking fashion and consumer trends, successful companies heed stakeholder concerns with regard to such issues as environmental performance, labour rights, and contributions to the community.Again, a few individual stakeholders may not sway organizational decision making, but collectively, mass numbers of individual stakeholders or coalitions of stakeholders groups can exert significant power. Large corporations, such as Nike and K-Mart, experienced first-hand the negative impacts on their companies when stakeholders reacted to use of child labour in offshore manufacturing operations.If you ever doubt that one small being can make a significant impact, just consider a mosquito. (Source unknown)As individuals, consumers, employees, shareholders, or community members, we may sometimes feel powerless or exempt from responsibility because we do not think our actions make much of a difference. However, stakeholders can harness individual and collective power by voting or by aligning with professional associations, advocacy groups, consumer coalitions, the media, and activist groups, or even by participating in mass boycotts to send messages to businesses, government, and other organizations.Stakeholder ManagementStakeholder management attempts to achieve an efficient combination of contributions, risks and benefits that takes account of the roles and concerns of all stakeholders. (Preston, 2003, n.p.)In a project at the Rotman School of Management at the University of Toronto, researchers from the University of Toronto collaborated with researchers from U.S. universities on a stakeholder model of the corporation. The following material is from Preston (2003)Stakeholder management involves the following policies and processes:1. Corporations should routinely monitor the status of stakeholders, and take relevant stakeholder interests into account in decision-making.2. Corporations should communicate openly and clearly with stakeholders, particularly about their respective contributions and benefits, and about the probability and severity of downside risks to which they may become exposed as a result of their contact with the corporation.3. In dealing with stakeholders, corporations should adopt processes and modes of behaviour that are accessible to relevant parties, and appropriate in view of their commitments, contributions, and risks.4. Corporations should attempt to distribute the benefits of their activities as equitably as possible among stakeholders, in the light of their respective contributions, costs, and risks.5. Corporations should avoid altogether activities that might give rise to unacceptable risks to stakeholders (e.g., Bhopal-type catastrophes).(Preston, L. (2003). Reproduced courtesy of Lee E. Preston.)In essence, advocates of the stakeholder model of the corporation pay attention to the concerns and interests of all individuals and groups with which an organization interacts. Risk or crisis aversion is one motivator, but stakeholder engagement policies and processes can also be driven by an ethic or sense of responsibility to individual stakeholders and society as a whole.While the five policies and processes of the stakeholder model may seem simple, interpretation and implementation present an extraordinary challenge for many organizations. Businesses and other organizations with strong ethical principles, as well as those that recognize the bottom-line benefits of minimizing risk and building co-operative stakeholder relationships, likely support this model, which complements the doctrines of corporate social responsibility (CSR). (We will explore social responsibility and ethics in the following section, as well as in Module 2.) Nevertheless, in many organizations today, there is a gap between theoretical models of ideal stakeholder engagement and practical implementation.Lawrence and Weber observe, “to be effective, corporations must meet the reasonable expectations of stakeholders and society in general. A successful business must meet all of its economic, social, and environmental objectives” (2014, p. 21). Furthermore, they state, “business success is judged not simply by a company’s financial performance but by how well it serves broad social interests” (2014, p. 21).ReferencesBellinger, G. (2004). Systems thinking: The way of systems. Retrieved from, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence, A., & Weber, J. (2014).Business and society: Stakeholders, ethics, and public policy(14th ed). New York, NY: McGraw-Hill Higher Education.McDonald’s posts first-ever loss. (2003, January 23).BBC News World Edition. Retrieved from, L. (2003).Redefining the corporation: Consensus statement on the stakeholder model of the corporation. Project of the Joseph L. Rotman School of Management, University of Toronto.Senge, P. (1990).The fifth discipline: The art and practice of the learning organization. New York, NY: Doubleday Dell Publishing Group.Weber, J., & Glyptis, S. M. (2002).Instructor’s resource manual to accompany Business and society: Corporate strategy, public policy, ethics(10th ed.). New York, NY: McGraw-Hill Higher Education.Activity 1-1: Stakeholder Influences and InterconnectionsIntroductionThe purpose of this activity is to help you develop the ability to identify the network or system of interconnection among primary and secondary stakeholders in an organization. As managers, leaders, and team members in our companies, organizations, or communities, we will make better decisions when 1) we have the skills to recognize our influence on other stakeholders and 2) when we understand that there are indirect as well as direct impacts of our decisions and actions.InstructionsPart A: Reflective Journal—Stakeholders DiagramStakeholders diagram: Complete a primary and secondary stakeholders diagram of an organization with which you are familiar, for example, your church or other faith-based organization, a community group, professional association, or your place of work.Part B: ReadingRead Chapter 1: The Corporation and Its Stakeholders, pages 2–19 (up to “The Dynamic Environment of Business”) to reinforce your understanding of stakeholders and stakeholder interrelationships.Part C: Reflective Journal—Revisiting the Stakeholders DiagramStakeholders diagram: Having completed the reading, return to your diagram and reflect again on the organization you selected. Ask yourself if there are other stakeholders that you omitted in your first consideration of stakeholder relationships. Be specific in naming stakeholders so that the content of this diagram is not abstract. Add more circles and arrows if necessary, and differentiate between primary and secondary shareholders or direct and indirect influences.Are there interrelationships between primary and secondary stakeholders that you omitted the first time you drew arrows connecting the stakeholders? Go back to the diagram that you created and spend enough time to really identify and consider the larger networks of influence and interconnections there are among stakeholders.Note:In your activities in this course, you may use personal names and information because the information is not shared or made public. If you wish to share this information, however, consider how you present it. Ideally, if anyone reads the information in your activities, they would be able to see themselves or others in a positive way.Module 1: Stakeholder…Topic 2: Forces Influencing Business-Government-Society RelationsBroad forces affecting business-society relationships in the twenty-first century include economics; globalization and an evolving world economy; changing ethical expectations and social responsibility in business, natural resource, and ecological concerns; and innovations in science and technology. These are macro environmental or dynamic forces that relate to the whole system of business and society, yet stakeholders may feel their force individually or collectively, directly or indirectly. We discuss these forces in greater detail in later modules, but given their importance we introduce them here.Economics—A Dominating Forceeco•nom•ics:a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services. (Merriam-Webster Dictionary, 2007)Economics is a broad and significant force influencing (and influenced by) stakeholders in business and society at the local, regional, national, and international level. While the global economy often takes centre stage with the push for international trade and business activities that transcend political boundaries, the local economy is of equal importance.Economic issues include employment (or unemployment), the cost of living, interest rates, imports and exports or balance of trade issues for a nation, and the desire for growth. All these issues affect individual stakeholders in some direct or indirect way.However, at the local level, the interconnection of these issues with social and political concerns may be more readily visible. Does Canada’s balance of trade mean anything to you when you do your weekly grocery shopping? If you are shopping for affordable and locally grown produce and availability is limited to imported fruits and vegetables that are premium priced due to currency fluctuations and an absence of local agriculture, perhaps the economic influences have a more personal impact on you as a consumer.The softwood lumber dispute that began in 2002 is a landmark example of economic and trade issues and their influence on Canadian stakeholders. When the United States levied tariffs on imports of Canadian softwood, the economic impact made competitive pricing impossible for Canadian lumber businesses. As the industry suffered, small towns in British Columbia that were largely dependent on export of softwood lumber to U.S. markets were hit with job losses and related social and economic impacts to their communities.Economic forces coupled with political forces as Canada and the United States disputed the issue via the governing bodies of the World Trade Organization (WTO) and the North American Free Trade Agreement (NAFTA). This dispute involved stakeholders within Canadian borders and beyond, from international bureaucrats to Canadian and U.S. politicians; business operators on both sides of the border; home buyers and housing developers in the United States; and, of course, workers, their families, and other direct and indirect stakeholders influenced by the collapse of the industry in mill towns throughout British Columbia.While we often think of the global economy in terms of large transnational business, even smaller businesses feel the force of international agreements, tariffs, and the politics of trade. In the case of the softwood industry, local business owners may service or supply the larger organizations engaged in lumber exports, or perhaps they rely on workers in the forestry industry for their customer base. Outside of that industry, there are increasing numbers of small businesses involved in international trade because larger forces—political, economic, and technological—facilitate opportunities for widespread global enterprise.Whether large-scale, small-scale, or something in between, economics is a broad force that influences stakeholders in business, government, and society.Ethics and Socially Responsible BusinessSocially responsible business refers to large or small organizations that strive to address both economic and social issues relevant to their stakeholders. The degree of socially responsible business activity varies from one organization to another, and the definition is still undergoing scrutiny.There is considerable overlap between corporate social responsibility and business ethics, and the terms apply to management of organizations beyond the corporate sector. As with socially responsible business, the standard and expectations for corporate ethics is subject to debate, and both are strongly connected to public values. “The public . . . expects business to be ethical and wants corporate managers to apply ethical principles . . . about what is right and wrong, fair and unfair, and morally correct . . .” (Lawrence & Weber, 2014, p.20)—but to what degree?We may place an organization on a continuum of ethical performance, yet it may be unclear at which point on the continuum we deem an organization to be unethical. The standards by which we measure ethics vary from individual to individual and from one organization to the next. Some criteria may be obvious. For example, no doubt we would all agree that humane treatment of workers is an important measure of an organization’s ethical performance.Yet, how do we definehumane, and how does the ethical standard vary from one culture or region to another in terms of issues such as minimum age of employees, number of hours to be worked each week, entitlements to benefits, and conditions in the workplace?Chapter 1 introduces ethics as a force in business and society and examines it further in Chapters 3 and 4. We will explore socially responsible business and ethics in Module 2, and both large- and small-scale economics and global economies in Module 3.Natural Resource and Ecological ConcernsFloods and droughts in the Prairie provinces, ice storms in Quebec, blizzards and hurricanes in the Maritimes, wind storms on BC’s west coast, and forest fires that ravage vast tracts of land across the country—the environment is a force that exerts a powerful influence on Canadians and on nations beyond our borders. The impact on business and society can be measured in financial and social costs, such as damage to infrastructure, homes, and facilities; disruptions to business and daily life; and even injury and death.Natural resource and ecological concerns, such as pine beetle infestation in British Columbia and Alberta, and the local and global impacts of climate change play a growing role in business and organizational management. “Managers are increasingly being challenged to integrate ecological considerations into their decisions” (Lawrence & Weber, 2008, p. 19).Controlling air and water pollution, managing waste, and protecting our natural resource base are some of the most common ecological concerns that affect every stakeholder group in some way or another. Responsibility for these issues is sometimes in the hands of business, but without government and societal pressures to address these concerns, business alone may find it difficult to determine the perfect balance between profit and protection of our ecosystem.Optional ResourcesThe following articles discuss natural disasters, the economic impacts of climate change, and disasters associated with human activity, such as floods, fires, and power blackouts in Canada:”Modern Plagues,” an essay by Andrew Nikiforuk, inCanadian Business(October 14, 2003, pp. 50–52), describing the impact on Canada’s economy of major forest fires, hurricanes, SARS, mad cow disease, and power blackouts.”Mother Nature, the newest scapegoat,” an opinion piece by David Suzuki, published in Canadian newspapers (October 29, 2003). Available at Review on the Economics of Climate Changeby economist Sir Nicholas Stern, evaluating the economic impacts of climate change and the cost/benefits of either taking action or doing nothing to abate climate change in the future. This report received worldwide coverage inThe Economistmagazine and other publications. Available at Safety Canada’s website, with news releases, articles, and reports related to natural disasters and other large scale emergencies and infrastructure issues in Canada, at Module 3, we will continue the discussion of environmental forces.Innovations in Science and TechnologyCan you remember a time when you were in a meeting, movie, or restaurant and your concentration was interrupted by an unmelodic version of the theme song fromThe Lone Rangeror a James Bond movie? Cellphone ring tones are part of everyday life in business and society, just one example from an extraordinarily long list of innovations in science and technology that influence our lives in the twenty-first century.Innovations in every field from manufacturing and communications, health and medicine, recreation, transportation, architecture, and urban design come from advances in science, new technologies, and new knowledge. The influences on business and society are dramatic and wide sweeping. Do you recall when written correspondence required a postage stamp and several days’ delay in communications? Internet and other information and communications technologies have revolutionized business and societal operations in all sorts of ways.Innovation and new knowledge may result in improved efficiency, reduced costs, increased opportunities for international business, instant communications, improved health and medical services, and an expanding global village. These are some possibilities, but what are the realities? Scientific and technological innovation is not without cost, including financial outlays for equipment, services, and infrastructure for communities, individuals, and organizations. There are also environmental and social costs associated with new technologies and knowledge.In the world of telecommunications, the volume of electronic waste (e-waste) is exploding as the pace of innovation and consumption continues to increase. Our food and our health are also issues of concern where advancements in science and technology may clash with social and environmental interests. Debates over genetically modified food (GMF), stem-cell research, and cloning are widely publicized examples of the challenge of evaluating the costs and benefits of innovations in science and technology. New technologies are a “dynamic force” that “often force managers and organizations to examine seriously the ethical implications of their use” (Lawrence & Weber, 2014, p. 21).We will continue to explore this powerful external force in Module 3.Stakeholder Perspectives on Macroenvironmental (Dynamic) ForcesBymacroenvironment, we refer to large or great forces (issues) relating to the whole system of business and society. These “dynamic forces” (Lawrence & Weber, 2014, pp. 19–21) affect individuals and individual organizations in direct or indirect ways. As Weber (one of the textbook authors) and Glyptis explain:The forces described in this section are so broad and powerful as to virtually guarantee that a national business magazine [such asCanadian BusinessorThe Economist] or a general news magazine [such asMaclean’s] will have a cover story that ties into one of these themes.John McElwee, former chief executive of John Hancock Insurance Company, was asked what accounted for his success during his thirty-five–year career with that company. One of the keys, he says, was each day to use a pen or highlighter to identify stories that seemed interesting on the front page of theWall Street Journal. Then, he read the article with three questions in mind: What do these mean to my family? To my company? To my country? (adapted from Weber & Glyptis, 2002, p. 4).McElwee’s questions are an approach to examining an issue from several stakeholders’ perspectives. Whenever you consider an issue, you may take a personal stakeholder perspective, but it is also important to consider other stakeholders’ interests, concerns, and viewpoints.Reflecting on an issue in terms of what it means to you or your family is the most direct and narrow perspective. Regardless of whether or not the implications for your company or organization directly impact you and your family, there are ramifications for employees, managers, shareholders, and other stakeholders associated with the organization. Reflecting on the implications for your country is taking an even broader view, even though there may be direct or indirect impacts on you and your family as well.We can illustrate these levels of reflection in terms of circles orspheres of influence. The stakeholder perspective of most direct and narrow influence is the smallest and most inner circle. This represents your reflection on the meaning or influence on you and your family. As you move to the outer circles, your reflection is taking a broader look at implications for your company, for your community, and for society in Canada.You may also consider global impacts if you look beyond this country’s borders. Global impacts of issues may seem far away and personally insignificant. For example, floods or typhoons in India may elicit your concern for the well-being of people living in that region, but unless you have relatives or friends or business operations in that region, these natural disasters may have no direct impact on you or your family. Other global issues, such as climate change, may have widespread impact around the world and influence the weather in your hometown or influence your livelihood in some direct or indirect way.Using the Circles of Reflection:This is an effective way for you to reflect on the impacts of various forces or issues influencing individual stakeholders, businesses, governments, and other organizations in society.In activities and assignments throughout this course, you will reflect and comment on issues from various stakeholder perspectives. Sometimes, the circle of reflection will be narrow; at other times, you will take a broader look at influences on stakeholders in business and society in Canada and abroad.ReferencesLawrence, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence,A., & Weber, J. (2014).Business and society: Stakeholders, ethics, public policy(14th ed.). New York, NY: McGraw-Hill Higher Education.Merriam-Webster Dictionary. (2007). Retrieved from J., & Glyptis, S. M. (2002).Instructor’s manual to accompany Business and society: Corporate strategy, public policy, ethics(10th ed.). New York, NY: McGraw-Hill Higher Education.Activity 1-2: Circles of Reflection on Macroenvironmental (Dynamic) ForcesIntroductionThe purpose of this activity is to encourage you, as a stakeholder, to recognize the influence of activities going on around you in your company, your community, and in the world.InstructionsPart A: ReadingRead Chapter 1: The Corporation and Its Stakeholders, pages 19–21. Focus your attention on how macroenvironmental or dynamic forces may impact your life.Look for two brief print or online newspaper and news magazine articles on globalization. Find articles that take different views; perhaps one promotes globalization activities and their benefits and the other criticizes globalization. Read the articles, keeping in mind McElwee’s three questions.Part B: Reflective Journal—GlobalizationUsing the circles of reflection, briefly describe what globalization means to you, your company or organization, and Canada. List influences that you believe it will have (or is already having) on stakeholders that you identify, and describe whether these may be positive and/or negative influences.McElwee does not seem to look beyond the influence on his country, but what about the influence of globalization on stakeholders in other countries? Is this something that concerns you? Briefly explain your answer.Remember to cite your references (i.e., the articles on globalization). Having these references handy may help you in later activities or assignments.Module 1: Stakeholder…Topic 3: Government’s Role in Business and SocietyGovernment is a key stakeholder in business and society. In our democratic society, Canadian politicians make the same claim as that made by U.S. President Abraham Lincoln in 1863: government is to be “of the people, by the people” and “for the people” (Lincoln, 1863).Do all Canadians believe this to be true? Many Canadians are not without disenchantment with their government. Criticism of taxation, regulation, policies, restrictions, and other governmental actions (or inactions) may be a national pastime for some Canadians. A debate over government strengths and shortfalls could preempt all other discussions in this course, but let us focus here on the role of government and its intended benefits to business and, in turn, to society.Governments and Intergovernmental AgenciesRelationships between governments, business, and society include agencies and participants at the national, provincial, local, and foreign governmental levels. Additionally, international governing bodies, such as the WTO, the United Nations, NATO, NAFTA, and the European Union include representatives from more than one country who work together to make collective decisions about a wide range of business and societal concerns from agricultural subsidies to international agreements on trade, pollution and environmental regulations, workers’ rights, and, even, war and peace.With the expansion of globalization and shifts in governmental relationships around the world, the influence of these international organizations is evolving.Government Influences and ChangeChapter 8 describes the changing role of government and public policy, focusing largely on U.S. and other foreign governments’ actions. Canada does not exist in isolation, and many of the changes discussed in Chapter 8 also have a profound influence on life in Canada. The changing role of government is evident in some Canadian provinces, such as Alberta and British Columbia, where privatization of government- or taxpayer-owned organizations and Crown corporations, such as liquor stores, power generation and distribution services, and health care services, significantly impacts society. Have governmental changes influenced life for you or your family? Has your community been impacted by changing governmental policies or programs?Your concern about these changes may vary depending on how directly you feel the impact and whether you perceive the government’s actions as beneficial. Taxes are a prime example. Reaction to federal or provincial tax cuts or additional taxes is typically influenced by how changes in taxation affect your own well-being or the well-being of your family. Would you agree?Beyond taxation, governments exert influence over business and society by implementing laws, regulations, and policies, as well as by administering funding and other mechanisms to enhance economic development and protect social welfare. Sometimes, there is a conflict of interests. For example, in the biotechnology sector, industry insiders view theconservativeregulatory process for research, patents, and approvals as hindrance to progress (Robin, 2003, p. 48).Yet, the intent of these government controls is to provide protection for the health and well-being of Canadians by controlling experimentation to screen pharmaceuticals and other biotech products before they enter the market.While regulations may hamper industry progress, funding, such as the federal government’s $80 million allocation to create eighty new university chairs in biotechnology, and the Canada Foundation for Innovation grants of $43.5 million for new researchers, are examples of government initiatives aimed at helping drive industry and economic development in this sector (Robin, 2003, p. 49).The following diagram illustrates certain roles of government as they relate to business and society. This diagram is by no means complete. Perhaps you can think of other roles as they relate to Canadian government and society.As the needs and interests of business and society change, governments’ roles also change. Can you think of any recent changes in governmental policies or laws that are influencing you, your family, or your community? Are there government actions that are affecting your business or livelihood? Keep in mind the following:Business decision making and political decision making are closely connected. Business decisions affect politics; political decisions affect business. (Weber & Glyptis, 2002, p. 113)ReferencesLawrence, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence, A., & Weber, J. (2014).Business and society: Stakeholders, ethics, public policy(14th ed.). New York, NY: McGraw-Hill Higher Education.Lincoln, A. (1863, November 19).The Gettysburg address. Retrieved from, R. (2003, September 2). Survival of the fittest.Canadian Business,50.Weber J., & Glyptis, S. M. (2002).Instructor’s manual to accompany Business and society: Corporate strategy, public policy, ethics(10th ed.). New York, NY: McGraw-Hill Higher Education.Activity 1-3: Government’s Influence on Industry and Public HealthIntroductionIn this activity, we examine the government’s influence on business and explore some of the reasons why it may intervene in business and societal affairs.Part A: ReadingRead Chapter 8: Business-Government Relations. Skim over any sections describing U.S. regulations, deregulations, and regulatory agencies, but recognize that Canadian government functions with many similar agencies or governing bodies and controls.Search online in newspapers and news magazines such asThe Globe and Mail, theNational Post, andMaclean’sfor archived articles on either bovine spongiform encephalopathy (BSE, or mad cow disease) outbreaks in the Canadian cattle industry, or avian influenza (bird flu). Find two articles and search them for information on how the Canadian government reacts to such diseases, and what government’s influence might be.Part B: Reflective Journal—Regulation of Food Product and SupplyDescribe the purpose of government involvement in the regulation of food products and food supply by discussing specific ways that government policies or initiatives may help protect, promote, support, and hinder industry. In the case of the latter, whose interests do you think the government is representing (stakeholders outside of the industry)? Use examples from food industry issues that you have read about in the popular press. Remember to cite your references.Note:Your description could be in the form of a diagram, mind map, or written paragraphs. What you want to focus on is brainstorming your ideas and capturing information in a way that is relevant to you.Module 1: Stakeholder…Topic 4: Managing Stakeholder Relationships—Public Issues and the MediaOrganizations face a large number of public and social issues. Consider the severe acute respiratory syndrome (SARS) outbreak in 2003 and its effect on businesses, government, and the economy of Canada. The Ontario government’s handling of this epidemic was the subject of extensive public and media scrutiny.Another example of widespread public and media scrutiny followed the death of Polish immigrant Robert Dziekanski, who was tasered by RCMP officers at the Vancouver International Airport in the early hours of October 15, 2007. Across the nation and around the world, Canada Customs and Immigration officials and the national police force faced pubic outcries and persistent media analysis and coverage. With a cellphone camera, a bystander at the airport was able to use the Internet to share video images of the horrific scene at the airport.These images were displayed on computers around the world, and millions of people weighed in on the responsibility and accountability of the police, the airport’s staff and management, Canada’s customs and border security, and the Canadian government itself.The Gap between Stakeholder Expectations and Organizational PerformanceWith innovations in computers and other technologies prompting greater access to information and an accelerating pace of change, leaders today face many new challenges in managing stakeholder expectations. The growing organizational complexities of a global society add another dimension which includes the potential for additional layers or networks of primary and secondary stakeholders. If their expectations are unmet, stakeholders may take action, pressuring business and government to make changes regarding their social, economic, or environmental concerns. As Weber and Glyptis say, “The existence of a gap between what is expected and actual performance stimulates the formation of a public issue” (2002, p. 22).Managing the gap between customers or other stakeholder expectations and actual performance is one of the challenges facing organizations. Large organizations may have public affairs officers who handle media and public relations, employee communications and consumer affairs, shareholder relations, and relations with government, community, public interest groups, and trade associations. Effective leaders or managers understand and anticipate the potential impacts of social, technological, political, and economic issues on their organization. They strategically manage the gap between their organization’s performance and the expectations of their stakeholders and the public.Chapter 2 describes the life cycle of public issues and the ways organizations can proactively or reactively handle them. Stop for a moment and think about an issue within your own organization, or perhaps an issue about a company or organization that you recently read about in the press.Did this issue last long? Was it here today, gone tomorrow, or did it drag out for weeks or months? Did it involve political action or legal implementation of changes in order to satisfy stakeholder expectations? How did the media cover the issue—did they provide perspectives of various stakeholders or focus on one group or individual? Did the press seem to favour the company’s position, or was the press critical of the company’s actions? If you were making decisions for that organization, would you have handled things differently in order to influence public perceptions? What could the organization do to minimize the gap between stakeholder expectations and the performance of the company?The Media’s Relationship with StakeholdersMedia communications refers to communications via television, radio, the Internet, newspapers, and other print and non-print media. These media are a source of entertainment, marketing, sales, and promotional opportunities, as well as a means of providing news and information, and, of course, education. Sometimes, the lines between entertainment, education, and journalism are blurred, as “infotainment” aims to provide information or knowledge in the form of an entertaining TV show or video, and “advertorials” present advertisements about products or services in a format that resembles magazine or newspaper editorials. Regardless of the form, media communications exert powerful forces on business and society.The media has played a central role in shaping the social values of the last half of the 20th century. (Bowling for Columbine, 2003b)Media plays a significant role influencing stakeholder perceptions and expectations. Businesses, government, and other organizations use the media to inform, educate, coerce, and cajole. Media influences what we know, where we spend our money, how we vote, and what our society values.The “Pepsi Generation” was a marketing slogan representing the corporation’s goal of capturing the entire youth market of soft-drink consumers and it came to represent a lifestyle—carefree and eternally young. Imagine an entire generation of people being named after a brand of soft-drink! Along with that perception came billions of dollars in sales as somehow a soda pop influenced culture and lifestyle as well as consumer choices.Corporations spend billions of dollars in the media, not simply advertising, but building loyalty to and affinity for their brand through carefully crafted messages and images that evoke a feeling or way of life that so many of us believe we desire. Klein explains:Saturn . . . came out of nowhere in October 1990 when GM launched a car built not out of steel and rubber but out of New Age spirituality and seventies feminism. After the car had been on the market a few years, the company held a “homecoming” weekend for Saturn owners, during which they could visit the auto plant and have a cookout with the people who made their cars. The Saturn advertisements boasted at the time, “44,000 people spent their vacations with us, at a car plant.”It was as if Aunt Jemima had come to life and invited you over to her house for dinner. (Klein, 2000b, n.p.)Will we really be taller, slimmer, happier, and more popular if we drive the right car, dress in the right clothes, or consume the right brand of beer? Maybe not, but the messages are potent, and consumers are buying. That’s the power of media.The escalation of dollars spent on advertising indicates growing use of media communications to influence our values, our lifestyles and, ultimately, our spending habits. In 1998, global spending on advertising was estimated at US$435 billion. Of that, US$196.5 billion was spent in the United States alone (Klein, 2000c). Less than a decade later, global spending on advertising was projected to grow six per cent in one year to $605 billion, with the U.S. accounting for $292 billion (McClellen, 2005). By 1998, the United Nations Human Development Report found the growth in global spending on advertisement outpaced the growth of the world economy by one-third (Klein, 2000c).While General Motors, Pepsi, and other corporations spend millions of dollars in media communications, other stakeholders are harnessing the power of the media to influence business. First, we witnessed dramatic protestors gaining media attention over cruelty to animals in the fur industry. Then, the use of child labour in the garment industry became a public issue, garnering negative media attention for corporations and influencing consumer behaviour across the Western world. Product recalls were followed by public criticism and class action lawsuits in the wake of the admission of the presence of lead in Chinese-produced toys sold by Mattel and other companies.Sometimes, businesses handle these media or public relations issues without government intervention. At other times, when issues become public affairs, governments step in to protect consumer interests by shutting down operations or imposing standards or regulations to protect members of society.The relationship between business, media, and the public (especially consumers) can result in the success or failure of a company. However, media itself is a business and subject to the influence of its stakeholders. The interests and biases of shareholders who own newspapers can influence the type of coverage of the perspective presented. Additionally, corporations that spend vast amounts of advertising dollars are important sources of revenue for television, magazines, and other media communications, and they, too, may wield significant sway in the type of information and perspectives published.When a California not-for-profit organization produced a television commercial criticizing Americans for driving gas-guzzling SUVs, several U.S. television stations refused to provide airtime. Despite the organization’s willingness to pay for the advertising and outcries over restrictions on “freedom of speech,” some networks were unwilling to broadcast a commercial that offended their bigger advertisers from the oil and auto industry. While the environmental and economic impacts of inefficient vehicles are well understood, some viewers criticized the advertisement for being anti-American. Did conflicting stakeholder interests influence freedom of the press?Governments exert some controls on advertising and media promotions. For example, in Canada there are significant restrictions on tobacco advertising and sponsorship. Purportedly, this intervention addresses ethical or socially responsible media promotions and advertising. Is that the extent of government influence?While it may not have censored the media, the U.S. government used the media extensively to promote its “war on terrorism” Was American media fair and balanced in its reporting after the attacks on the World Trade Centre and Pentagon on September 11, 2001? How did American attitudes influence journalism in Canada?Perhaps we are conscientious of the sway advertising attempts to gain over consumers and other stakeholders, but what is the influence of journalism? Is the news fair and unbiased? Journalists, newspaper and television station owners and shareholders, advertisers, and the public for which the news is presented—these are all stakeholders whose interests and perspectives may influence what we hear and the how it is presented.In his 2003 Academy Award–winning documentary,Bowling for Columbine, Michael Moore highlights stakeholder interests and biases in journalism. The movie explores the question of why there is so much violence in the United States. After identifying a number of potential influences, Moore points to journalism, and in particular television news broadcasting, as a driving force behind violence. According to Moore, violence sells news, and therefore, the news in the U.S. focuses on dramatic stories about violence. After all, media is a business and it must sell to survive. Moore posits that media’s obsession is creating a culture of fear, and perhaps it is this fear that is driving violence in the United States (Bowling for Columbine, 2003a).While stakeholders continue to debate the influence of violence in video games, movies, and music videos, is it possible that the news is an even more potent force affecting our emotions, actions, and way of life?Regardless of whether or not you agree with Moore’s thesis, fairness and balance of reporting, distortion of images, restrictions on free speech, and media stereotyping are important concerns, not just for government as a watchdog over media, but for us as critical thinkers or whole-brain thinkers. It is important to develop awareness of the perspective of the reporting, be it right wing, left wing, or anywhere in between.While the accuracy of information presented in newspapers, magazines, televisions news, and other media sources may sometimes be difficult to discern, we may detect biases or sweeping generalizations and distortions in reporting if we read with awareness of both our own preconceptions and the potential partiality of the writer or broadcaster. Seeking information from a variety of sources, including those that are not financed by corporate dollars, may also help us to gain a more balanced understanding of issues in the news.Consumers, citizens, and other stakeholders in business, government, and society will benefit from developing the skills to critically read and understand media information and messages.SummaryBusiness, government, and society exist as an interdependent system that influences and is influenced by economics, politics, and culture. The system is made up of stakeholders who interact and influence each other in direct and indirect ways. Within this system, there are forces both internal and direct, as well as broad forces including media, technology, economics, and the environment. When we understand the complex interplay of economic, political, and social forces, we are better able to comprehend the impact of advances in science, globalization of markets, and the changing relationship between people and the environment in which we live.As you progress through this course examining the various forces and stakeholder groups in business and society, take time to reflect on the circles of influence. In the context of the topic under discussion in each module, ask yourself the following question: What does this mean to my family, to my company, and to my country? As business and society become more globally interconnected, consider also the impacts on people around the world. In business and society, recognize and appreciate the importance of stakeholder interrelationships and the significant forces influencing people near and far.ReferencesBowling for Columbine. (2003a). [Film’s website’s home page.] Retrieved from for Columbine. (2003b). [Film’s website’s library page.] Retrieved from, N. (2000a). No logo: Taking aim at the brand bullies. Toronto, ON: Random House.Klein, N. (2000b). Excerpt fromNo logo. Part II. (2000, November 27). Retrieved from,6761,403549,00.htmlKlein, N. (2000c). Excerpt fromNo logo. Part I. (2000, November 27). Retrieved from, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence, A., & Weber, J. (2014).Business and society: Stakeholders, ethics, public policy(14th ed.). New York, NY: McGraw-Hill Higher Education.McClellen, S. (2005, December 6). Global ad spending expected to grow 6%.Brandweek. Retrieved from, J., Lawrence, A., & Weber, J. (2003).Business and society: Corporate strategy, public policy, ethics(10th ed.). New York, NY: McGraw-Hill Higher Education.Weber J., & Glyptis, S. M. (2002).Instructor’s manual to accompany Business and society: Corporate strategy, public policy, ethics(10th ed.). New York, NY: McGraw-Hill Higher Education.Activity 1-4: Critically Assessing Media InformationIntroductionAs stakeholders in society and consumers of information, we will be better decision makers if we develop skills to evaluate the information we receive via the media. In order to do so, we must become aware of our own biases or perspectives that affect how we receive and filter information and practise critically analyzing and evaluating the accuracy of information. This activity provides information and practice in critically assessing media information.InstructionsPart A: ReadingRead Chapter 2: Managing Public Issues and Stakeholder Relationships. As you read, consider the role media may play in public issues from both the perspective of wanted and unwanted media attention for a business or organization.Read Chapter 19: Managing Public Relations. Skim Exhibit 19.C on page 438 to see the sensational impact that individuals can have on a large corporation. Consider also the significant role of media and their influence on market and nonmarket stakeholders.Read “Evaluating Internet Research Sources” at The CARS Checklist (credibility, accuracy, reasonableness, support) provides a list of things to look for in evaluating the quality of information reported on the Internet. This checklist is also a relevant tool to apply in assessing other forms of information presented in the media.Part B: Reflective Journal—Media PerspectivesReview recent newspapers or magazines and look for one example of an article that appears to present information from the perspective of a business and one example of an article that presents information from a government perspective. Do these articles also present other perspectives? Briefly describe why you think these articles are or are not fair and balanced in their reporting. You should refer back to the CARS Checklist and use the checklist in your assessment.Part C: Online DiscussionChoose a topic relevant to the current module for posting to the online discussion. This may be derived from an entry you made in your reflective journal as you worked through the activities in Module 1 or from another area of interest to you.See TRU Library’s research guides for business page at article databases and indexes page at you prepare your posting, remember the following:o The discussion topic must be a matter ofcurrentconcern in the field of business and society.o The topic must be supported by recent articles, commentaries, or events.Demonstrateparticipationin an online dialogue by responding to some of the comments your topic may elicit from other students of MNGT 3711.Demonstrateparticipationin an online dialogue by commenting on the initial posting of at least one other student.You are required to post a minimum of three postings for each module. Post your discussion under the Discussions link.Although your online discussion is not graded, you will need to draw from online discussion material when you complete the Major Project. The depth of your postings and interaction with other students will contribute to the mark you receive for that part of the Major Project.MODULE 2Module 2: Ethics and the Social…Topic 1: Defining Ethics and the Ethics ContinuumThe public image of business does not always inspire public confidence, since it is often assumed that talk of ethics in business is only talk. . . (Gillespie, 2002, p. 112)Is it possible for a company and its management team to be ethical and successful?How often do you hear stories about companies that made millions of dollars while engaging in unethical practices? Do you recall the sensational reports of the ethical transgressions at Bre-X? First, the company’s stock value soared, and they were heralded as a great Canadian success story, with the company’s claims of rich mineral deposits sending stock prices soaring. Later, investors lost millions as the lies and deceit became public knowledge. What about the meltdown of Enron in the United States? Enron was a multi-billion dollar triumph before the extraordinary magnitude of managerial malfeasance and unethical accounting practices resulted in corporate bankruptcy and criminal indictments of senior staff. Once lauded for their outstanding success, the leaders of these companies were eventually exposed for their criminal activities. Indeed, the management teams of these companies did not simply act unethically; they broke the law.The Ethical ContinuumEthics is a conception of right and wrong conduct. It tells us whether our behavior is moral or immoral and deals with fundamental human relationships . . . (Lawrence & Weber, 2014, p. 69)Both laws and ethics define acceptable or unacceptable behaviour or practices within a company or organization. Government intervention establishes and regulates many ethical business practices. However, the challenge with ethics is that they may not appear black or white, and laws rarely capture the shades of grey that people often encounter in making ethical decisions. If we picture a horizontal line with legal on the right side and illegal on the left side, perhaps we can measure everything in between in terms of greater or lesser shades or degrees of ethics.At what point on this continuum does something become unethical?What if a business practice is legal in one country but illegal in another? For example, a multi-national business many operate under several governmental legal jurisdictions. Which one dictates their level of responsibility? Do ethical standards transcend legal obligations? What about child labour in less developed countries? In many places in the world, the legal age for children to work is much lower than it is in Canada. If it is legal, is it ethical to employ children? What about environmental standards? If there are no regulatory controls on air emissions or dumping of waste or effluent, is it ethical to contaminate the air, water, and land in the country in which you are operating? What about cultural norms, such as bribery? If bribery is commonplace in some countries, does that make it ethical for organizations to engage in these practices? In today’s globalized economy, the issue of business ethics is more complex than ever before—or is it?You will explore these issues in the activities and the assignment in this module.Optional Resource:An optional resource on child labour is the website for theInternational Programme on the Elimination of Child Labour(IPEC) at is part of the International Labour Organization’s ( efforts to garner worldwide agreement banning abusive child labour.There are many laws that prevent organizations from undertaking unethical practices, but sometimes the law does not adequately address ethical issues. Sometimes the law is the rationale used to justify unethical decisions. If it’s not illegal, it must be acceptable. Paine says:Even in the best cases, legal compliance is unlikely to unleash much moral imagination or commitment. The law does not generally seek to inspire human excellence or distinction. It is no guide for exemplary behaviour—or even good practice. Those managers who define ethics as legal compliance are implicitly endorsing a code of moral mediocrity for their organizations. (Paine, 2008, p. 279)When Enron falsely posted its expected future revenues as its current earnings, it was applying legally acceptable accounting procedures. The intent was to present the most optimistic figures to Enron’s shareholders. This is only one of the dozens of ways Enron contrived to maintain share value while revenues faltered. Was this aggressive and optimistic or manipulative and deceptive? Was it ethical or unethical? For Enron, sometimes the shades of grey on the continuum slipped beyond ethics and into illegalities.Unethical, or Illegal?Who decides what is ethical or unethical, right or wrong? Laws are imposed on us, but in our democratic society, they emerge from our common value systems. Do we all share the same values and ethics? Consider the debates over legalization of marijuana in Canada or same-sex marriages, the ethics of euthanasia, abortion, polygamy, child labour, and the legal age for alcohol consumption. Canadian laws and legislation with regard to these issues are constantly under scrutiny because our collective views change as our society changes. Irrespective of the law, our own personal values and morals influence both our opinion of these issues and how we act. What influences our perception of ethics?How do we judge right from wrong? Our upbringing and family values, religious and cultural background, heritage, where we live, our education, our lifestyles, and our life experiences all influence our personal ethics and where we are on an ethical continuum. These same influences also affect ourperspectiveon where are on the continuum.Perhaps an individual spends an hour each day sending and receiving personal emails at the office but works hard at other times. In their opinion, they are behaving very ethically. Another person may behave in the same way but feel they are cheating the organization or feel some guilt for engaging in personal activities on company time. Upon reflection, despite having the same behaviour, the second person may place him or herself lower on the ethical continuum with regard to this particular behaviour or issue. A third person, observing the behaviour of both these individuals, may have yet another opinion of the standard of ethics that these individuals exhibit. Why do these opinions vary?Even when we are aware that our behaviour or actions are less than perfect ethically, we may use rationalization to justify our behaviour (as person 1 in the previous example did: “I work hard, so doing personal emails at the office is not unethical”). In your activities, you will read the article “The Psychology of Ethical Lapses,” by Mark Johnson, which highlights four common rationalizations people use to justify ethical lapses.It is important to be aware of what influences our ethics so that we make conscious decisions with full appreciation of the shades of grey in our actions and behaviour. If we fully appreciate the ethical implications of our actions, will we make the same decisions or behave in the same way?Personal Ethics versus Business EthicsDo our personal ethics differ from our ethics in the workplace?In “Corporate Roles, Personal Virtues: An Aristotelean Approach to Business Ethics,” Robert Solomon states that ethics draws on basic human “virtues” of “honesty, loyalty, sincerity, courage, reliability, trustworthiness, benevolence, sensitivity, helpfulness, cooperation, civility, decency. . . and reasonableness…” (1992, p. 330). These are fundamental or general ethical principles, and, according to Lawrence and others, “Business ethics[authors’ emphasis] is the application of general ethical ideas to business behavior” (Lawrence & Weber, 2014, p. 70).Sometimes, the presence or absence of these virtues is obvious (cooperative/uncooperative, honest/dishonest, sincere/insincere); at other times, they are present in greater or lesser degrees. Is a business operator dishonest if he or she claims their product is the best on the market, yet better products do exist? Should the advertisements read, “The third-best product on the market”? Perhaps a company claims that their product or service is reliable, but how reliable? Marketing, including advertising, promotions, pricing, and product information, is an area of business in which there is great temptation and tolerance for positioning that is lower on the ethical continuum.Is this acceptable? If we value the virtues we just listed for individuals in society, should we expect the same level or degree of virtue or ethics in business? Are business ethics the same as individual ethics, or do so-called ethical companies sit lower on the continuum than ethical individuals?Solomon notes, “Business ethics is too often conceived as a set of impositions and constraints, obstacles to business behaviour rather than the motivating force of that behaviour” (1992, p. 330). It seems that the importance of economics and profit in business may supersede the importance of ethics, or shift some ethical values down the continuum.Paul Hawken makes the following comments inThe Ecology of Commerce:By nature, by law, and by tradition, corporations often place their interests above others, including those of the community, the state, and the environment.When the chairman of the board of Union Carbide [a Fortune 500 company] first heard about [the suffering and death associated with his company’s industrial accident in] Bhopal, he stated that he would devote his life to making right what had gone so wrong for so many victims. Within weeks he was on record with a correction, saying that he had previously “overreacted,” and then sought to limit compensation to the people killed and injured. His first reaction was the human one, but his second and crucial response was corporate. The president of Union Carbide cannot publicly express grief, suffering, and compassion if it places the corporation in financial jeopardy.Following the accident, Union Carbide proceeded to liquidate a substantial portion of its assets and give them out to shareholders in special dividends, thus reducing the corporation’s potential payout to the victims. Investors who bought shares after the disaster tripled their money as billions were paid out to Wall Street speculators, institutions, and arbitrageurs. In India, years after the accident, a majority of the200,000 victims exposed to deadly gassuffer corneal opacity or blurred vision . . . as well as high rates of long-term damage to the lung, brain, liver, and kidney. Most have still received no compensation.Union Carbide’s response to Bhopal was, in the opinion of many critics, unethical and inhumane, but it was not illegal[emphasis added].Fortune 500 companieshavebeen involved in illegal behaviour between 1975 and 1985.U.S. News and World Reportstates that 115 of the 500 were convicted of a serious crime during the 1980s. (Hawken, 1993, p. 116)Many years have passed since Union Carbide was exposed for the deadly gas leaks in Bhopal, India, yet unethical and inhumane acts associated with legal business practices continue globally. Competition and the pressure to succeed in business may be the rationale for shifting virtues down into darker grey areas on the ethical continuum. Is this right or wrong? How far will we allow ourselves as stakeholders—whether employees, managers, shareholders, consumers, neighbours, or community members—to compromise our ethics for the sake of short-term economic gain? With whom does the responsibility lie for the ethical standards of the business or other organizations in which we are stakeholders? We will explore these issues in the readings and activities for this section, and you can be the judge.ReferencesBusiness owes significant obligations to our society.Newswise. (2000, February 22). Retrieved from, A. (1968, January/February). Is business bluffing ethical?Harvard Business Review, 46(1), 143–153.Gillespie, N. (2000). The business of ethics. In T. Donaldson, P. Werhane, & M. Cording (Eds.),Ethical issues in business: A philosophical approach(7th ed., pp. 112–118). Upper Saddle River, NJ: Prentice Hall.Hawken, P. (1993).The ecology of commerce. New York, NY: HarperBusiness.Johnson, M. (Winter 2003).The psychology of ethical lapses. Newsletter of the Canadian Centre for Ethics and Corporate Policy, 2. Retrieved from, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence, A., & Weber, J. (2014).Business and society: Stakeholders, ethics, public policy(14th ed.). New York, NY: McGraw-Hill Higher Education.McCoy, B. (2008). The parable of the Sadhu. In T. Donaldson & P. Werhane (Eds.),Ethical issues in business: A philosophical approach(8th ed., pp. 287–293). Upper Saddle River, NJ: Pearson Prentice Hall. Originally published inHarvard Business Review, 61(5).Paine, L. (1994, March/April). Managing for organizational integrity.Harvard Business Review, 72(2), 106–117.Solomon R. (1992). Corporate roles, personal virtues: An Aristotelean approach to business ethics.Business Ethics Quarterly 2(3), 317–399.Weber J., & Glyptis, S. (2002).Instructor’s manual to accompany Business and Society: Corporate strategy, public policy, ethics(10th ed.). New York, NY: McGraw-Hill Higher Education.Activity 2-1: Ethical Decision MakingIntroductionThis activity gives you the opportunity to explore conflicting opinions on individual ethics and ethics in business and to challenge yourself to reflect on your own ethics and values.InstructionsPart A: ReadingRead the first part of Chapter 4: Ethics and Ethical Reasoning, pages 68–78. Skim or skip the sections that describe U.S. laws, and focus on gaining an understanding of the definition of business ethics and why ethical problems occur in business, and end at the section “The Core Elements of Ethical Character.”Read the following articles; access them through TRU Library at, A. (1968, January). Is business bluffing ethical?Harvard Business Review, 46(1), 143–153.McCoy, B. (1983, September). The parable of the Sadhu.Harvard Business Review, 61(5), 103–108.Part B: Reflective Journal—Ethical PracticesBriefly answer the following questions:In McCoy’s “The Parable of the Sadhu,” the group faced decision-making challenges due to conflicting ethics. Have you witnessed an experience where one person in an organization did not share the same ethics as others in the group?How was the situation handled?What role did leaders play in this ethical situation?Prompting Questions:How did the conflicting ethics within the group make you feel?Did the difference in values affect working relationships, trust, or morale among staff or organizational members?Were the leaders or managers aware of the conflicting ethics? Was it important to them?Did they openly address the situation, or was it ignored or handled in some private way?Do you believe that playing to win is an appropriate reason for businesses to distort information that they provide to customers and other stakeholders? Comment on your opinion and how it compares to the ideas espoused in Carr’s article on business bluffing.Reflect on your interactions with businesses, government, or other organizations. Can you think of examples of practices that you felt were unethical but not illegal? What influences your opinion? Perhaps you have a similar business or have had similar experiences, so you empathize with management of that organization. Perhaps you have suffered as a result of the unethical practices of an organization with which you dealt, and this is influencing your opinion. Be aware of your values and experiences that may be influencing your judgment.What criteria or perspectives influence your perspective on what is unethical, but not illegal?Why would unethical behaviour be justifiable?Is the motivation profit, convenience, harmony within an organization, or playing to win, as Carr suggests?Does placement on an ethical continuum relate to whether or not something that is unethical is justifiable? For example, if it is just a little unethical, maybe it is reasonable under certain circumstances, but if it is very unethical, is it never acceptable?Part C: ReadingRead pages 78–83 of Chapter 4: Ethics and Ethical Reasoning, up to but not including the section“Analyzing Ethical Problems in Business.”Read Johnson’s one-page article “The Psychology of Ethical Lapses,” in theNewsletter of the Canadian Centre for Ethics and Corporate Policy(Winter 2003) at you read, consider the following questions, and answer them in your journal:Does our ability to make ethical decisions and apply moral reasoning change over time?Are our ethical standards unwavering irrespective of the situation?Are there times when we may slip further towards the dark grey shades of ethics? What are the triggers and what rationalization do we consciously or unconsciously apply in making ethical (or unethical) decisions?Part D: Reflective Journal—Analyzing SituationsConsider the following scenarios and, in your journal, answer the questions that follow.Scenario 1:A friend is shopping at a large department store and the clerk mistakenly gives an extra $20 in change on your friend’s purchase. Your friend notices the mistake but does not alert the clerk to the error.Scenario 2:Your colleague is traveling on business in a foreign country and is bringing sample products into the country. The customs agent explains that some of the goods are not allowed unless applications are filled out in advance of entering the country and it is now too late to go through this process for this trip. The agent then suggests that, for a “tip,” he can overlook this infraction. Your colleague chooses to pay the bribe.Scenario 3:Your neighbour is an elderly lady who is living independently but is getting older and struggling to take care of her home. Her adult children agree to share the cost of a housekeeper to cook and clean for their grandmother. They have the opportunity to hire a woman who is a new immigrant and pay a significantly lower cost than some agencies are offering. However, the terms of payment are cash only so the family suspects the wages will not be reported to Revenue Canada and the housekeeper may not be legally entitled to work in Canada. The family chooses this lower-cost option, anyway.Questions:Consider the list of four ways of rationalizing decisions (as cited in the Johnson article), and identify which excuse(s) or rationalization fits each of the above scenarios. Do you think the rationalization(s) is/are justified in any or all of these circumstances? Defend your position.You may have ideas other than the four that Johnson found about how people rationalize ethical lapses. You may include these in your analysis of these scenarios.Consider Figure 4.5 on page 81 of the textbook. For each of the above three scenarios, identify what development stage and corresponding basis of ethical reasoning applies to the decisions. Now that you have considered the scenarios from this lens, has your opinion changed as to whether or not the rationalization(s) is justified in any or all of these circumstances? Explain your answer.Module 2: Ethics and the Social…Topic 2: Values and Ethics in the WorkplaceEvery ethical failure in business that makes the news is usually followed by media and business commentary that attribute the wrongdoing to corporate culture. (Johnson, 2003)We blame the work environment and the culture of an organization for influencing the decision making of individuals, but what makes up a corporation or other form of organization? Organizations are staffed, managed, and operated by individuals, and it is individuals who make decisions.“One can argue that this collection of decisions creates the culture which itself influences subsequent decisions,” Johnson says; therefore, “cultures do not make decisions. Decisions make cultures” (2003).The ethical analysis and resolution of ethical dilemmas in the workplace depend on the values, virtues, personal character, and spirituality of managers and other employees. Good ethical practices not only are possible, but also become normal with the right combination of these components. (Lawrence & Weber, 2014, p. 78)It is the responsibility of managers, leaders, and all members of an organization to create an ethical corporate culture, and rewarding ethical behaviour is essential. In 1996, Thomas Donaldson wrote that developing ethical standards and codes of conduct, and treating them as absolutes, helps to define boundaries and guidelines for ethical behaviour. These absolutes go beyond definitions of legal or illegal behaviour and draw on the virtues listed earlier: honesty, loyalty, sincerity, courage, reliability, trustworthiness, benevolence, sensitivity, helpfulness, co-operation, civility, decency, and reasonableness.Management “based on integrity holds organizations to a more robust standard” than management based on compliance, whereas “compliance is rooted in avoiding legal sanctions, organizational integrity is based on the concept of self-governance in accordance with a set of guiding principles” (Paine, 1994, p. 111).Hallmarks of an Effective Integrity StrategyWhile strategies and guidelines for ethical management may vary from one organization to another, Paine identifies hallmarks of an effective integrity strategy; these may apply to all organizations:The guiding values and commitments make sense and are clearly communicated.Company leaders are personally committed, credible, and willing to take action on the values they espouse.The espoused values are integrated into the normal channels of management decision making and are reflected in the organization’s critical activities.The company’s systems and structures support and reinforce its values.Managers throughout the company have the decision-making skills, knowledge, and competencies needed to make ethically sound decisions on a day-to-day basis. (Paine, 1994, p. 112)For a more complete description of this strategy, see page 112 in Paine, 1994.The integrity strategy for supporting ethics in the workplace is more descriptive than prescriptive. It requires management to demonstrate a fundamental grasp of core ethical values, and it encourages management and employees to act with integrity rather than simply complying with rules.Perceptions about right and wrong behaviour may vary from one culture to another or from one organization to the next. While we may agree that integrity and values are important, determining the degree of ethics in our day-to-day lives seems to be a challenge of many stakeholders in society. Yet, studies documented in theNational Geographic(2003) indicated that even highly social species of monkeys demonstrate an understanding of fairness and intolerance with unfairness (Markey, 2003).Nevertheless, personal gain and self-interest, and competitive pressures on profits and business goals versus personal values may create ethical conflicts in organizational decision making. Maybe if the monkeys were seeking promotions or profit or chasing an idealized notion of success they would face the same dilemmas!To create and sustain ethical organizations, we must reflect on the motivators for our decisions, actions, and behaviour, and question the decisions and actions of those around us. In business, as in life, the pressure for success may provoke compromises in our ethics as well as rationalizations for our decisions, without recognition of their position on an ethical continuum.Perhaps if we imperfect humans are better able to recognize our own rationalizations for actions that trigger our ethical alarm bells and recognize this reasoning in others, we’ll be led to making more ethical and ultimately better business decisions. (Johnson, 2003).ReferencesBusiness owes significant obligations to our society.Newswise. (2000, February 22). Retrieved from, T. (1996, September). Values in tension: Ethics away from home.Harvard Business Review, 74(5), 48–62.Donaldson, T., Werhane, P., & Cording, M. (Eds.). (2002). The role of organizational values [Case study on Merck & Co., Inc.]. InEthical issues in business: A philosophical approach(8th ed., pp. 250–256). New Jersey. NJ: Pearson Prentice Hall.Johnson, M. (Winter 2003). The psychology of ethical lapses.Newsletter of the Canadian Centre for Ethics and Corporate Policy( Retrieved from, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence, A., & Weber, J. (2014).Business and society: Stakeholders, ethics, public policy(14th ed.). New York, NY: McGraw-Hill Higher Education.Markey, S. (2003, September 17). Monkeys show sense of fairness, study says.National Geographic News. Retrieved from, L. (1994, March-April). Managing for organizational integrity.Harvard Business Review, 72(2), 106–117.Activity 2-2: Stakeholder Perspectives and Applying Ethical Reasoning MethodologiesIntroductionThis activity gives you the opportunity to apply ethical reasoning to a case study and to explore stakeholder perspectives on the outcomes.InstructionsPart A: ReadingRead the balance of Chapter 4: Ethics and Ethical Reasoning, pages 83–87. Pay particular attention to three of the four ways identified for ethical reasoning (utility, rights, and justice).Read “Discussion Case: Chiquita Brands: Ethical Responsibility or Illegal Action?” on pages 88–89.Part B: Reflective Journal—Perspectives and MethodologiesApply the utilitarian, rights, and justice methods of ethical reasoning to the issue of whether Chiquita should have agreed to make payments to the terrorist group in order to protect its employees.Activity 2-3: Workplace Ethics, Perceptions, and SafeguardsIntroductionThe purpose of this activity is to encourage you to identify your own perceptions of ethical behaviour and to reflect on things that may influence or change your perceptions. The activity also reinforces learning about systems that safeguard organizations from unethical behaviour.Our family background, community experiences growing up and our culture influence our personal ethics. So, too, do these influences and life experiences affect our ethics in the workplace. What happens when one’s personal ethics clash with a business organization’s ethics? Have you ever had this experience? What about organizations that find their ethics conflicting with those of their customers or, or other stakeholders with which they are affiliated?In today’s increasingly global marketplace, we may face cultural clashes as one’s personal or professional ethics and values conflict with workplace ethics or standards. Consider restrictions on women’s opportunities in management in some countries, the use of child labour in factories, or the practice of bribery to secure government or business contracts that is pervasive in some countries. In some parts of the world, the business culture may view these practices as appropriate and acceptable, while people from countries or cultures may frown upon the values and ethics that allow such practices to exist.InstructionsPart A: ReadingRead Chapter 5: Organizational Ethics and the Law.Read the following article; access it through TRU Library at, L. (1994, March). Managing for organizational integrity.Harvard Business Review, 72(2), 106–117.Part B: Reflective Journal—Ethics in the Workplace1. Briefly answer the following:List programs, systems, safeguards, or other ways that organizations help foster ethical behaviour in the workplace. Comment on your preferences. Refer back to readings for this activity and reflect on your own experiences with business and workplace ethics for ideas.Sample Answer:Organizations can foster an ethical climate through managements’ actions and treatment of employees and through programs and policies that encourage an ethical corporate culture.Management should not ignore ethical transgressions, because it weakens ethical standards and indicates that ethics are not truly important within the organization.Organizations can openly promote ethics in the workplace and provide training to staff on ethical standards and application of ethics in decision-making.Organizations can develop formal ethical standards and/or codes of ethics.Organizations can develop ethics committees, ethics offices, and/or ethical hotlines.Organizations can conduct regular audits or evaluation of the standard of ethics and adherence to standards among staff and management (as well as among suppliers, contractors, and other organizations with which they have significant professional relationships).Organizations can train and develop a culture of ethics. This requires a culture in which employees do not simply comply with standards or rules but embrace the integrity of their organization’s ethical practices.2. Search online for one company or organization’s ethical code of conduct (also sometimes called “corporate code of conduct”). This can be a company of your choice, but it is more likely you will find this information on websites of larger corporations. Briefly answer the following:Do you think these statements reflect a compliance-based or integrity-based ethics program (or both) at the company/organization? (Refer to pages 99-100 of your textbook for a description of these two approaches to ethical management.) Defend your answer.Is the ethical code of conduct directed at one group of stakeholders within the organization or is it inclusive of all internal stakeholders (such as employees, management, and boards of directors)?Module 2: Ethics and the Social…Topic 3: Corporate Social ResponsibilityCorporate social responsibility—or CSR, as it is commonly called—has increasingly become a part of organizational management and decision making. According to Lawrence and Weber, in terms of accountability, CSR “means that a corporation should be held accountable for any of its actions that affect people, their communities, and their environment” (2014, p. 49).This suggests external stakeholders are holding businesses accountable. Indeed, in Canada, as in many other countries, there are environmental regulations, employment standards, and other municipal, provincial, and federal regulations and standards to which corporations are expected to adhere.When corporations are perceived to perform at standards below some stakeholders’ expectations, this may prompt activists or special interest groups to lead campaigns demanding that corporations be held accountable for negative environmental or societal impacts of their operations.In 2007, when lead was discovered in children’s toys imported from China, Mattel withdrew its products from store shelves and recalled certain products. However, concerned parents and organized groups questioned the degree to which corporations are being accountable for the health and safety of toys made offshore. Concerned leading citizens also asked what role governments were playing in ensuring both corporate responsibility and accountability for the health and safety of toys imported for children.Defining Corporate Social ResponsibilityCorporate social responsibility generally refers to the operation of a business in a socially acceptable manner, that is, in a way that meets the ethical, legal, commercial and/or public expectations that society has of business. (Industry Canada, 2008)The Social Aspects of CSRThe scope of CSR extends beyond corporate accountability today. Its definition and application is evolving as managers learn to apply CSR in planning and decision-making.CSR encompasses business decisions or actions that have social or societal impacts. CSR considerations can include management decisions regarding fair labour practices and employment policies that foster workplace diversity, including opportunities for people with disabilities. Some CSR management practices aim to create safe, harassment-free work environments for women, or even pro-actively seek to include women in management. Other CSR programs focus on family-friendly work environments or support for employees’ personal and professional development.Beyond Corporate Social Responsibility:Despite its name, corporate social responsibility extends beyond the business, orcorporate, sector to include socially responsible management practices in government and not-for-profit organizations. It refers to a management approach and ethical operating standard that are applicable, irrespective of the type of organization.CSR also extends beyond employees to other stakeholders and seeks to build healthy relationships between the business or organization and the broader community.Social Responsibility to StakeholdersFor years, CSR was based on “acts of charity” (Lawrence & Weber, 2014, p. 51). That was a notion that companies have a responsibility to give back to the community through what the textbook authors call “corporate philanthropy” (p. 51). This practice continues today with corporations donating to charitable organizations or community programs. Tim Hortons supports minor hockey and other children’s sports teams across Canada through its Timbits Minor Sports Program (see Tim Hortons website, 2010–2012). No doubt many of Tim Hortons’ employees, customers, suppliers, and other stakeholders have benefited from this financial supportGovernment and not-for-profit organizations, too, engage in workplace giving programs by supporting the United Way or charitable groups. Some companies and organizations are become more strategic about the choice of charitable support or sponsorship they offer to communities, seeking more obvious or direct connections with their stakeholders. For example, women’s cosmetics companies may choose to support research for the cure for breast cancer or other programs that support women’s health. Financial institutions support financial literacy training programs in schools, and sporting goods companies support amateur athletes or sports teams.Some businesses or organizations help to support community economic development and community development programs; others are active in human rights and programs to support ethical global business (Willard, 2002, p. 9). Some businesses and organizations include environmentally responsible management as part of their CSR commitments.For example, TD Bank Financial Group sponsors the Great Canadian Shoreline Cleanup, a program that organizes volunteers to spend a few hours or a few days helping clean up litter and other debris along riverbeds and coastlines across Canada, as well as helping collect data on the causes and types of shoreline litter in each region (TD Great Canadian Shoreline Cleanup, 2008). TD’s support goes beyond its financial commitment—the bank encourages its employees to volunteer alongside other community members. Engaging employees in community volunteerism is something that numerous organizations are doing to better involve their staff in CSR.More than GivingIn its infancy, CSR focused on corporate philanthropy. While corporate giving and sponsorship programs are still popular, for many companies and other organizations, CSR has a broader application. Some organizations view it as a “branch of risk management” (“Just Good Business,”2008). The risk perspective may be associated with potential costs or risks of stakeholder backlash associated with unfair labour practices or poor environmental management practices.Risk can be assessed in terms of potential for loss of customers or decrease in product sales, or even loss of license to operate if health, safety, or environmental transgressions are beyond acceptable limits to society. What was the financial cost to Mattel in terms of reputation and loss of revenues when lead was detected in some of its toys? By considering CSR issues in terms of risk, companies can assert an economic or financial value on the cost of doing “good” business.Lawrence and Weber refer to the “stewardship principle” in CSR, which are management practices that assume an “obligation to see that all” stakeholders—“particularly those in need or at risk” (Lawrence & Weber, 2008, p. 49)—benefit from the actions of the organization. It is from the stewardship principle that stakeholder management theory evolved. Organizational leaders who adopt a stakeholder management approach acknowledge theinterdependenceof business and society. This can require leaders to balance the interests and needs of many diverse stakeholder groups.Note:Stakeholder management theory was introduced in Module 1.In the past, the term CSR was sometimes used to explicitly indicate the inclusion of stakeholder concerns for the environment as well as for societal concerns. However, in recent years, the term usually encompasses environmental issues as a recognized part of social or societal concerns. Perhaps the environment is included in CSR because neglect or abuse of the environment has societal ramifications. For example, air pollution caused by manufacturing and transportation of goods damages air quality and compromises our quality of life. Worse yet, certain air pollutants trigger higher incidences of asthma and other respiratory problems, particularly among children.Water pollution and solid and liquid waste management are other examples from which we can draw a connection between social and environmental issues. What about the depletion of resources including forests and fish stocks? Is this an environmental issue or a social issue? Perhaps it is an economic issue. Consider the communities across Canada that rely on these natural resources for their livelihood, as well as people who enjoy recreational activities in parks and wilderness areas.As you can see, many social and environmental issues are inexorably interrelated. Organizational leaders who support CSR recognize the interconnection with economics as well. Well beyond philanthropic support for environmental not-for-profit organizations, CSR can encompass pollution prevention initiatives, energy- and water-efficiency programs, and corporate efforts to protect or restore natural environments. These environmental initiatives may be directly related to core business activities. For example, CSR efforts can include efforts to minimize pollution and waste in manufacturing or distribution of goods. Ideally, CSR decisions and actions have direct and positive economic or financial benefits as well as benefits associated with enhanced community relations and license to operate.Some companies engage in environmental leadership that goes beyond their core business activities. In Module 3, we will consider the environment as a macro force in business and society.The Evolving Definition of CSRWhile the scope and definition of CSR continues to evolve, businesses and other organizations interpret and apply CSR differently, depending on their needs, interests, and level of commitment to the wellbeing of their stakeholders. Instead of being called CSR management practices or issues, sometimes they are referred to as environmental, social, and governance issues (ESG). Governance issues are more typically related to ethics and accountability issues associated with executives, boards of directors, and shareholders. You will examine governance issues in Module 4.Corporate social responsibility is sometimes referred to as the 3Ps: people, planet, profit. This refers to corporate or organizational planning and decision-making that takes into consideration the positive and negative impacts on society (people), the environment (planet), and financial or economic considerations (profit). This is also sometimes called “triple bottom-line reporting” (Lawrence & Weber, 2014, pp. 153–154).CSR, triple bottom-line reporting, ESG—all these terms refer to strategies used by organizations to integrate social and environmental considerations along with financial or economic considerations in business planning and decision making. In Module 3, you will examine sustainable development and triple bottom-line management, and the similarities to CSR.Corporate Social Responsibility Criteria and ContinuumsCorporate social responsibility (CSR) goes beyond compliance with environmental laws, employment standards, and fundamental responsibilities of the corporation to the community—but to what degree? Opinion varies from country to country as well as within different organizations and cultures. Just as we may view organizational ethics on a continuum, so too can we view socially responsible business on a continuum.What criteria would you use to place organizations on different parts of this continuum? What degree or level of social responsibility merits placement on the far right side, indicating an organization is totally responsible socially (and environmentally)? At what point does an organization shift from being socially responsible to being socially irresponsible? Do you think others would make the same judgments as you? Do you think your work experiences or other interactions with business and organizations influence your perception of what is socially responsible?How an organization chooses to engage in CSR (or corporate citizenship) may reflect the values and interests of stakeholders within the organization, as well as the type of business or industry sector in which it exists. For example, Canadian Business for Social Responsibility is a professional organization that includes large companies, some of which are publicly criticized because of the pollution they generate. Yet, these same companies may have highly effective CSR programs that focus result in exemplary labour conditions for staff and wonderful programs that support local communities and charities.Where would these companies fall on a CSR continuum? This a challenging question because there are so many factors that we can use to evaluate the social responsibility of an organization. In lieu of a continuum, reports, checklists, rating systems, audits, and social-responsible “screens” are some of the methods stakeholders employ in evaluating CSR performance.Canadian Business for Social Responsibility (CBSR):“CBSR is a business-led, non-profit CSR consultancy and peer-to-peer learning organization that provides its members with candid counsel and customized advisory services as they formulate powerful business decisions that improve performance and contribute to a better world.” (Canadian Business for Social Responsibility R, 2008a)CBSR publishes reports, including the CSR/Sustainability Report Assessment tool. Some of CBSR’s reports are available to the public, while others are available to members only.More and more people are choosing to flex their investment power to support corporate social responsibility. This has created a category of mutual fund-type investments called SRIs or socially responsible investments. Investors include individuals as well as organizations and institutions such as foundations, religious organizations, unions, insurance companies, trusts, investment pools and corporate and public sector pension funds. Today, many financial institutions and independent organizations manage funds that specialize in socially responsible investments (SRIs). These are funds that screen investment for negative and/or positive social (and environmental) performance as well as financial performance.Given that social responsibility comes in many forms, how do SRIs determine which companies to select? Socially responsible investment screening applies all the standard financial decision-making processes that are a part of a prudent investment management approach, but it also selects investments based on investors’ ethical, moral, social, or environmental concerns. There are a large number of social and environmental issues that SRIs can use to select (or screen) investment.Rather than using a continuum, SRI funds typically use a checklist to negatively screen out investments that would not qualify as socially (or environmentally) responsible and a rating system to evaluate potential investments for their compliance with some or all of the following criteria. The choice of corporate social responsibility criteria varies from one SRI fund to the next, and the degree to which they scrutinize investments for social (and environmental) responsibility also varies.Next is a list of some of the more common issues that motivate socially responsible investors in Canada, according to the Social Investment Organization:What are the issues that motivate socially responsible investors?Charitable contributions.How much and what kinds of charities does a company contribute to?Community involvement.Does a company support local programs strengthening the community in which it operates?Corruption.Does a company have a history of working with regimes that operate in corrupt ways?Ecology and environment.Does a company operate according to sustainable development practices?International human rights.Does a company operate in countries respecting human rights?Labour relations.Does a company have a good record with regard to treatment of its employees? Do contractors of the company use sweatshop or child labour?Military weapons.Is a company a major military contractor?Minority groups.Does a company have a good record in dealing with minority groups?Nuclear power.Does a company generate nuclear power or contribute to the nuclear power industry?Product safety and quality.Does a company produce safe, reliable products or services? Does its advertising truly represent its products or services?Women.Does a company have a good record on its treatment of women generally and its female employees in particular?Investors can select investments managed by professionals employing screens on these issues, or they can directly choose their own investments based on their own research or research provided by investment professionals.(Reproduction with permission of the Social Investment Organization.)The Canadian Socially Responsible Investment Reviewcalculated that as of June 2006, Canadians held $503.61 billion in assets invested according to socially responsible guidelines. This was a huge increase over the value of assets two years earlier, which totalled $64.46 billion (Social Investment Organization, 2007, p. 5).In addition to leveraging their financial resources, socially responsible investors also have the opportunity to leverage their voting power as shareholders to influence CSR performance of the companies in which they invest. Investors sometimes choose their SRI funds based in part on the shareholder activism of the fund managers. You will consider shareholder activism and its influence on corporate governance in Module 4.Optional Resources:Social Investment Organization (SIO) athttp://www.socialinvestment.cais a Canadian organization that publishes articles, studies, policy and advocacy briefs, and background information on socially responsible investment in Canada. SIO’s website also has links to other resources on socially responsible investing and mission-based investing.Social Investment Organization (SIO) annually publishes theCanadian Socially Responsible Investment Review. The 2012 SIO Review was published in 2013 and is available at: an American website with articles, press releases, and background information on socially responsible investment, as well as links to indices, including Calvert Social Fund Index, The Dow Jones Sustainability Index, and the Jantzi Social Index (Canadian) also posts CSR links, including the list of “100 Best Corporate Citizens,” and free downloadable guides, such as theSRI Mutual Funds Kit(an easy-to-read guide to introduce new investors to socially responsible investment (SRI) mutual funds) andThe Community Investment Guide, which explains how investments can work to assist community development.The Prores and Cons of Corporate Social ResponsibilityThere are arguments for and against CSR. The challenge is to balance the organization’s financial responsibilities with legal, ethical, social, and environmental responsibilities. Figure 3.2 on page 51 of the textbook lists the evolving phases of CSR for a period of over more than fifty years and cites various drivers, including societal concern for human rights and ecological awareness. Moral obligation to society is sometimes identified as the driving force behind CSR, as is the notion that corporate social responsibility is an extension of individual ethics and values. Enlightened self-interest is also sometimes cited as a driver, or at least a benefit, of CSR.Many of today’s successful companies are operating with their stakeholders in mind. Their progressive corporate social performance contributes to their long-term financial viability, which further promotes healthy communities and stable economies. (Canadian Business for Social Responsibility, 2008b)Lawrence and others cite a number of arguments for and against CSR. Critics claim that CSR or corporate citizenship programs and initiatives lower economic efficiency and profits, and impose unfair costs on more responsible companies, thereby creating unequal competition. They also claim that CSR requires skills that businesses lack, imposes hidden costs on customers and other stakeholders, and shifts the onus for social responsibility from individuals and society to business (Lawrence & Weber, 2014, pp. 56–58). Arguments favouring CSR include claims that it balances power with responsibility, discourages government regulation, improves business value and reputation, corrects social problems caused by business, and promotes long-term profits (Lawrence & Weber, pp. 53–56).Canadian Business for Social Responsibility adds the following list of positive effects of socially responsible management, noting that all these benefits of good corporate citizenship translate into financial bottom-line benefits:Reduced operating costsEnhanced brand and image reputationIncreased sales and customer loyaltyIncreased ability to attract and retain employeesPublicity and increased public image from good works(Canadian Business for Social Responsibility, 2008b)While organizations that engage in CSR may reap long- and short-term benefits from key stakeholders, many organizations make only a superficial commitment to socially responsible business practices. If the values and ethics of leaders in the organizations are not congruent with CSR, then it is unlikely that the companies will integrate environmental and social policies and programs into planning and decision making.Although SRIs have enjoyed rapid increase in investment in recent years, Canadian and international capital markets, in general, tend to ignore “the potential of Corporate Social Responsibility to create shareholder value” (Corporate Governance and Corporate Social Responsibility, 2003, p. 86).According to Brian Schofield, a partner in a Toronto-based investment firm focusing on CSR and sustainable development strategies, “‘Forward-thinking corporations that seek recognition for their Corporate Social Responsibility activities need to . . . articulate their successes in a way that capital markets can understand, such as cash flow, reduced risk and business growth and development’” (Schofield, cited by Corporate Governance and Corporate Social Responsibility, 2003, p. 86). After all, CSR is a balance of environmental, social, and economic imperatives.While SRIs are gaining the attention of the capital markets, CSR management practices within companies (and other organizations) are evolving beyond philanthropy and responsiveness to societal demands. Stakeholder partnerships and triple bottom-line decision-making is resulting in an integration of CSR into overall planning and management in some organizations.Some companies (and other organizations) are recognizing the potential for CSR management to go beyond moral obligation or social responsibility. CSR management can generate opportunities to build and strengthen stakeholder relationships and to “create value” (“Just Good Business,” 2008, n.p.). While few companies have yet learned how to truly capitalize on corporate social responsibility, CSR—if done well—“is not some separate activity that companies do on the side, a corner of corporate life reserved for virtue: it is just good business” (“Just Good Business,” 2008, n.p.).Optional Resources:Industry Canada’s website at information on CSR, including information on principles and guidelines, various CSR management systems, indicators, measurements, benchmarks, reporting, and other CSR tools.Industry Canada offers, in various accessible formats,Corporate Social Responsibility: An Implementation Guide for Canadian Businessat, M. & Kramer, M. (2006, December). Strategy & society: The link between competitive advantage and corporate social responsibility.Harvard Business Review, 84(12), 79–92.ReferencesCanadian Business for Social Responsibility (CBSR) (2008a).About CBSR. Retrieved from http://www.cbsr.caCanadian Business for Social Responsibility (CBSR). (2008b). What is corporate social responsibility? Retrieved from governance and corporate social responsibility [Electronic version]. (2003, September 15).Canadian Business, 76(17), 83.Friedman, M. (1970). The social responsibility of business is to increase its profits. In T. Donaldson & P. Werhane (Eds.), Ethical issues in business: A philosophical approach (8th ed., pp. 34–39). Upper Saddle River, NJ: Pearson Prentice Hall.Industry Canada. (2013). International business information: Corporate social responsibility. Retrieved from good business [Electronic version]. (17 January, 2008).The Economist. Special Reports. Retrieved from, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence, A., & Weber, J. (2014).Business and society: Stakeholders, ethics, public policy(14th ed.). New York, NY: McGraw-Hill Higher Education.Porter, M., & Kramer, M. (2006, December). Strategy & society: The link between competitive advantage and corporate social responsibility.Harvard Business Review, 84(12), 79–92.Social Investment Organization (SIO). (2003). Socially responsible investment FAQ:What are the issues that motivate social investors? Retrieved from Investment Organization (SIO). (2007, March).Canadian socially responsible investment review 2006. Retrieved from Social Investment Organization. (2013).Canadian Socially Responsible Investment Review 2012. Retrieved from: Great Canadian Shoreline Cleanup. (n.d.).What we do. Retrieved from Hortons. (2010–2012).Local programs. Retrieved from, B. (2002).The sustainability advantage: Seven business case benefits of a triple bottom line. Gabriola Island, BC: New Society Publishers.Activity 2-4: The Benefits of Corporate Social ResponsibilityIntroductionCritics of CSR still refer to economist Milton Friedman’s classic article first published in 1970 inThe New York Times Magazine, in which he states, “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits . . . ” (Friedman, as cited in Donaldson and Werhane, p. 39). In contrast, there are many articles written since that time that describe a host of roles and responsibilities for business in society.In 2006,Harvard Business Reviewpublished a paper by famed corporate strategist Michael Porter and colleague Mark Kramer, on how CSR can be seized for “competitive advantage,” if properly integrated into corporate strategy.InstructionsThis activity challenges you to reflect on the benefits of CSR and to scrutinize the information a company discloses about its corporate citizenship (or CSR performance).Part A: ReadingRead Chapter 3: The Corporation’s Social Responsibilities and Chapter 7: Global Corporate Citizenship.Read the Discussion Case: “Apple’s Supplier Code of Conduct and Foxconn’s Chinese Factories” at the end of Chapter 7.Part B: Reflective Journal—AppleDo you believe that Apple demonstrated global corporate citizenship, as defined in Chapter 7? Explain why or why not.What are the advantages and disadvantages to Apple joining the Fair Labor Association rather than relying solely on its own internal audits?Module 2: Ethics and the Social…Topic 4: Organizations and Their Role in the CommunityWe know that where community exists, it confers upon its member’s identity a sense of belonging and a measure of security. It is in communities that the attributes that distinguish humans as social creatures are nourished. Communities are the ground-level generators and preservers of values and ethical systems. The ideals of justices and compassion are nurtured in communities. (John W. Gardner, as cited in Shaffer & Anundsen, 1993, p. 28)Businesses and other organizations exist in communities. Lawrence and others discuss communities as “a range of groups that are affected by an organization’s actions” (Lawrence & Weber, 2014, p. 404). This includessite communitiesand immediate neighbours in the geographic location where the business or other organization operates. It also includes the community of employees, various communities of interest, and communities associated via cyber space. Organizations may have positive or negative impacts on the people of these communities, and, given the prevalence of Internet and international operations, impacts can occur on both local and far away communities.Community members represent stakeholders or stakeholder groups that are associated directly or indirectly with an organization. As we discussed in Module 1, Preston describes a stakeholder model of management that is inclusive of stakeholders, “takes their interests into account in decision making,” avoids “activities that might give rise to unacceptable risks to stakeholders,” and provides “benefits to stakeholders” (Preston, 2008, n.p.).Businesses that seek to provide benefits to community members beyond employees and other primary stakeholders are also practicing corporate social responsibility (CSR). Of course, as with many CSR practices, businesses that take community interests and benefits to their community stakeholders into consideration are likely acting with “enlightened self-interest” (“Do It Right,” 2008, n.p.).Organizations benefit from strengthening and supporting the community in which they operate. Corporate community involvement includes charitable works and volunteerism as well as involvement in educational, scientific, and health-related programs. It also may include financial benefits associated with payment of taxes and contributions to economic development. Some corporations partner with governments on projects such as new bridge or road construction and management, new parks and recreational facilities, and educational institutions and facilities as well as cultural facilities.Are there any public buildings or facilities in the town or city in which you live that are named after a company? This project may have received financial support from that company or perhaps the project was a result of a public-private partnership. Public-private partnerships can be leveraged to provide project management expertise and financial capital for communities while building social capital for the corporation.Social Capital in CommunitiesSocial capitalis a term that “refers to features of social organization, such as networks, norms, and trust that facilitate coordination and cooperation for mutual benefit” (Putnam, 2002, n.p.). Adler and Kwon define social capital as “the goodwill that is engendered by the fabric of social relations” (as cited in Lawrence & Weber, 2014, p. 406). Social capital refers to a sense of connection, willingness to help, friendliness, and goodwill among people in communities. Businesses and other organizations that invest in social capital enhance the quality of life, thereby helping to build vital, healthy and cooperative communities. In return, “social capital can be transmuted . . . into financial capital” (Putnam, 2002, n.p.). Thus, “social capital is coming to be seen as a vital ingredient in economic development around the world” (Putnam, 2002, n.p.).Supporting social capital and engaging in community development are key elements of corporate social responsibility (CSR). We have already discussed some benefits of CSR in the previous topic section. Organizations that practice CSR recognize the interconnection of economic development with the quality of life of their stakeholders including the workforce, their families, the site community or communities in which the organizations operate, and the society in which they exist. The World Business Council for Sustainable Development states, “Business is not divorced from the rest of society. The two are interdependent and it must be ensured, through mutual understanding and responsible behaviour, that business’s role in building a better future is recognized and encouraged by society” (WBCSD, 2003).Why Invest in Social Capital?According to Victor, business has two significant obligations to society. One is to “meet the expectations of the community, obey the laws, and be good keepers of the community’s faith” (as quoted in “Business Owes,” 2000, n.p.). The other, Victor says, is for business to “do extraordinary things to enhance the quality of life and the community and to assure the character and future of our shared environment” (as quoted in “Business Owes,” 2000, n.p.).Regardless of obligations, or opportunities for acts of enlightened self-interest, businesses and other organizations are interconnected and are part of larger circles of influences, just as their stakeholders are interrelated. Thus, building strong relationships and strengthening community provides benefits for organizations, their workforce, and the local and global communities or societies in which they exist.Be it volunteerism, charitable contributions, or other forms of support for the community, organizations that engage in community relations are helping to build social capital and enhance their own success. Returns are visible in terms of positive publicity and goodwill toward the company. For some companies, that may translate into customer loyalty and an expanding customer base.Organizations may also benefit from tax breaks associated with their sponsorship programs and philanthropic initiatives. Those that support health and educational development, as well as economic development initiatives in communities, may benefit because this helps to build a healthier and more skilled workforce as well as enriching the company’s social capital. Organizations that build relationships with the community also have the opportunity for enhanced civic engagement. A higher level of social capital “produces a win-win outcome because it enables everyone to be better off” (Lawrence & Weber, 2014, p. 407).Stop for a moment and think about some of the corporations or organizations in which you are a stakeholder. Are you familiar with any programs or initiatives they have in place that support local hospitals, non-profit associations, or community events?Now, think about your experiences at schools, community centres, parks, or local events. Have you noticed the logos or names of corporations or other organizations that are providing support to these community services and events? How does that make you feel about these organizations?Optional Resources:The following businesses describe their social capital and community initiatives on their corporate websites. Search online for these businesses and review their community engagement or the community aspects of their CSR programs:Canadian TireVancity Credit UnionIKEAFortisBCTD Bank Financial GroupGap Inc.BC HydroThere is ample evidence of business and community or social sector interaction. As we discussed in Topic 3, traditional corporate giving is still prevalent today—local stores collect toys for children of low-income families during the holiday season, companies participate in annual United Way campaigns, and large corporations such as CIBC support the “Run for the Cure” in cities across Canada.Yet, beyond corporate philanthropy, innovative businesses are creating new arrangements such as “collaborative partnerships” (Lawrence & Weber, 2014, p. 420) that benefit communities while also having more strategic benefits for the company. Partnerships can include business, government, not-for-profit organizations, and other stakeholders. Together they can be responsive to community needs, “contributing aid and assistance where feasible and being socially responsive to legitimately expressed human needs” (Lawrence & Weber, 2014, p. 422).Sagawa and Segal (1999) have this to say:. . . we see in these exchanges a new paradigm for business and the social sector, one that eliminates barriers between the sectors while preserving their core missions.This new paradigm pairs visionary companies that see how the social context in which they operate affects their bottom lines with a new breed of social entrepreneurs who understand how business principles can enable them to fulfill their social missions more effectively.Together, they are reshaping how communities tackle some of their most intractable social challenges. (Sagawa & Segal, 1999, p. 3)ReferencesBusiness owes significant obligations to our society.Newswise. (2000, February 22). Retrieved from it right. (2008, 19 January).The Economist, 386(8563), 22–24.Lawrence, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence, A., & Weber, J. (2014).Business and society: Stakeholders, ethics, public policy(14th ed.). New York, NY: McGraw-Hill Higher Education.Post, J., Lawrence, A., & Weber, J. (2003).Business and society: Corporate strategy, public policy, ethics(10th ed.). New York, NY: McGraw-Hill Higher Education.Preston, L. (2003).Redefining the corporation: Consensus statement on the stakeholder model of the corporation. Project of the Rotman School of Management, University of Toronto.Putnam, R. (2002, 30 November). The prosperous community: Social capital and public life [Electronic version].The American Prospect. Retrieved from, S., & Segal, E. (1999).Common interest common good: Creating value through business and social sector partnerships. Boston, MA: Harvard Business School Press.Shaffer, C., & Anundsen, K. (1993).Creating community anywhere. New York, NY: G. P. Putnam’s Sons.Weber J., & Glyptis, S. (2002).Instructor’s manual to accompany Business and society: Corporate strategy, public policy, ethics(10th ed.). New York, NY: McGraw-Hill Higher Education.World Business Council for Sustainable Development (WBCSD). (2003).Business role: Corporate social responsibility. Retrieved from http://www.wbcsd.orgActivity 2-5: Public-Private PartnershipsIntroductionPublic-private partnerships are one approach that provincial and municipal governments in Canada use to help fund social programs and local infrastructure. There are a growing number of agreements with private enterprises to build, own, lease, maintain, or operate healthcare facilities, roads, bridges, and other infrastructure in Canada. Buildings and other facilities along with equipment and even educational programs in universities, colleges, and elementary and secondary schools are also funded by corporate contributions and supported by public-private partnerships.What are the costs and benefits to business and society? In this activity, we explore the costs and benefits to communities of public-private partnerships.InstructionsPart A: ReadingRead Chapter 18: The Community and the Corporation.Optional Reading:Corporate sponsorship and education partnerships: A class act. [Advertising supplement.]Canadian Business, 74(20). October 29, 2001, pp. 89–98.Part B: Reflective Journal—Perspectives on PartnershipsReview either the optional reading or another article/news story on public-private partnerships. Drawing on your own experience, discuss some of the pros and cons of these types of relationships. Identify stakeholder groups, including those from the community, and discuss how their opinions vary on this issue. Identify what may be influencing these opinions. Use the circles of reflection to consider what perspectives you think may influence these stakeholders.Consider public-private partnerships in education. At the high school, college, or university level, this kind of partnership can provide real-life or applied research and work experience forstudents. Does this experience compromise academic learning? What if it shifts the focus of the education to a company’s needs, perspectives, and interests, thereby compromising students’ exposure to a balanced education?Can these partnerships benefitcommunitiesandsociety(the country and its economy) by providing useful employability skills and practical experience to students who will enter the workforce?What is the motivation ofcorporationsto provide support or engage in public-private partnerships in the education sector? Are they motivated by potential benefits to the company, to the community, and to the country? They can receive tax breaks, help develop a skilled workforce, gain access to low-cost (student) labour, influence education and curriculum to coincide with their corporate interests, and develop a dependency on the use of their products (which may or may not cost the schools money in the future).If schools are in need of the financial support or in-kind contributions of computers, software, books, and other equipment that corporations can provide, how will this influence education? Willschool administratorsmake decisions based on the best learning opportunities for students, or the more financially beneficial options for the school?What isgovernment’s(e.g., the Ministry of Education’s) role in public-private sponsorships? Where does their responsibility lie in providing adequate funding for education or abdicating financial support to corporations? If government budgets are limited, cansocietybenefit by private sector support of education? What about public-private partnerships which bringcorporatesponsorship into schools? How might this influencestudentvalues, or their objectivity in decision making? Are decisions made in the best interest of students? Consider the impact of soft-drink and junk-food vending machines in schools. They bring revenues into schools, while increasing student exposure to unhealthy food products. What cost or impacts does this have onstudents, on thehealth care system, and onCanadian society? What influence does commercialization of education have on students and on society? (This is a big question).What does corporate support of schools mean to you and your family, to your community, and to the country? How is it influencing individuals, business, government, and society in Canada today?Note:We will discuss some of the negative implications of brand and corporate influence in schools in the consumerism section of Module 4.Review recent newspapers or magazines and look for one example of an article that appears to present information from the perspective of a business and one example of an article that presents information from a government perspective. Do these articles also present other perspectives? Briefly describe why you think these articles are or are not fair and balanced in their reporting. Refer back to the CARS Checklist and use it in your assessment.Part C: Online DiscussionChoose a topic relevant to Module 2: Ethics and Social Responsibility Continuum for posting to the online discussion. This may be derived from an entry you made in your reflective journal as you worked through the activities in Module 2, or from another area of interest to you.Use Summon@TRU Library (which is on the main page,, visit the Article Databases & Indexes page (, or see the Research Guides ( to find the Business resources.As you prepare your posting, remember the following:What you chooses as a topic for your discussion must be a matter ofcurrentconcern in the field of business and society.Your topic must be supported by recent articles, commentaries, or events.Demonstrate yourparticipationin an online dialogue by responding to some of the comments your topic may elicit from other students of MNGT 3711 and by commenting on the initial posting of at least one other student.Post a minimum of three postings for each module. Post your discussion in the appropriate module area under the Discussions link.Although your online discussion is not graded, you will need to draw from online discussion material when you complete the Major Project. The depth of your postings and interaction with other students will contribute to the mark you receive for that part of the Major Project.MODULE 3Module 3: Broad Forces in Global…Topic 1: Globalization and Global Social-Economic IssuesThe term [globalization] has come into common usage since the 1980s, reflecting technological advances that have made it easier and quicker to complete international transactions—both trade and financial flows. It refers to an extension beyond national borders of the same market forces that have operated for centuries at all levels of human economic activity—village markets, urban industries, or financial centers. (International Monetary Fund, 2002)The definition above refers to increasing trade and capital flows that integrate local, national, and regional economies around the world and to the movement of people (labour) and knowledge (technology) across international borders. A powerful and broad force in business and society, globalization is fuelled by expansion of international trade and supported by improvements in transportation systems along with innovations in information and communications technologies (ICT).While much of the focus of globalization is on local and national economic impacts, globalization also generates widespread social impacts and political and environmental issues. It affects culture, communities, and the way of life of workers, consumers, and communities throughout the world.Has globalization influenced your life in some way? Check the label on the shirt you are wearing, or look to see where the produce you buy is grown. Review the names of the companies in the mutual funds you purchase, or see where your electronics goods are made. Are these Canadian companies? Even if the answer isyes, do these companies conduct all their business activities within Canada? How might this global business environment influence your employment prospects, the costs of goods that you purchase, or some of the decisions you make in everyday life?In business and society today, businesses and even universities are shifting to global operations. We are all influenced by globalization one way or another. What control do we have over globalization and our role in it?Stakeholders with particular influence on globalization include governments and international institutions, such as the Word Bank and the World Trade Association. Transnational corporations are conducting an unprecedented scope and scale of business and economic activity around the world, and advances in information and communications technologies are enabling even the smallest businesses or organizations to participate in global commerce and other international activities.Author andNew York Timescolumnist Thomas Friedman identifies three fundamental changes that enable globalization: changes in how people communicate; changes in how individuals, organizations, and governments invest; and changes in how people learn about the world (Friedman, 2000).Proponents of globalization believe its advancement is both inevitable and beneficial; however, its focus on economic development provokes a wide range of stakeholder views on the costs and benefits of this new world order. Stakeholders’ perspectives on the costs and benefits of globalization run the gamut. Advocates of globalization believe in the social and economic benefits of expanding capitalism and increasing efficiency in a global business climate. The International Monetary Fund (IMF) cites advancements in living conditions around the world, while acknowledging, “the strongest gains have been made by the advanced countries and only some of the developing countries” (IMF, 2002).Stakeholders that hold anti-globalization perspectives are concerned about growing economic disparity, indicating that while economic conditions in lesser developed countries may be improving, it is through exploitation of the poor, the natural resource base, and the environment. While many stakeholders enjoy greater access to lower cost and greater variety of goods and services, others have antipathy for increasing consumerism and/or concern over the ecological impacts of global economic growth.The Costs and Benefits of GlobalizationAdvocates of expanding global business through free trade and globalization align, typically, with Adam Smith’s classic economic theory: “if government abstained from interfering with free competition, industrial problems would work themselves out and the practical maximum efficiency would be reached” (Bullock, 2001, paraphrasing Smith, 1776).Critics of globalization argue that the quest for efficiency may produce benefits in absolute terms, but these benefits are being unequally and inefficiently distributed amongst the global community. They also challenge the information presented about the true costs and impacts of these so-called efficiencies.For years, Robert F. Kennedy Jr., senior attorney for the Natural Resources Defense Council, has campaigned against the negative aspects of globalization. In an interview withMacLean’smagazine, Kennedy made the following comments:I believe in free-market capitalism. But in a true free-market economy you can’t make yourself rich without making your neighbour rich. You show me a polluter and I’ll show you someone who’s imposing his costs of production on the public. Eastern Canadian lakes are contaminated with mercury and your forests are acidified. That’s the result of coal-burning power plants in the Ohio Valley. Those impacts pose costs on the people of Canada and should, in a true free-market economy, be reflected in the price of electricity generated by those plants. If those plants had to pay the true cost of bringing their product to market they would shift to natural gas or other less-polluting counterparts. We ought to force polluters to absorb the true costs of doing business. Not doing so distorts all of free enterprise. (Leahy, S. (2003).An Imbalance of Power. Maclean’s Magazine, (p. 40).)Kennedy and other critics of the free-market system from which globalization was born cite the problems of an economic system that fails to assign costs to anything that does not directly produce economic returns. Globalization may have negative environmental and social costs that are not measured, and, therefore, we are not truly evaluating the costs and benefits of expanding global economics.Globalization is driven by governments seeking economic growth for their citizenry, as well as by corporations competing to capture opportunities to expand markets and revenues while increasing their economic efficiency. Globalization has brought many benefits in terms of technological advances and increasing economic efficiencies. The primary measure of its success is economic growth. With increasing economic growth comes prosperity and enhanced quality of life, or does it?With expanding global trade, we hear of governments that are complicit in human rights violations associated with business and nations unwilling to enforce regulations to protect their natural resource base. For the leaders of such countries, globalization results in economic gains offset by social and environmental losses.We observe companies that neglect their responsibilities to the communities or countries in which they operate. They increase their profits by relocating their operations to countries where they can pay very low wages or avoid corporate taxes.Other corporations enhance their profit margins by circumventing regulations or working in countries with less restrictive regulations, thereby reducing financial costs associated with environmentally responsible management.David Korten, author ofWhen Corporations Rule the World, has long criticized globalization of the world’s economy, claiming that it benefits transnational corporations (TNCs) at the expense of developing countries and other community-based economies (Korten, as cited in Copeland, 1999, p. 6).Korten also warns of the world’s economy being controlled by a very few large corporations and the economic disparities associated with this shift in power. Five firms “control more than 50 percent of the global markets for consumer durables, automotive products, airlines, aerospace, electronic components, electricity and electronics and steel,” and five corporations “control over 40 percent of the global markets for oil, personal computers, and media” (Korten, as cited in Copeland, 1999, p. 6).Among the world’s Fortune 500 firms, sales increased 1.4 times and assets increased 2.3 times in the period between 1980 and 1993. During the same period, these top 500 companies in the world reduced employment by 4.4 million people while increasing salary and benefits to chief executive officers (CEOs) by 6.1 times their compensation of the previous decade (Korten, as cited in Copeland, 1999, p. 6). By the end of the 1980s, the average compensation for CEOs in the United States was about 70 times the wage of a factory worker (Reich, as cited in Copeland, 1999, p. 6).Optional Resources:David Korten’s website athttp://www.davidkorten.orgThe International Forum on Globalization (IFG) at International Forum on Globalization (IFG)Is this the price of “integrating economies around the world” (IMF, 2002)? Does the economic efficiency espoused by Adam Smith translate into profits for some countries and corporations and losses to quality of life and environment in other countries? Does large-scale business result in a very slow trickle of economic benefits from tremendous wealth at the top, to marginal wages for those at the bottom? Is this good business? Is this ethical business?Whatever your perspective on these questions, it seems apparent that globalization is a powerful force that will continue to provoke debate over the responsibilities of affluent countries to their poorer counterparts and the importance of universal standards of environmental management, business ethics, and human rights.Implementation of a standard of universal human rights, as well as worldwide agreement on environmental standards and goals, requires international agreements. In case of transgressions of agreements, standards or commitments, policing by international authorities is required. Perhaps, with such controls in place, globalization can truly do more good than harm.However, finding common ground on issues relating to the social and environmental responsibilities of global business operations is a challenge, especially given the diversity of cultures, societies, and economies around the world. These influence the values and priorities of leaders and decision makers in both the government and the corporate sector. In addition, the values and concerns of other stakeholders may also conflict with the economic priorities of globalization. Such stakeholder controversy is evident in the public protests and contentious atmosphere pervading the larger meetings of the World Trade Organization (WTO) in recent years.In a speech appealing to the global business community to support the UN Global Compact (which stresses the importance of sustainable economic, environmental, and social strategies), Kofi Annan, then Secretary-General of the United Nations, stated:If we cannot make globalization work for all, in the end it will work for none. The unequal distribution of benefits and the imbalances of rule making, which characterize globalization today, inevitably will produce backlash and protectionism. And that, in turn, threatens to undermine and ultimately unravel the open world economy that has been so painstakingly constructed over the course of the past half-century. (Annan, as quoted by Post, Lawrence, & Weber, 2003, p. 500)According to statistical evidence, globalization contributed to an unprecedented rise in economic growth in the last few decades, with global per capita GDP (gross domestic product) increasing almost five fold. In parts of Asia, average per capita incomes are rapidly approaching the levels found in industrial countries. However, “a larger number of developing countries have made only slow progress or have lost ground. In particular, per capita incomes in Africa have declined relative to the industrial countries and in some countries have declined in absolute terms” (IMF, 2002).Community Economic DevelopmentGlobalization is a force in society, the success of which we measure in terms of economic growth. What is society’s ultimate goal? Increasing financial wealth? Is economic growth alone the metric for quality of life? Is large-scale global economic development the only way to bring prosperity and well-being to society?One approach that seeks a closer interconnection between economics and the well-being of society is “community economic development” (CED). “CED is the process by which local people build organizations and partnerships that interconnect profitable business with other interests and values” (Centre for Community Enterprise, 2003). CED brings economics to the local level where quality of life is not measured by gross domestic product or balance of trade, but by healthy and vital communities where healthy social interaction, housing, education, physical and environmental health and well-being, culture, and the arts all play an equal role to employment and economic activity. As stated on the Curve Lake First Nation (2012) website:CED is a participatory process by which communities initiate and generate their own solutions to economic problems leading to positive concrete changes in communities by:creating employmentstabilizing local economiesreducing povertycontributing to the health of the natural environmentbuilding on local resources and capacitiesincreasing community control (Curve Lake, 2012)CED strategies have multiple bottom lines, “based on a consideration of the relationship between economic factors and other elements” such as education and training, the natural environment, health, housing, and the arts (SFU, n.d.).CED draws from the ideas of the British economist E. F. Schumacher, who was a protégé of J. M. Keynes, another renowned British economist, and who worked closely with J. K. Galbraith, the Canadian and American economist. In 1973, Schumacher published the classic bookSmall is Beautiful, a critique of the problems of large-scale economics of western society and a guide to human-scale economics. This book was updated and republished in 1989 and 1999.Contrary to the advocacy for globalization and trans-national organizations which dominate economic forces in western world society, Schumacher argued that large-scale economics are economically inefficient, environmentally irresponsible, and inhumane to workers (Schumacher, 1999). The expression “small is beautiful” refers to smaller-scale business, cooperative ownership, and regional workplaces that use local labour and resources. Schumacher’s concern was for the well-being of people and not maximization of production and corporate projects.Small is Beautifulprovides guidelines for development where financial capital serves people rather than where people serve capital.Schumacher’s philosophy “faults conventional economic thinking for failing to consider the most appropriate scale for an activity, blasts notions that ‘growth is good’ and that ‘bigger is better,’ and questions the appropriateness of using mass production in developing countries, promoting instead ‘production by the masses’” (Wikipedia, 2013), that people can benefit from employment, rather than their governments benefiting from natural resource exploitation.“Schumacher was among the first economists to question the appropriateness of using gross national product (GNP) to measure wellbeing, emphasizing that ‘the aim ought to be to obtain the maximum amount of well being with the minimum amount of consumption’” (Wikipedia, 2008, n.p.). This philosophy was sometimes referred to as “economics from the heart rather than from the bottom line” (Sustainable Economics, n.d.)The most recent edition includes contributions from thirty-three contemporary leaders and thinkers, who discuss the impact of Schumacher’s philosophy on current political and economic thought.Optional Resource:The Schumacher Society (UK): Corporate CitizenshipIs it possible for large-scale global economics to serve people? Critics of globalization claim it “threatens employment and living standards and thwarts social progress” (IMF, 2002). “The powers behind this system are those of the global banks and financial institutions, the military-industrial complex, the oil and energy giants, the biotech conglomerates and the powerful media and communications giants, which fabricate the news and overtly distort the course of world events” (Chossudovsky, 2001).Fabrication and distortions aside, how does a transnational company relate to the society in which it exists? Does it have the same level of commitment to all the communities in which it operates? How do the stakeholder relationships of multinational corporations differ from those of a small independent operator who lives and works in the same community as his or her customers?There is considerable debate, given large multifunctional corporations are now the dominant form of economic organization worldwide, about how responsive and accountable companies should be to their stakeholders. This debate includes fundamental questions asked by Clarkson, such as: Who should be considered stakeholders? Which stakeholder interests should a corporation take into account? How should stakeholder interests be balanced against stakeholder objectives (such as profits)? What changes should be made to corporate governance to reflect these new interests? (Clarkson, 1998)Global corporate citizenship refers to both acts and processes that identify, analyze, and respond to a “company’s social, political and economic responsibilities as defined through law and public policy, stakeholder expectations, and voluntary acts flowing from corporate values and business strategies” (Post, cited in Lawrence & Weber, 2014, p. 139). While globalization can enable organizations to find ways to avoid social and environmental responsibilities, companies that aspire to good global corporate citizenship apply a high standard of business ethics regardless of the country or community in which they operate. “No society holds the view that human beings are accountable only for themselves.…When a corporation or a business enterprise is part of a community, the leaders of that business are expected to assume responsibility for the community’s welfare” (Post, Lawrence, & Weber, 2003, p. 488).What, specifically, constitutes good global corporate citizenship is subject to interpretation and may vary according to the laws, public policies, stakeholder values, and expectations of one organization or political region to the next. It is a “rapidly evolving area of managerial practice” (Lawrence & Weber, 2014, p. 142), and, in larger organizations this may be managed through corporate communications or public affairs departments, or through a department dedicated to corporate citizenship or corporate social responsibility (CSR).As with CSR (discussed in Module 2), we may view corporate citizenship on a continuum. Indeed, many of the characteristics of organizations engaging in corporate social responsibility are similar to those of organizations pursuing good global citizenship strategies. Companies’ placement on the continuum may shift as they address social, environmental, and economic issues associated with their international operations.Organizations can merge global corporate citizenship strategies with their global business strategies, reconciling and integrating “their private, profit-seeking activities with their public responsibilities” (Post, Lawrence, & Weber, 2003, p. 489). Good global corporate citizens may support issues in their community relating to poverty, housing, education, the natural environment, health, and the arts, the same concerns raised by community economic development.Perhaps, then, it is possible for global organizations to share the samelevelof responsibility and concern for communities and their stakeholders. The challenge is to attract the same level of commitment to global corporate citizenship as to global economic development. Critics of corporate citizenship programs suggest the efforts are either “superficial attempts to enhance reputation, without real substance, or that [the initiatives] are inherently limited by the corporation’s profit-maximizing imperative, or both” (Lawrence & Weber, 2014, p. 146).ReferencesBullock, C. J. (Ed.) (2001). Introductory note Vol X. In A. SmithWealth of nations(1776). [Electronic version]. The Harvard Classics: New York, NY: P.F. Collier & Son. Retrieved from for Community Enterprise (2003).Community Economic Development. Retrieved from, M. (Ed.). (2001, August 29). CRG statement. Centre for Research on Globalization.Shanty Bay, ON. Retrieved from, M. (Ed.). (1998).The corporation and its stakeholders: Classic and contemporary readings.Toronto, ON: University of Toronto Press.Copeland, G. (1999).Acts of balance: profits, people and place. Gabriola Island, BC: New Society Publishers.The Centre for Sustainable Community Development at Simon Fraser University. Courses and certificate program for community economic development professionals: Our definition of CED. Retrieved from Lake First Nation. (2012). Economic development & employment [Webpage]. Retrieved from, T. (2000).The Lexus and the olive tree: Understanding globalization.New York, NY: Anchor Books.International Monetary Fund [IMF] staff. (April 12, 2000; Corrected January 2002). Globalization: Threat or opportunity?International Monetary Fund[IMF]Issues Brief. Washington, DC. Retrieved from, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence, A. & Weber, J. (2014).Business and society: Stakeholders, ethics, public policy(14th ed.). New York, NY: McGraw-Hill Higher Education.Leahy, S. (2003, March 31). An imbalance of power [Electronic version].Maclean’s. Retrieved from the Business Source Complete database.Post, J., Lawrence, A., & Weber, J. (2003).Business and society: Corporate strategy, public policy, ethics(10th ed.). New York, NY: McGraw-Hill Higher Education.Schumacher, E. (1999).Small is beautiful: Economics as if people mattered(25th Anniversary Edition with Commentaries). London UK: Hartley & Marks.Simon Fraser University (n.d.). Centre for Sustainable Community Development. [Web page.] Retrieved from Economics. (n.d.) Cultural creative. [Web page.] Retrieved from (2013). Small is beautiful. [Web page.] Retrieved from 3-1: Introduction to Global Business ChallengesIntroductionThe purpose of this activity is to provide you with exposure to ethical and economic challenges that may be faced by companies doing business in a global society.InstructionsPart A: Reading and ResearchRead Chapter 6: The Challenges of Globalization, to reinforce your understanding of globalization and global corporate citizenship.Read the Discussion Case: Conflict Coltan in the Global Electronics Industry Supply Chain at the end of Chapter 6.Part B: Reflective Journal—Conflict ColtanWhat measures could be taken by governments, NGOs and companies to strengthen the process to exclude Conflict Coltan and other conflict minerals from the global supply chain?Could Conflict Coltan be excluded from the global supply chain without harming the noncombatant citizens of the Democratic Republic of the Congo?Module 3: Broad Forces in Global…Topic 2: Business and Sustainable DevelopmentGlobalization is a social, political, and economic force created and influenced by humankind’s activities. The environment is another broad force with the potential for significant social and economic impact on individuals, communities, and entire nations. Consider the floods, droughts, forest fires, ice storms, blizzards, hurricanes, and heat waves that have taken their toll on Canadian communities. Millions have died as a result of the 2008 typhoon in Burma (Myanmar) and the earthquake in China that same year. Thailand, Sri Lanka, other countries on the coast of the Indian Ocean have taken years to recover from the tsunami that struck their coastlines in December 2004.There is no disputing the impact. The question is whether activities such as industrialization and urbanization contribute to these sometimes catastrophic events. What is the role of businesses, governments, and other organizations in influencing environmental force, and how does this force influence us?Climate change is an environmental force resulting in rising average global temperatures that are melting polar ice caps and causing sea levels to rise, as well as generating frequent and severe hurricanes and tropical storms in coastal areas.In 2007, the Intergovernmental Panel on Climate Change (IPCC) published a seminal report on climate change which was endorsed by hundreds of scientists around the world. This report explained how human activity is causing climate change. As a result, most public discourse shifted from debate as to whether human activity is causing climate change to discussions regarding responsibility for action and what steps to take to control or mitigate the impacts of global warming.What is the IPPC?IPPC is an intergovernmental organization set up by the World Meteorological Organization (WMO) and the United Nations Environment Programme (UNEP). Its members include hundreds of scientists from all over the world, as well as government representatives and the United Nations representatives.The main activity of the IPCC is to publish regular assessment reports on the state of knowledge of climate change. For example,Climate Change 2007: Synthesis Report: An Assessment of the Intergovernmental Panel on Climate Changewas the pivotal report identifying human activity as a cause of climate change and forecasting significant negative outcomes if the status quo of business and development were to continue.In December 2007, the IPCC and Al Gore were awarded the Nobel Peace Prize for “their efforts to build up and disseminate greater knowledge about man-made climate change, and to lay the foundations for the measures that are needed to counteract such change” (Intergovernmental Panel on Climate Change, 2008, n.p.).IPCC Climate Change Assessment reports are at Beyond catastrophic events and growing concerns over the impacts of climate change, references to the environment (or ecosystem) may be referring to our air, water, land, and all the natural resources we depend on for building our homes, highways, and headquarters. Every product we grow, manufacture, process, and consume comes from the environment. From corn, cars, and cameras to candy, we rely on natural resources, and we rely on more natural resources to ship them to their points of sale. Most likely, more natural resources are consumed in picking up or processing the waste associated with use of these and all other products. Every social and business activity in which we engage takes place in the environment, and everything we own or operate comes from the earth.Yet, the environment is a force that many of us take for granted and recognize only as an externality to business and society. As the textbook authors say:The need for balance between economic progress and environmental protection is captured in the concept of sustainable development….Meeting the goal of sustainability is like trying to solve an extraordinarily complex puzzle, in which businesses, governments, civil society, and individuals must work together to achieve common goals. (Lawrence & Weber, 2014, p. 213)Activity 3-2: Ecology and Sustainable Development in Global BusinessIntroductionChapter 10 introduces, defines, and backgrounds ecology and sustainable development as they pertain to business. This chapter also defines other key terms, such as carrying capacity, and provides a good foundation on global environmental issues, threats to the earth’s ecosystem, environmental ethics, and voluntary business initiatives.InstructionsPart A: ReadingRead Chapter 10: Sustainable Development and Global Business before proceeding with the following discussion on business and sustainable development.Sustainable development, corporate social responsibility (CSR), ecologically responsible development, eco-efficiency, triple bottom-line management—these are some of the terms that, for business, mean “sustaining nature’s resources as well as sustaining the company” (Willard, 2002, p. 5). Some of the terms, such as CSR, address social responsibilities to stakeholders within the organization as well as stakeholders in the communities in which they operate. Other terms, such as eco-efficiency, focus only on economic and environmental responsibilities of organizations.Sustainable development is more inclusive. Sustainable development is like a three-legged stool. Its legs are economic prosperity, environmental stewardship, and social responsibility. If one of the legs is missing, the stool is not going to work…(Willard, 2002, p. 5)Willard, B. (2002).The sustainability advantage: Seven business case benefits of a triple bottom line.Gabriola Island, BC: New Society Publishers.Integration versus BalanceSustainable development is an approach to development in which stakeholders seek tobalancesocial, economic, and environmental considerations when making decisions. These decisions can relate to businesses or organizations as well as to the communities in which they operate. This is contrary to a “prevailing view” in which businesses, in particular, believe “there is an inherent and fixed trade-off: ecology versus the economy” (Porter & van der Linde, 2000, p. 131).While perceptions of the trade-offs between economic development and environmental protection persist, there are numerous societal benefits associated with environmental protection and restoration. Thus, thesetwo legs of the stoolcan be complementary. For example, by avoiding contamination of lakes and waterways, drinking water can be protected, and, in turn, people’s health and safety. Air pollution and smog in Beijing, Mexico City, Bangkok, and even Toronto, contribute to incidences of asthma and deaths in these cities. The social or societal benefits of minimizing or mitigating water and air pollution can be significant, but seldom are they quantified. In the absence of adequate governmental regulations, businesses may choose to degrade the environment for the sake of quantifiable financial gain.Governments around the world struggle to balance support for business and economic development against protection of the health and well-being of their citizenry. “When people talk about ‘trading off’ or ‘balancing’ economic progress against environmental and social impacts, rather than ‘integrating’ these three dimensions, it indicates a lack of understanding of sustainable development” (Willard, 2002, p. 8).Rowledge et al. argue:There is mounting evidence that our old-world, trade-off paradigm, pitting economic success against environmental and social goals, is seriously flawed. Both research studies and practical experience have demonstrated that improved environmental and social responsibility increase value to shareholders, customers, employees, and society (rather than adding costs). Improving environmental and social performance, in fact, leads to enhanced profitability and value: cost reductions…waste reductions and process improvements, price premiums…costumer loyalty, lowered cost of capital due to reduced liability and risk, increased revenue from new products, markets, and even new businesses; and enhanced asset management…(Rowledge et al., cited in Willard, 2002, p. 8)Some companies report other, less tangible benefits of sustainable development, such as “higher employee job satisfaction and commitment, increased innovation and creativity, and motivation from a higher sense of purpose” (Rowledge et al., cited in Willard, 2002, p. 8).Note:Willard also published a second book,The Next Sustainability Wave(2005), which builds on the discussion of sustainability covered in his first book,The Sustainability Advantage(2002).The Next Sustainability Wavefocuses much of the discussion on the “perfect storm” of market forces driving increasing interest in business and corporate social responsibility (Willard, 2005, p. 89).Integrating social and environmental issues with economic interests in decision making requires a shift in mindset in business and society. The shift is away from thebusiness as usualattitude that considers environmental or socialtrade-offsor add-on costs, to thinking that is more strategic or innovative. Instead of pursuing profit while addressing environmental or social problems as an afterthought, sustainable thinkingintegratessocial and environmental goals into planning and decision making.With this approach, organizations can develop strategies that avoid degradation of the environment and negative impacts on society in the first place. As a result they can avoid the time and costs associated with paying for waste disposal, cleaning up contaminated sites, or paying to correct other social or environmental problemsafterprojects are executed. “Life-cycle analysis” and “industrial ecology” are two examples of innovated thinking that integrate economic, social, and environmental goals (Lawrence & Weber, 2014, pp. 227–228).Industrial ecology, according to the International Society for Industrial Ecology (ISIE):…encompasses a variety of related areas of research, manufacturing, and business management practices, including:Material and energy flow studies (“industrial metabolism”) of products, and manufacturing and production processesDematerialization and decarbonizationTechnological change and the environmentProduct life-cycle planning, design, and assessmentProduct design for the environment (“eco-design”)Extended producer responsibility (“product stewardship”)Eco-industrial parks (“industrial symbiosis”)Product-oriented environmental policyEco-efficiency(ISIE, 2008)Can you think of any organizations that apply industrial ecology or strategically integrating social and environmental concerns with their goals for sales or other revenue increases?Companies like Volkswagen, BMW, Hewlett-Packard, and Interface, Inc. are embracing environmental aspects of sustainability, designing their products (including automobiles, computers and printers, and carpet tiles) with consideration for disassembly and product take-back for reuse of parts and materials at the end of the product lifecycle. They are among the companies in the world using industrial ecology methodologies, taking responsibility for thestewardshipof their products. By integrating environmental considerations at the design phase and building them into product lifecycle management, they can achieve more cost effective and environmentally beneficial results. When solutions come at the back end of production, the pollution and waste already exist; environmental solutions are more limited and sometimes more costly.Optional Resources:Cradle-to-cradle design:For discussion on the wisdom and advantages of cradle-to-cradle product design, search the Internet for video clips of William McDonough and/or Michael Braungart of MDM design, and make use of the following resources:Their award winning video,The Next Industrial Revolution, features the results of their consulting work with several large companies including Nike, Ford, and Herman Miller. This documentary has been aired on television numerous times and is available in some university libraries. View a video clip ofThe Next Industrial Revolutionat clips of some of McDonough’s entertaining public presentations are available by searching online. See his presentation,The Wisdom of Designing Cradle-to-Cradle, at, W., & Braungart, M. (2002).Cradle-to-cradle: Remaking the way we make things. New York, NY: North Point Press.Industrial ecology:For more on industrial ecology, search online for:TheIndustrial Ecology Compendium, which defines industrial ecology, presents its history and goals, describes some of the methodologies and strategies for industrial ecology, and presents examples of projects around the world.The website of theInternational Society for Industrial Ecology(ISIE).TheJournal of Industrial Ecology.According to John Elkington, an international expert on sustainable development in business, and van Heel, “a commitment to sustainability will only reap maximum benefits when it is fully incorporated in a company’s core business models, strategies and processes” (cited in Willard, 2002, p. xviii). Despite corporate success stories, and the growing body of research that supports a case for sustainable development, few companies have truly made this transition. Change is often difficult, especially if it requires a paradigm shift in the way we manage organizations and in how businesses evaluate success.Interface, Inc.:In the third activity of Topic 2 of this module, you will look at Interface, Inc., a company that has incorporated sustainable development into its core business model. Interface, Inc. is a large company employing cradle-to-cradle product design and product management, industrial ecology, as well as other environmentally responsible principles and practices in the manufacture and sales of its billion-dollar carpet-tile business.Roadblocks to Sustainable DevelopmentIs resistance to change the only roadblock to sustainable development? If sustainable development makes sense, why are so many businesses, organizations, and communities slow to adopt its principles?Just as businesses, governments, and other organizations face dilemmas in determining priorities with regard to corporate social responsibility and ethical issues, establishing priorities for sustainable development strategies and initiatives is also challenging. The potential tension between social, environmental, and economic goals is part of this challenge. Even if organizations integrate goals for each of these elements of sustainable development, there is still a question of balance or degree. If certain socially or environmentally responsible actions affect short-term economic gain, is that acceptable to all the stakeholders in a business?What if long-term advantages, such as positive community relations, are not easily quantified? What if the benefits are not directly attributable to the financial bottom line? For example, if a company’s effluent pollutes the local river, but fines or permits for discharging effluent cost less than implementing new processes to minimize pollution, and the company is not directly impacted by downstream degradation of the river, what is a good management decision with regard to discharge of effluent? This is a typical dilemma that an industrial manager may face.Similarly, if a real estate developer builds an office complex or apartment building and plans to sell all the offices and suites, what might motivate that developer to design an energy-efficient building? The developer may not be paying the utility bills for heating and cooling after owners occupy the building. Will the developer realize a significant financial return after investing in energy-efficient lighting, heating, and ventilation systems that increase the capital cost of the building? If the market recognizes the value that the developer brings to the project, and is willing to appraise the building at a higher value, then there is a direct financial benefit to the developer. Consider another perspective: what are the implications on our natural resources of buildings that waste energy? What is the impact on society? Who really pays for this waste and the excessive consumption of oil and other natural resources?Consumption and Economic GrowthWhat if a company reduces the amount of pollution at its plant in Ontario but builds additional facilities elsewhere, whether it be in British Columbia, Quebec, or Malaysia, and generates pollution at these plants? The company improves its environmental performance in relative terms, but the company’s growth results in a net increase in overall output of pollution. Is this sustainable development? Can economic growth be compatible with environmental protection? How do we measure sustainable development?Our economy is based on growth and consumption. There are those who advocate reassessing our values and creating massive shifts away from our consumer society to a life of “volunteer simplicity” (Elgin, 1993). In his bookThe Ecology of Commerce, Hawken states:…the ultimate purpose of business is not, or should not be, simply to make money. Nor is it merely a system of making and selling things…The promise of business is to increase the general well-being of humankind through service, a creative invention and ethical philosophy. (1993, p. 1)If we agree that the purpose of business is to increase our well-being, can we also agree on a definition of well-being? This, too, is subject to debate. And determiningwhosewell-being is yet another potentially contentious issue. Should business serve only the well-being of individual stakeholders directly involved in its activities, or is the welfare of stakeholders in the community also a concern? Does this concern extend only to stakeholders in the local community or to the global community as well? Is business responsible for only those stakeholders directly related to its activities, or is it accountable for indirect impacts on the well-being of people, plants, animals, and the planet earth?Growth versus DevelopmentAnother great economist, Herman Daly, “called sustainability in a growth-dependent globalized economy an ‘impossibility theorem’” (Daly, as cited in Copeland, 1999, p. 7). Sustainability does not exclude economics, but it advocates economic development, not economic growth. This distinction is an important one. “Politically it is very difficult to admit that growth, with its almost religious connotations of ultimate goodness, must be limited. But it is precisely the non-sustainability of growth that gives urgency to the concept of sustainable development” (Daly & Townsend, 1993, p. 267). Daly, who was once a senior economist with the World Bank, wrote the following comments on the conflicts between economic growth and sustainability:In the minds of many people, growth has become synonymous with increase in wealth. They say that we must have growth to be rich enough to afford the cost of cleaning up and curing poverty . . . . What is at issue is whether growth at the present margin really makes us richer. There is evidence that . . . [growth] . . . now makes us poorer by increasing costs faster than it increases benefits . . . . In other words we appear to have grown beyond the optimal scale.The concept of an optimal scale of the aggregate economy relative to the ecosystem is totally absent from current macroeconomic theory. The aggregate economy is assumed to grow forever . . . . A given scale (the product of population times per capita resource use) constitutes a given throughput of resources and thus a given load on the environment, and can consist of many people each consuming little, or fewer people each consuming correspondingly more.An economy in sustainable development adapts and improves in knowledge, organization, technical efficiency, and wisdom; and it . . . stops at a scale at which the remaining ecosystem (the environment) can continue to function and renew itself year after year. The non-growing economy is not static—it is being continually maintained and renewed . . . . (Daly, 1990)(Daly, H. E., & Townsend, K. N. (1990). Valuing the Earth: Economic, Ecology, Ethics. Development (p. 267). )In contrast to Daly, Hawken says, “free-market purists believe that their system works so perfectly that…the marketplace will attain the best social and environmental outcome” (1993, p. 11). Free-market economists believe that as resources become scarce, prices will rise, therefore enhancing their value in the marketplace and encouraging conservation and efficiency. Perhaps this is true, but at what point do we agree on scarcity, and when does it create widespread response in the marketplace? Oil is a finite resource that is subject to a number of forces that affect its price and availability.Many consumers are unsure or aware of whether or not this resource is scarce and how this will affect future prices and availability of supply. Every time prices rise (which may or may not be caused by scarcity), consumers react vehemently. Yet, in recent decades, North Americans have demonstrated only nominal consumer shift toward the purchase of more fuel-efficient or alternative fuel vehicles. Do rising gasoline prices affect your consumer habits with regard to the type of vehicle you purchase or the number of kilometres you drive?Californians reacted to the energy blackouts in 2002; people consciously conserved and saved electricity. Similarly, a power outage in August 2002 resulted in a blackout throughout much of Canada and the United States, stakeholders in parts of Ontario were asked to conserve electricity. With an unstable power supply and the threat of more blackouts, people in these regions reduced their consumption, temporarily.How many power blackouts will it take before businesses, government, and society recognize the advantages of efficient use of electricity? What price must consumers pay for gasoline before there is a widespread shift in the marketplace towards conservation and efficiency? How many forests will be cut down before trees are perceived as scarce resources? How much contamination and deterioration in the quality or our air and water must there be before we impose a higher cost on polluters?Limits to GrowthIn addition to contrasting beliefs in business, government, and society over the appropriate economic approach to sustainable development, there are conflicting ideas about the impacts of climate change and the earth’s carrying capacity. Decades have gone by since Dana Meadows, Dennis Meadows, and Jorgen Randers first generated computer models calculating the impacts of increasing industrialization, pollution, resource depletion, growth in world population, and food production. They published their results in a bestselling book calledThe Limits to Growth(1972) and then updated their observations twenty years later inBeyond the Limits(1992). Their books describe the limits to growth and the potential “uncontrollable decline in both populations and industrial capacity” unless growth trends are altered to a “condition of ecological and economic stability” (1992, p. 1). Yet, industrial development, economic growth, and population growth still continue at an astounding pace.Technological Solutions?Despite the work of scientists, economists, researchers, and leaders with similar notions, debate continues over the earth’s carrying capacity and the role of economics in sustainable development. Some acknowledge that resources are finite, and the present level of industrial activity is damaging the earth and its inhabitants. Others cite science and technological innovation as the solution that will enable continued economic growth without environmental devastation.Indeed, innovations in science and technology already provide options for reducing or eliminating dependency on fossil fuels, maximizing efficient use of renewable resources, substituting clean technologies for polluting ones, and restoring degraded ecosystems. Hydrogen fuel cells can substitute for fossil fuels in cars, buses and trucks; hydroxyl waste water treatment systems can clean water contaminated by sewage and industrial pollution; solar and wind power can generatecleanenergy—these are a few of the technological innovations purported to offer sustainable alternatives to business as usual. Innovations in science and technology are also enabling some people to live longer.If these technological solutions exist, why are they not widely implemented? We will examine some of the barriers, incentives and disincentives for sustainable development in the next topic section, and explore technology in Topic 4 of this module.On the other hand, can science alone provide a panacea for all that ails us environmentally and socially? Can technological solutions enable us to grow indefinitely? Perhaps, like many of the earth’s resources, science and technology may also have their limits.Social Responsibility—The Third Leg of the StoolIf we can agree that there are limits to growth, or at least acknowledge our reliance on a finite natural resource base, then there can be some consensus on the importance of protecting our ecosystem in order to sustain economic development. Yet, sustainable development is the integration of economics with environmentalandsocial concerns.CSR as an Approach to Sustainable DevelopmentWe explored social responsibility in Module 2 and observed that there is some debate as to whether it is a legitimate responsibility of business.If presenting a business case for integrating social responsibility into business management requires demonstrating the economic benefits of socially responsible business, we can argue that many benefits of corporate social responsibility offset costs. For example, providing good working conditions for staff and management can translate into increased productivity and higher employee retention rates. Contributing to charities can garner goodwill as well as tax breaks; sponsoring education can lead to skilled employees for future hire.As Walmart recognizes, supporting local community can generate goodwill amongst local government and other stakeholders who can support (or combat) business expansion in a community. It can also help business to develop a loyal customer base. Even if the precise value is not easily quantified, these are bottom-line benefits of socially responsible business that some businesses recognize and embrace as part of their business strategy.While some corporations are embracing social responsibility on a local or global scale, others are criticized for using globalized business activities as a means of acting in ways that are quite the contrary.According to Wheeler, Colbert, & Freeman:Two decades ago Peter Drucker famously asserted: “…the proper ‘social responsibility’ of business is to…turn a social problem into economic opportunity and economic benefit, into productive capacity, into human competence, into well-paid jobs, and into wealth.” In the intervening years there has developed a lively debate over the role of business in society—most acutely with respect to the supposed environmental and social impacts of economic globalization. This development has led to the concerns of anti-globalization protestors on issues like third world development, poverty, the environment and employment being echoed by large numbers of ordinary citizens worldwide. (Wheeler, Colbert, & Freeman, 2003)Social Equity—An Element of Sustainable DevelopmentThe social element of sustainable development includes such CSR strategies as listed above, but it also reflects a more global context than is not addressed in all CSR programs.Says Willard, “Social responsibility calls for a global view of society and seeks to ensure that resources and wealth are more equitably shared among citizens of the world” (2002, p. 7). Meadows et al. are more specific, describing a sustainable society as one in which “the basic material needs of each person on earth” would be satisfied and each person would have “an equal opportunity to realize his or her individual human potential” (Meadows, Meadows, & Randers, 1992, p. 1).Are equity and equal opportunity realistic goals? Are these reasonable expectations of businesses, of governments, and of society?Rawls states, “We may think of human society as a more or less self-sufficient association regulated by a common conception of justice and aimed at advancing the good of its members” (as cited in Donaldson & Werhane, 2008, p. 222). The notion of “distributive justice” suggests that people should have the right to the basic material necessities of life, but that does not necessarily mean equity or equal distribution (Donaldson & Werhane, 2008, pp. 148–150).Reasonable or not, the concept of equity is an ethical issue, and our perspective on it likely reflects our individual values and moral principles as well as those of the society in which we exist. If our ethical reasoning is based on justice, we face a common ethical dilemma: What is fair or just?It may be easier to dismiss any serious consideration of equity if we view sustainable development purely from a business perspective driven predominantly by economic interests. However, despite the dominance of business as a force in society today, sustainable development extends beyond the boundaries of corporate affairs. It is an approach to development that influences the decisions of small, medium, and large companies, transnational corporations, global economies, as well as non-profits associations and other organizations, international governing bodies, local and regional governmental organizations, and communities big and small.Economic Benefits of Social EquityWhile the ethics of global social equity is another subject of debate associated with sustainable development, there are pragmatic arguments for supporting social and economic development in poorer regions. One is that “poverty is an underlying cause of environmental degradation.” Slash and burn agriculture is an example of how people in poor conditions may “misuse resources just to survive . . . . Environmental protection will require providing a decent standard of living for all the world’s citizens” (Lawrence & Weber, 2014, p. 213).Other advocates of the economic benefits of societal equity suggest that increasing the education and economic prosperity of the five billion people in the world who live in relative poverty will provide new markets for goods and services, thereby supporting global economic development. Microsoft and other leaders in information and communications technologies are supporting programs to bridge the “digital divide” between rich and poor nations. They are donating billions of dollars in cash, products, and service to introduce and expand the use of the Internet and other computer technologies in poorer nations around the world.Through its Community Technology Skills Program, Microsoft has donated millions of U.S. dollars in cash grants and software to community partners around the world since 2003. The program supports computer literacy and internet technology skills training as well as more advanced training in order to foster global workforce development.Is this an act of philanthropy or enlightened self-interest—or both?“Economic development and the digital divide go hand-in-hand for many reasons. Communities with the tools and skills to compete in the digital economy are at a distinct advantage over communities that don’t” (Joint Government-Private Sector, 2001). As the world embraces more and more innovations in science and technology, the division between rich and poor may widen. “A community with a well-educated, technology-literate population is more likely to attract and sustain new businesses, and these new businesses in turn attract more well-educated, technology-literate people” (Joint Government-Private Sector, 2001).Is Social Equity Environmentally Sustainable?Efforts to increase social equity may also benefit economic development, but what of environmental stewardship? Technology and social responsibility aside, the world simply cannot sustain global economic development in the form and pattern of the first world. Given that current consumption of food, forestry products, and fossil fuels alone “might already exceed global carrying capacity by roughly 30%” and about [three quarters] of this consumption “goes to the 1.1 billion people who live in affluence, while [one quarter] of the consumption remains for the other 4.6 billion people” (Sustainable Development Research Institute, 2003), sustainable development faces many challenges indeed. Where we chose to place our limitations in terms of growth, equity, innovation, and development is largely a matter of political and social will. Yet, we cannot dismiss the significance of forces in our natural environment, without which we cannot exist.Optional Resources:Ecological footprint for measuring sustainable existence:Since the 1996 publication of researcher Mathis Wackernagel and UBC professor William Rees’sOur Ecological Footprint: Reducing Human Impact on the Earth, several non-governmental organizations have adopted the ecological footprint model as an accounting tool for measuring and visualizing the resources required for individuals, households, communities, regions, and nations to continue to exist on this planet.The ecological footprint measures human consumption and use of natural resources and translate the measurement into afootprint, or area of land, required to sustain that life.“The ecological footprint of the average Canadian totals 4.8 hectares. This is the footprint or amount of land required for food, housing, transport, consumer goods, and services . . . . If everyone on earth lived like Canadians, it would require at least three earths to provide all the material and energy she or he currently uses. (Sustainable Development Research Institute, 2003). Canadians’ ecological footprint is unsustainable A more recent study conducted by the Canadian Centre for Policy Alternatives indicated an even larger ecological footprint in Canada of 7.6 hectares per capita—behind only the United States and the United Arab Emirates (CBC, 2008).California-based organization Redefining Progress is one of several non-governmental organizations providing information on the concept of ecological footprints and offering a quiz for measuring an ecological footprint. Visit Redefining Progress’s site and take the quiz: history of industrial ecology. (n.d.). International Society for Industrial Ecology (ISIE). Retrieved from http://www.is4ie.orgCopeland, G. (1999).Acts of balance: Profits, people and place. Gabriola Island, BC: New Society Publishers.Daly, H., & Townsend, K. (1993). Sustainable growth: An impossibility theorem. In H. Daly & K. Townsend (Eds.),Valuing the earth: Economics, ecology, ethics. Cambridge, MA: MIT Press. Retrieved from[journal]. (1990),3–4, pp. 45–47. Society for International Development. Retrieved from, T., & Werhane, P. (Eds.) (2008).Ethical issues in business: A philosophical approach. (8th ed.). Upper Saddle River, NJ: Prentice Hall.Donaldson T., & Werhane, P. (2008). Property, profit, and justice. In T. Donaldson & Werhane, P. (Eds.)Ethical issues in business: A philosophical approach(8th ed., pp. 143–150). Upper Saddle River, NJ: Prentice Hall.Elgin, D. (1993).Voluntary simplicity: Toward a way of life that is outwardly simple, inwardly rich(Rev. ed.). New York, NY: Quill.Hawken, P. (1993).The ecology of commerce. New York, NY: HarperBusiness.Interface, Inc. (2003a). Our goals. Retrieved from, Inc. (2003b). Our goals/our vision. Retrieved from, Inc. (2008c). Who we are. Retrieved from Panel on Climate Change (IPCC). (2008). [Home page.] Retrieved from Government-Private Sector Committee of Experts on Electronic Commerce (United States). (2001, October 24).Information technology—literacy and training(FTAA.ecom/inf/103). Retrieved from, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence, A., & Weber, J. (2014).Business and society: Stakeholders, ethics, public policy(14th ed.). New York, NY: McGraw-Hill Higher Education.McDonough, W. (2007, April). Talks: William McDonough. The Wisdom of designing cradle-to-cradle [Lecture]. Retrieved from, D. H., Meadows, D. L., & Randers, J. (1992).Beyond the limits. Toronto, ON: McClelland & Stewart.Microsoft Corporate Citizenship. (2008). Microsoft unlimited potential—community technology skills program. Retrieved from, M. & van der Linde, C. (2000). Green and competitive: Ending the stalemate.Harvard business review on business and the environment. Boston, MA: Harvard Business Review School Press.Rawls, J. (2008). Distributive justice. In T. Donaldson & P. Werhane (Eds.)Ethical issues in business: A philosophical approach(8th ed., pp. 222–232). Upper Saddle River, NJ: Pearson Prentice Hall.Richest Canadians have largest ecological footprint: Study. (2008, June 24) Retrieved from Development Research Institute (SDRI). (2003). How sustainable are our choices? Retrieved from, M., & Rees, W. (1996).Ecological footprint: Reducing human impact on the earth. Gabriola Island, BC: New Society Publishers.Wheeler, D., Colbert, B., & Freeman, R. (2003). Focusing on value: Reconciling corporate social responsibility, sustainability and a stakeholder approach in a network world.Journal of General Management, 28(3), 1.Willard, B. (2002).The sustainability advantage: Seven business case benefits of a triple bottom line. Gabriola Island, BC: New Society Publishers.Willard, B. (2005).The next sustainability wave: Building boardroom buy-in. Gabriola Island, BC: New Society Publishers.Activity 3-3: Striving for Sustainable Business DevelopmentIntroductionClimate change, biodiversity issues, water supply, waste management, population growth, consumption, and poverty are all key issues to address in pursuit of sustainable development. Stakeholder groups such as governments, citizens, and community groups may be in conflict with businesses in terms of priorities for environmental protection. Some corporations and other organizations are engaging in initiatives to reduce ecological damage associated with their business activities.This activity gives you the opportunity to examine a successful business that is a leader in sustainable development.Interface, Inc. is the largest commercial carpet manufacturer in the world, with manufacturing locations on four continents and offices in more than 100 countries. In addition to producing floor coverings, interior fabrics, architectural products, specialty chemicals and other products and services for commercial interiors, Interface is a leader in industrial ecology.InstructionsPart A: Reading and ExplorationRead Chapter 10: “Sustainable Development and Global Business.” Pay attention to the terminology and definitions provided in the chapter. The chapter introduces significant environmental issues, which have local, national, and international impacts on business and society.Visit Interface, Inc. at Look for information on its goals, strategies, and initiatives concerning sustainable development.View at least one video interview or speech by Interface, Inc.’s founder, Ray Anderson. You can find video clips by doing an Internet search, or search for “Raywatch” on the Interface, Inc. website: This includes an interview (aired January 2007) with George Stroumboulopoulus on CBC’sThe Hour, at may choose to continue to examine Interface, Inc. in Assignment 3.Part B: Reflective Journal—Interface, Inc.List or chart at least six ways Interface, Inc. is integrating sustainable development into its business strategy and operations. Don’t forget to look for social initiatives as well as environmental and economic programs, policies, and initiatives.Identify what you think is motivating Interface, Inc. to identify sustainable development as part of its vision and goals. Do you think these are serious initiatives, or is this a public relations strategy?Would you say Interface, Inc. is growing or developing, or both? Explain your answer.Comment on the role of staff and leadership at Interface in motivating and driving improvements in the company’s strategic business initiatives and progression toward its sustainability goals.Module 3: Broad Forces in Global…Topic 3: Business and Government Approaches to Protecting the EnvironmentTopic 1 introduced globalization as a force in business and society. Topic 2 discussed the environment as another broad force and examined sustainable development as a means of integrating economic forces with social and environmental influences and concerns. “Society and the economy need a healthy environment” (Willard, 2002, p. 146). In Topic 3, you will investigate how government and business mechanisms help or hinder the health of the environment and how they protect or ignore the well-being of natural resources.The task for policymakers, corporate leaders, and environmental advocates is “how to promote ecologically sound business practices in an increasingly integrated world economy” (Lawrence & Weber, 2014, p. 236).Willard says:The traditional business view places the environment and society as separate entities, outside economic considerations and miniscule in relative importance. Conventional business intuition mistakenly sees priorities in economic, environmental and social policy as competing. A more accurate frame of reference would reverse this perspective and acknowledge that the global economy is a small sector within global society, which in turn is within the global environment that is necessary for life as we know it. (Willard, 2002, p. 146)Willard, B. (2002).The sustainability advantage: Seven business case benefits of a triple bottom line.Gabriola Island, BC: New Society Publishers.Corporate Environmental ResponsibilityThe industrial revolution . . . greatly expanded the possibilities for material development of humankind. It continues to do so today, but at a severe price. Since the mid-eighteenth century, more of nature has been destroyed than in all prior history. While industrial systems have reached pinnacles of success, able to muster and accumulate human-made capital on vast levels,natural capital, on which civilization depends to create economic prosperity, is rapidly declining… (Lovins, Lovins, & Hawken, 1999, p. 2)Natural capitalis another term for natural resources, such as water, air, trees, and other vegetation, minerals, soil, and oil. It “encompasses living systems” including oceans, wetland, grassland, rainforests, tundra, coral reefs, as well as all plants and animals living within these systems (Lovins, Lovins, & Hawken, 1999, p. 2). “As more people and businesses place greater strain on living systems, limits to prosperity are coming to be determined by natural capital rather than industrial prowess” (Lovins, Lovins, & Hawken, 1999, p. 2). Businesses that recognize this imperative are implementing a variety of formal and informal programs and strategies for reducing the amount of pollution and waste that they generate, increasing efficient use of natural resources, and mitigating negative impacts on the ecosystem on which humans, as well as billions of other plant and animals species, rely for our existence.As with corporate social responsibility, some organizations are motivated by an environmental ethic; others are realizing significant direct and indirect financial benefits of their environmental initiatives. Although Dow Chemical is still a significant polluter, it initiated its Waste Reduction Always Pays (WRAP) program in 1986. According to Willard (2002), Dow’s rate of return on their investment in this program was 204% (p. 84).What makes this program particularly interesting is the stakeholder involvement in these initiatives: all the ideas for reducing pollution and waste were proposed by employees. In addition to the economic benefits of improved environmental performance, the company sent a message to employees and other stakeholders that they care about environmental issues. The value to Dow in terms of employee morale and goodwill among investors, customers, and stakeholders in the communities in which they operate is unmeasured.Beyond Compliance“Growing public concern about the health of the Earth’s ecosystem has prompted political, corporate, and civil society leaders to become increasingly responsive to environmental issues” (Lawrence & Weber, 2014, p. 234). Business may be proactive or reactive—responding to public demands and government regulatory requirements, or taking the lead to improving their environmental performance. Public expectations as well as the demands of global, regional, and local governmental (and inter-governmental) organizations are generating interest and action with regard to protection of our natural capital, and attention to environmental concerns, such as climate change. Regulation and international agreements are also increasing the pressure on companies to, at least, comply with environmental standards.Greenhouse Gases and Climate Change:One of the most significant environmental concerns in business and society today is that of climate change associated with greenhouse gas emissions.Greenhouse gasesare gases present in the earth’s atmosphere as a result of natural and human activity. Among others, these gases include carbon dioxide, methane, nitrous oxide, chlorofluorocarbons (CFCs) and ozone (Wikipedia, 2008a).In 2007, the Intergovernmental Panel on Climate Change (IPCC), releasedClimate Change 2007, a report on present and forecasted environmental and socio-economic (or human) impacts of greenhouse gas emissions. The IPCC assessment describes catastrophic climate related impacts of greenhouse gas emissions, including an increase in droughts, tropical cyclones, extreme high tides and rising ocean temperatures (Wikipedia, 2008b). These environmental impacts are a result of the greenhouse effect, essentially the formation of a blanket of greenhouse gases around the earth which allows the sun’s heat to penetrate but blocks the escape of heat, leading to changes in global temperatures.The greenhouse effect is widely accepted as the primary cause ofclimate change(also known asglobal warming), and the consensus of the IPCC scientists is that human activity is a major cause of climate change and the accompanying environmental and social impacts.Governments implement environmental standards and regulations that establish rules and restrictions with regard to the amount of pollution, waste, or environmental degradation that organizations and communities can create. Organizations face penalties including fines, closure, and negative public relations for non-compliance with these restrictions. When was the last time you read an article or heard a news story about a company that failed to comply with environmental standards and regulations? Remember the movieErin Brockovich?“Most firms would prefer to pursue their environmental strategies voluntarily, rather than be legislated or externally pressured into doing so” (Willard, 2002, p. 4), and the “impulse in Canada,” as in the United States, “is for devolution of responsibility for regulation to corporate control” (Leahy, 2003, n.p.). There is some argument that a “command and control” approach to environmental management stymies the ability of companies to be flexible in findings ways to reduce their environmental impacts. This may result in cost burdens that create conflicts between economic performance and other elements of sustainable development. Michael Porter, a world-renowned business strategist, disputes this claim:The lingering belief that environmental regulations erode competitiveness has resulted in a stalemate. One side pushes for tougher standards, the other tries to roll standards back . . . This static view, in which everything except regulation is held constant, ignores the fact that companies are constantly finding innovative solutions in response to pressures of all sorts—from competitors, from customers, from regulators . . . . Research shows that tougher environmental standards can enhance competitiveness by pushing companies to use resources more productively. (Porter et al., 2000, p. 131)Market-Based SolutionsSome businesses are shifting from being reactive or responsive to public or governmental demands to being strategic. “Companies normally frame greening in terms of risk reduction, re-engineering, or cost cutting. But . . . when greening becomes part of strategy, opportunities of potentially staggering proportions open up. A number of companies are moving in that direction” (Hart, 2000, p. 106).“Increasingly, companies will sell solutions to the world’s environmental problems” (Hart, 2000, p. 112). In addition to technologies that monitor and measure the quality of our environment, and new products and services that minimize or even mitigate environmental damage, some innovative companies are finding ways to improve the condition of our ecosystem. With the appropriate incentives, the market economy may attract these innovations, but government plays a role in market-based solutions as well.Market-based mechanisms for promoting environmentally responsible business and economic development are gaining popularity. Governments can implement them in lieu of some regulatory controls or introduce them as incentive for organizations to perform beyond environmental standards established by law. Economists, in particular, advocate market-based mechanisms, and evidence suggests that some companies have found it “surprisingly inexpensive to achieve pollution reductions that seemed very costly when imposed by rigid regulations” (Krugman in Hamond, 1999).Alcan Inc. is one large company that claims increases in shareholder return on investment and wealth creation can be achieved, in part, by sustainable development strategies. Initiatives such as pollution control, waste reduction, and recycling reduce costs and risks, and provide new business opportunities as well. Alcan claims that wealth creation provides the company “with the means to contribute to the economic, environmental and social dimensions of our corporate sustainability, [and] “increased awareness of these issues is fundamental to identifying new business opportunities, further maximizing value within our business” (Alcan, 2002).Government Policies for Driving Market SolutionsWhile economists advocate market-based solutions, governments can play a role in influencing the transformation of markets and the economic viability of businesses in the marketplace. Typically, the corporate sector resists government intervention, except when it is in the form of tax breaks and subsidies that benefit their sector.Thus, it was quite unusual when, in January 2007, ten transnational corporations, including General Electric, DuPont, and Alcoa, partnered with leading environmental organizations in the United States to call for a nationwidecapon carbon dioxide emissions. The corporations from a variety of industry sectors—utilities, manufacturing, petroleum, chemicals and financial services—published a full-page advertisement inThe New York Timesproposing legislative approaches and emissions reductions targets for the United States over a fifteen-year period.While concern for economic, environmental, and social (or human impacts) of climate change could be a driver, the group believed that a national standard will level the playing field because some businesses are more active than others in voluntary emissions reductions. The group expressed concern that “the various state efforts, if not coordinated, could lead to a scattershot system of regulation” (Barringer, 2007).Stern Review on the Economics of Climate ChangeIn October 2006, British economist Sir Nicholas Stern published a 700-page report on the economic impact of climate change on the world economy. Stern warned that climate change could be greatest and widest-ranging market failure ever seen. He concluded that investment of one percent of global gross domestic product (GDP) each year is required in order to avoid the worst effects of climate change. According to Stern, failure to do so could risk global GDP being up to twenty percent. In June 2008, Stern increased the estimate to 2% of GNP to account for faster than expected climate change (Wikipedia 2008d).Stern proposed the following economic solutions, ones that can be driven by governmental policy initiatives:Carbon pricing, through taxation, emissions trading or regulation, to show people the full social costs of their actionsEmissions trading schemes, like that operating across the EU, should be expanded and linkedTechnology policy changes should drive the large-scale development and use of a range of low-carbon and high-efficiency productsGlobally, support for energy research and development should at least double; support for the deployment of low-carbon technologies should be increased by up to five timesClimate change should be fully integrated into development policy, and rich countries should honour pledges to increase support through overseas development assistance (Osborn, 2006)To read more about the Stern report, search for articles inThe Economistor search the Internet for any of the hundreds of articles summarizing and discussing Stern’s findings. Review the report or a summary of the report on the following website: transnational companies, the emerging regulatory regime and varying government policies on carbon emissions can increase the complexity and costs of doing business internationally. Stern’s report focused on costs to businesses and the world economy associated with failure to implement solutions for climate change. Just as climate change has a global impact, so, too, does theeconomicrisk associated with it.Because the Stern report presented the risk ineconomicterms, the impact of climate change resonated with business and governments around the world. Stern reinforced the serious risk to people, especially those in poorer countries of the world. He also proposed policy-related solutions that could lead to shifts in the market, and calculated the economic benefits of implanting those solutions. According to Stern’s analysis, shifting the world onto a low-carbon path could eventually benefit the economy by $2.5 trillion a year, and by 2050, markets for low-carbon technologies could be worth at least US$500 billion (Osborn, 2006).Emissions Trading and Pollution CreditsEmissions trading and sale of carbon offsets are market-based mechanisms that help businesses and other organizations (including governmental agencies) achieve reductions in greenhouse gas emissions. Businesses or organizations that excel in reducing carbon dioxide or other greenhouse gas (GHG) emissions may sell or trade credits for their efforts.Note:The termcarbon emissionsrefers to emissions of carbon dioxide, which is one of the more prominent greenhouse gases. Often, the discussion of carbon emissions or carbon offsets will actually also include emissions (or emissions reductions) of other greenhouse gases, such as methane.The European Union’s (EU)cap and tradegovernment system is a required part of doing business in the EU. Through cap and trade, the EU has created a virtual market for exchange (selling and buying) of carbon emissions permits between one business or organization and another. Unlike conventional markets in which goods are produced and exchanged, companies that are successful in reducing their carbon emission are able to sell their carbonoffsets.Offsetsare the differencebetween the amount of carbon that they actually emit in a year and the amount they are legally permitted to emit. So, in reality, they are selling the absence of carbon. The buyers are those companies with operations that generate carbon output that exceeds the level they are permitted to emit. Many companies find it more financially advantageous to purchase these extra rights to pollute, rather than meet the carbon emissions cap set for them by the government.The aim of this program is to meet overall carbon reductions targets, while allowing the market to dictate the source of reductions and to achieve results more cost-effectively. (See page 235 of the textbook for a discussion of New Zealand’s tradable permit program for carbon emissions.)The Alberta government has experimented with cap and trade in some industry sectors, and as of 2008, British Columbia, as well as other provincial governments and the federal government, are exploring the establishment of regional or national cap and trade systems. Given that cap and trade systems have focused on larger companies due to the logistics of establishing targets and permit levels, there is some discussion of establishment of an international or global cap and trade system.In Canada and the United States, voluntary carbon trading has emerged as a means of supporting climate change solutions. Not-for-profit and for-profit organizations acquire the rights to carbon offsets from suppliers, and sell the offsets to voluntary buyers. Buyers are businesses of all sizes, some municipalities and government agencies, and other not-for-profit organizations.Individuals, municipal governments, and some businesses and other organizations are voluntarily buying carbon offsets as part of their commitment to contributing to climate change solutions. Some businesses are motivated by an opportunity to differentiate their brand or an opportunity to attract and retain customers by claiming to becarbon neutral. Companies seeking ways to achieve a label or certification for exemplary environmental performance are also using the carbon neutral claim as a way to establish a sort of label or standard of corporate environmental performance. As the voluntary market matures, business and society will learn to scrutinize carbon neutral claims, and verification of performance will become more standardized.Carbon Neutral—What Does it Mean?For companies and communities to claim to be carbon neutral, they must first measure the direct and indirect carbon emissions associated with their operations. Typically, direct and indirect carbon emissions are associated with energy consumption in buildings and operations. Fuel consumption associated with employee travel by land, sea, or air is also calculated. (Some companies include employee commute to and from the workplace, while others do not). Indirect carbon emissions associated with use of key resources such as paper is also calculated.After calculating their total annual carbon emissions, companies will then, ideally, establish targets for reductions and implement programs and policies to achieve results. For example, a municipality that installs energy-efficient lighting and a geothermal system at the municipal recreation centre could realize significant carbon reductions through energy-efficiency improvements in the buildings.A company that subsidizes employee transit passes and helps reduce employee trips in single-occupancy vehicles will realize carbon reductions associated with few cars on the road. An organization that switches from virgin paper to % post-consumer recycled paper can claim significant carbon reductions because the production of recycled paper results in about 50% fewer carbon emissions in the atmosphere than production of virgin paper. Of course, the organization is not actually manufacturing paper, but their purchasing choices have an indirect impact on carbon emissions.Businesses, governments and organizations committed to climate change solutions will measure their direct and indirect emissions each year and continue to implement programs and initiatives to reduce their carbon emissions. If an organization in Canada or the United States wants to claim to be carbon neutral each year, it will also purchase carbon offsets through the voluntary markets.Offsets may come from large-scale tree planting or other carbon sequestration programs. As trees absorb carbon dioxide (CO2), they are considered a carbon sink. Other offset projects fund construction of solar, wind, micro-hydro, or other renewable energy projects which are considered to be clean, non-carbon–producing sources of electricity and power generation. Organizations that sell carbon offsets may offer offsets on projects that are local (i.e., within the same province) or international. In the voluntary carbon offset market, many buyers have preferences as to whether they want to support local or international projects, and whether they prefer tree planting or other offset projects. The cost of offsets can vary from one supplier to another, and at present there are several standards in the marketplace.Taxes and SubsidiesTaxes and subsidies are also market-based mechanisms that can governments can implement to provide incentives or disincentives for companies to implement climate change solutions or improve their environmental performance in other ways.As a powerful stakeholder in business and economic development, the government uses taxes and subsidies as a means of encouraging innovation and new business development. These financial instruments influence how businesses and other organizations spend their money and where they focus their initiatives. “Ideally, subsidies . . . exert a positive outcome by helping people, industries, regions, or products that need to overcome cost, pricing, or market disadvantages” (Lovins, Lovins, & Hawken, 1999, p. 160). However, many taxes and subsidies encourage waste and environmentally damaging business practices. They are “perverse subsidies . . . [that] function as disinvestment, leaving the environment and the economy worse off than if the subsidy had never been granted” (Lovins, Lovins, & Hawken, 1999, p. 160).Some would argue that government subsidies to the forestry, oil, and gas sectors in Canada encourage unsustainable practices. Other subsidies or tax incentives support environmental initiatives such programs to reduce energy consumption. Federal programs provide funding for new technology developments in energy-efficiency and provide financial assistance to businesses and households implementing energy conserving upgrades to buildings.Stakeholders who fail to recognize the importance of sustainable development to our long-term survival and quality of life may lobby or push for taxes or subsidies that support short-term gain or financial advantages at the expense of social and environmental concerns. “We need, incrementally, but firmly, to transform the sticks and carrots that guide and motivate business. That means, in essence, revising the tax and subsidy system” (Lovins, Lovins, & Hawken, 1999, p. 159).Can you think of any government taxes or subsidies that are not benefiting your community or the environment? Can you name any government taxation policies, subsidies, or other fiscal programs that help protect our natural capital while supporting economic development?Ecological TaxationBeyond shifts in government subsidies, there is a growing body of economists and environmentalists calling for more widespread transformations in fiscal policies supporting sustainable development.This is called “ecological tax reform” (von Weizsäcker & Jesinghaus, 1992, p. 18), and it is not a new idea, but it is one that is gaining a larger voice in recent years, especially among those who acknowledge the dominance of business over our social and environmental well-being.“Around the world, governments tax labour and investment while they subsidize the use of natural resources” (Willard, 2002, p. 151). This taxation system is a barrier to business managers and other stakeholders who are seeking ways to rationalize the economic benefits of sustainable development with the environmental benefits.Typically both individuals and businesses balk at the thought of additional taxes, but anyone who buys gasoline, tires, or batteries knows that the Canadian government has introduced numerous environmental taxes nonetheless. Do these taxes really provide incentive for people to drive less, pollute less, or make different choices about the products they purchase?Ecological tax reform does not advocate additional taxes. Its intent is not to increase the tax burden on businesses and society. Ecological tax reform (also known as environmental tax reform) is a revenue-neutral approach to taxation that rewards individuals and organizations for environmentally responsible business and consumer choices, and penalizes wasteful, unsustainable practices. The idea is to put taxes on fossil fuels . . . water consumption . . .and tax the use of raw materials (especially those which are likely to end up as toxic pollutants or hazardous waste), to tax emissions and waste, while reducing taxes on “human labour” (income tax), and create added value and business activity (von Weizsäcker & Jesinghaus, 1992, p. 18).In their article “Sharing the Wealth,” authors Dunkiel, Hamond, and Motavalli write:Reforming the tax system now would have two benefits: The tax system would complement environmental regulation rather than frustrating it (as it now does); and the tax code could harness market forces so that they work for the environment, not against it. Given the large impact that taxes have, they could be a powerful tool for promoting sustainable development, while actually helping the economy and supporting labour.Environmentalists are proposing a “tax shift” to redirect the incentives in the tax code. The goal, asThe Ecology of Commerceauthor Paul Hawken puts it, is to give people and companies positive incentives to avoid taxation. The green economists would purge the tax code of regulations and loopholes that clearly encourage environmental degradation, such as the [US]$17 billion cost of tax-free parking. New levies would be applied on pollution-generators like products containing lead, gas-guzzling cars, ozone-depleting chemicals, and the burning of fossil fuels. Taxes would be judged on their real contribution to the economy, in terms of job creation and productivity growth, equity for the people paying them, and resource conservation. (Dunkiel, B. M., Hamond, M. J., & Motavalli, J. (1999). The Environmental Magazine.)International AgreementsIn our market economy, which is “the familiar world of commerce comprising both the developed nations and the emerging economies,” we have come to value the world as “a complex set of global interdependencies” (Hart, 2000, p. 108). Thus, despite the existence of independent nations with their own standards, policies, and regulations, there are also international agreements and governing bodies providing guidelines and rules for everything from human rights issues to subsidies on wheat.While much of the focus is on economic interdependencies, the air we breathe, the water we consume, and the land on which we depend for all our existence is also interconnected. After all, we are sharing one world. Whether motivated by growing “environmental ethic” (Lawrence & Weber, 2008, p. 222), levels of pollution are relatively low in the developed economies compared to levels in lesser-developed countries, despite intense use of energy and materials (Hart, 2000, p. 109). While business isgreeningin Canada, the European Union, the United States, and other economically developed areas, many corporations are relocating their “most polluting activities (such as commodity processing and heavy manufacturing) to the emerging market economies. Thus, to some extent, the greening of the developed world has been at the expense of the environments in emerging economies” (Hart, 2000, p. 109).Many of the world’s large manufacturers have established operations in China, sometimes shutting down operations in Canada and the United States. Are these companies reducing their output of pollution or simply shifting the environmental damage to a country with less stringent environmental regulations? Mining companies in Canada have faced elevated environmental standards in the past decade. Is it a coincidence that many companies have shifted exploration and development to South American and African countries?The rapid rise of industrialization in countries with extremely large populations, such as China, India, and Malaysia, “could easily offset the environmental gains made in the developed economies” (Hart, 2000, p. 109).Given the rise of transnational business and globalization, it has never been more important to forge international agreements on issues such as elimination of toxic chemicals, control of dumping or export of wastes, and reductions in greenhouse gas emissions. Finding a balance between the responsibilities of economically developed countries and those of countries with emerging economies is a contentious issue. Can we expect countries with millions of people living in poverty to share the same level of concern for sustainable development? While long-term protection of the earth’s natural resource base will help sustain life for all humankind, it is difficult to recognize environmental priorities when short-term survival is a more pressing issue. This may be the rationalization of government leaders in lesser-developed countries, but what are the responsibilities of the companies that operate in these countries?An International Treaty on Climate ChangeThe Kyoto Protocol, also known as the United Nations Framework Convention on Climate Change, is an effort to bring nations around the world together in agreement on goals to reduce the amount of greenhouse gases that each country generates. The Protocol outlines a variety of market-based mechanisms and economic instruments intended to facilitate international co-operation in the reduction of fossil fuel consumption and generation of greenhouse gases. Additionally, governments of the countries signed on to the Kyoto Protocol establish their own specific strategies for achieving the targets for greenhouse gas reductions. These strategies include guidelines, standards, regulations, policies, subsidies, and a host of other programs to provide incentive or disincentive to stakeholders in business, as well as to other members of society.Recognizing that environmental degradation resulting from carbon dioxide and other greenhouse gases is a global problem, bureaucrats, politicians, business leaders, and other stakeholders began negotiating the terms of this international agreement at the United Nations (UN) Earth Summit in Rio de Janeiro in 1992. After years of intergovernmental meetings, 182 countries have ratified the Kyoto Protocol (Wikipedia, 2008c). The United States declines participation in this international accord, while other developed countries that are party to the agreement have committed to targets for greenhouse gas emissions reductions.Despite this major international effort at establishing this global compact, few countries have made any significant progress towards reaching those targets. Some critics challenge the usefulness of the Protocol given the lack of accountability for failure to meet targets, while others criticize the accord because developing countries such as China, India, and Brazil are required only to commit to monitoring and reporting emissions, without any emissions reductions targets.Despite international commitment to the Kyoto Protocol, there is much question as to whether we will achieve the targets we set and powerful resistance to the agreement from certain industries, such as the oil and gas sector. Supporters of Kyoto include thousands of Canadian physicians and leading medical organizations, which claim the Kyoto Protocol is critical for clean air and health (David Suzuki Foundation, 2007b). Many business, environmental, and community stakeholders also believe that Canadian businesses and society can benefit economically as well as environmentally from the Kyoto Protocol.The Kyoto Protocol requires Canada to reduce greenhouse gas emissions to six per cent below 1990 levels. This shift will require investments in energy efficiency, but the payoff will include lower energy costs for consumers, new jobs from innovation and enhanced economic growth…As a wealthy country with well-developed infrastructure and advanced technological capabilities, we can provide global leadership on this issue. (David Suzuki Foundation, 2007a)The Canadian federal government’s decision to ratify the Kyoto Protocol has elicited a high degree of controversy (Beltrame, 2002). In 2002, prior to signing the agreement, the federal government conducted cross-Canada consultations with hundreds of stakeholders. Following the consultations, the Government of Canada released a proposed strategy for meeting the emissions reductions targets for Kyoto including a wide variety of policies and programs to encourage energy efficiency and pollution reduction, not only in the industry sector, but among individual Canadian households, as well.Gaining international agreement on issues, such as actions to mitigate pollution and environmental degradation, is a tremendous challenge. International agreements can take years to negotiate, and the terms and details of the agreements may change many times throughout negotiations.Regardless of whether or not there is ever complete international agreement, the Protocol encouraged the Canadian government develop a plan for addressing greenhouse gas pollution generated by households, industry, and transportation. With the change from the Liberal government to Harper’s Conservatives, the name of the federal government program changed; most of the plans and commitments remained the same. These include programs that offer financial incentives to homeowners, building owners, businesses, business owners, and other organizations or institutions to implement improvements that reduce fuel consumption and associated carbon emissions. (Search the Government of Canada website for climate action programs as implementation of ecological tax reform would need to overcome significant resistance to change, the international agreements on climate change face many challenging obstacles in order to bring governments and nations together in transforming business, government, and society toward a more sustainable future.ReferencesAlcan, Inc. (2002).The business case: Corporate sustainability report 2002.Barringer, F. (2007, January 19). A coalition for firm limits on emissions.The New York Times. 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[Summary version.] Retrieved, from”Krugman”Lawrence, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence, A., & Weber, J. (2014).Business and society: Stakeholders, ethics, public policy(14th ed.). New York, NY: McGraw-Hill Higher Education.Leahy, S. (2003, March 31). An imbalance of power. [Electronic version.]Maclean’s. Retrieved from the Business Source Complete database.Lovins, A., Lovins, H., & Hawken, P. (1999). A road map for natural capitalism. InHarvard Business Review on Business and the Environment. Boston, MA: Harvard Business Review Paperback Series.Osborn, H. (2006, October 30). Stern report: The key points., Retrieved from, M. & van der Linde, C. (2000). Green and competitive: Ending the stalemate.Harvard business review on business and the environment. Boston, MA: Harvard Business Review School Press.von Weizsäcker, E., & Jesinghaus, J. (1992).Ecological Tax Reform. London, UK: Zed Books Ltd.Wikipedia. (2008a).Greenhouse gas. [Web page] Retrieved from (2008b). Intergovernmental panel on climate change. [Web page.] Retrieved from (2008c). Kyoto Protocol. [Web page.] Retrieved from (2008d). Stern Review. [Web page.] Retrieved from 3-4: Stakeholder Viewpoints on Carbon Taxes and Cap and TradeIntroductionInternational agreements, taxes, subsidies, and other market-based mechanisms, as well as voluntary and mandatory programs for improving environmental performance of businesses in society are all strategies that integrate environmental and economic forces.The Government of Canada and several Canadian provinces have invested hundreds of millions of dollars in recent years to encourage Canadian businesses and society to save energy and avoid greenhouse gases and other emissions associated with energy consumption. These are voluntary programs and their impact has been minimal.With Canadians indicating that climate change is a prime concern, numerous other fiscal policy mechanisms including carbon taxes and cap and trade systems are either being introduced or considered in all or parts of Canada.In July 2008, the Government of British Columbia was the first to introduce a carbon tax. Taxes are never popular, but the BC government claimed this tax was revenue neutral because individuals and businesses paid a tax on consumption that was associated with carbon emissions, but received tax breaks and a climate change dividend payments back.The purpose of carbon taxes is to increase the costs associated with pollution or emissions of carbon dioxide. One way to reduce carbon emissions is to increase energy-efficiency and minimize fossil fuel consumption. Businesses can do this through operational improvements such as minimizing idling of their delivery trucks. Technological solutions can result in reduced energy consumption in manufacturing and transportation, and innovation can drive improvements that are both operational and technological.In this activity, you will examine carbon taxes and/or cap and trade systems from a variety of stakeholder perspectives.InstructionsPart A: ReadingRead Chapter 11: Managing Environmental Issues. Skim or skip sections or figures (such as Figure 11.1) that describe specific U.S. laws, but pay attention to general information about the role of governments in environmental management and protection, as well as the greening of management.Conduct an Internet search for ”cap and trade” systems and “carbon taxes.” Be aware of the source of information and the perspectives presented. Seek fact-based sources, not simply opinion pieces, or at least seek contrasting opinions so that you do not simply explore one perspective.Resources for Your Research:The European Union has been operating a cap and trade system for several years, and some European countries also introduced carbon taxes even before British Columbia introduced a carbon tax in 2008.British Columbia; Manitoba; and several U.S. states, including California, Washington, Oregon, Utah, New Mexico, and Arizona have collaborated since 2007 on actions to address climate change. This program was called the Western Climate Initiative (WCI), but as Ontario, Quebec, and other eastern provinces and states joined the collective, the name became inappropriate. This group advocates a cap and trade system among member provinces and states.Governments and most opposition parties at both the federal and provincial level in Canada have taken positions with regard to carbon taxes and/or cap and trade systems. You should be able to find position papers and newspaper articles on their positions by doing an Internet search.The David Suzuki Foundation, Pembina Institute, Environmental Defense, and other environmental organizations publish information and commentaries on carbon taxation and cap and trade systems.A U.S. organization called The Carbon Tax Center published its opinion on carbon tax versus cap and trade systems at: November 2007,The New York Timesonline published a primer on carbon pricing called “The Real Climate Debate: To Cap or to Tax?” (Redburn, 2007 B: Reflective Journal—Cap and Trade and Carbon Tax StrategiesExplain the difference between carbon taxes and cap and trade systems.List places in which one or both of these strategies has been implemented and describe its impact. (Remember to cite your sources).Comment on the pros and cons of each of the two strategies.List at least two stakeholder groups that might have different perspectives on the pros and cons you have listed above, and explain why.Examples of Different Perspectives:How might the perspective on a carbon tax on gasoline of someone living in a rural area differ from someone living in an urban area with access to public transportation?Would a company that is an intensive user of coal, such as a cement company, be more in favour of a carbon tax than a company that manufacturers wind turbines? Why would their perspectives differ?If your company has invested millions of dollars in energy efficiency and your competition has not, which company do you think would be more in favour of a cap and trade system or carbon tax?Module 3: Broad Forces in Global…Topic 4: Technological Change as a Socio-Economic Force“Technology is an unmistakable economic and social force in both business and the world where we live” (Lawrence & Weber, 2014, p. 260). The influence of technological innovations can be small or wide sweeping, insignificant or profound. Do you remember rotary telephones that pre-dated push-button technology? This telecommunications innovation was relatively minor in comparison to the massive social and economic impacts associated with the introduction of wireless telephones.Social and Economic Impacts of Technology on Business and SocietyIn Canada, the impact of wireless phone technology is evident in our everyday lives. Elsewhere in the world, people in remote and economically underdeveloped regions with limited telecommunications infrastructure are now able to communicate via cellular phone technology. Cell phones are transforming business and society in many parts of the world.In Senegal, West African farmers and market traders use wireless telephones to improve business efficiencies. French and Senegalese entrepreneurs provided cellular phone services to farmers to use the technology to check prices of foods and goods before going in town to make purchases. “Before having access to this technology to obtain market information, middlemen often took advantage of farmers, selling them goods at higher prices” (Mobiles Find Right Price, 2002).In 2001 in Bangladesh, 97% of homes and virtually all rural villages lacked telephones. This contributed to underdevelopment of the country and the widespread poverty of Bangladeshis (Cohen, 2001, p. 2). The Grameen Bank established Grameen Telecom (a non-profit) and Grameenphone (in partnership with U.S., Norwegian, and Japanese companies).Grameen Bank is a micro-finance institution renowned for its successful programs helping very poor women gain access to credit, with a track record of implementing unusual financing and development programs. The three foreign companies recognized opportunities to acquire cellular licenses in Bangladesh and to partner with the non-profit organization to build a new cellular phone market in this country. The entrepreneurs are typically very low-income women who borrow money from Grameen Bank and use the loans and the cellphone technology to establish small businesses that support their families. The entrepreneurs offer use of the cellphones on a pay-per-call basis to other poor people who would not otherwise have access to telephones.The goal of Grameen Telecom is to help poor people in Bangladesh to “shift from relatively low-yield traditional ventures like animal husbandry into the technology sector, by creating micro-enterprises that can both generate individual income and provide whole villages with connectivity” (Cohen, 2001, p. 2). The average income for the cellphone entrepreneurs is US$93 per month, a considerable amount by Bangladeshi standards. In addition to creating economic opportunities for the poor, the introduction of cellphone technology in this village phone network “also yields important secondary benefits to the women who live in the villages that they serve. Because 95% of the operators are female, and the phones are in their homes, women who might otherwise have had very limited access to a phone feel comfortable using one . . . [and] because the phones are so important for whole villages, having female operators has helped to enhance the status of women in the communities where they work” (Cohen, 2001, p. 2).This is an example of both social and economic impacts of technology. Can you think of other examples of technological innovations that are transforming communities, cultures, economies, lifestyles, or livelihoods?The Speed of ChangeIn addition to wireless telephone technology, many other technological innovations are influencing the way we interact both socially and professionally, creating massive shifts in economic development and transforming the workplace. Technology influences the type of work people are doing as well as where, when, how and for whom people work. It is creating new management challenges and challenges for government and society as well.What are the true costs of technology innovation? What is the cost to society of a growing trend towards communications or socialization that takes place over computers, mobile phones, and PDAs (personal data assistants)? What are the environmental impacts of a world in which people buy and dispose of computers, cellphones, and all sorts of other electronic devices and gadgets with increasing frequency, as new versions and impressive new features dictate the need to upgrade more frequently? What are the health implications of long-term use of computers or use of wireless technology, such as the Internet and cellphones? Some studies suggest cellphone use causes brain tumours; others refute it. Some critics claim that the electro-magnetic fields (EMFs) associated with use of electronic devices are harmful, and even deadly. If we cannot see the transmission path, is the technology harmless?In their book,Everybody’s Business: Managing Risks and Opportunities in Today’s Global Society, authors Adrian Hodges and David Grayson quote the simple but significant words of Microsoft founder, Bill Gates: “The Internet changes everything” (2002, p. 16).The speed of penetration of Internet technology into business and society is, perhaps, unprecedented in history. In one year (July 1999 to summer 2000), the number of Internet users almost doubled worldwide from 185 million to 360 million people (Hodges & Grayson, 2002, p. 16). In China, Internet growth was even faster, “from four million users at the end of 1999 to 17 million in September 2000 (Hodges & Grayson, 2002, p. 16). Ongoing technological transformations in computers and other information technology, as well as decreasing costs are allowing “powerful applications, that were previously available only to governments and large business, to be within the reach of small businesses and individuals (Hodges & Grayson, 2002, p. 15).Harnessing Internet and Communications Technologies (ICT) for Business, Government, and Societal ChangeInternet and communications technologies (ICTs) help create efficiencies and enhance the speed and volume of business activity. In previous generations, real-time communications around the world was expensive or technically challenging, making day-to-day communications complicated for global business activities.Much of the focus of technological innovation is on the impact on business, but Internet and other communications technologies are also transforming the educational and entertainment sectors, as well as politics, government and public opinion. Indeed, Internet and other communications technologies are among the most powerful and broad forces influencing primary and secondary stakeholders today.Widespread use of computers and Internet technology facilitates mass communications and virtual organization of consumers, activist groups, and other stakeholders, who are no longer restricted by costs, time zones, political boundaries, or language barriers. In the past, many of these stakeholders lacked the logistical or financial means to exert significant influence on business, government, or society. Today, Internet technology and no-cost or low-cost telecommunications services aid organizations and enable stakeholders to harness the power of their collective voices without the cost, time delays, or other logistical challenges that groups faced in the past. For example, the large-scale protests at World Trade Organization meetings that began in Seattle in December 1999 were made possible by global planning and information campaigns that harnessed the power of the Internet as a tool for organization and communications.Homemade videos taken from cellphone cameras or digital cameras can be uploaded to the Internet in minutes and broadcast around the world to share silly, sublime, or serious issues and information. Whether it’s a baby panda bear born in captivity, a Hollywood star behaving badly, or an international protest against global warming or fair trade, today’s ICT enables instantaneous sharing of information and mobilization of opinion or action.Leaders, bureaucrats, and workers in government are also harnessing the power of the Internet and other communications technologies. Today, Canadians can file their income tax, contact their local Member of Parliament, research government funding programs for homeowners and businesses, and even vote via the Internet.It’s no secret that in many of the world’s democracies, fewer and fewer people are actually interested in the old ways of doing politics . . . such as voting, for example. Countries like Canada and Britain are quickly catching up to the low voter turnout levels long associated with the United States.All this voter apathy has led some people to look to the promise of the Internet as a way to engage average citizens in everyday politics. And their vision of so-called “e-democracy” is gathering steam.Markam, Ontario [is] preparing to hold Canada’s first municipal election in which residents will be able to avoid the queue at the ballot box and vote with the click of a mouse instead . . . . Earlier [in 2003] Britain became the first country in the world to experiment with Internet voting in a public election. And the birthplace of parliamentary democracy is leading the way in other areas, too, from online consultations to MPs’ Web logs. (Canadian Broadcasting Corporation, 2003)Technological Cost and ChallengesAlong with their benefits, information and communications technologies create challenges for business and society. In terms of sustainable development, there are many potential environmental and social benefits, such as the ability for researchers, organizers, activists, and other stakeholders in business and society to transform the way they work, play, plan, meet, or interact. They can use virtual communications in order to collaborate on projects and develop plans or solutions via the Internet and other information technologies. “Satellite images and geographic information systems help researchers to identify and solve a host of environmental problems,” and data can substitute “for materials and energy, as digital cameras do in their use of computer chips rather than film” (Worldwatch Institute, 2003).Computers and other technologies can help reduce consumption of paper and other material goods (although few businesses and organizations have actually achieved significant reduction in paper usage), and they enable people to avoid automobile use by telecommuting or doing banking and other day-to-day transactions online. Parents can register their children for soccer season, bridge players can meet online to challenge opponents in far off countries, families can digitally send paperless photographs to relatives around the world, non-profits and universities can organize virtual conferences, and businesspeople can meet without getting in cars or on airplanes. However, despite all the potential environmental and social benefits for business and society, these technologies generate massive amounts of solid and toxic waste, and large quantities of toxic chemicals that may pollute air and water are used in manufacturing computers and electronics. This is an ever-growing burden on the earth’s ecosystem (Worldwatch Institute, 2003).In addition to information and communications technologies, there are many other innovations that can help reduce household energy consumption, improve automobile fuel efficiency, and eliminate pollution and toxic waste associated with manufacturing processes. While these technologies exist, consumers, business operators, and other stakeholders may not choose to use them.Vehicles are a prime example. Technological innovations enable reduced emissions and increased fuel efficiency in automobiles and light trucks. Cleaner fuels and hybrid gas-electric cars have also entered the marketplace, and Ballard Power Systems has been test-marketing its hydrogen fuel cells in vehicles for more than a decade. Yet, it is not simply technological know-how that influences the adoption and spread of innovation.Despite the lower performance standards with regard to both fuel efficiency and emissions standards in SUVs and light trucks, these vehicles dominated the auto market in North America for several years. Even before the jump in gas prices in 2007 and 2008, studies indicated that raising fuel efficiency “standards for SUVs and light trucks to the same level as cars would save American consumers $27 billion at the gas pump and save over one million barrels of oil a day” (Becker, 2003). Despite the environmental and financial costs, the trend for purchase of SUVs and light trucks continued for several years.In this case, was it innovation that drove uptake of SUVs, or was it creative marketing campaigns of the North American auto industry? Were the environmental and financial impacts the by-products of innovation, or were they outcomes of changing consumer preferences that were driven by clever advertisements and low-interest financing?Privacy and SecurityAlong with the financial and environmental costs and benefits of innovation, technological change, there are social costs and benefits. Among these are social ethical concerns relating to health, safety, privacy, security, and ownership. (Some of these issues are discussed in Chapter 12, which is your assigned reading in this topic section). In the words of de la Mothe, “Innovationis a dynamic through which so much new value and creative destruction flows” (2000, p. 5).Issues of privacy and security have always been a concern for stakeholders dealing with business, government, and other organizations. However, the growth of the Internet and e-commerce has introduced a host of new concerns. Organizations entrusted with customer or client information have a responsibility to protect the privacy of these stakeholders and to use information according to an ethical protocol that has emerged in e-commerce. Internet users and organizations handling private information must also deal with Internet-enabled security breaches and malicious damage caused by hackers.In addition to the costs, Internet privacy and security issues are creating ethical as well as legal concerns that are complicated by the size and scope of the industry as well as the fact that users and abusers can operate in a “virtual” environment where policing and control are particularly challenging.Internet technology has also enabled piracy or theft of software, and created logistical and ethical concerns surrounding copyright, production, and distribution rights, especially in software and music. In 2003, the music industry began prosecuting individuals who illegally download music from the Internet. It is unlikely they intend to punish all the offenders; however, by taking legal action against some offenders, the industry generated media attention, sending two powerful messages to the virtual community. The first is that Internet users are not invisible in cyberspace, and the industry is capable of tracking users’ activities. The second is that Internet theft is a crime and it is punishable by law.© John Fewings. www.fewings.caHealth, Safety, and RisksInternet and other communications technologies are not the only technological innovations influencing business and society. Automation and nanotechnologies are transforming the manufacturing sector, influencing job and skills requirements and cost-efficiencies. Transportation technologies have revolutionized leisure as well as business travel and the movement of goods around the world in the last century. Innovation in science, medicine, pharmaceuticals, agriculture, fisheries, forestry, mining, and technologies have small-scale and wide-reaching impacts on individuals, communities, economies, and the eco-system.Can you list at least three technologies you are using today that you did not use ten years ago? How have they influenced your life?Technological change provides many benefits, but there are also risks as well. As we mentioned earlier, there is pollution and environmental degradation associated with the industry producing all the technological gadgets and wizardry that so many people now require to get through daily life. Furthermore, all these new technologies, with their built-in obsolescence, are creating consumerism on a scale unprecedented in history. The insatiable need to dump our outdated products and upgrade or acquire an even more sophisticated version of the same gizmo might be good for business, but is it good for society? Consumption, waste, pollution, and industrial activity all take their toll on humans, plants, and animals in our ecosystem.Perhaps this is the price that society pays for technological change, but what of other risks to our health and safety? Technologies may be developed for a productive purpose but used for a destructive one. For example, nuclear and aerospace technologies have the power to enhance our quality of life, yet they also have the potential to do great harm—and they have. Even seemingly benign technological innovations, such as biological manipulation of plants, can be beneficial or harmful. The debate on genetically modified food products (GMFs) is ongoing. Opponents cite the potentially hazardous impacts on our health or the health of the agricultural ecosystem, while advocates of biological innovations believe the agriculture and food industry (and society) benefit from advances associated with the genetic engineering of seeds, plants, and food ingredients.The Good, the Bad, and the EthicsBiotechnology, bioengineering, and innovations in medical science are creating tremendous ethical debates in determining the risks and benefits to individuals and society. Organizations and individuals are concerned about their rights with regard to food and health safety, health care, impacts on our environment, preservation or creation of human life, and genetic manipulation of humans, plants, and animals.Endless Innovation or Enough?Innovations in medicine and medical technology enable organ transplants and prolonged life. Biotechnology and bioengineering facilitate new drug treatments to cure diseases, enhance human performance, eliminate wrinkles, and bring people closer to the “fountain of youth.” In his book,Enough: Staying Human in an Engineered Age, Bill McKibben examines the medical, social, ethical, and philosophical arguments against certain technological advancements that he challenges as taking us away from our humanness (2003). McKibben acknowledges our technological and intellectual ability to continue to innovate, but suggests that individuals, business, and society today, or someday soon, need to make decisions about how much technology isenough.Environmental EthicsWhile the industry giant Monsanto battled a Saskatchewan farmer over ownership of genetically modified seeds that had blown into the farmer’s fields, other stakeholders, including ethicists, activists, organic farmers, bio-engineers, and industry insiders, continued to debate the risks and benefits of genetically modified soy beans, corn seed, and other food and animal crops. Heath and safety is a paramount concern, but what about the environmental ethic?With the emergence of an industrial society in the 1800s and 1900s came an interest in conquering nature for the benefit of humankind. While some western philosophers believe the purpose of civilization is to dominate and control the environment (or nature) and other living things, environmentalists and other stakeholders in society dispute both the ethic behind this philosophy as well as the practicalities of it. The Jane Jacobs, Dr. Carl Henrick Robèrt, Paul Hawken, and many other environmental leaders and thinkers have suggested that patterning economics and technological development after nature and integrating ecological principles into planning and design will result in a healthier and more sustainable society. Some writers use metaphors from nature to describe business paradigms. For example, inLeadership and the New Science, Margaret Wheatley uses the patterns of a stream as a metaphor for patterns in business and organizational behaviour (1999).Optional Readings:The following books describe the benefits of economics and/or business development patterned after the principles of ecology and the processes of nature.Jacobs, J. (2001)The nature of economies. Toronto, ON: Vintage Canada.Hawken, P. (1993).The ecology of commerce. New York, NY: HarperBusiness.Robèrt, K.-H. (2002).The natural step story: Seeding a quiet revolution. Gabriola Island, BC: New Society Publishers.http://www.newsociety.comNattrass, B., & Altomare, M. (2002).Dancing with the tiger: Learning sustainability step by natural step. Gabriola Island, BC: New Society Publishers.Nattrass, B. and Altomare, M. (1999).The natural step for business: Wealth, ecology and the evolutionary corporation. Gabriola Island, BC: New Society Publishers.Waage, S. (Ed.). (2003).Ants, Galileo, and Gandhi: Designing the future of business through nature, genius, and compassion. Sheffield, UK: Greenleaf Press.Harnessing the GoodIssues regarding environmental ethics, other morals or values, and technological developments will, no doubt, continue to provoke ethical debates about the risks, benefits, and righteousness of innovation and change. After all, there is much good that comes of innovation. A program at the University of Victoria (UVic) is an example of the highest integrity being applied to technological innovation. More than 300 UVic faculty, staff, and students volunteer “their time and expertise to develop and test new devices” that assist people with disabilities to improve their quality of life (Shore, 2003). “Machinists, computer scientists, electrical and mechanical engineers, biologists, physiologists, psychologists, neuroscientists, technicians, and students” from the university collaborate on projects such as:…a sensor system that allows visibly impaired children to ride tricycles, a communication system based on the detection of eye movement, automatically opening laptops to assist people in wheelchairs or people with limited hand movement, a device to teach developmentally delayed children how to grip bars, and a lateral-movement rocking horse to teach children with developmental disabilities how to balance…They’re all innovative ideas that have, or are being, turned into reality by the University of Victoria Assistive Technology Team. (Shore, 2003)A “Knowledge Society”“Knowledge, learning and information are centrally posed as the new currency” (de la Mothe & Niosi, 2000, p. 5). Information and communication technologies, automation, and other innovations are driving the emergence of an “information society” (Lawrence & Weber, 2008, p. 279) or what Drucker calls the “knowledge society” (Drucker, 2001, p. 1). “Knowledge will be its key resource, and knowledge workers will be the dominant group in its workforce” (Drucker, 2001, p. 1).According to Drucker, this new economy will rely heavily on “knowledge workers”—teachers, accountants, scientists, engineers, doctors, and lawyers—but the “knowledge technologist” will also be in demand. These are computer technicians, software designers, paralegals, manufacturing technologists, analysts in clinical labs and research facilities, who require specific training but still engage in a fair amount of manual labour in their day-to-day professional activities (Drucker, 2001, p. 2).A knowledge society can be borderless because “knowledge travels even more effortlessly than money” (Drucker, 2001, p. 1). “As more business becomes information and data-oriented, rather than requiring raw materials and production facilities, jobs will be rapidly shifted to different locations and at little cost” (Hodges & Grayson, 2002, p. 17).Thus, technological transformations shaping the knowledge society are facilitating globalization. The evidence is everywhere, according to Hodges and Grayson:In Barbados, as many people now work in the IT industry as there are in the sugar-growing industry.Motorola has equipment design centres in both India and China.Texas Instruments designs its most sophisticated computer chips in India (Hodges & Grayson, 2002, pp. 17–18).Throughout history, technological developments have revolutionized business, culture, and communities, and we continue to innovate in electronics, computers, telecommunications software, hardware and infrastructure, biotechnology, medicine, and other sectors. Every country of the world is at some stage of technological transformation, although the pace of change varies dramatically. The many influences of this powerful force on business, government, and society are staggering. What impact will it have on our economy, our environment, our communities, and our culture next year…and over the next ten or twenty years? How will technology influence change? How will society embrace that change? What will be the benefits and what will be the casualties and drawbacks to these changes?ReferencesBecker, D. (2003). I don’t care about the air. [Web page.] Retrieved from Broadcasting Corporation. (2003, September 2). E-democracy—Markham. [Transcript.]The Current. Retrieved fromCohen, N. (June 2001).What works: Grameen Telecom’s village phones. A digital dividend study by the World Resources Institute. Retrieved from la Mothe, J., & Niosi, J. (2000, September). Tools for analysing biotechnology. In J. de la Mothe & J. Niosi (Eds.),Economics, science, technology and innovation series: The economic and social dynamics of biotechnology, 21(3-5). Boston, MA: Kluwer Academic Publishers.Drucker, P. (2001, November 3). A survey of the near future: The next society.Economist 316(8246).Hawken, P. (1993).The ecology of commerce. New York, NY: HarperBusiness.Hodges, A. & Grayson, D. (2002).Everybody’s business: Managing risks and opportunities in today’s global society. London, UK: DK Publishing, Inc.Lawrence, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence, A., & Weber, J. (2014).Business and society: Stakeholders, ethics, public policy(14th ed.). New York, NY: McGraw-Hill Higher Education.McKibben, B. (2003).Enough: Staying human in an engineered age. New York, NY: Henry Holt and Company, LLC.Mobiles find right price for farmers. (2002, October 6).BBCNews: World edition. Retrieved from, V. (2003, October). UVic ingenuity goes on display at UVATT Open House.The Ring: University of Victoria’s community newspaper 29(12). Retrieved from, M. (1999).Leadership and the new science. San Francisco, CA: Berrett-Koehler Publishers, Inc.Worldwatch Institute. (2003). Resource center: Economy. Retrieved from 3-5: Technology’s Influence on Stakeholders and SocietyIntroductionIn this activity, you will reflect on the influence of technological innovations on your own life and consider the impact of new technologies on stakeholders in society around you.InstructionsPart A: ReadingRead Chapter 12: Technology, Organizations, and Society.Part B: Reflective Journal—Influence of TechnologyIn your journal, describe three recent technological initiatives that directly affect your daily life and/or lifestyle.How have these technologies influenced your life or required (or inspired) you to change. Do you think this influence (or change) is beneficial or detrimental to your wellbeing? Explain your answer.Do these technologies influence other stakeholders with whom you interact (at work, home, or in the community)? Briefly explain why and/or why not?Do you have ethical concerns regarding these technologies? Defend your answer.Note:Your description could be a diagram, mind map, or written paragraphs. What you want to focus on is brainstorming your ideas and capturing information in a way that is relevant to you.Activity 3-6: The Ethics of E-businessIntroductionE-commerce and other business activities conducted through the Internet are provoking the need to establish ethical guidelines to protect the privacy and security of online customers. The following Discussion Case and eBC article provide some ethical principles and guidelines for businesses and other organizations engaged in e-commerce and other Internet-based marketing and communications activities.InstructionsPart A: ReadingRead Chapter 13: Managing Technology and Innovation.Part B: Reflective Journal—Uses and AbusesAccording to the information presented in Chapters 12 and 13, the Internet affects society both positively and negatively. In your opinion, what is greater—the benefits from the Internet or the damage caused to society by the Internet? Explain your answer.Many businesses collect information on customers’ lifestyles and purchasing preferences, and well as financial information about customers or clients. Is it appropriate for organizations to share profiles of customers or clients (with other organizations) without the knowledge or approval of those customers? Defend your answer and identify your stakeholder perspective (i.e., are you involved in the business of e-commerce or Internet-based marketing, are you a consumer, or both?).Given the prevalence of social networking websites, such as Facebook, how do you think these public forums and communities can be used or abused to gather market intelligence or information on potential customers, employees, or business associates?Review recent newspapers or magazines and look for one example of an article that appears to present information from the perspective of a business and one example of an article that presents information from a government perspective. Do these articles also present other perspectives? Briefly describe why you think these articles are or are not fair and balanced in their reporting. Refer back to the CARS Checklist and use the checklist in your assessment.Part C: Online DiscussionChoose a topic relevant to Module 3: Broad Forces in Global Society for posting to the online discussion. This may be derived from an entry you made in your reflective journal as you worked through the activities in Module 3, or from another area of interest to you.Use Summon@TRU Library (which is on the main page,, visit the Article Databases & Indexes page (, or see the Research Guides ( to find the Business resources.As you prepare your posting, remember the following:o The discussion topic must be a matter ofcurrentconcern in the field of business and societyo The topic must be supported by recent articles, commentaries, or eventsDemonstrateparticipationin an online dialogue by responding to some of the comments your topic may elicit from other students of MNGT 3711.Demonstrateparticipationin an online dialogue by commenting on the initial posting of at least one other student.Post a minimum of three postings for each module. Post your discussion in the appropriate module area under the Discussions link.Although your online discussion is not graded, you will need to draw from online discussion material when you complete the Major Project. The depth of your postings and interaction with other students will contribute to the mark you receive for that part of the Major Project.MODULE 4:Module 4: Internal Forces and…Topic 1: Shareholders and Governance“The termcorporate governancerefers to the process by which a company is controlled, or governed” (Lawrence & Weber, 2014, p. 313). Managers are accountable to stakeholders, including creditors, shareholders and/or owners of the company, government agencies, and employees. Employees may be stakeholders in terms of their role in day-to-day operations, and they may also own stock in the company.Shareholders own the company. A private company may be a family-owned enterprise, or it may belong to one owner, a few, a few dozen, or many, many shareholders. In contrast, public companies typically have thousands of shareholders with some of the stock (or shares) in the company changing hands in daily stock market trading. Despite the large number of shareholders, public companies tend to have a few shareholders (or small numbers of institutional investors that represent the collective investment of pension funds or mutual fund buyers) who dominate the stock holdings. Sometimes the dominant shareholders are the original founders or financiers, but not always.Corporate GovernanceShareholders hold authority within a firm because they are the collective owners. However, upper management or senior executives typically make most decisions, and therefore control most companies. Boards of directors play a key role in corporate governance. They are an elected group of individuals who have “a legal duty to establish corporate objectives, develop broad policies, and select top-level personnel,” and to review the performance of management to ensure that “the company is well run” and shareholders’ “interests are protected” (Lawrence & Weber, 2014, p. 313).While many not-for-profit organizations have boards of directors and adhere to governance issues, the focus of this section is on the private sector. By this we mean public or private corporations operating in a for-profit environment. Your textbook tends to address issues in the context of large corporations, most of which are public companies that trade on at least one exchange and are owned by thousands of shareholders. Nevertheless, many of the governance issues discussed in your text are relevant to small and not-for-profit organizations, as well.Managers control the day-to-day operations of businesses and other organizations. They represent the interests of a larger group of stakeholders, including customers or clients, suppliers, shareholders or investors, employees, government agencies, and community members. Of course, it is assumed that individuals also have their own interests in mind when they work for a business or organization. Governance refers to policies and procedure that aim to help ensure that managers serve the interests of shareholders and other stakeholders. According to the Conference Board of Canada, governance arrangements can include guidelines and controls such as the following:The power given to managementControls over how management can use power (e.g., boards of directors may oversee management-level decision-making)Management’s accountability to stakeholders (e.g., guidelines or rules about what issues are within a leader’s individual control and what issues or decisions must be vetted by a board of directors or advisors)Formal and informal processes by which stakeholders influence management decisions (The Conference Board of Canada, 2003)In recent years, corporate scandals and corrupt practices in businesses and not-for-profit organizations has prompted calls for more effective corporate governance. This includes greater awareness of the responsibility and accountability of boards of directors and a movement toward increasing shareholder involvement. Professor Len Brooks affirms this in his description of Enron Corp.: “This company experienced a failure of the governance process . . . and as a result, we find that management was out of control, certainly out of control of the board of directors” (Brooks, as quoted in McFarland, 2002, p. B9).Shareholder Influence on GovernanceThe primary reason that individuals and institutions invest in corporate stock is to pursue financial gain, although some shareholders also seek corporate control. Typically, shareholders influence the price of shares by creating demand that pushes prices up. Conversely, en masse selling of stock pushes prices down when buyers will only respond to lower prices.Individual participation in the stock market fluctuates with investor confidence in the public markets, and with personal interest in investment opportunities. In today’s public markets, institutional investors are playing increasingly bigger roles influencing both the price of stock and sometimes also influencing activities of the companies in which they invest. Institutional investors pool the equity of large groups of individuals into a collection of investments. Pension funds and mutual funds are two significant categories of institutional investors. Even people who do not have stock market trading accounts can be investing in the stock market by way of their pension plan at work or through investment in mutual funds. Unless you pay attention to the list of companies in which these funds invest, you may not even be aware that you are an owner of Shell, Ballard Power, Intrawest, DeBeers, or other large public companies. (Institutional investors are discussed briefly in Chapter 14 on page322).Institutional investors have the same rights and responsibilities as other shareholders. However, larger funds may have considerable holdings in a particular company, and this enables them to flex collective shareholder powers if they so choose. In recent years, institutional investment groups have become influential stakeholders in business and society, and they “have become more assertive in promoting the interests of their members” (Lawrence & Weber, 2014, p. 322).One of Canada’s larger institutional investment groups, the Ontario Teachers’ Pension Plan (OTTP), uses its substantial shareholder power to influence corporate governance issues. In 2002, the CEO of (OTPP), Claude Lamoureux, co-founded the Canadian Coalition for Good Governance (CCGG). CCGG’sAnnual Report 2007states that assets would have grown from $350 billion in 2003 to $1.4 trillion in 2008, and the number of members from 13 to 45 (Canadian Coalition for Good Governance [CCGG], 2007, p. 1). “The mission of the Canadian Coalition for Good Governance is to represent Canadian institutional shareholders in the promotion of corporate governance practices that best align the interests of boards and management with those of the shareholder” (CCGG, 2008).Coalition members use their collective voting power to encourage the corporations in which they invest, “to follow the best practices of good governance” (CCGG, 2003b). Said Lamoureux, “For us, governance is a means to improve performance . . . We own these stocks . . . And we have a responsibility to act like owners” (Lamoureux, as quoted in Gray, 2003a, p. 46).Good GovernanceThe coalition developed guidelines for good governance that focus primarily on improving the boards of directors of corporations to achieve effective and ethical management. The guidelines include how to select directors with extraordinary qualities, how to structure boards to create strong governance teams, and how to ensure the processes of good governance are followed (CCGG, 2003b). These are not new ideas. InBusiness Week’’s 1996 “report card on corporate governance,” writers Byrne and Melcher listed similar board attributes and performance characteristics as those listed in the CCGG’s guidelines. So, why is it that the coalition felt the need to organize and to develop its own set of guidelines for corporate governance?According to Stephen Jarislowsky, co-founder of the CCGG, “’Investor confidence in the capital system has been badly shaken by events that in many cases could have been prevented if boards of directors had provided vigorous and competent oversight of corporate executives . . .’” (CCGG, 2002).The objectives of the CCGG include:Ensuring that all public corporations have highly qualified boards of directors who understand that they are accountable only to the shareholders in the carrying out of their fiduciary duties.Ensuring that boards of directors insist on excellent and ethical management.Ensuring that that the board of directors supervise management proactively.Ensuring that all committees of the board of directors are independent from management and highly qualified.Ensuring that external auditors follow policies of transparent accounting, reporting directly to the audit committee thereby ensuring independence from the management of the company.Supporting compensation schemes that reward employees for superior performance.Developing a common position on acceptable accounting standards and financial disclosure through input with the various regulators and standard setting organizations.(Reproduced courtesy of the Canadian Coalition for Good Governance, coalition considers the role of the board of directors as key to good governance, and it encourages its membership to use their collective power as shareholders to advance this agenda. In addition to addressing the roles and responsibilities of boards, the CCGG is also concerned with other issues, such as fair and reasonable compensation, ethical management, and transparency in accounting (CCGG, 2005). Given some of the high profile corporate governance scandals reported in the press in recent years, it is not surprising that these issues are of concern to the CCGG.Today, investment groups, management consulting firms, watchdog organizations, financial institutes, and institutional investors around the world consider “environmental, social, and governance” (ESG) issues in evaluating business performance and investments. For example, Mercer is an international consulting firm that delivers human resource and related financial advice (Mercer, 2008a). Beyond a set of guidelines, Mercer applies an assessment of managers, [integrating] environmental, social and governance issues into the assessment (Mercer, 2008b). According to Mercer, “institutional asset owners are becoming increasingly interested in whether managers behave as active owners of capital and whether they reflect the materiality of ESG in their investment decision-making” (Mercer, 2008b).Tim Gardener, global chief investment strategist at Mercer explains: “’In the past, it was just a small group of organi[s]ations that were interested in active ownership and environmental, social and governance analysis. However, there are a growing number of mainstream investors who believe these issues can have an impact on long-term investment performance’” (Mercer, 2008b).Optional Resources:Search online for:Canadian Coalition for Good Governance (CCGG)On the website, search for:Corporate Governance Guidelines for Building High Performance Boards and forGovernance Self Appraisal Form based on the Corporate Governance Guidelines for Building High Performance Boards. (This is a tool for self-assessment that can be used by organizations of boards of directors.)Canadian Businessmagazine publishes an annual survey of the twenty-five highest- and lowest-ranked boards of directors in Canadian businesses. The ranking is based on such criteria as independence, accountability, and performance. You can search for these annual surveys inCanadian Businessmagazines through TRU Library.Search for the term “Environmental, Social, Governance” (ESG) for discussion of companies, tools, and methodologies for ESG assessment, or information on companies applying ESG analysis in management and/or investment analysis.Governance ReformThe power of investment funds is evident by their financial influence in the stock markets. However, their influence on corporate governance has gained media attention in recent years and support from critics of poorly governed companies. In 2003, the Ontario’s Teachers’ Pension Plan (OTPP) created a stir when they withheld support for election of directors at several companies because OTPP was not satisfied with the performance of the boards of these companies on key matters.For example, OTPP targeted the board of Magna International Inc. when the company approved a pay package of more than $52 million for founder Frank Stronach. Teachers’ voted against the board because they believed the pay to Stronach was unreasonably high (Gray, 2003b), especially given the fact that his role was only in a consulting capacity, with his daughter holding the senior executive position at that time (Watson, 2003, p. 17). Despite their efforts, the pension fund’s collective voting power did not stand up against the Stronach family, who controlled more than fifty per cent of the voting shares in Magna while actually owning less than one per cent of the company’s equity (Gray, 2003b). Advocates of governance reform list the conflict of interest surrounding family members on boards of directors and the duel-class share structure as two other areas of concern (Gray, 2003b).While the Teachers’ pension fund did not change things at Magna, their vigilance along with the coalition’s collective power may help to reform corporate governance in Canada. While many applaud their influence, critics claim that tighter regulations and increased shareholder activism is resulting in more paperwork with most of the benefits going to lawyers, accountants and consultants, not the corporate bottom line (Gray, 2003b).Among the critics, Lord Conrad Black, one of Canada’s most successful business leaders, called corporate governance afad, withzealots, and atendency to excess(Black, quoted in Gray, 2003b). It is interesting to note that less than a year after making these statements, Black was forced to step down as Chief Executive Officer (CEO) of Hollinger International due to an investigation about collecting $7.2 million in non-compete fees without proper authorization from the board of directors (Stewart & Waldie, 2004).Speculation about Black’s impending resignation caused share prices to increase in the few months preceding his announcement, and on the day that Black stepped down as CEO, Hollinger’s stock rose another six per cent (Gray, 2003b). Share value increased, despite calls for resignation of Hollinger’s board of directors as well, some of whom were Lord Black’s family members. For Black, this was not the first scandal surrounding business improprieties. Black also resigned as chair of the board of directors and in the fall of 2004, the Securities Exchange Commission filed a civil fraud lawsuit against Black and some of his colleagues. The following year, Black was arrested on criminal fraud charges and subsequently convicted of three counts of fraud and one count of obstruction of justice. Despite appealing the conviction, Black was sentenced to seventy-eight months in prison (“Conrad Black sentenced,” 2007).Ethical or legal transgressions sometimes devastate the share value of publicly trading companies, impacting shareholders who assume that the companies abide by good governance practices. The OTTP and shareholder activists, such as representatives from socially responsible investment (SRI) funds, do not simply assume companies are practicing good governance. They are watchdogs, using their voting power to influence governance practices and their investment power to choose companies that meet their standards of good governance. Claude Lamoureaux of Teachers’ believes that “good governance is just good business, and improving it is a vital way to improve performance” (Gray, 2003b). In Canada, there is no quantitative research to back Lamoureaux’s claims. However, in the U.S., a study done by Wilshire Associates Inc. showed a positive correlation between improved governance and share performance (Gray, 2003b).Accounting and AccountabilityThe extreme to which Enron Corp. used accounting practices to inflate revenues and misrepresent the true financial condition of the company is almost too outrageous to believe. Yet, despite the public outrage over this debacle, many corporations continue to employ accounting and reporting practices that do not accurately disclose financial information to stakeholders.The CCGG identifies accounting procedures as another issue of concern for good governance, and they are not alone. Gaps and inconsistencies in regulations enable companies to provide misleading financial information, and the difference between reality and reporting can be staggering. In response to the increasing scrutiny of securities commissions, some public companies are disclosing vastly different financial situations despite no material changes in their operations.For example, Crystallex International Corp., which trades on the Toronto Stock Exchange, “took a trip to the confessional . . . reporting millions of dollars of retroactive write-downs” (Baines, 2003, p. 13). For Crystallex and its shareholders, the result was to reverse an earlier-reported profit of $3.4 million to a loss of $40 million (p. 13), a change that could significantly influence shareholder confidence in the company.Good governance alone may not be sufficient to protect stakeholders from unethical or illegal accounting practices. The accounting profession has yet to establish specific standards and guidelines for reporting that eliminates the opportunity for ambiguity or manipulation of information, and regulators have allowed these practices to exist without sufficient oversight. Audits are conducted with the assumption of management’s “good faith.” The weakness of the audit process is that few companies would willingly pay more money to get auditors to actively look for wrong-doing and audited financial statements are not vetted for fraud.In the case of Enron, the external audits were done by the same firm that Enron paid to do the internal audit, and “were compromised by conflicts of interest” (McFarland, 2002, p. B9). Some of Enron’s staff expressed concern about unethical decision making and questionable account practices, but the board of directors ignored internal whistle blowers and “suspended the code of conduct rules . . . ” (p. B9). This was poor governance, indeed. Without good governance, the absence of accountability and lapse in ethical management contributed to the creation of a corrupt corporate culture. Enron and WorldCom and other scandals cost investors billions of dollars when share prices collapsed, and some companies closed their doors.In response, theSarbanes-Oxley(SOX, or Sarbox)Act, also known as thePublic Company Accounting Reform and Investor Protection Act, was introduced into law in 2002 for companies trading on U.S. stock exchanges . This “legislation establishes new or enhanced standards for all U.S. boards, management, and public accounting firms” (Wikipedia, 2008). It includes descriptions of corporate board responsibilities and a host of criminal penalties for non-compliance with this law (Wikipedia, 2008).There is some debate of the costs and benefits of Sarbox. Supporters contend that strengthening corporate accounting controls and other aspects of the legislation “has played a useful role in restoring public confidence” in capital markets, but opponents claim the act “has introduced an overly complex and regulatory environment,” which is reducing American competitiveness “against foreign financial service providers”(Wikipedia, 2008).Transparency and Corporate Social ResponsibilityWhile the Canadian Coalition for Good Governance calls for transparency in accounting and financial reporting (CCGG, 2003a), some stakeholders are demanding greater transparency and accountability inallaspects of business operations and management (Hodges & Grayson, 2002). Business consultants and authors Don Tapscott and David Ticoll coined the term “naked corporation” in their book of the same title (2003a). Anaked corporationis one that is open, accountable, and transparent to all its stakeholders. This goes beyond disclosure of basic financial information.According to Tapscott and Ticoll (2003a), if firms are not open and accountable, their stakeholders will find out anyway. “People and institutions that interact with firms are gaining unprecedented access to all sorts of information about the corporate behaviour, operations, and performance” (p. xi). The Internet is one of the tools that provide low-cost access to information and a rapid means of widespread communications for shareholders, activists, and the media. “Stakeholders now scrutinize the firm as never before, inform others, and organize collective responses. The corporation is becoming naked . . .” (p. xi) and, if it must expose itself, it should try to look its best.The Naked CorporationTapscott and Ticoll claim transparency is an “old force with new power” with “far-reaching implications for most everyone” in business and society (2003a, p. xi). According to the authors, “at the end of 2003 the corporate world was still weathering a crisis of trust on a scale unseen since the Wall Street crash of 1929” and greater transparency is the panacea for this crisis (p. xii). “Firms that exhibit ethical values, openness, and candour have discovered that they can better compete and profit” (p. xii).Tapscott and Ticoll recommend that corporations maintain the privacy of their trade secrets and personal data, but they question the ethics and values of organizations that fail to disclose other information, suggesting that these firms may be masking “shoddy financial deals and inferior or unsafe products” (2003b). In a critique ofThe Naked Corporation, an article inThe Economistchallenged transparency, citing the dangers of exposing corporations to anti-capitalist media and activities. “Capitalism is not a fair fight and, as nobody is perfect, there will always be things happening within a firm that its enemies can seize upon to embarrass it, or worse” (“Get Naked,” 2003).Is business an unfair fight? Is fear of media or activists a reason to avoid transparency? Open and engaging, or selective and secretive—which approach will benefit stakeholders? Which stakeholders will benefit? Which stakeholders will suffer?According to Tapscott and Ticoll, research shows that transparency pays off for companies with good governance, quality products and service, and consideration for their employees, their community, and the environment (2003b). A naked corporation engages with its stakeholders, building “transparency and integrity into their business strategy, products and services, brand and reputation, technology plans, and corporate character” (Tapscott & Ticoll, 2003a, p. xiv). Public exposure encourages ethical and effective management and good governance, because when you are naked, you cannot hide your flaws.The Link between CSR, Stakeholders, and GovernanceThe stakeholder model of management, which we discussed in Module 1, also advocates of transparency and accountability. This model calls for “corporations to communicate openly and clearly with stakeholders. . . ” (Preston, n.d., n.p.). It recommends corporations strive to be accessible, “and take relevant stakeholder interests into account in decision making” (Preston, n.d., n.p.). Similarly, corporate social responsibility (CSR) espouses the responsibilities of organizations to a broader spectrum of stakeholders than those represented by the primary stakeholder group.In the traditional governance model, management is accountable to the board of directors and investors or shareholders. However, as we discussed in Module 1, a large web of market and nonmarket stakeholder groups influence and are influenced by an organization. A growing number of corporations are realizing that they are accountable to a large web of these primary and secondary stakeholders, and they are recognizing opportunities associated with stakeholder engagement.At its most basic, corporate social responsibility (CSR) is about seeing business as an integral part of Canadian society, the global community and the environment that supports it. A business does not exist in isolation. It relies on a multitude of relationships with customers, employees, suppliers, communities, investors, and others—in other words, stakeholders.Stakeholder engagement comprises the formal and informal ways of staying connected to the parties who have an actual or potential interest in or effect on the business.Stakeholder engagement spans a continuum of interaction that reflects the degree of influence stakeholders have in decision making. At one end, businesses simply inform stakeholders of their plans. At the other, stakeholders are deeply involved from early in the decision-making process. In between are varying degrees of consultation and participation. Suncor Energy characterizes three positions on the continuum as information sharing, consultation and collaboration. In this guide, stakeholder engagement includes, at a minimum, a genuine effort to understand stakeholder views. (Industry Canada, 2007)Some businesses perceive the convergence CSR and governance in the context of risk (Strandberg, 2005). For example, a factory’s operations may pose environmental, health or safety risks to employees or the communities in which they operate. Boards of directors and executive leadership may be held accountable for these risks, so good governance would evaluate and ideally eliminate or mitigate these risks.Others connect governance and CSR as a values issue (Strandberg, 2005). That is, the leadership of a company may integrate stakeholder accountability and responsibility into management and decision-making, looking beyond risk to consider corporate environmental and social responsibilities and opportunities (Strandberg, 2005).The Power of External StakeholdersModule 2 introduced socially responsible investment (SRI) funds and their use of social screens to select investments in socially responsible businesses. A growing number of pension funds also use social screens. Individuals and groups invest in socially responsible investments on principle or because they want to exert control over the companies in which they invest. Shareholders are also becoming active by “sponsoring social responsibility shareholder resolutions” (Lawrence & Weber, 2014, p. 323). These resolutions are typically presented at companies’ annual general meetings in order to use shareholder voting power to dictate improvements or actions with regard to one aspect or another of a company’s CSR performance.As a result of shareholder activism, these stakeholders are exerting increasing power and influence over management of the company. As we discussed, large institutional investment groups, such as Ontario Teachers’ Pension Plan, are also using their voting power to influence governance and decision making in public companies. Pension funds and SRIs may not actually attract active voting by their many shareholders, but they can use the power of the proxy (absentee ballot) in order to represent large numbers of shareholders and a significant percentage of the shares in companies. The more shares, the more votes, and therefore the greater the influence over management and decision making.In 2003, the large transnational company, PepsiCo, battled through shareholder ballots with some of its vocal shareholder groups. The publicly trading company sought support from the U.S. Securities and Exchange Commission to prevent a shareholder vote on the company’s responsibility to world water scarcity issues. Denied their request, a resolution was filed by Boston-based Trillium Asset Management Corporation and Vancouver-based Real Assets Investment Management Inc. (now called Inhance Investment Management, with majority ownership by Vancity Credit Union). In the first resolution of its kind, the two socially responsible investment (SRI) funds “called on PepsiCo to consider the new business risks it faces in a world rapidly running out of fresh water” and to “develop plans to address the emerging crisis of global fresh water scarcity” (Real Assets, 2003).Given that PepsiCo earns thirty-seven per cent of its sales from beverages that use water as their base ingredient, and bottled water is one of their fastest growing product lines, water scarcity is a business concern to this multi-national corporation (Real Assets, 2003). For the socially responsible investment funds, water scarcity is also a social and environmental concern around the world and a concern for which they believe this company should take some responsibility.The two socially responsible investments funds (SRIs) garnered significant shareholder support, with significant ramifications for PepsiCo. This is a new approach to environmental activism and corporate social responsibility, one in which shareholders and shareholder activists use their voting power to connect global environmental issues with corporate social responsibility.ReferencesBaines, D. (2003, June 23). Digging deeper.Canadian Business, 76(12), 12–13.Byrne, J., & Melcher, R. (1996). The best and worst boards: Our new report card on corporate governance.Business Week, 3503, 82–98.Canadian Coalition for Good Governance (2002, June 27). Institutional investors form coalition to fight for improved corporate governance.The Voice of the Shareholder.Canadian Coalition for Good Governance (2003b, September 15). Canadian Coalition for Good Governance sets out guidelines for corporate Canada [Media release].The Voice of the shareholder.Canadian Coalition for Good Governance (2005). Canadian Coalition for Good Governance recognizes Canada’s leaders in corporate disclosure.The Voice of the shareholder. 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Analysis raises questions about his income, expenses.The Globe and Mail, A1. Retrieved from, C. (2005, March).The convergence of corporate governance and corporate social responsibility. A study sponsored by the Canadian Cooperative Association. Retrieved from, D., & Ticoll, D. (2003a).The naked corporation. Toronto, ON: Free Press/Viking Penguin Canada.Tapscott, D., & Ticoll, D. (2003b, October 14). The naked corporation.The Wall Street Journal Online. Retrieved from,,SB106608157577651000,00.htmlWatson, T. (2003). A tale of two executives.Canadian Business, 76(11), 17.Wikipedia. (2008). Sarbanes–Oxley Act [Web page]. Retrieved from 4-1: Governance in Canadian BusinessIntroductionThe purpose of this activity is to encourage you to build your awareness of issues in organizations and the role of media, shareholders, and other stakeholders in influencing good governance.InstructionsPart A: ReadingRead Chapter 14: Stockholder Rights and Corporate Governance. Despite the American perspective and use of the termstockholdersinstead ofshareholders, the topics discussed in this chapter are all relevant to shareholder and governance issues in Canada. You will note that some of the issues, such as socially responsible investment (called “social investment” in this chapter), were introduced briefly in Module 2.For your interest, read the Discussion Case: Citigroup Shareholders Say No on Pay at the end of Chapter 14. This case provides an example from Citigroup Inc. of a governance issue relating to shareholders rejecting an executive pay package proposed by the board of directors.Part B: Reflective Journal: Governance IssuesFind two articles in a newspaper or magazine, such as theGlobe and Mail, theNational Post,MacLean’smagazine, orCanadian Business, that describe corporate governance activities of a publicly trading company. Choose a company that trades on a Canadian stock exchange or has corporate offices in Canada.Hint:If you do not have access to hard copies, look online for the websites of the newspaper or magazine you choose.Based on your research, describe the governance issue or issues.List ways the company tried to improve its corporate governance or recommend way(s) in which you think the company should improve.In your opinion, what is the most important or significant governance initiative that this company can undertake? Explain your answer by discussing the impact of this initiative on the stakeholders of the company.Is there any indication of efforts to increase transparency of reporting and communications at the company in the articles you read? Alternatively, are there any indications that the company is avoiding transparency and/or accountability? Explain your answer.Note:Your description could be a chart, diagram, mind map, or written paragraphs. Focus on brainstorming your ideas and capturing information in a way that is relevant to you. This process will help you to gather ideas or observations you want to make, and to analyze and effectively communicate the information.Module 4: Internal Forces and…Topic 2: Consumer StakeholdersConsumers are market (or primary) stakeholders. They are customers or clients that influence organizational decisions and activities. Conversely, businesses and other organizations can exert power and influence over consumers through marketing, advertising, and through day-to-day operations and their presence in a community.“Safeguarding consumers while continuing to supply them with the goods and services they want, at the prices they want, is a prime social responsibility of business” (Lawrence & Weber, 2014, p. 332). Some businesses and organizations fulfill this responsibility; others do not.Consumer ProtectionIn Canada, consumer protection is arightof all citizens. Consumers are at risk from unsafe or unreliable products, and some organizations abuse customers with unfair pricing or unreasonable conditions of sales or service. False advertising is another unethical practice that consumer protection aims to guard against in our society, and many consumers are duped by misleading or confusing labeling on products. In recent years, the right to privacy has also become an increasing consumer protection concern as the Internet enables organizations to collect and transmit all sorts of information about customers, patients, clients, or other consumers.Government agencies and consumer advocacy groups serve as watchdogs for consumer rights and protection. Product liability laws and other consumer protection laws are in place to support consumer protection, but proactive businesses and other organizations establish and adhere to their own high standards of quality and responsibility to consumers. Socially responsible companies undertake a variety of initiatives for anticipating and satisfying customer expectations.Government’s Role in Consumer ProtectionIn Canada, a number of federal and provincial agencies provide services aimed at protecting the rights and interests of consumers. For example, Transport Canada handles road and transport safety concerns. Among other services, they provide consumer information and enforce standards and regulations with regard to airbags in cars, vehicle defects, recalls, and cellular phone use while driving.Transport Canada also oversees consumer protection for airline travel, including fairness in pricing and procurement, as well as airline and airport safety issues.The Canadian Food Inspection AgencyDespite the significant role that federal and provincial agencies play in consumer protection, many Canadians pay little attention until events generate media interest. The Canadian Food Inspection Agency (CFIA) influences Canadians each and every day because they deliver all federal inspection services related to nutrition and food labelling, food safety (such as food alerts and recalls) and animal health, and plant protection (CFIA, 2003).The Agency played a prominent role in the handling of the bovine spongiform encephalopathy (BSE) outbreak in western Canada in 2003. When the Agency found a single steer in Alberta that tested positive for BSE (also known as mad cow disease) in the summer of 2003, it precipitated a consumer protection issue that went beyond health and safety concerns, resulting in widespread economic ramifications as well. Stakeholders affected by the outcome of the inspections included cattle ranchers, the feed industry, beef wholesalers and retailers, businesses that shipped meat, and brokers that handled the export trade. Of course, meat consumers in Canada and elsewhere who feared for the safety of their food supply played a significant role in this issue, and the economic impact on beef farmers also extended to the communities in which they lived.Optional Activity:In Module 1, Topic 3: Government’s Role in Business and Society, you examined the government’s role in protecting Canadian consumers against bovine spongiform encephalopathy (BSE, or mad cow disease) in the Canadian cattle industry or Avian influenza (also known as bird flu). After reading this topic section and Chapter 15: Consumer Protection, you may wish to reflect on and re-examine the government’s role in protecting consumers from BSE or bird flu.Look back at Module 1, Topic 3, Activity 1-3: Government’s Influence on Industry and Public Health. Review your description of government’s roles and responsibilities in protecting consumersandsupporting the industry. Which government agencies were involved, and whose interests did they protect?Health CanadaHealth Canada is another government agency engaged in consumer protection. It is a federal government department that sets standards and provides legislation and enforcement on consumer health and safety issues from product safety to advertising restrictions. It addresses a broad range of health and safety issues in this country.Health Canada was a key player in management of response to outbreaks of mad cow disease and avian influenza (bird flu) in parts of our nation. Health Canada’s involvement extended beyond consumer protection issues associated with these outbreaks in animals (that could influence our food chain) to the 2003 human health crisis associated with an outbreak of severe acute respiratory syndrome (SARS) in Ontario and other parts of Canada. In more recent years, Health Canada dealt with widespread concerns about bisphenol A, a toxic chemical that leaches from some plastic water bottles (and baby bottles), and that some believe migrates to the food contents of canned goods.In 2008, after several deaths associated with an outbreak of Listeriosis (Listeria) in cured meats from a food packing plant in Ontario were confirmed, Health Canada and the Canadian Food Inspection Agency (CFIA) collaborated with provincial and local health authorities across Canada to investigate the outbreak. Responses included a widespread food recall of cured meats and an investigation into the cause of the deadly food contamination. Food inspection practices were reviewed by the company and the Public Health Agency of Canada (Public Health Agency, 2008).Optional Resources:CBC (2008, August 28). How Maple Leaf Foods is handling the Listeria outbreak. Available at Health Canada activities and responsibilities include reviewing new drugs before approval for sale and distribution in Canada. Health Canada oversees the safety of foods, health products, natural health products, and cosmetics. Health Canada approves or rejects the sale of products or ingredients in Canada if it deems them unsafe.Determining acceptable levels of risk to Canadians’ health and safety is sometimes challenging. Developers may provide evidence of their products’ safety or benefits, but later evaluation by the developers or other stakeholders may produce contradictory information. Many consumer activists are discontented with the level of scrutiny that Health Canada applies to the safety of various products and ingredients, such as genetically modified foods (GMFs) and the production and sale of alcohol and tobacco.Health Canada is still exploring the risks associated with GMFs. Meanwhile, organic farmers, environmental activists, and other stakeholder groups are calling for bans or product labelling, at the very least, and warnings for consumer protection. Other stakeholders, particularly those from the biotechnology industry, refute consumer concerns.While the health and safety of genetically modified foods is a subject of ongoing debate, most would agree that alcohol and tobacco have little or no nutritional value. Due to the serious health risks associated with the consumption of both these substances, Health Canada restricts the sale of alcohol and tobacco products to minors, and controls distribution, regulates advertising, and requires health warning labels on tobacco product packaging. Any further restriction would likely meet fierce battles over individual rights and freedoms, despite the fact that tobacco and alcohol consumption are associated with tremendous health costs that are borne by Canadian society. Rather than ban these products, Health Canada supports campaigns to educate consumers about the risks associated with alcohol abuse, drinking and driving, and cigarette addiction.Industry Canada—Office of Consumer AffairsEven though federal departments, such as Health Canada and Transport Canada, address certain consumer protection concerns that relate to their jurisdictions, Industry Canada’s Office of Consumer Affairs (OCA) covers many of the same issues, such as protecting consumers from unhealthy, unsafe, unfair, or illegal practices associated with the buying and selling of goods and services. This can relate to consumer policies, standards, laws and codes, scams, recalls, tips on cellphone contracts, guarding against identify fraud, doing business online, and other consumer interests and concerns (Industry Canada, 2008).The Office of Consumer Affairs—Mandate:Canada’sDepartment of Industry Actdictates the federal government’s statutory responsibility to promote and protect consumer interests in Canada as well as to promote productivity and innovation.The Office of Consumer Affairs (OCA) responds to these responsibilities with the following activities:Conducting policy research and analysis on consumer issuesEnsuring consumers have the information and tools needed to protect their interests, while driving industry to be more innovative and productiveWorking with business to develop consumer friendly business practices, including voluntary codes and standardsSupporting consumer groups and NGOs to enabling them to provide input into policy development and consumer expectationsSupporting legislative and regulatory reforms with provincial and territorial partners. (Industry Canada, 2008)Federal Consumer Protection ServicesThe OCA ‘s Consumer Information website at information from federal departments and agencies, provincial and territorial ministries, and NGO partners. It is a repository of information on Canadian consumer information and services, providing tools and information to support informed consumer decisions about a wide variety of consumer issues that may be simple or complex.The site has many features, including lists of product and food recalls, alerts on consumer scams and frauds, interactive financial calculators for determining costs associated with credit cards, and comparisons of the cost of buying versus leasing vehicles. It also offers tips on consumer protection in various consumer situations, such as shopping online, investing, dealing with telemarketers or door-to-door sales people, renovation contractors, and car repairs. The site includes a Complaint Roadmap.Optional Resources:Consumer Information: Canada:http://www.hc-sc.gc.caCanadian Food Inspection Agency (CFIA):http://www.inspection.gc.caTransport Canada: Protection BC: Consumer Protection ServicesIn addition to federal government agencies, provincial governments also have consumer relations departments. For example, in British Columbia, the Ministry of Justice “works to maintain and enhance public safety across British Columbia” (Ministry of Public Safety and Solicitor General, 2008). The Ministry focuses on issues such as crime prevention, law enforcement and corrections, road and fire safety, hazard mitigation and emergency response, among other service areas.In 2004, the British Columbia Legislature passed theBusiness Practices and Consumer Protection Act[SBC2004].The Business Practices and Consumer Protection Authority (BPCPA) of British Columbia is not-for-profit organization established in 2004 to offer consumer protection information and services related to business practices, such as debt collection and telemarketing, and is also a licensing body for some industry sectors (BPCPA, 2008).The Better Business BureauThe Better Business Bureau (BBB) a non-profit consumer protection organization, with chapters across Canada.People who need support in dealing with unfair business transactions contact the BBB and file a complaint against a business, and the BBB investigates, expelling members who do not comply with BBB membership standards. The BBB also publishes reports listing member organizations with good reputations and member and non-member organizations for which BBB has received consumer complaints. BBB programs include business and consumer education, review of fairness and accuracy in local advertising, and dispute resolution.Information and Privacy RightsIn addition to the right to safety, health, and fairness, consumer protection issues also deal with the right to information and the right to privacy.The right toinformationcovers a number of issues relevant to Canadians. For example, health and safety issues are a prime issue associated with information rights relating to product and ingredient labeling. Another important issue is the itemized breakdown of parts and labour in automobile repairs.Federal and provincial legislation also provides Canadians with the right to information that is in the public domain. This includes transparency of government contracts with private companies.The federal Department of Justice laws and policies dealing with freedom of information and data protection, including theAccess to Information Actand thePrivacy Act. Provincial governments also have provisions for the rights of residents with regard to how government agencies access and use personal information. In British Columbia, for example, the Office of the Information and Privacy Commissioner (OIPC) establishedThe Freedom of Information and Protection of Privacy Act(FIPPA), which allows access to information that is held by public bodies in BC. Conversely, BC’sPersonal Information Protection Act(PIPA) “sets out how private organizations (including businesses, charities, associations, and labour organizations) may collect, use, and disclose personal information” (Office of the Information and Privacy Commissioner, 2004). Alberta’s Ministry of Government Services administers similar legislation under that province’sFreedom of Information and Protection of Privacy(FOIP)Act.See policies, procedures and guides to British Columbia’sFreedom of Information and Protection of Privacy Act(FOIPPA) andPersonal Information Protection Act(PIPA) at: Alberta’sFreedom of Information and Protection of Privacy(FOIPP)Actat: on Alberta’s Personal Information Protection Act (PIPA) is available at: the federal Department of Justice page on access to information and privacy laws at: and Internet Privacy IssuesBrokering of personal information for bulk mail advertisers and telemarketing sales has been a contentious privacy issue for many years. See the Canadian Anti-Fraud Centre at read about mass-marketing and Internet fraud, identity theft, how to recognize and report a scam, fraud prevention, and other issues. This website also has a list of scams.As we discussed in Module 3, the emergence of Internet use in government and business is raising ethical and social questions of privacy, security, and ownership, as well as health and safety concerns (Lawrence & Weber, 2008, pp. 119–121). Consumer protection faces unprecedented concerns with regard to privacy rights, and the speed of change and adoption of Internet and other telecommunications innovations is magnifying the challenge.The ease with which customer, client, or patient information can be collected and disseminated is creating the need for guidelines and policing of Internet use in business and government, as well as among private users. Organizations entrusted with customer or client information have a responsibility to protect the privacy of these stakeholders and to use information ethically. In 2004, Industry Canada publishedThe Canadian Code of Practice for Consumer Protection in Electronic Commerce. The code “establishes benchmarks for good business practices for merchants conducting commercial activities with consumers online” (Consumer Measures Committee, 2004). The code does not change existing laws, regulations, or voluntary codes of conduct that exist in Canada with regard to consumer privacy and protection. It attempts to fill in the gaps and collate the information in the context of online business and consumer activity.The Canadian Code of Practice for Consumer Protection in Electronic Commerce:Information onThe Canadian Code of Practice for Consumer Protection in Electronic Commerceis archived on the Consumer Measures Committee (CMC) website, a secretariat of the federal department of Consumer Affairs, at: A PDF Version of is available on the CMC website.The Consumer MovementDespite the significant role that government departments and agencies play in protecting consumer rights, many people believe that individual stakeholders should also participate in consumer rights and protection activities. Collectively, this is called the “consumer movement,” and for decades, consumer movements have targeted businesses or industry sectors addressing concerns ranging from fluoride in toothpaste to truth in advertising. The consumer movement arose because of the failure of some businesses to operate fairly and honestly; the consumer movement is a collective effort by consumers to counterbalance the power of business and to “safeguard” consumer rights (Lawrence & Weber, 2014, pp. 335–336).Health and SafetySome of the more prominent consumer movements in recent years are associated with food products and additives. Mothers and other citizens concerned for the health of their families generate public awareness especially relating to risks associated with our food and water supplies. These consumer watchdogs have been particularly concerned about the use of chemical fertilizers and pesticides in food production, toxins and contaminants associated with bottled water and canned foods, and genetic modification of fruits and vegetables.The organic movement has become a significant force in society, attracting a broad group of stakeholders including farmers and food producers as well as consumers from a variety of demographic sectors. The movement has shifted from the fringes of society to become both a mainstream concern and an economic opportunity for the food industry, and an emerging market opportunity in the clothing industry.Consumer movements can very powerful. They can shift consumer preferences away from certain products or brands, organize widespread boycotts, stimulate demand for new products or services, and orchestrate the removal of products from the marketplace by government regulators or by companies that don’t want to fight the movement.Consumer activism associated with genetically modified organisms (GMOs) is a prime example. (These are also called GMFs [genetically modified foods] or GE [genetically engineered foods] when referring to bio-engineered food crops or genetically modified crops.) Not all GMOs are used for food. Clothing and other products can also be manufactured from GMOs. The health and safety risks associated with the genetic engineering of soybeans and other food crops is the subject of ongoing research and debate among government researchers, agency and industry representatives, and activists. Consumer watchdogs and activists created such a powerful public reaction that, in June of 1999, the European Union (EU) issued a moratorium on growing or importing GMOs. The moratorium was in existence for several years until the World Trade Organization ruled against the EU in a case brought by the U.S., Canada, and other nations (, 2007).What is your opinion of the health and safety of GMOs? Are there benefits to society? Are there risks?You will explore consumer issues associated with GMOs in an activity at the end of this topic section.Consumer ActivismNot all consumer movements are concerned with health and safety issues. Fairness and equity issues have also galvanized consumer movements. For example, consumer watchdogs and activists have prompted massive public outcries against child labour, slave labour, and inadequate or inhumane working conditions in sweatshops around the world.One consumer movement that is gaining attention among some stakeholder groups is the anti-consumerism movement. We will discuss anti-consumerism in this module, but first let us define consumerism.Defining ConsumerismLawrence and Weber defineconsumerismas synonymous with the consumer movement, that is, the “organized, collective efforts by consumers to safeguard their own rights” (Lawrence & Weber, 2014, p. 334). Merriam-Webster’s dictionary has a similar definition:con•sum•er•ism:the promotion of the consumers’ interestsHowever, it also includes the following definitions:con•sum•er•ism:the theory that an increasing consumption of goods is economically desirable; also: a preoccupation with and an inclination toward the buying of consumer goods.© John Fewings. www.fewings.caConsumer spending is an economic driver in Canada, contributing a significant portion of our nation’s gross domestic product (GDP). It “affects the economy, governments, educational institutions, the workforce, the retail sector, consumer-based manufacturers and service providers, and the financial services and investment community” (Roberts, 1998, p. 15). In the award winning documentary,Manufacturing Consent: Noam Chomsky and the Media, Chomsky explained that consumerism not only influences our economy, it is “the purpose of our economic system,” and he cautioned that a society based on “individual material gain…will destroy itself in time” (Adbusters, 2008b).For a video clip of one of Chomsky’s discussion of our economic principles of individual material gain, visit:, companies spend billions of dollars on advertising campaigns aimed at convincing consumers of their need for material gain. Market researchers and managers seek information on why consumers choose certain products or services, how people’s attitudes towards products are formed, and how to change those attitudes. Business operators want to know what to do to persuade consumers to buy their products or services and how to motivate customer loyalty. Researchers profile sectors of the consuming public, so companies can design marketing and sales activities to capture the interest of the demographic group that is the target market for their products or services.Marketing and advertising drive consumerism or consumer spending, and while the impact on business is more obvious, we might also consider the influence of consumerism on society. In his bookThe Myth of Consumerism, author Conrad Lodziak observes:Life in the west is lived within a culture awash with the advertising, brand-names and labels of conspicuous consumerism. Accordingly, consumerism and consumer culture have become central to critical discussions of identity…and culture as never before. (Lodziak, 2008)Factors Influencing ConsumersCorporations have significant power to sway consumers, but so, too, do consumers have power to change corporations. What are the factors that influence consumer behaviour? Marketing strategist Shirley Roberts identified nine factors: economy, globalization, technology, government, environment, demographics, consumer psyche, wellness, and retailing (1998, pp. viii, ix). According to Roberts, these factors change with the influence of values, attitudes, lifestyles, and buying behaviour (p. ix). With the emergence of Internet and other technologies, Roberts claimed that society had shifted to a “consumer driven era” (1998, p. 1).Globalization and Economic GrowthIn other modules, we discussed some of the influences of globalization, the environment, and technology. What are some of the ways these forces influence consumers and other stakeholders?Corporations pursuing global business seek opportunities to expand markets throughout the world by attracting and increasing new consumers or more consumption. In an interview withCanadian Businessmagazine, which called her “the world’s most powerful female auto exec,” Maureen Kempston Darkes explained that General Motors (GM) would target emerging markets in Latin America in recognition of the fact that the auto market in most of the wealthy countries was nearing saturation (Watson, 2003). In countries where many individuals and families did not own automobiles, Kempston Darkes explained that GM could expect sales to increase “by 45 per cent—much higher than the single digit gains expected in wealthy countries.” No doubt, to shareholders, board members, employees, and managers of General Motors, these sales projections were good news. But what were the implications for other stakeholders?Expanding global sales for this transnational corporation would result in spill-over benefits to suppliers, distributors, and other firms associated with their operations. The economies of the communities and countries in which these businesses operate might also benefit. What about the global and local environmental impacts of such a significant increase in vehicle use? What about the societal impacts of communities in which people spend much of their day driving in automobiles? What about the economic benefits and burdens to individuals, communities, and countries in which car ownership increases by forty-five per cent?Consumers influence a much broader group of stakeholders than simply those involved in the direct buying and selling transaction. And consumerism is a powerful force influencing the social, economic, and environmental well-being of business, government, and society. On a global scale, these impacts are even more far reaching.Enough Consumerism?As we noted earlier, Merriam-Webster’s dictionary offers two definitions of “consumerism.” One refers to it as a theory on the economical desirability of increasing consumption, and the other defines consumerism as “a preoccupation with . . . the buying of consumer goods” (Merriam-Webster OnLine, 2008). Yet, peruse the Internet for articles on consumerism, and your search results are likely to come upon a raft of information on anti-consumerism. Perhaps this is a backlash to the aggressiveness of marketers and the culture of consumerism that pervades much of western society. For some, it is a reaction to rising corporate power and the advancement of globalization. Others identify environmental and social perils associated with increasing worldwide consumption, and they are asking, “How much is enough?”An anti-consumerism campaign in the United Kingdom organized by the nonprofit group Enough, proclaims that “any proposed solutions to the problems of world poverty, environmental destruction, and social alienation will fail, unless they also address the role that the consumerist lifestyle plays in creating these problems” (Enough, 1992). According to Enough’s campaign booklet, “20% of the world’s population consumes over 70% of its material resources, and owns over 80% of its wealth” (Enough, 1992). The organization does not call for denial of basic needs, abandonment of technology, or compromises to our quality of life but rather is advocating three types of consumerism: green consumerism, ethical consumerism, and anti-consumerism.Green consumerismrefers to “purchase or participate in goods or services which attempt to replace existing ones with something designed to be ‘friendlier’ and less damaging to ecosystems and natural planetary defences” (Enough, 1992). According to Enough,ethical consumerismis “green consumerism which [also] considers a variety of wider issues than just a product’s green credentials, such as whether or not the manufacturer invests in the arms trade or has supported oppressive regimes” (Enough, 1992). These are also the types of consumer values shared by stakeholders who choose socially responsible investments (SRIs). Watchdog organizations, as well as firms that seek to attract these consumers, are helping to educate and inform the public about ethical or green consumerism.Stakeholders in these consumer groups are those individuals or families who put their beliefs about environmental and social responsibility “into action in their purchase decisions,” according to reporter Joanne Blain (2003, p. F1). In aVancouver Sunarticle, “Cashing in on Conscience,” Blain profiled typical green consumers in Vancouver. “Lohas” (which stands for “lifestyles of health and sustainability”) is the label the marketing industry uses for the “growing group of consumers who have strong moral values about what they buy—and are willing to put their money where their convictions are” (Blain, 2003, p. F1). According to Blain, consumers in this demographic represent as much as 32 per cent of the U.S. market, and businesses that want to capitalize on this market are making greener choices about the products they choose to produce and sell (2003, p. F1).Anti-ConsumerismAnti-consumerism goes beyond shifts in purchasing choices. It challenges “many of the assumptions about what is needed in contemporary society” (Enough, 1992). The anti-consumerism movement is spreading throughout the world, although it is eclipsed by the much bigger shift to globalization and expansion of global world trade. Many advocates of anti-consumerism are motivated by environmental values about conserving the world’s natural resources or concerned about the ethical implications of inequitable distribution and consumption of goods between wealthier and economically disadvantaged individuals and nations. Others are rebelling against a consumer lifestyle and the values with which they believe it is associated.The bookVoluntary Simplicity(Elgin, 1993), as well as many subsequent books and magazines, organizations, and networks, describe a way of life in which personal fulfillment is not tied to material well-being. Two of the many groups around the world advocating this lifestyle are The New Road Map Foundation and The Simple Living Network in the U.S. These organizations challenge whether growing consumerism has a positive of negative impact on the health and happiness of families and individuals in our society.We are producing more and spending more, but are we happier?In addition to these lifestyle movements toward voluntary simplicity, other consumer movements target specific actions or events. In 1992, the first Buy Nothing Day (BND) was launched in the Pacific Northwest in Canada on the day after U.S. Thanksgiving. Buy Nothing Day organizers called upon individuals to avoid buying anything on this one day of the year. Think about it—do you purchase something every day of the year?This simple initiative sparked debate, radio talk shows, TV news stories and newspaper headlines around the world, and the campaign continues each year. Buy Nothing Day/Xmas is promoted by organizations around the world with participants in many countries (Adbusters, 2008a). According to Adbusters, every year organizers approach major U.S. television networks to request broadcast time promoting the event, and every year the networks refuse, claiming that “asking people not to buy anything threatens ‘the current economic policy of the United States’” (Adbusters, 2008a).Inspired by the success of Buy Nothing Day, there are now dozens of organizations that promote similar events. Buy Nothing Christmas, for example, started as a national initiative of the Canadian Mennonites and is another campaign promoted by Adbusters in Vancouver, B.C. In the U.S., The Christmas Resistance Movement and the Centre for a New American Dream’sSimplify the Holidaycampaigns promote boycotts of Christmas and holiday season consumerism. They promote ways to enjoy the holiday season without excessive buying and consumption (The Christmas Resistance Movement, 2008, and New American Dreams, 2008).Optional Resources:Buy Nothing Day/Xmas: the Holidays: this “bah humbug” or emancipation from the burdens of consumerism in the holiday season? You can decide. Whether you support these consumer (or anti-consumerism) movements or not, it is interesting to note the power of consumers as stakeholders in business and society. This can be the collective purchasing power that influences the success of products, services or certain brands. It can also be the collective force of consumers that choose ethical or green purchasing options, or even those who choose to “buy nothing.”You might enjoy viewing Wearable Feedbags, an entertaining news broadcast style commentary on our addiction to consumption of fast-foods at This video was produced by The Onion, a U.S.-based online news website that parodies current events and issues in the U.S.ReferencesAdbusters. (2008a). Buy nothing day. Retrieved from (2008b). Noam Chomsky on rethinking capitalism. [Blog.] Retrieved from, J. (2003, July 24). Cashing in on conscience.Vancouver Sun, F1.Business Practices and Consumer Protection Authority [BPCPA]. [Renamed Consumer Protection BC]. (2008).About us. Retrieved from Canadian Consumer Information Gateway. (2008a). Canada’s Government and Partners. Retrieved from http://consumerinformation.caCanadian Council of Better Business Bureaus. (2008). Overview of the BBB in Canada. Retrieved from Food Inspection Agency [CFIA]. About the CFIA. Retrieved from, N.Manufacturing consent: Noam Chomsky and the media[Documentary]. (2004). On Adbusters: Blackspot Blog: Naom Chomsky on rethinking capitalism. [Website.] (2008, July 31). Retrieved from Measures Committee (2004).The Canadian code of practice for consumer protection in electronic commerce[Archived web page].Retrieved from (2007). News: WTO panel rules EU GMO moratorium illegal (2006, 8 February). Retrieved from Canada (2008).Canada’s Office of Consumer Affairs(OCA: About the Office of Consumer Affairs. Retrieved from, D. (2003, March 3). Who’s responsible?Canadian Business, 76(4), 39–42.Lawrence, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence, A., & Weber, J. (2014).Business and society: Stakeholders, ethics, public policy(14th ed.). New York, NY: McGraw-Hill Higher Education.Merriam-Webster OnLine. (2008). Consumerism. [Definition.] Retrieved from of Public Safety and Solicitor General (2008). About the ministry. British Columbia. Retrieved from, (1992). Enough – Anticonsumerism Campaign. Retrieved from: of the Information and Privacy Commissioner for British Columbia. (2004). [Home page.] Retrieved from Health Agency of Canada. (2008). Listeriosis (Listeria) outbreak. Retrieved from, S. (1998).Harness the future: The 9 keys to emerging consumer behaviour. Toronto, ON: John Wiley & Sons.Simple Living Network. (2003). Understanding where we are as a culture. The Story of Stuff, with Annie Leonard. (2008). [Video presentation.] Retrieved from http://www.storyofstuff.comUniversity of Michigan Press (n.d.). The myth of consumerism: Conrad Lodziak. About the book.Watson, T. (2003). Driven.Canadian Business 76(20), 72–76.Activity 4-2: Consumer Protection and Genetically Modified Foods (GMFs)IntroductionThe purpose of this activity is to encourage you to consider the perspectives and influences of various stakeholders in a consumer protection issue.InstructionsPart A: ReadingRead Chapter 15: Consumer Protection. As you read, focus your attention on rights of consumers identified in this chapter and in this module’s notes.Using the Internet and/or print media sources, research consumer protection issues in Canada concerning foods derived from genetic engineering, such as genetically modified foods (GMFs) and genetically modified organisms (GMOs), and agriculture biotechnology.Review consumer protection information on one of these Government of Canada websites:o Canadian Consumer Information: Health Canada:http://www.hc-sc.gc.cao The Canadian Food Inspection Agency (CFIA):http://www.inspection.gc.caPart B: Reflective Journal—The GMF DebateCreate a chart, paragraph, or diagram with the following information:o Stakeholders and stakeholder groups involved in the GMF debate in Canadao A brief description of each stakeholder’s role and influence in this consumer protection issueWrite several short paragraphs addressing the following:o The consumer protection concerns over GMFs and your opinion of whether or not you regard it as an important consumer issueo Whether you believe products containing GMOs should have this information presented on the product labelling, and/or whether there should be a warning label indicating the potential dangers of GMFs (defend your answer)o How activist groups influence the GMF consumer protection debate in Canada and their influence on both consumers and the government, and whether this stakeholder group’s role is a benefit or a hindrance to consumer protection issuesWhen reviewing your own reference resources, remember to use the CARS Checklist (credibility, accuracy, reasonableness, support) you used in Module 1. Re-read Evaluating Internet Research Sources at things to look for in evaluating the quality of information reported on the Internet.Activity 4-3: The Story of StuffIntroductionIn this activity, you reflect on stakeholders involved and influence in the extraction, production, distribution, consumption, and disposal of the “stuff” we consume.InstructionsPart A: Online VideoGo to The Story of Stuff and view all sections of the presentation at: at the beginning (“Intro”) and proceed through the various brief sections: “extraction,” “production,” “distribution,” “consumption,” “disposal,” and “another way.” Be patient if buffering causes a delay before the production plays online for you. The entire video takes about 20 minutes to view.Recommendation:Review the journal questions/discussion points below before you begin viewing the video.Part B: Reflective Journal—StuffList the various stakeholders involved or influenced by our desire for “stuff.”Describe the real or potential positive and negative impacts of “the corporation’s” activities as presented in this video.Pick a product that you can see near you at this time (such as your computer, paper, the chair you’re sitting on, or the cup of coffee you are drinking). Create a diagram or map of the potential stakeholders involved in bringing this product to you, from the raw materials (extraction) through to delivery at the store in which you made the purchase. Comment on the influence you are having on some of these stakeholders because of the collective power you exert as a consumer.Comment on the messages and opinions presented in the video. Was there anything that was new to you? Was there any information that you do not believe or perspectives with which you disagree? What information or commentary did you find most interesting, and why?Note:Your discussion could be a diagram, a mind map, or written paragraphs. Focus on capturing information in a way that is relevant to you.Module 4: Internal Forces and…Topic 3: Employee StakeholdersEmployees are an important primary stakeholder group in organizations. There is a mutual dependency between employees and employers, with economics playing a pivotal role in the relationship. In the private sector, companies exist largely to generate revenues. In the governmental and non-profit sectors, organizations exist to provide services or assist society to function in some way. Employees of government, non-profits, and for-profits earn their livelihood by helping operate organizations and by producing the goods and services for which the organization exists.Employee and Employer Rights and ResponsibilitiesThere are numerous social, ethical, and legal issues associated with employees in the workplace. Both employees and employers have certain rights and responsibilities. Please note the list on page 364 of your textbook.Laws protect some employer or employee rights and responsibilities; employee-employer contracts may protect others. Some rights and duties have a social or ethical connotation, which may or may not be explicitly addressed in the working relationship. Take “loyalty and commitment,” for example. There may be a formal contract committing the employer to securing the employee’s job for a certain period of time or, perhaps, organizational policies and employment contracts dictating employee obligations for nondisclosure of trade secrets. However, a sincere level of loyalty and commitment by employees is more likely to be engendered by exemplary working conditions and fair and just treatment.Just as cultural influences and personal values can affect workplace ethics, so, too, can they affect employees’ and employers’ perceptions of their rights and responsibilities. Do workers in Japan have the same expectations about their rights and responsibilities as workers in Canada? What about workers in China, or Italy, or Mexico?Employee and employer rights, responsibilities, and expectations vary among industry sectors, as well as from country to country. Each year,Maclean’smagazine lists the top 100 employers in Canada, but does not rank the companies because of these industry differences. “Apples can’t be compared to oranges—some sectors offer better benefits and working conditions than others (MacKlem, 2003, p. 24). The listing uses a survey that grades companies on several issues including health, financial and family benefits, as well as working conditions and involvement of the organization in the community.In addition to benefits such as additional vacation time, maternity leave salary top-ups, and financial bonuses, many companies provide benefits aimed at enhancing employee morale and encouraging health and well-being among employees. Nature’s Path Foods of Richmond, British Columbia, provides free health breakfasts, on-site fitness facilities, and a company-sponsored wellness program. ArcelorMittal Dofasco of Hamilton offers profit-sharing, recreational and educational facilities, and three post-secondary scholarships to employees’ children each year. Sun Life Financial Inc. of Toronto provides tuition subsidies, and the company pays for a life coach for employees who need help addressing personal or work-related issues. Amex Canada of Markham, Ontario, allows up to six months of paid leave for staff to work for charities, and both Epcor Utilities of Edmonton and Vancity Credit Union in British Columbia allow extended leaves of absence (MacKlem, 2003). One Vancity employee spent a year volunteering in Albania, and “brought back skills, and a fresh perspective” that, she believes, enhanced her contributions to the organization (p. 26).The benefits and perks that these companies offer to employees extend well beyond any legal responsibilities, so why do they do it?Some companies are motivated by a sense of social responsibility, and they recognize the benefits in terms of employee morale and company reputation among customers and the community. “Companies making a difference in the broader community also make their employees feel good about going to work. And from a bottom-line point of view, smart companies know that happy employees are generally more productive” (MacKlem, 2003, pp. 23–24).For their annual list of the twenty-five best companies to work for in British Columbia,BC Businessmagazine uses a consulting firm to conduct its survey. The firm developed a “human capital index” that analyzes human resources (HR) practices “that drive shareholder value” (Withers, 2003, p. 53).The annual survey of employees and employers focuses on questions that address attraction and retention of employees, organizational communications and the working environment, as well as organizational effectiveness, decision making, and supervision. Other questions address performance management and employee benefits, including rewards and recognition, career development, and learning and leadership opportunities.Many of the same benefits we identified for companies that engage in corporate social responsibility (in Module 2) also extend to companies that engage in exemplary employer-employee practices. “The best employers do more than issue pay cheques. They improve life in the workplace and in the surrounding community as well” (MacKlem, 2003, p. 22). In return, organizations that provide exemplary working conditions and outstanding benefits are rewarded with attraction and retention of committed and talented employees, higher productivity, and an excellent reputation, all of which can translate into higher revenues.Author Bob Willard estimates that the cost of hiring a new employee is about $7,000, and according to KPMG and Canadian Advanced Technology Alliance, the cost of replacing a worker that leaves a company is at least $25,000 (2002, p. 28). Employee turnover is a serious organizational and financial concern for companies, especially in the case of skilled-worker retention where estimates for “the loss of intellectual property that accompanies each departed worker can be enormous” (Willard, 2002, p. 28). Costs can include the loss of productivity during turnover, the expense of training replacement staff, administrative expenditures, cash payments for separation settlements, and the cost of lost experience, knowledge, and contacts (Willard, 2002, p. 28). Thus, beyond any social or ethical responsibility to employees, organizations benefit financially from programs and initiatives that enhance the work experience for employees.Leadership and CommitmentIn addition to the provision of comfortable working conditions, perks, and benefits to employees, what other factors support a healthy employee—employer relationship?We identified commitment as an employee’s duty and an employer’s right. Commitment goes beyond compliance with the rules and fulfilling one’s duties. According to Willard, “Commitment engages the energy and creativity of people’s hearts, minds and hands, while compliance only engages their hands” (2002, p. 47). Leaders who share a vision with their employees help to foster commitment (p. 47), and in “a high-performance culture/company,” the organizational structure and dynamics help to “unleash the potential of people who are committed to clear, relevant, and meaningful work that they have been involved in shaping” (p. 48).Willard lists four factors of an employee commitment model developed by the consulting company Belgard-Fisher-Rayner. According to this firm, the following four factors yield employee commitment:Clarity:Employees understand what the goal is—the objectives are clear and they can articulate them to others.Relevance:Employees see the relevance of the goal to business success—they understand how it is good for the company’s customers and helps the company succeed.Meaning:They see the personal meaning of the goal—what it means to them personally and how it resonates with their personal values as a worthwhile goal.Involvement:They want to be, and are, involved in the shaping and deployment of the goal. Without involvement, there is no commitment. . . . Giving people the choice to be involved is key . . . even if they choose not to be.Organizational leaders who empower their employees and who help to make employees’ work relevant and meaningful find that productivity is higher because employees are “fulfilled by doing worthwhile work” (Willard, 2002, p. 49). This belief provides some of the rationale for corporate social responsibility.Legal Rights and ResponsibilitiesCorporate social responsibility (CSR) is a voluntary commitment on the part of the organization, just as the top companies listed inMaclean’sandBC Businessmagazines’ surveys voluntarily commit to their exemplary programs. At the same time that we are witnessing an increase in CSR, there are also organizations that are abusing the rights of employees and neglecting their responsibilities as employers. The government of Canada sets workplace standards and regulations dictating certain rights and duties of both employers and employees.Companies found to be non-compliant with their legal responsibilities to employees can be subject to fines or other penalties, including jail terms for corporate officers.The right to fair treatment, a safe working environment, and a certain level of privacy and security are all issues addressed by Canadian law. However, these rights may be subject to interpretation, and there are limits. Unions are a powerful force in western society, and they came about because of the need to establish greater worker power to offset employers who did little to ensure worker rights. Today, some stakeholders believe unions have outlived their purpose or exceed their role in business and society, creating unreasonable expectations on employers. Others believe unions are an essential force, and their role in protecting workers’ rights is just as important today as it was in the early part of the twentieth century.The Right to Employment SecurityUnions played a high profile role in protecting employment rights and job security for hospital workers in British Columbia in 2003–2004. Three large unions, the Hospital Employees’ Union (HEU), the BC Nurses’ Union (BCNU), and the BC Government and Service Employees’ Union (BCGEU), legally challenged the BC Liberal government’s introduction of Bill 29, theHealth and Social Services Delivery Improvement Act(CUPE, 2003a).In an attempt to reduce health care costs, the BC government introduced the new legislation to break its legally binding contracts with almost 100,000 hospital employees, who were members of these unions. By voiding the contracts, they eliminated many jobs, reduced services, privatized some services, and outsourced labour to lower-cost contract workers. From the government’s perspective, the cost savings benefited more stakeholders (the residents of BC) than employees. From the workers’ and unions’ perspective, the government violated theCanadian Charter of Rights and Freedoms.In March 2003, the United Nations (UN) International Labour Organization (ILO), which is the UN organization in charge of upholding labour standards, assessed the BC government’s new legislation (along with five other laws that Premier Gordon Campbell’s government enacted) and issued a public statement condemning the BC government’s actions. The ILO concluded that Bill 29 (and the five other laws) “violate basic rights and protections for working people,” and breach “international labour standards that are respected in democracies worldwide” (CUPE, 2003b).The unions took the BC government to court to have Bill 29 struck down as unconstitutional. However, despite the public protests and condemnation by the UN, the BC Supreme Court dismissed the constitutional challenge of the three unions. After the September 2003 ruling, the three unions announced they would appeal the court’s decision. According to the President of the B.C. Government and Service Employees’ Union, George Heyman, “Bill 29 represents a fundamental attack on the rights of workers,” and “there are important principles at stake” that the unions plan to defend . . . “all the way to the Supreme Court of Canada if necessary” (CUPE, 2003c). According to Heyman, “Bill 29 poses a threat to the rights of every union member, not just in this province, but across the entire country. . . [and] at its core, this case is about the value of freely negotiated collective agreements under Canadian law” (CUPE, 2003c). While the court battle dragged on, more and more union workers lost their jobs.What do you think? Should a new government have the right to break contracts of previous governments? Under what circumstances (if any) could you justify breaking employee-employer contracts?In these days of increasing global competitiveness, employees without unions or contracts may find themselves increasingly at risk of job loss, as organizations downsize to reduce employee wage and salary burdens, outsource to eliminate the cost of pensions and benefits or to save money on lower contract labour, and shift operations to low-cost labour pools in developing countries. For many workers, the right to security is a thing of the past.The Right to a Safe Work EnvironmentOrganizations are legally obliged to provide a safe working environment. How safe? Safety issues address a wide variety of concerns from the use of hard hats on work sites to indoor air quality issues associated with emissions in manufacturing and tobacco smoking in the workplace. There are rigorous and specific standards with regard to some safety issues, while other standards are more loosely defined and monitored.Smoking is a contentious workplace safety issue. After years of research and debate on the impact of second-hand smoke, Health Canada implemented the federalNon-smokers’ Health Actin 1998, restricting smoking in federally regulated workplaces and public places such as airline flights, intercity buses, trains, and transport terminals. Numerous federal, provincial, and municipal laws have followed to limit or restrict smoking in or around workplaces. Additionally, many employers have established policies or restrictions regarding workplace smoking (Health Canada, 2008).While workers no longer smoke in offices, the definition of “workplace” is unclear, so debate continues with regard to workers such as truck drivers, who spend much of their days outside or in vehicles, and service workers whose jobs take place outside. Bars and restaurants are another contentious location, and the hospitality industry has balked at smoking bans. Nevertheless, in some jurisdictions, such as the City of Vancouver, smoking in bars and restaurants has been restricted for some years now.There is no federal administrative body with power to ban smoking. Restrictions on smoking in the workplace have come under local government jurisdiction, however, some provincial governments are now using occupational health and safety (OHS) and workers’ compensation legislation to ban smoking in bars, restaurants, and other workplaces. Some people believe this infringes on personal rights and freedoms.What is your opinion on the safety of smoking in the workplace? Do you think your opinion is influenced by whether or not you are a smoker?Banning tobacco smoking remains controversial because debate continues over the degree to which workers’ health is at risk from environmental (or “second-hand”) tobacco smoke. Many other safety issues concerning employees are, however, more straightforward, so there is legislation and regulation concerning employee safety—from technicians’ exposure to radiation in hospital X-rays to the training required to operate heavy equipment.Breach of safety issues can constitute criminal negligence. Under existing criminal negligence laws, companies can be charged for health and safety violations. Officers and directors of companies face fines and jail terms for violations of occupational health and safety legislation, however, the federal government is revising the Criminal Code to make it easier to convict corporations who neglect safety concerns (Jobb, 2003, p. 39). The revisions aim to hold corporate decisions makers, including managers and boards of directors, directly accountable for “an explicit duty to protect the safety of workers and the public” (p. 40).Even before high profile cases of corporate fraud and illegal accounting scandals, such as at Enron and Worldcom in the U.S., the Canadian government was examining corporate governance and corporate liability law. The tragic death of twenty-six coal miners in an explosion at Westray mines in Nova Scotia was the catalyst. An investigation into the 1992 mining disaster found that “Westray management ignored even the most rudimentary safety rules, allowing methane and coal dust to far exceed explosive levels” (Jobb, 2003, p. 40).The RCMP charged the mine owner and two Westray officials with criminal negligence and manslaughter. However, the owner declared bankruptcy, and prosecution withdrew charges in 1998. “A public inquiry called for a review of the criminal accountability of corporations,” and the United Steelworkers of America Union (USWA) sent lobbyists to Ottawa to pressure the government into action (p. 40). As a result, Bill C-284 was introduced into parliament in 2001, but more than two years later, it was still undergoing review and amendments.One of the key elements of the Bill is “whether an official with operational authority committed the crime, or knew underlings were breaking the law and turned a blind eye” (Jobb, 2003, p. 40). According to Greg Yost, a lawyer with Justice Canada’s criminal law policy section, senior corporate officers should be accountable for the actions of their employees, and it is the responsibility of these officers to be informed. Determining accountability and punishing those responsible for criminal misconduct may pose a challenge in some cases, especially as large corporations become “more complex, with far-flung branches, subsidiaries and layer upon layer of management” (p. 40).One critic claims it will be difficult to get compliance if this law requires constant supervision on the part of management, while “others suggest Ottawa’s proposal does not go far enough. Australian law enables firms to be convicted if they allow acorporate cultureto develop that encourages or tolerates wrongdoing” (p. 43). David Stewart-Patterson, senior vice-president of policy for the Canadian Council of Chief Executives, stated that this legislation tries to “’refine the question of how we determine who’s responsible. If you’re not doing anything wrong in the first place, then the question of who’s responsible doesn’t come up’” Stewart-Patterson, as quoted in Jobb, 2003, p. 43).The Right to PrivacyIn the previous topic, we addressed privacy issues with regard to consumer protection. In Module 3, we briefly discussed some of the privacy protection concerns associated with use of Internet marketing and communications in business and government. The article “The Importance of Business Ethics” provides an opportunity to reflect on the employers’ and employees’ attitudes about ethical practices. This article reports on a survey of 557 employers and employees in which the participants rated “business ethical violations” (2001, p. 3).It is interesting to note that most of the employer practices listed in that article relate to privacy issues. They include monitoring of employees’ Web surfing content and their emails; and allowing supervisors to access employees’ personal health records, inspect employees’ lockers or work areas, and use video surveillance in the workplace. These types of actions are increasingly common in the workplace as technological innovations enable organizations to monitor employees by a variety of means. Often employees are unaware of these infringements on their privacy, and most often, monitoring is legal. In addition to ethical concerns, the question is: Do these practices help build a healthy and productive organization?Fair Labour StandardsIn other parts of this course, we briefly touched on fair labour practices in the context of labour standards and worker conditions for organizations operating in developing countries. Labour standards also exist in Canada, and labour relations boards protect workers’ rights with regard to fair treatment on issues such as entitlement to breaks during the workday, right to a minimum wage, payment and time off for vacations or sick leave, and other rights. Issues where employees’ rights may be challenged relate to privacy, monitoring, ethical behaviour, working terms and conditions, and free speech.Apart from their legal obligations, employers’ consideration of these rights may vary according to the corporate culture, personal values, and the influence of the society in which the business operates. Employees’ expectations for fair labour standards are also affected by culture and personal values, as well as their experiences in the workplace. Many organizations, especially larger corporations, establish guidelines, codes of conduct, or other standards to establish criteria for acceptable behaviour and performance in the workplace. There are also industry-wide codes of conduct associated with particular sectors and voluntary codes established and promoted by non-profit organizations that reinforce ethical labour practices and increase the standard of acceptable employer and employee behaviour.These guidelines and codes cannot contravene Canadian laws or the laws of the country in which an organization is operating. However, in countries with lower labour standards, corporate codes and guidelines can establish higher standards for such issues as minimum age of employees, compensation levels, and working conditions. In addition to codes of conduct that are company-specific, some non-governmental organizations and industry associations also develop and promote adherence to their standards.For example, Nike is a supporter of the Fair Labor Association (FLA). FLA oversees Nike’s, and other apparel companies’, voluntary compliance with the FLA’s Workplace Code of Conduct (Lawrence & Weber, 2008, p. 509).Levi Strauss & Co., established its own guidelines, the “Business Partner Terms of Engagement” to “address issues that are substantially controllable by [their] individual business partners” (Paine & Katz in Donaldson, Werhane, & Cording, 2002, p. 447). In these terms of engagement, Levi Strauss & Co. outlines employment, ethical, and health and safety standards that guide the company in selection and management of business partner relationships. The company uses its clout as a large multi-national corporation to demand that its business partners, including contractors and suppliers in developing countries, establish a higher level of employment standards than the standards to which their partners might otherwise adhere.Levi-Strauss & Co. also developed an “Aspiration Statement” to accompany its mission statement. “We want a company that our people are proud of and committed to . . . We want our people to feel respected, treated fairly, listened to, and involved. These goals are indicative of an organization that respects their employees and values the contributions of this important stakeholder group (Paine & Katz in Donaldson, Werhane, & Cording, 2002, pp. 452–453).ReferencesCUPE on the front line. (2003a, April 10). BC Supreme Court to hear unions’ Bill 29 Charter of Rights suit starting Monday. Retrieved from (2003b, March 26). UN body slams Campbell government for violating basic standards, protections for workers [News release]. Retrieved from (2003c, September 11). Unions intend to appeal BC Supreme Court judgment on contract-breaking law [News release]. Retrieved from Canada (2008). Healthy living: Smoking cessation in the workplace—A guide to helping your employees quit smoking, non-smoking regulations. Retrieved from importance of business ethics. (2001, July).HRfocus, 78(7), 1.Jobb, D. ((2003, March 3). ). Who’s responsible?Canadian Business, 76(4), 39–42.Lawrence, A. T., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy, (12th ed.). New York, NY: McGraw-Hill Higher Education.MacKlem, K. (2003). Top 100 employers.Maclean’s, 116(42), 22–28.Paine, L. S., & Katz, J. P. (2002). Levi Strauss & Co.: Global source (A). In Donaldson, T., P. Werhane, & M. Cording (Eds.)Ethical issues in business: A philosophical approach(7th ed., pp. 432–457). Upper Saddle River, NJ: Prentice Hall.Willard, B. (2002).The sustainability advantage: Seven business case benefits of a triple bottom line. Gabriola Island, BC: New Society Publishers.Withers, P. (2003). The 25 best companies to work for in BC.BC Business, 30(1), pp. 32–53.Activity 4-4: Internet Use in the WorkplaceIntroductionThe Internet is lauded as a tool to increase efficiency. However, by some estimates, organizations lose millions of dollars in lost productivity each year because of employee use of the Internet (and telephones) for personal business. In this activity, you reflect on employee rights to use the Internet and telephone for personal use.InstructionsPart A: ReadingRead Chapter 16: Employees and the Corporation. Apart from references to U.S. government departments and U.S. legislation or labour laws, the same issues and terms of conditions of employment that the textbook describes for employees in the U.S. are relevant to Canadian employees.Part B: Reflective Journal—Personal Use of Telephones and InternetWrite a few short paragraphs describing your perspectives on personal use of telephones and the Internet in the workplace:Do you think it is the right of organizations to monitor employee use of the Internet and telephones for personal use? In your answer, consider that some employees may make use of the Internet on their coffee or lunch breaks. Do you think this is acceptable? Also, do you think the nature of the communications should influence the employment policies, rights, and restrictions? (For example, perhaps personal emails are permitted but not web-surfing.) Defend your position.Identify the stakeholder perspective or perspectives that you represented above. Was it that of an employee, manager, owner, or other? How might your stakeholder perspective(s) have influenced your answer? Reflect back on the question from another stakeholder’s perspective. Comment briefly.Module 4: Internal Forces and…Topic 4: Diversity in the WorkplaceDiversity is viewed as one of Canada’s most important attributes, socially and economically. Canadians value diversity for enriching cultural expression and making daily life more varied and interesting. Businesses and employers recognize that diversity in the workplace promotes innovation, stimulates teamwork and creativity, and helps expand markets for goods and services. (Canadian Heritage, 2004)TheCanadian Charter of Rights and Freedomsprohibits discrimination based on race, national or ethnic origin, colour, religion, sex, age, or mental or physical disability (Status of Women Canada [SWC], 2003a). This extends to equity in all aspects of Canadian life, not just in the workplace. In this country, the federal and provincial governments play an important role in protecting and promoting inclusion and equity in the workplace and in society. Section 15 of theCanadian Charter of Rights and Freedomscame into effect in 1985, “guaranteeing equality for all Canadians before and under law and equal protection and benefit of law” (SWC, 2003b). According to the Charter, every individual is equal before and under Canadian law, regardless of religion, gender, age, colour, or mental or physical abilities (Department of Justice, Canada, 2008a).Despite this statement about equality, there are four categories for which special attention to protection of rights and freedoms applies in Canadian law: women, Aboriginal people, persons with disabilities, and members of visible minorities.Why do these groups get special attention and protection in the Canadian workplace?It is not that individuals in the designated groups are inherently unable to achieve equality on their own, it is that the obstacles in their way are so formidable and self-perpetuating that they cannot be overcome without intervention . . . . Equality in employment will not happen unless we make it happen. (Abella, 1985, as cited in Human Resources and Social Development Canada [HRSDC], 2008a)One of the myths that HRSDC dispels is that equality should be left up to market forces. According to HRSDC, employment equity programs and initiatives are required to complement market forces because the market can be quite ineffective in remedying workplace inequity (HRSDC: Labour, 2008a).It may not be intentional; however, for a variety of reasons, women, Aboriginal people, persons with disabilities, and members of visible minorities face inequitable workplace opportunities to white males. Surveys and studies of workplace policies and practices “confirm that certain people are denied access to jobs, promotions, and training” in Canada (HRSDC: Labour, 2008a).Equality versus EquityThe termemployment equityis not used in your textbook because it is a Canadian term coined in 1984 by Judge Rosalie Silberman Abella, Canada’s Commissioner of the Royal Commission on Equality in Employment (HRSDC, Labour, 2003a). Employment equity describes “a distinct Canadian process for achieving equality in all aspects of employment” (HRSDC, Labour, 2003a). Canadian law considers all people equal, but employment equity does not seek to facilitateequaltreatment of all workers in an organization because people are not all the same. The term was introduced in order to distinguish Canadian employment laws and process from the “affirmative action” model in the U.S. and equal opportunity measures that “were available in Canada at that time” (HRSDC, Labour, 2003a).Employment equity programs were introduced in Canada in order to address “’systemic discrimination’” that “was responsible for most of the inequality found in employment” (HRSDC, Labour, 2003).Equity and EqualityEqual employment opportunity is discussed in Chapter 17, with specific reference to U.S. employment laws.Employment equity differs from equality or equal employment opportunities. Employment equity does not always mean treating everyone the same, it “means treating everyone with fairness, taking into account people’s differences” (HRSDC, Labour, 2008a). In a diverse workforce, fair or equitable treatment requires organizational leaders to understand individuals’ needs and differences and take these into account in order to foster productivity.For example, hiring persons with disabilities may require adaptation of workstations. Organizations may consider this to be too onerous or expensive, yet the cost of adapting a workstation to accommodate a person with a disability is, typically, less than five hundred dollars (HRSDC: Labour, 2008a). Sometimes the real impediment is an employer’s lack of understanding about hiring, training, promoting, and accommodating people with disabilities, and this can lead to unfair employment practices.Wheelchair ramps and automated doors, special computers and computer programs for the visually impaired, and communications devices to assist people who are hard of hearing are all logistical solutions that can facilitate greater employment equity for persons with disabilities.Government Support of DiversityIn addition to theCanadian Charter of Rights and Freedoms, there are a number of other federal laws and policies that support Canada’s commitment to diversity, including theCanadian Human Rights Act, theEmployment Equity Act, theOfficial Languages Act, thePay Equity Act, and theMulticulturalism Act. Provinces and territories also promote diversity through programs, laws, and human rights commissions, and Canada is a signatory to international conventions on equity and diversity, including theUniversal Declaration of Human Rightsand theInternational Covenant on Economic, Social and Cultural Rights.In addition to legislation, governments from the municipal to federal level also undertake numerous programs addressing employment equity as well as diversity issues in everyday Canadian life. The goal is to “mobilize communities to promote dialogue and help people overcome barriers to their participation in society” Canadian Heritage, 2004).Optional Resource:See the Human Resources and Skills Development Canada (HRSDC) website at general information on employment equity and equal pay, among other things.Federal Employment Equity ProgramsTwo important federal legislative acts governing employer obligations to workplace diversity include theEmployment Equity Actand theEmployment Equity Regulations. TheEmployment Equity Actcovers Crown Corporations, as well as four hundred of the country’s private sector employers operating in federally regulated industries, such as banking, communications, and inter-provincial and international transportation (HRSDC, Labour, 2003a). The act does not dictate diversity quotas or other excessively onerous employer obligations with regard to accommodation of the four designated group members.TheEmployment Equity Actoutlines core employer obligations to eliminate barriers and improve employment access to the four designated groups, remedy past employment discriminations, and “foster a climate of equity” in the workplace (HRSDC, Labour, 2003a). TheEmployment Equity Regulationslists regulations associated with the Act, which “were finalized after Canada-wide consultations in 1995 with representatives of labour, employers, and other designated groups” (HRSDC, Labour, 2003b).Human Resources and Skills Development Canada refers to employment equity as an “on-going planning process used by an employer” to:Identify and eliminate barriers in organizations’ employment procedures and policies;Put into place positive policies and practices to ensure the effects of systemic barriers are eliminated;” andEnsure appropriate representation of ‘designated group’ members throughout their workforce (HRSDC, Labour, 2003a).Other Governmental and Non-Governmental Equity ProgramsIn addition to the above federal government services listed in the resources box above, there are hundreds of other federal, provincial, and municipal government programs and services, including programs specifically assisting women, Aboriginal people, persons with disabilities, and members of a visible minority. The Ontario government was particularly aggressive in the early 1990s with its employment equity program, which some likened to the quota system of affirmative action in the U.S. With the change in provincial government in 1995, the province’s legislated employment equity quotas came to an end (Wilson, 1997). Across Canada, various non-governmental organizations offer access and equity support for people from these four designated groups (women, Aboriginal people, persons with disabilities, and members of a visible minority) as well for a broader group of individuals identified as part of Canada’s diverse society. Additionally, some for-profit consulting firms across Canada and the U.S., as well as in Europe and elsewhere, provide businesses and other organizations with guidance implementing, measuring, and monitoring diversity programs.Expanding Diversity and InclusivenessIn their book,Understanding and Managing Diversity, authors Carol Harvey and M. June Allard present a more comprehensive definition of diversity than one addressing the four designated categories. Their book looks at the influences on the workplace of secondary aspects of diversity associated with different life experiences (such as military or international travel experience), different ways of communicating, differences in religion, and other influences, as well as primary diversity issues of gender, ethnicity, mental or physical abilities, and age, sexual orientation, and education. According to Harvey and Allard, understanding how these influences create diversity—or differences—in employees is an important key to good management (Harvey & Allard, 2001).In management circles, the terminclusionis sometimes used interchangeably withdiversity. The terminclusiveconjures an image of the way in which employees and managers should act in order to foster workplace equity. According to human resources consultant Myra Howze Shiplett, leaders set the tone in organizations by establishing processes that require employees to work together and by creating a climate that is open and welcoming to a diverse workforce (Shiplett, 2003). Organizations that understand and value inclusiveness (or diversity) are “more productive” and “able to attract and retain the best talent” (Shiplett, 2003, p. 1).Organizational Benefits of DiversityChanges in Canada’s population and labour pool in recent years, as well as globalization, are drivers of employment diversity. “Diversity is fast becoming a key strategic business issue in many corporate boardrooms” (Global Diversity @ Work, 2008a).This is the perspective of an organization called Global Diversity @ Work, which is sponsored by corporations including IBM Canada, Honeywell, and United Airlines. According to Global Diversity @ Work, labour shortages in certain industry and professional sectors have encouraged organizations to expand the diversity of their workforce in order “to tap into previously under-utilized labour supplies, both locally and globally” (Global Diversity @ Work, 2008a). Additionally, globalization requires the ability to work with people in other countries, wherein culture and other differences create the need to manage diversity among employees, managers, contractors, and customers.Many employees are intolerant of harassment and discrimination in the workplace, so progressive organizations implement diversity initiatives to mitigate these problems, as well as to attract high calibre employees” (Global Diversity @ Work, 2003a). “Managers are now being asked to deal with the highly complex and sometimes emotional issues that are generated in an increasingly diverse workforce” (Global Diversity @ Work, 2003a). This presents challenges to business leaders who, says diversity expert Trevor Wilson, recognize the key to success in global business is the ability “to attract, retain, motivate and develop high potential employees regardless of race, culture, age, sexual orientation, education, economic class or thinking style (Wilson, n.d.). Effective management requires leaders who foster “an organizational culture that values differences and maximizes the potential of all employees” (Taylor, 1995).Workplace Diversity and Equity Initiatives“Progressive employers have begun to use diversity initiatives as a means of positioning themselves as the employer of choice for their industry” (Global Diversity @ Work, 2008a). Global Diversity @ Work presents a business case for employment diversity, which lists potential organizational and financial benefits for implementing various equity initiatives. Hiring and retention initiatives may cut costs associated with legislative non-compliance and reduce losses and turnover costs associated with recruiting and training new employees.Creation of an inclusive workplace may also help avert turnover and eliminate other costs associated with investigating, defending, and litigating human rights complaints and payment of financial settlements in the event of harassment or discrimination complaints (Global Diversity @ Work, 2003a). A diverse and inclusive workplace may also lead to greater creativity, which can result in new ideas for greater productivity, enhanced service, or even new product ideas.Organizations implement employment equity programs that address hiring and promotion and retention programs and policies, as well as compensation equity policies. Some establish guidelines for workplace interaction, implement employee and management diversity training, and monitor and analyze their equity programs. Outside their internal operations, some organizations also develop sales and marketing initiatives that target diverse customers (Global Diversity @ Work, 2003a).Legal and Financial IncentivesRBC Financial Group employs experts to adapt their software so that visually impaired workers can interact with their computer monitors by using a talking screen reader. In addition to legal requirements to provide access for people with disabilities, some companies recognize the market opportunity. “One in seven Canadians over the age of 14 has some form of disability,” representing “$25 billion in annual disposable income. RBC began tapping into that market when it became the first Canadian bank to offer Braille statements” (Eastwood, 2003, p. 73).Diversity Policy StatementsSome organizations develop a diversity policy statement outlining their commitment to diversity. At a minimum, this statement should reflect their responsibilities underCanada’s Employment Equity Act.Levi-Strauss & Co. created an “Aspirations Statement,” which included the company’s perspective on inclusiveness. It states: “We want a company . . . where all employees have an opportunity to contribute, learn, grow, and advance based on merit, not politics or background” (Paine & Katz, as cited in Donaldson, Werhane, & Cording, 2002, p. 452). The statement lists one of its goals as “leadership that values a diverse workforce (age, sex, ethnic groups, etc.) at all levels of the organization, diversity in experience, and diversity in perspectives” (p. 453). Levi-Strauss & Co. claims that diversity provides advantages upon which the company can capitalize.Successful Diversity InitiativesIn their bookManaging the Mosaic: Diversity in Action, authors Kandola and Fullerton report on a survey in which representatives of 285 organizations evaluated a number of workplace diversity initiatives. The following is a ranking of the “ten most successful initiatives” (Global Diversity @ Work, 2003b).The 10 Most Successful Diversity Initiatives1. Introducing benefits for part-time workers.2. Allowing flexibility in dress requirements.3. Allowing time off for dependent care beyond legal requirements.4. Benefits for same sex and different sex partners equally available.5. Buying specialized equipment, e.g., Braille keyboards.6. Employing helpers/signers for those who need them.7. Training trainers in equal opportunities.8. Eliminating age criteria from selection decisions.9. Providing assistance with childcare.10. Giving “fair selection” training to recruiters.11. (And tied for 10th place) Allowing staff to take career breaks.Source: Kandola & Fullerton. (1996).The 10 Most Successful Diversity Initiatives. Managing the Mosaic: Diversity in Action. Retrieved from: of the initiatives above are unrelated to the four designated diversity groups—women, Aboriginal people, persons with disabilities, and members of a visible minority—identified in Canada’sEmployment Equity Act. For example, initiatives relating to benefits for same-sex partners addresses the rights of gay people in the workplace, and elimination of age criteria in selection decisions targets ageism in the workplace.A list of Canada’s top 100 employers is published each year by the Canada’s Top 100 Employer’s project. Employers are compared to other organizations in their field to determine which companies offer the most progressive and forward-thinking programs (Canada’s Top 100 Employers, 2013). Among other things, the evaluation criteria includes work atmosphere and social programs; health, financial and family benefits; and vacation and time off (Canada’s Top 100 Employers, 2013).Companies with programs such as childcare, job-sharing, flex-time, and part-time employment practices cater to parents seeking opportunities to balance work and family life. More often these are women workers, but not always. While some companies balk at the cost of employee programs, others recognize the benefits in terms of employee health, productivity, and retention. In justifying their commitment to “family-friendly programs,” the CEO of General Mills, Steve Sanger, comments on how turnover is very costly and that after investing in their employees, they do not want them to leave.Diversity expert Trevor Wilson states that in order to be effective, workplace diversity strategies must:Link to business objectives. They should not be social programs.Include all employees, even those that may not be identified in any designated categories of diversity.Protect the merit principle (i.e., hire, promote, or retain employees based on merit, not simply to fill quotas). This approach avoids tokenism and reverse discrimination (Hayes, 1999).Assessing Employment EquityCanada is a nation of diversity, but, despite the rhetoric of government ministries, the amount of diversity to which you are exposed varies depending on where in Canada you live.Consider your own place of work or a workplace with which you interact, such as the bank or the supermarket. Do you witness a significant diversity of age or ethnicities? Is this representative of the community or region in which you live? Is there a mix of women and men employed there? If so, which gender dominates management? What about the presence of people with disabilities, or the presence of Aboriginal people? How diverse is this workplace, and how do you think the diversity (or lack of diversity) influences the culture and dynamics within this organization?In Canada, many women have become entrepreneurs, perhaps as a means of bypassing the so-called “glass ceiling” that some people believe exists, especially in larger corporations. Indeed, men still dominate senior management positions in most Canadian businesses, but the reasons for this may or may not relate to employment equity issues. Traditional industry sectors, such as mining and forestry, and older institutions, such as banks and financial services, may be more entrenched in obsolete management strategies that are not supportive of diversity.One example of this is the barriers women encounter in their efforts to access financing and capital for entrepreneurial ventures.Profitmagazine publishes an annual report on the top 100 women business owners in Canada, based on a ranking of annual revenues. The top 100 have a combined average revenue base of $32.5 million (Myers, 2007).Over the years, many successful women entrepreneurs have commented on the effects of gender bias on their careers, and some say they were treated unfairly by male bankers (Oliver, 2003). In 2003, CarePartners had more than $13.5 million in sales, and CEO Linda Knight was ranked byProfitmagazine as one of Canada’s top 100 women business owners. Despite her success, Knight described an incident in which her (male) banker requested she obtain the support of her husband in co-signing for a line of credit for the business she founded (Oliver, 2003).Some banks have responded to long-standing complaints about gender bias against women-owned businesses by developing equity policies, and others have implemented programs to serve women customers specifically. Knight explains that she had no expectations for special treatment, and simply wants fair treatment that is based on the merit of her business, not her gender (Oliver, 2003). Recognizing that forty-nine per cent of all new businesses in British Columbia are started by women, RBC is targeting this sector with online resources (Make It Business, 2008, p. 13). RBC and Vancity also co-sponsor and facilitate a series of professional development workshops targeting women entrepreneurs (The RBCs of Lending, 2008).Whether small business or large, woman-owned or not, about eighty per cent of the Canadian workforce is made up of women, Aboriginal people, visible minorities, and people with disabilities (Mourtada, 2007). If employers want to effectively compete for the best talent out there, they have to consider all of their options, and that means reaching out to visibly diverse candidates. “Aside from assembling a staff that reflects what’s going on in the real world, in terms of appearances and work styles, there’s a real business case to be made for diversity” (Mourtada, 2007).Marc St-Amour, VP of human and financial resources for Expographiq (a Canadian firm that designs exhibits), claims that his company is “better at retaining its staff since making diversity a priority,” and “it’s also better at understanding its clients” (as quoted in Mourtada, 2007).With increasing ethnic diversity, as well as other equity issues influencing Canadian organizations, diversity is an issue that can we cannot ignore in business, as well as in other parts of Canadian society.Optional Resource:Diversity in the Workplace athttp://diversityintheworkplace.caSummaryThis topic is best summed up by Lawrence and Weber:…In a global community, where traditional buffers no longer protect business from external change, managers can create strategies that integrate stakeholder interests, respect personal values, support community development and are implemented fairly. Most important, businesses can achieve these goals while also being economically successful. Indeed, they may be the only way to achieve economic success over the long term. (Lawrence & Weber, 2014, p. viii)ReferencesCanada’s Top 100 Employers. (2013). Retrieved from Heritage. (2004).Multiculturalism. Canadian diversity: Respecting our differences.Canadian Heritage. (2004).Multiculturalism: Canadian Multiculturalism Act. Retrieved from News. (August 28, 2008).How Maple Leaf Foods is handling the Listeria outbreak. Retrieved from of Justice, Canada (2008).Canadian Charter of Rights and Freedoms, Constitution Act, 1982. Retrieved from, A. (2003). Second sight.Canadian Business, 76(4), pp. 73–74.Global Diversity @ Work. (2003a). Diversity at work: The business case for equity. Retrieved from Diversity @ Work. (2003b). Diversity at work: The business case for equity. Retrieved from Diversity @ Work. (2008a). About us. Retrieved from, C., & Allard, M. J. (2001).Understanding and managing diversity: Readings, cases, and exercises. Upper Saddle River, NJ: Prentice Hall.Hayes, V. (1999). Beyond employment equity.Ivey Business Journal, 64(1).Human Resources and Social Development Canada [HRSDC]: Labour. (2003a).What is Employment Equity?Human Resources and Social Development Canada [HRSDC]: Labour. (2003b).Key Elements of the Employment Equity Act and Regulations.Human Resources and Social Development Canada [HRSDC]: Labour. (2008a).Employment Equity—Myths and Realities.Human Resources and Social Development Canada [HRSDC]: Labour. (2008b).Equality in the Workplace.Lawrence, A., & Weber, J. (2008).Business and society: Stakeholders, ethics, public policy(12th ed.). New York, NY: McGraw-Hill Higher Education.Lawrence, A., & Weber, J. (2014).Business and society: Stakeholders, ethics, public policy(14th ed.). New York, NY: McGraw-Hill Higher Education.Mourtada, Rasha. (2007, March 5). Diversity in the workplace., J. (2007, November). PROFIT W100: Canada’s Top Women Entrepreneurs. Posted to Canadian Business Online.Oliver, L. (2003). What women want.Profit, 22(5).Paine, L. S., & Katz, J. P. (2002). Levi Strauss & Co.: Global source (A). In Donaldson, T., P. Werhane, & M. Cording (Eds.)Ethical issues in business: A philosophical approach(7th ed., pp. 432–457). Upper Saddle River, NJ: Prentice Hall.The RBCs of Lending. (2008).Make It Business, 5(5), 13.Shiplett, M. H. (2003, November). The power of diversity and inclusion.IN Brief[Newsletter],1. Retrieved from of Women Canada [SWC]. (2003a).Setting the stage for the next century: The federal plan for gender equality. Advancing gender equality. Retrieved from of Women Canada [SWC]. (2003b).Setting the stage for the next century: The federal plan for gender equality. Advancing gender equality. Progress of women’s rights. Retrieved from, C. (1995). Building a business case for diversity.Canadian Business Review, 22(1).Wilson, T. (2013).The human equity advantage: Beyond diversity to talent optimization. New York, NY: Wiley.Wilson, T. (1997).Diversity at work: The business case for equity. Etobicoke, ON: John Wiley & Sons Canada Limited.Activity 4-5: Diversity and Equal Opportunity in the WorkplaceIntroductionIn this activity, you will examine equity issues in the workplace with which you associate.InstructionsPart A: ReadingRead Chapter 17: Managing a Diverse Workforce. Focus on the content that is relevant to Canadian stakeholders, and ignore references to U.S. laws and commissions.Affirmative actionis a term only used for the U.S. It refers to a program that began in the U.S. in the late 1960s and continues in some parts of the U.S., even as legal, academic, and business leaders continue to challenge its merit.Part B: Reflective Journal—Workplace Equity IssuesIn a couple of short paragraphs, comment on the following with regard to your own experiences with workplace equity issues.Consider your own place of work or an organization with which you are familiar. Are you aware of any inequities? If so, describe what you know or believe to be the cause of these inequities. If not, explain why you think inequities do not appear to be a problem in this workplace.Do you think workplace equity is important? Explain your answer, giving reasons (including your opinion on the benefits and/or costs).Reflect back on your answers above. Do you think your own race, gender, age, life experiences or circumstances affect your perspective on what you observe with regard to workplace equity issues? Explain your answer.Part C: Online DiscussionChoose a topic relevant to Module 4: Internal Forces and Stakeholders (Internal “Circle of Influence”) for posting to the online discussion. This may derived from an entry you made in your reflective journal as you worked through the activities in Module 4, or another area of interest to you.As you prepare your posting, remember the following:The discussion topic must be a matter of current concern in the field of business and societyThe topic must be supported by recent articles, commentaries, or events.You should demonstrate participation in an online dialogue by responding to some of the comments your topic may elicit from other students of MNGT 3711.You should demonstrate participation in an online dialogue by commenting on the initial posting of at least one other student.You are required to post a minimum of three postings for each module. Post your discussion in the appropriate module area (in Discussions) in the Course Menu.Although your online discussion is not graded, you will need to draw from online discussion material when you complete your final project. The depth of your postings and interaction with other students will contribute to the mark you receive for that part of the final project.