The Challenge for Business and Society

From Risk to Reward
 
 
Standards Information Network (Verlag)
  • 1. Auflage
  • |
  • erschienen am 9. Mai 2018
  • |
  • 208 Seiten
 
E-Book | ePUB mit Adobe-DRM | Systemvoraussetzungen
978-1-119-43748-2 (ISBN)
 
A roadmap to improve corporate social responsibility

The 2016 U.S. Presidential Campaign focused a good deal of attention on the role of corporations in society, from both sides of the aisle. In the lead up to the election, big companies were accused of profiteering, plundering the environment, and ignoring (even exacerbating) societal ills ranging from illiteracy and discrimination to obesity and opioid addiction. Income inequality was laid squarely at the feet of us companies. The Trump administration then moved swiftly to scrap fiscal, social, and environmental rules that purportedly hobble business, to redirect or shut down cabinet offices historically protecting the public good, and to roll back clean power, consumer protection, living wage, healthy eating initiatives and even basic public funding for public schools. To many eyes, and the lens of history, this may usher in a new era of cowboy capitalism with big companies, unfettered by regulation and encouraged by the presidential bully pulpit, free to go about the business of making money-no matter the consequences to consumers and the commonwealth. While this may please some companies in the short term, the long term consequences might result in just the opposite.

And while the new administration promises to reduce "foreign aid" and the social safety net, Stanley S. Litow believes big companies will be motivated to step up their efforts to create jobs, reduce poverty, improve education and health, and address climate change issues - both domestically and around the world. For some leaders in the private sector this is not a matter of public relations or charity. It is integral to their corporate strategy-resulting in creating new markets, reducing risks, attracting and retaining top talent, and generating growth and realizing opportunities. Through case studies (many of which the author spearheaded at IBM), The Challenge for Business and Society provides clear guidance for companies to build their own corporate sustainability and social responsibility plans positively effecting their bottom lines producing real return on their investments. This book will help:

* Create an effective corporate social responsibility and sustainability plan
* Provide long-term bottom line benefit
* Protect and enrich brand value
* Recruit and retain top talent


Perfect for CEOs, CFOs, Human Resource/Corporate Affairs executives, but also for government and not-for-profit leaders, this book helps you come up with a solid plan for giving back to society, producing real sustainable value.
1. Auflage
  • Englisch
  • USA
John Wiley & Sons Inc
  • 0,37 MB
978-1-119-43748-2 (9781119437482)

weitere Ausgaben werden ermittelt
STANLEY S. LITOW is a global thought leader on critical policy issues including education, jobs, and the economy. He has had a lengthy high-level career in business, government, education, and civil society. Serving under three CEOs, he led IBM's corporate citizenship programs and the IBM Foundation, where he created some of the world's most innovative corporate social responsibility efforts. At IBM he organized and helped lead three National Education Summits for the U.S. president, the nation's governors, CEOs, and education leaders. Before his IBM career he served as deputy chancellor of schools for the City of New York where he pioneered significant education reforms. He also founded and led a major think tank, Interface, that helped the City of New York cope with its last fiscal crisis. Prior to that he served under the mayor of New York City as executive director of the New York City Urban Corps, the nation's largest college intern program, and served on a range of advisory panels for the president of the United States and the governor of New York, where he chairs the State University of New York's Academic Affairs Committee.
Foreword ix

Acknowledgments xiii

Introduction 1

Chapter 1: The Good, Bad, and Ugly: A History of Corporate Behavior 17

Another Way of Proceeding 23

Public-Private Partnership Before the Phrase Was Coined 32

Discrimination and Jobs Are the Same Issue 37

Gender Equality 41

Environmental Leadership 42

Supply Chain Practices 46

Lessons Learned and Strategies Used 48

Can We Intelligently Regulate Business? 53

Can Ethics Be Taught? 56

The Recent Past 60

Chapter 2: Past Is Prologue, but Today Is What Matters 65

Best Practices in Corporate Responsibility 71

Corporate Responsibility and Education 73

The Background on School Reform 74

P-TECH: Reinventing High Schools 80

Changing Federal Policy 95

Walking and Chewing Gum at the Same Time 98

Student Stories 102

Results 105

Engaging the Company over the Long Term 106

Lessons Learned 108

IBM Launches Teacher Advisor with Watson 109

The Skills Crisis Goes Far Beyond the Entry Level 113

Citizen Diplomacy 114

JPMorgan Chase: A Company's Values Are at the Core of Its Actions 120

Starbucks 122

American Express 123

The Food Industry 124

Failures in Corporate Citizenship 126

Private-Sector Leadership in the Public and Volunteer Sectors 128

Lessons to Be Learned, and Moving Forward 130

Chapter 3: The Future 133 Leadership: We Need Leaders to Lead 137

Ethics and Community Service: A Culture of Ethics and Service Needs to Be Reinforced and Expanded 140

Key Problems Facing Society Today and How They Can Be Addressed 144

Critical Issues That Need a New Focus: Education and Jobs 149

Four Ideas That Will Boost Education Achievement 150

Economic Development and Jobs 161

A Brighter Future 169

Conclusion 171

About the Author 181

Index 183

Chapter 1
The Good, Bad, and Ugly: A History of Corporate Behavior


In the late nineteenth century, Carnegie Steel was one of the world's most well-heeled and effective businesses, expanding its workforce in large numbers and growing rapidly across the United States. It came close to being a monopoly, and its success enriched its founder, Andrew Carnegie, who first gained prominence in the railroad industry. With the financial support of J. P. Morgan, Carnegie leveraged his knowledge and experience to build a massive business in steel, to the point where by 1885 he was producing most of the steel that built America's tools, factories, tall buildings, ships, streetcars, and machines. He was an iconic American business leader. Carnegie's personal wealth approached that of John D. Rockefeller, reaching far beyond any nineteenth-century standard of wealth. In today's world, Carnegie would be more than just a billionaire; his wealth would be at the Bill Gates or Warren Buffett level. To put the success of Carnegie's business into context, when he sold Carnegie Steel in 1901, it netted him nearly $500 million, which today would equate to more than $15 billion. And this was not value that would accrue to shareholders, investors, and executives; it represented Carnegie's personal enrichment, building on his already extensive wealth. And Carnegie's personal wealth grew subsequent to the sale, allowing him eventually to become one of the world's most generous philanthropists, on a scale equal to that of Rockefeller.

Carnegie didn't just give out money via his philanthropy. He had a vision of what he wanted and executed it effectively, pioneering America's public library system, which contributed to the nation's literacy and its transition from agriculture to a manufacturing-based economy. Carnegie's transformative private foundation survives to this day and plays a vital role in the support of public education and civil society. Its impact has truly been significant. Carnegie is a brand with strong positive impact. And yet the success of his company depended not a scintilla on philanthropy, sound business ethics, solid labor practices, or the support of community. Quite the contrary. Carnegie and the company he founded focused with laserlike attention on the economics of building and sustaining the business, which he did at any cost.

The company did provide benefits to the American economy. It pioneered steel production at massive levels, effectively competed with international geographies, and enriched a range of companies, including the railroads that it did business with. Most important, it created a large number jobs for Americans at a time when industrialization was on the rise. But in that period of industrialization, economic success depended heavily on the productivity of, and the company's relationship with its core asset, its workforce. Carnegie and the tight group of executives he had chosen to manage and lead the company in the late 1880s became increasingly worried and concerned about the influence of its fledgling labor union, the Amalgamated Steel Workers. The union representing these skilled workers saw the increasing size and scope of the company, and its astounding financial success, and saw an opportunity to increase wages, limit the workweek, and improve working conditions.

Work conditions at Carnegie's company were certainly not unique: it had a six-day and in some cases seven-day workweek, twelve- to fourteen-hour or longer workdays, unsafe working conditions, low wages, incidences of child labor, and offered no vacation days or overtime pay. This Industrial Revolution was a time of increased focus on working conditions and worker pay across American industries and around the world. This was intensified by an economic slump in the early 1890s that was part of a range of global economic trends largely beginning in Europe. Carnegie and his company chairman, Henry Clay Frick, who was in charge of the company's Homestead plant in Pennsylvania, felt the need to act and act promptly to reduce and not increase their labor costs. (Incidentally, Frick also donated his personal wealth at the end of his work life, in his case to create the Frick Museum on Fifth Avenue in Manhattan, which survives to this day.)

Carnegie and Frick and their tight circle of very well-compensated managers and investors were convinced that increased labor costs and any labor demands to improve working conditions and employee benefits would damage the fiscal future of the company and cut into the financial well-being of Carnegie Steel. This was top of mind to Carnegie because steel markets were in a brief decline. The consequences of their actions on the workforce were more than secondary, they were profound. As a result, in 1892 discussions with the union, Carnegie and Frick proposed not only to turn a deaf ear to any and all demands by the union, but to go one step further and reduce the minimum wage in the new contract. And beyond that, they aimed to abolish the bargaining power of the union entirely.

When the negotiations faltered, Carnegie and Frick ceased their negotiations with the Amalgamated Steel Workers and instead aimed to beat the union, or more explicitly, to break it. Their plan had nothing whatever to do with effective negotiation tactics, fairness, or even long-term success. They conceived and executed a strategy that began with employing hundreds of strikebreakers to replace the company's striking workforce; in record time, they built a ten-foot fence around the workplace to prevent interruption of work. But perhaps most important, they hired the Pinkerton Detective Agency to engage in swift, armed conflict with the strikers. The Carnegie and Frick strategy resulted in the deaths of dozens of workers, with over a hundred more injured, and effectively ended the worker strike and opposition to the company's labor practices.

They developed and executed their strategy swiftly and without remorse. The action effectively accomplished their goal-it broke the union. While Frick never regretted the action, Carnegie did. He later wrote, "No pangs remain of any wound received in my business career save that of Homestead." Perhaps some of his commitment to philanthropy served as a reaction to those events. However, in response to Carnegie's personal philanthropy in the creation of libraries, the president of Dartmouth College at the time, William Jewett Tucker, referring to Carnegie's efforts, opined that it was a "belated gospel . . . and too late for a social remedy," and one of Carnegie's steelworkers at the Homestead plant said, "What good are libraries to me, working practically 18 hours a day?"

Carnegie and Frick's reaction to their workers organizing to improve labor practices was not unique. The Pullman Strike in 1894, the 1902 anthracite strike, the 1913 Paterson silk strike, and the 1914 Colorado coal strike grew out of similar circumstances. Workers organized to improve working conditions and compensation, and in swift reaction employers beat back their demands with planned and calculated violence.

The actions that led to the Colorado strike and what happened afterward, known as the Ludlow Massacre, are particularly illustrative. Brooklyn-born John C. Osgood established a very successful mining company in Colorado called Colorado Fuel and Iron. Osgood has been characterized as one of a generation of business leaders known as the "robber barons." Though CF&I was actually owned in the main by John D. Rockefeller, Osgood played a major role in the company and had broad influence over the entire mining industry. Initially he seemed to be a progressive business figure, establishing the town of Redstone, Colorado, as a "company town" and investing in housing for its employees and even building a school for Redstone children and their parents. But after a strike by the workers, similar to what led to Carnegie and Frick's brutality, Osgood embarked on a publicity campaign to discredit the workers. He engineered actions by the National Guard to break the strike and break the union through violence. Two dozen people were killed in Redstone, leading to further violence. While the union was broken and these industrialists prevailed in the short run, a growing negative reaction by American citizens began to develop, leading to organizing and political advocacy at the state and national levels that ultimately brought about passage of child labor laws and the eight-hour workday.

Carnegie and Frick as well as Osgood and Rockefeller and many others were successful, at least in the short term. In the case of Carnegie and Frick, they and the company created some economic benefit, to be sure, but they enriched themselves greatly and cared little about the consequences. Carnegie's business grew rapidly through the end of the nineteenth century into the beginning of the twentieth. The business practices he followed with respect to his workforce were reprehensible. And, sadly, they had their influence on the practices of many other businesses. Jay Gould, a man of outsized wealth, legendary for his greed and lack of ethics, and importantly an investor in CF&I, summed up his views regarding labor practices as follows: "I can hire one half of the working class to kill the other half." Gould's actions went far beyond breaking unions. He engaged in stock fraud, manipulated the gold market, and rightly...

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