Deck 2: Being Ethical and Socially Responsible

Question 1

In 2010, Pepsi decided to develop a new social media-based project, called Pepsi Refresh Project, aimed at Millennials and allowing consumers to post ideas for improving their communities. This replaced the $20 million they spent on Superbowl advertising. The project received more than 57 million votes. However, the general consensus was this was not a successful program for Pepsi. Using the Internet for research, answer the following questions:
1. Why do you think the Pepsi Refresh Project was not as successful as the company hoped?
2. Do you think this is a good example of corporate social responsibility (CSR)? Why or why not?
3. How does this CSR example for Pepsi compare with that of its main rival Coca-Cola (see www.thecoca- colacompany.com/ citizenship/index.html)?

Answer 1

Considering the variables mentioned in the question some observations have been made. On perusing the facts mentioned in the problem, the following deductions are stated below:
1. The project was declared to be unsuccessful because of the following reasons:
a. The sales declined during the year when the project was used to market the products.
b. The company lost its long time hard earned second spot in the industry to its arch rival.
c. The project did not augment to the reputation of the company as was expected.
d. There were various allegations of frauds on the company regarding the participation and monitoring of the project.
2. The given project can be considered as a good example of corporate social responsibility. This is so because of the following reasons:
a. A good cause.
b. The project created hundreds of little advantageous impacts over time.
c. A participative campaign which allowed people all across the world to vote as to where the money should be invested.
3. The CSR example of company P compares with that of its main rival company CC in the following ways:
a. Company P focused on attaining feedbacks as to which cause should be supported.
Company CC on the other hand, focused on reducing and replacing the use of water in its products.
b. Company P focused more on short term revenues from its social projects.
Company CC on the other hand, focused on enhancing its reputation as an environment friendly organization.
Hence, it can be concluded that the project discussed in the case was not a success for the organization.

Question 2

Can a corporate giant build its business on the basis of being green and clean? By 2020, Unilever aims to double its revenues while cutting its environmental footprint in half and educating one billion people about how to live healthier lives. Although these are aggressive goals, the Anglo-Dutch company has considerable resources available to implement its plans. Unilever rings up $62 billion in annual sales of a wide range of foods, household cleaners, and personal care products under such well-known brands as Axe, Ben Jerry's, Dove, Lipton, Lifebuoy, Skippy, Suave, and Surf. It has 170,000 employees and operates in 100 countries, with more than half of its revenues coming from developing nations. Every day, all over the world, 2 billion people use one (or more) of its products.
Unilever's managers see great profit potential in actively managing the environmental and social impacts of its products to meet the needs of consumers in all markets and at all income levels. "We are advocating a business model that gives to the environment and society," explains CEO Paul Polman. "That is the essence of sustainable growth."
Before setting specific green and clean goals, Unilever's managers spent years studying the eco-effects of its products and talking with customers, suppliers, government officials, and non-profit specialists about population growth, natural resources, and human health. They set up programs to develop and test efficient, eco-friendly ways of manufacturing products and obtaining raw materials. They also took a close look at how they might address challenges such as providing clean drinking water for billions of people and preventing the spread of disease.
Out of this research came a comprehensive plan called the Unilever Sustainable Living Plan. It included a detailed timeline for dramatically reducing Unilever's energy and water usage, getting raw materials from sustainable sources, and slashing emissions and waste. As one example, the company set a deadline for obtaining all of its palm oil from certified sustainable sources (and achieved that goal three years early). Meanwhile, Unilever's product development experts began devising new products to address common consumer needs in earth-friendly ways. For example, for areas where water is scarce, they developed a shampoo to be used without water and laundry products that clean with a single rinse.
Unilever's research also pointed to the need for educating consumers about simple steps they can take to stay healthy, such as washing their hands. The company found that the first step is to explain why people should take a particular action (wash with soap to stop disease from spreading). Next, show them how easy it is to take action (by buying and using soap), outline the benefits (keeping families safe from germs), and make them feel good about taking action (to keep family members healthy). Finally, encourage people to continue this action over and over again (for example, by reminding children to wash before meals). Following these five steps, Unilever has already educated 35 million people in developing nations about the benefits of washing hands-while promoting the company's Lifebuoy soap brand at the same time.
In the process of moving toward its sustainability goals, Unilever has developed tools and techniques that it is now sharing with other companies and with suppliers. Its free, downloadable Cool Farm Tool, for instance, enables farmers to calculate the level of greenhouse gas emissions from their farming and livestock activities. Using this calculation as a baseline, farmers can then experiment with different ways of reducing emissions while improving agricultural yield. This is yet another way that the company's plan "can unleash innovation which will help us grow," says the head of Unilever's business in India.
Questions
E very year, Unilever posts on its web site and distributes to the media a report detailing its progress toward the 2020 sustainability goals. Why would the public be interested in such a report?

Answer 2

NOT ANSWER

Question 3

When a company acts in an ethically questionable manner, what types of problems are caused for the organization and its customers?

Answer 3

Customers and investors expect the organization to act fairly and without prejudice. The following problems arise for the organization when they act in an ethically questionable manner:
1) A tarnished reputation and goodwill of the organization
2) Decrease in sales and earnings due to bad word of mouth
3) Increase in costs due to fines and other legal expenses
4) Trial and imprisonment of employees in cases of severe misconduct
The customers face the following problems when the organization acts in an ethically questionable manner:
1) Customer dissatisfaction from the use of the product or service of the organization
2) Paying higher price for a low quality product or service
3) Physical harm leading to death or injuries after using untested or bad goods, such as medications with major side effects.

Question 4

Panera Cares is very much like every other Panera bakery- café, offering the same seasonal menu, the same fresh-baked bread, and the same comfortable ambiance. At Panera Cares, however, customers pay what they can afford. A mother with a toddler in tow may donate $5 for a pastry while a homeless person pays nothing for the same type of pastry. It's Panera's way of doing something for local communities, and it's starting to catch on.
Panera Cares must receive 80 percent of the suggested funding level to continue as a viable venture. Some of the cafés consistently achieve that level, while others fall short on some days. As word spreads and more customers understand what Panera is trying to achieve, the cafés are building a loyal and generous following. "The lesson here is that most people are fundamentally good," notes Panera's founder. "People step up and they do the right thing."
Questions
How does Panera Cares fit into the socioeconomic model of social responsibility?

Question 5

Why might an individual with high ethical standards act less ethically in business than in his or her personal life?

Question 6

Discovery statement: This chapter was devoted mostly to business ethics, ethical concerns that arise in the business world, personal ethics, and social responsibility of business.
Assume that you are an accountant at ABC Corporation, where you question the company's accounting practices. What legal and managerial changes would you suggest to prevent the use of accounting tricks to manipulate corporate earnings?
Assignment
1. Assume that your manager refuses to incorporate any of your suggestions. Would you blow the whistle? Why or why not?
2. Suppose that you blow the whistle and get fired. Which law might protect your rights, and how would you proceed to protect yourself?

Question 7

Can a corporate giant build its business on the basis of being green and clean? By 2020, Unilever aims to double its revenues while cutting its environmental footprint in half and educating one billion people about how to live healthier lives. Although these are aggressive goals, the Anglo-Dutch company has considerable resources available to implement its plans. Unilever rings up $62 billion in annual sales of a wide range of foods, household cleaners, and personal care products under such well-known brands as Axe, Ben Jerry's, Dove, Lipton, Lifebuoy, Skippy, Suave, and Surf. It has 170,000 employees and operates in 100 countries, with more than half of its revenues coming from developing nations. Every day, all over the world, 2 billion people use one (or more) of its products.
Unilever's managers see great profit potential in actively managing the environmental and social impacts of its products to meet the needs of consumers in all markets and at all income levels. "We are advocating a business model that gives to the environment and society," explains CEO Paul Polman. "That is the essence of sustainable growth."
Before setting specific green and clean goals, Unilever's managers spent years studying the eco-effects of its products and talking with customers, suppliers, government officials, and non-profit specialists about population growth, natural resources, and human health. They set up programs to develop and test efficient, eco-friendly ways of manufacturing products and obtaining raw materials. They also took a close look at how they might address challenges such as providing clean drinking water for billions of people and preventing the spread of disease.
Out of this research came a comprehensive plan called the Unilever Sustainable Living Plan. It included a detailed timeline for dramatically reducing Unilever's energy and water usage, getting raw materials from sustainable sources, and slashing emissions and waste. As one example, the company set a deadline for obtaining all of its palm oil from certified sustainable sources (and achieved that goal three years early). Meanwhile, Unilever's product development experts began devising new products to address common consumer needs in earth-friendly ways. For example, for areas where water is scarce, they developed a shampoo to be used without water and laundry products that clean with a single rinse.
Unilever's research also pointed to the need for educating consumers about simple steps they can take to stay healthy, such as washing their hands. The company found that the first step is to explain why people should take a particular action (wash with soap to stop disease from spreading). Next, show them how easy it is to take action (by buying and using soap), outline the benefits (keeping families safe from germs), and make them feel good about taking action (to keep family members healthy). Finally, encourage people to continue this action over and over again (for example, by reminding children to wash before meals). Following these five steps, Unilever has already educated 35 million people in developing nations about the benefits of washing hands-while promoting the company's Lifebuoy soap brand at the same time.
In the process of moving toward its sustainability goals, Unilever has developed tools and techniques that it is now sharing with other companies and with suppliers. Its free, downloadable Cool Farm Tool, for instance, enables farmers to calculate the level of greenhouse gas emissions from their farming and livestock activities. Using this calculation as a baseline, farmers can then experiment with different ways of reducing emissions while improving agricultural yield. This is yet another way that the company's plan "can unleash innovation which will help us grow," says the head of Unilever's business in India.
Questions
Is Unilever applying the economic or the socioeconomic model of social responsibility? How do you know?

Question 8

How can an employee take an ethical stand regarding a business decision when his or her superior already has taken a different position?

Question 9

Panera Cares is very much like every other Panera bakery- café, offering the same seasonal menu, the same fresh-baked bread, and the same comfortable ambiance. At Panera Cares, however, customers pay what they can afford. A mother with a toddler in tow may donate $5 for a pastry while a homeless person pays nothing for the same type of pastry. It's Panera's way of doing something for local communities, and it's starting to catch on.
Panera Cares must receive 80 percent of the suggested funding level to continue as a viable venture. Some of the cafés consistently achieve that level, while others fall short on some days. As word spreads and more customers understand what Panera is trying to achieve, the cafés are building a loyal and generous following. "The lesson here is that most people are fundamentally good," notes Panera's founder. "People step up and they do the right thing."
Questions
What ethical issues are raised by the idea of expecting some people to pay more for a Panera meal so that others can pay less?

Question 10

How would an organizational code of ethics help to ensure ethical business behavior?

Question 11

Recently, an article entitled "Employees Coming to Terms with Moral Issues on the Job" appeared in a big-city newspaper. It posed the following situations:
• You are asked to work on a project you find morally wrong.
• Important tasks are left undone because a co-worker spends more time planning a social event than working on a proposal.
• Your company is knowingly selling defective merchandise to customers.
Unfortunately, many employees currently are struggling with such issues. The moral dilemmas that arise when employees find their own ethical values incompatible with the work they do every day are causing a lot of stress in the workplace, and furthermore, these dilemmas are not being discussed. There exists an ethics gap. You already may have faced a similar situation in your workplace.
Assignment
1. In small groups with your classmates, discuss your answers to the following questions:
a. If you were faced with any of the preceding situations, what would you do?
b. Would you complete work you found morally unacceptable, or would you leave it undone and say nothing?
c. If you spoke up, what would happen to you or your career? What would be the risk?
d. What are your options?
e. If you were a manager rather than a lower-level employee, would you feel differently and take a different approach to the issue? Why?
2. In a written report, summarize what you learned from this discussion.

Question 12

Can a corporate giant build its business on the basis of being green and clean? By 2020, Unilever aims to double its revenues while cutting its environmental footprint in half and educating one billion people about how to live healthier lives. Although these are aggressive goals, the Anglo-Dutch company has considerable resources available to implement its plans. Unilever rings up $62 billion in annual sales of a wide range of foods, household cleaners, and personal care products under such well-known brands as Axe, Ben Jerry's, Dove, Lipton, Lifebuoy, Skippy, Suave, and Surf. It has 170,000 employees and operates in 100 countries, with more than half of its revenues coming from developing nations. Every day, all over the world, 2 billion people use one (or more) of its products.
Unilever's managers see great profit potential in actively managing the environmental and social impacts of its products to meet the needs of consumers in all markets and at all income levels. "We are advocating a business model that gives to the environment and society," explains CEO Paul Polman. "That is the essence of sustainable growth."
Before setting specific green and clean goals, Unilever's managers spent years studying the eco-effects of its products and talking with customers, suppliers, government officials, and non-profit specialists about population growth, natural resources, and human health. They set up programs to develop and test efficient, eco-friendly ways of manufacturing products and obtaining raw materials. They also took a close look at how they might address challenges such as providing clean drinking water for billions of people and preventing the spread of disease.
Out of this research came a comprehensive plan called the Unilever Sustainable Living Plan. It included a detailed timeline for dramatically reducing Unilever's energy and water usage, getting raw materials from sustainable sources, and slashing emissions and waste. As one example, the company set a deadline for obtaining all of its palm oil from certified sustainable sources (and achieved that goal three years early). Meanwhile, Unilever's product development experts began devising new products to address common consumer needs in earth-friendly ways. For example, for areas where water is scarce, they developed a shampoo to be used without water and laundry products that clean with a single rinse.
Unilever's research also pointed to the need for educating consumers about simple steps they can take to stay healthy, such as washing their hands. The company found that the first step is to explain why people should take a particular action (wash with soap to stop disease from spreading). Next, show them how easy it is to take action (by buying and using soap), outline the benefits (keeping families safe from germs), and make them feel good about taking action (to keep family members healthy). Finally, encourage people to continue this action over and over again (for example, by reminding children to wash before meals). Following these five steps, Unilever has already educated 35 million people in developing nations about the benefits of washing hands-while promoting the company's Lifebuoy soap brand at the same time.
In the process of moving toward its sustainability goals, Unilever has developed tools and techniques that it is now sharing with other companies and with suppliers. Its free, downloadable Cool Farm Tool, for instance, enables farmers to calculate the level of greenhouse gas emissions from their farming and livestock activities. Using this calculation as a baseline, farmers can then experiment with different ways of reducing emissions while improving agricultural yield. This is yet another way that the company's plan "can unleash innovation which will help us grow," says the head of Unilever's business in India.
Questions
Do you agree with Unilever's approach of promoting its Lifebuoy soap brand in programs to teach consumers about handwashing? Explain your answer.

Question 13

Overall, would it be more profitable for a business to follow the economic model or the socioeconomic model of social responsibility?

Question 14

How and why did the American business environment change after the Great Depression?

Question 15

A firm's code of ethics outlines the kinds of behaviors expected within the organization and serves as a guideline for encouraging ethical behavior in the workplace. It reflects the rights of the firm's workers, shareholders, and consumers.
Assignment
1. Working in a team of four, find a code of ethics for a business firm. Start the search by asking firms in your community for a copy of their codes, by visiting the library, or by searching and downloading information from the Internet.
2. Analyze the code of ethics you have chosen, and answer the following questions:
a. What does the company's code of ethics say about the rights of its workers, shareholders, consumers, and suppliers? How does the code reflect the company's attitude toward competitors?
b. How does this code of ethics resemble the information discussed in this chapter? How does it differ? c. As an employee of this company, how would you personally interpret the code of ethics? How might the code influence your behavior within the workplace? Give several examples.

Question 16

Why should business take on the task of training the hard-core unemployed?

Question 17

What are the major differences between the economic model of social responsibility and the socioeconomic model?

Question 18

Business ethics has been at the heart of many discussions over the years and continues to trouble employees and shareholders. Stories about dishonesty and wrongful behavior in the workplace appear on a regular basis in newspapers and on the national news. Assignment Prepare a written report on the following:
1. Why can it be so difficult for people to do what is right?
2. What is your personal code of ethics? Prepare a code outlining what you believe is morally right. The document should include guidelines for your personal behavior.
3. How will your code of ethics affect your decisions about:
a. The types of questions you should ask in a job interview?
b. S electing a company in which to work?

Question 19

To what extent should the blame for vehicular air pollution be shared by manufacturers, consumers, and government?

Question 20

What are the arguments for and against increasing the social responsibility of business?

Question 21

Why is there so much government regulation involving social responsibility issues? Should there be less?

Question 22

Describe and give an example of each of the six basic rights of consumers.

Question 23

There are more women than men in the United States. Why, then, are women considered a minority with regard to employment?

Question 24

What is the goal of affirmative action programs? How is this goal achieved?

Question 25

What is the primary function of the Equal Employment Opportunity Commission?

Question 26

How do businesses contribute to each of the four forms of pollution? How can they avoid polluting the environment?

Question 27

Our environment can be cleaned up and kept clean. Why haven't we simply done so?

Question 28

Describe the steps involved in developing a social responsibility program within a large corporation.