SOLUTION: Embry Riddle Walmart The Main Street Merchant of Doom Case Study Analysis


Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in undivided or in divorce. WCN 02-200-203 Business & Society Ethics, Sustainability, and Stakeholder Management TENTH EDITION ARCHIE B. CARROLL University of Georgia JILL A. BROWN Bentley University ANN K. BUCHHOLTZ Rutgers University Australia • Brazil • Mexico • Singapore • United Kingdom • United States Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in undivided or in divorce. WCN 02-200-203 Business & Society: Ethics, Sustainability, and Stakeholder Management, Tenth Edition Archie B. Carroll, Jill A. Brown, and Ann K. Buchholtz Senior Vice President, General Manager, Social Sciences, Humanities & Business: Erin Joyner Product Director: Jason Fremder Senior Effect Manager: Scott Person Content Developer: Sarah Huber Tara Slagle—MPS North America © 2018, 2015 Cengage Learning ALL RIGHTS RESERVED. 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WCN 02-200-203 Brief Contents Preface xvii About the Authors PART 1 xxv Business, Society, and Stakeholders 1 CHAPTER 1 The Business and Society Relationship CHAPTER 2 Corporate Social Responsibility, Citizenship, and Sustainability CHAPTER 3 The Stakeholder Approach to Business, Society, and Ethics PART 2 2 4 Corporate Governance: Foundational Issues CHAPTER 5 Strategic Management and Corporate Public Policy CHAPTER 6 Risk, Issue, and Crisis Management Business Ethics and Leadership 7 Business Ethics Essentials CHAPTER 8 Managerial and Organizational Ethics CHAPTER 9 Business Ethics and Technology 10 PART 4 102 183 184 Ethical Issues in the Global Arena External Stakeholder Issues 224 272 305 341 CHAPTER 11 Business, Government, and Regulation CHAPTER 12 Business Influence on Government and Public Policy CHAPTER 13 Consumer Stakeholders: Notification Issues 395 CHAPTER 14 Consumer Stakeholders: Effect and Service Issues CHAPTER 15 Sustainability and the Natural Environment CHAPTER 16 Business and Community Stakeholders PART 5 135 155 CHAPTER CHAPTER 71 Corporate Governance and Strategic Management Issues 101 CHAPTER PART 3 30 Internal Stakeholder Issues 342 370 432 457 491 521 CHAPTER 17 Employee Stakeholders and Workplace Issues CHAPTER 18 Employee Stakeholders: Privacy, Safety, and Health 551 CHAPTER 19 Employment Diversity and Discrimination 522 580 Cases 611 Subject Index 748 Name Index 763 iii Copyright 2018 Cengage Learning. 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WCN 02-200-203 Contents Preface xvii About the Authors PART 1 xxv Business, Society, and Stakeholders 1 CHAPTER 1 The Business and Society Relationship . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.1 Business and Society 5 1.1a Business Defined 5 1.1b Society Defined 6 1.2 Society as the Macroenvironment 6 1.3 A Pluralistic Society 7 1.3a Pluralism Has Strengths and Weaknesses 8 1.3b Multiple Publics, Systems, and Stakeholders 8 1.4 A Special-Interest Society 9 1.5 Business Criticism and Corporate Response 10 1.5a Factors in the Social Environment 10 1.5b A General Criticism of Business: Use and Abuse of Power 17 1.5c Balancing Power after a while Responsibility 20 1.5d Business’s Response: Concern and a Changing Social Contract 20 1.6 Focus of the Book 22 1.6a Managerial Approach 22 1.6b Business Ethics Theme 23 1.6c Sustainability Theme 23 1.6d Stakeholder Management Theme 1.7 Structure of the Book Summary 26 Key Terms 26 Discussion Questions Endnotes 27 24 24 27 CHAPTER 2 Corporate Social Responsibility, Citizenship, and Sustainability . . . . . . . . . . . . . . . . . 30 2.1 Corporate Social Responsibility as a Concept 31 2.1a Historical Perspectives on CSR 32 2.1b Adaptations of the Economic Model 33 2.1c Evolving Meanings of CSR 35 2.1d A Four-Part Definition of CSR 35 2.1e The Pyramid of Corporate Social Responsibility 2.1f CSR in Practice 42 2.2 Traditional Arguments opposing and for CSR 2.2a Arguments opposing CSR 44 2.2b Arguments in Support of CSR 45 2.2c The Business Case for CSR 46 39 44 iv Copyright 2018 Cengage Learning. 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WCN 02-200-203 Contents 2.3 Ages and Stages of CSR 2.4 CSR Greenwashing 2.5 Political CSR 48 49 50 2.6 Corporate Social Responsiveness 2.7 Corporate Social Performance 2.7a Carroll’s CSP Model 51 50 51 2.8 Corporate Citizenship 53 2.8a Broad and Narrow Views 54 2.8b Stages of Corporate Citizenship 54 2.8c Global Corporate Citizenship 56 2.8d CSR and Corporate Citizenship Awards by Business Media 57 2.9 The Social Performance and Financial Performance Relationship 57 2.9a Three Perspectives on the Social–Financial–Reputation Relationship 2.10 Sustainability—Profits, People, Planet 61 2.10a Creating Shared Value and Conscious Capitalism 2.11 Socially Responsible, Sustainable, Ethical Investing Summary 64 Key Terms 65 Discussion Questions Endnotes 66 v 58 62 63 66 CHAPTER 3 The Stakeholder Approach to Business, Society, and Ethics . . . . . . . . . . . . . . . . . . . . . 71 3.1 Origins of the Stakeholder Concept 72 3.1a What Is the Stake in Stakeholder? 72 3.1b What Is a Stakeholder? 72 3.2 Who Are Business’s Stakeholders? 73 3.2a Three Views of the Firm: Production, Managerial, and Stakeholder 74 3.2b Primary and Secondary Stakeholders 75 3.2c Important Stakeholder Attributes: Legitimacy, Power, Urgency 76 3.3 Stakeholder Approaches: Strategic, Multifiduciary, and Synthesis 3.4 Three Values of the Stakeholder Model 3.4a Descriptive Value 80 3.4b Instrumental Value 80 3.4c Normative Value 80 78 80 3.5 Stakeholder Management: Five Key Questions 80 3.5a Who Are the Organization’s Stakeholders? 81 3.5b What Are Our Stakeholders’ Stakes? 85 3.5c What Opportunities and Challenges Do Our Stakeholders Present? 86 3.5d What Responsibilities Does a Firm Have inside Its Stakeholders? 87 3.5e What Strategies or Actions Should Management Take? 88 3.6 Effective Stakeholder Management 91 3.6a Stakeholder Thinking 91 3.6b Developing a Stakeholder Culture 91 3.6c Stakeholder Management Capability 92 3.6d Stakeholder Engagement 93 3.6e The Stakeholder Corporation 95 3.6f Principles of Stakeholder Management 96 3.7 Strategic Steps inside Global Stakeholder Management 3.7a Implementation 96 96 Copyright 2018 Cengage Learning. 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WCN 02-200-203 vi Contents Summary 97 Key Terms 97 Discussion Questions Endnotes 98 PART 2 98 Corporate Governance and Strategic Management Issues 101 CHAPTER 4 Corporate Governance: Foundational Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 4.1 Legitimacy and Corporate Governance 102 4.1a The Purpose of Corporate Governance 104 4.1b Components of Corporate Governance 104 4.2 Problems in Corporate Governance 106 4.2a The Need for Board Independence 107 4.2b Issues Surrounding Compensation 107 4.2c The Governance Impact of the Market for Corporate Control 4.2d Insider Trading 112 4.3 Improving Corporate Governance 114 4.3a Legislative Efforts 114 4.3b Changes in Boards of Directors 115 4.3c Board Diversity 115 4.3d Outside Directors 116 4.3e Use of Board Committees 116 4.3f The Board’s Relationship after a while the CEO 4.3g Board Member Liability 118 111 117 4.4 The Role of Shareholders 120 4.4a Shareholder Democracy 120 4.5 The Role of the SEC 121 4.6 Shareholder Activism 122 4.6a The History of Shareholder Activism 4.6b Shareholder Resolutions 123 4.6c Shareholder Lawsuits 124 122 4.7 Investor Relations and Shareholder Engagement 124 4.8 An Alternative Model of Corporate Governance 125 Summary 127 Key Terms 128 Discussion Questions Endnotes 129 129 CHAPTER 5 Strategic Management and Corporate Public Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 5.1 Strategic Management and Corporate Public Policy 135 5.1a Relationship of Ethics to Strategic Management 136 5.2 Four Key Strategy Levels 137 5.2a Four Strategy Levels Described 137 5.2b Emphasis on Enterprise-Level Strategy 138 5.3 The Strategic Management Process 143 5.3a Strategic Corporate Social Responsibility 144 5.3b Measuring Sustainable Corporate Performance 145 Copyright 2018 Cengage Learning. 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WCN 02-200-203 Contents 5.4 Public Affairs as a Divorce of Strategic Management vii 149 5.5 The Corporate Public Affairs Employment Today 149 5.5a PA’s Place at the Table 150 5.5b Future of Corporate PA in the 21st Century 150 Summary 151 Key Terms 151 Discussion Questions Endnotes 152 152 CHAPTER 6 Risk, Issue, and Crisis Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155 6.1 The Relationships among Risk, Issue, and Crisis Management 6.2 Risk Management 156 6.2a Risk Management and Sustainability 156 157 6.3 Issue Management 158 6.3a A Portfolio Approach 159 6.3b Issue Definition and the Issue Management Process 6.3c Issue Development Process 166 6.3d Issue Management in Practice 167 159 6.4 Crisis Management 168 6.4a The Nature of Crises 169 6.4b Managing Business Crises 172 6.4c Crisis Communications 174 6.4d Successful Crisis Management 176 Summary 177 Key Terms 178 Discussion Questions Endnotes 178 PART 3 178 Business Ethics and Leadership 183 CHAPTER 7 Business Ethics Essentials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184 7.1 The Public’s Opinion of Business Ethics 187 7.1a Are the Media Reporting Business Ethics Over Vigorously? 7.1b Is It Society That Is Changing? 189 7.2 Business Ethics: Some Basic Concepts 189 7.2a Descriptive versus Normative Ethics 190 7.2b The Conventional Approach to Business Ethics 7.2c Ethics and the Law 194 7.2d Making Ethical Judgments 195 188 191 197 7.3 Ethics, Economics, and Law—A Venn Model 7.4 Three Models of Management Ethics 199 7.4a Immoral Management 199 7.4b Moral Management 201 7.4c Amoral Management 204 7.4d Two Hypotheses Regarding the Models of Management Morality 7.5 Making Moral Management Actionable 7.6 Developing Moral Judgment 209 7.6a Levels of Moral Development 210 7.6b Opposed Sources of a Person’s Values 209 213 Copyright 2018 Cengage Learning. 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WCN 02-200-203 207 viii Contents 7.7 Elements of Moral Judgment 217 7.7a Moral Imagination 217 7.7b Moral Identification and Ordering 217 7.7c Moral Evaluation 217 7.7d Tolerance of Moral Disagreement and Ambiguity 7.7e Integration of Managerial and Moral Competence 7.7f A Sense of Moral Obligation 218 Summary 219 Key Terms 220 Discussion Questions Endnotes 221 218 218 220 CHAPTER 8 Managerial and Organizational Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224 8.1 Ethics Issues Arise at Opposed Levels 225 8.1a Personal Level 225 8.1b Managerial and Organizational Levels 226 8.1c Industry or Profession Level 227 8.1d Societal and Global Levels 227 8.2 Managerial Ethics and Ethical Principles 228 8.2a Principles Approach to Ethics 228 8.2b Ethical Tests Approach to Decision Making 237 8.3 Managing Organizational Ethics 240 8.3a Factors Affecting the Organization’s Moral Climate 241 8.3b Improving the Organization’s Ethical Culture 243 8.4 Best Practices for Improving an Organization’s Ethics 245 8.4a Top Management Leadership (Moral Management) 246 8.4b Effective Communication of Ethical Messages 249 8.4c Ethics and Compliance Programs and Officers 249 8.4d Setting Realistic Objectives 252 8.4e Ethical Decision-Making Processes 252 8.4f Codes of Ethics or Conduct 254 8.4g Disciplining Violators of Ethics Standards 255 8.4h Ethics “Hotlines” and Whistle-Blowing Mechanisms 257 8.4i Business Ethics Training 257 8.4j Ethics Audits and Risk Assessments 260 8.4k Corporate Transparency Policies 260 8.4l Board of Directors Leadership and Oversight 261 8.5 Behavioral Ethics—Toward a Deeper Understanding 8.6 Moral Decisions, Managers, and Organizations Summary 265 Key Terms 265 Discussion Questions Endnotes 266 262 264 266 CHAPTER 9 Business Ethics and Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272 9.1 The New Cosmos-people of Big Data 9.1a Social Media 273 9.1b Surveillance 274 273 9.2 Technology and the Technological Environment 9.3 Characteristics of Technology 274 275 Copyright 2018 Cengage Learning. 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WCN 02-200-203 Contents 9.3a Benefits, Costs, and Challenges 9.4 Technology and Ethics ix 276 277 9.5 Notification Technology 278 9.5a E-Commerce as a Pervasive Technology 278 9.5b Ongoing Issues in E-Commerce Ethics 279 9.5c Invasion of Consumer Privacy via E-Commerce 279 9.5d The Workplace and Computer Technology 286 9.6 Biotechnology 291 9.6a Bioethics 291 9.6b Genetic Engineering 292 9.6c Genetically Modified Organisms (GMOs) Summary 299 Key Terms 299 Discussion Questions Endnotes 300 296 300 CHAPTER 10 Ethical Issues in the Global Arena . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 305 10.1 Business Challenges in a Global Environment 306 10.2 Ethical Issues in the Global Business Environment 308 10.2a Questionable Marketing and Plant Safety Practices 309 10.2b Human Rights, Sweatshops, and Labor Abuses 312 10.2c Corruption, Bribery, and Questionable Payments 318 10.3 Improving Global Business Ethics 325 10.3a Balancing and Reconciling the Ethics Traditions of Home and Host Countries 10.3b Strategies for Improving Global Business Ethics 328 10.3c Corporate Action opposing Corruption 334 Summary 334 Key Terms 335 Discussion Questions Endnotes 336 PART 4 326 335 External Stakeholder Issues 341 CHAPTER 11 Business, Government, and Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 342 11.1 The Pendulum of Government’s Role in Business 343 11.2 The Roles of Government and Business 345 11.2a A Clash of Ethical Belief Systems 346 11.3 Interaction of Business, Government, and the Public 11.3a Government–Business Relationship 347 11.3b Public–Government Relationship 348 11.3c Business–Public Relationship 348 347 11.4 Government’s Nonregulatory Influence on Business 348 11.4a Industrial Policy 349 11.4b Privatization 351 11.4c Other Nonregulatory Governmental Influences on Business 11.5 Government’s Regulatory Influences on Business 11.5a Regulation: What Does It Mean? 355 11.5b Reasons for Regulation 355 352 354 Copyright 2018 Cengage Learning. 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WCN 02-200-203 x Contents 11.5c Types of Regulation 357 11.5d Issues Related to Regulation 360 11.6 Deregulation 363 11.6a Purpose of Deregulation 363 11.6b The Changing Cosmos-people of Deregulation Summary 365 Key Terms 366 Discussion Questions Endnotes 366 363 366 CHAPTER 12 Business Influence on Government and Public Policy . . . . . . . . . . . . . . . . . . . . . . . . . 370 12.1 Corporate Political Participation 371 12.2 Business Lobbying 371 12.2a Organizational Levels of Lobbying 373 12.3 Corporate Political Spending 381 12.3a Arguments for Corporate Political Spending 383 12.3b Arguments opposing Corporate Political Spending 383 12.4 Political Action Committees 383 12.4a The Impact of Super PACs 384 12.4b Agency Issues 384 12.5 Political Accountability and Transparency 385 12.6 Strategies for Corporate Political Activity 387 12.6a Financial Performance Outcomes 388 Summary 388 Key Terms 389 Discussion Questions Endnotes 390 389 CHAPTER 13 Consumer Stakeholders: Notification Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 395 13.1 The Consumer Movement 396 13.1a Ralph Nader’s Consumerism 397 13.1b Consumerism Today 397 13.1c Product/Service Notification Issues 399 13.1d Advertising Issues 400 13.1e Specific Controversial Advertising Issues 403 13.1f Warranties and Guarantees 417 13.1g Packaging and Labeling 418 13.1h Other Effect Notification Issues 421 13.2 The Federal Trade Commission (FTC) 421 13.2a The FTC in the 21st Century 422 13.2b Consumer Financial Protection Bureau 423 13.3 Self-Regulation in Advertising 424 13.3a The National Advertising Division’s Program 13.4 Moral Models and Consumer Stakeholders Summary 426 Key Terms 426 Discussion Questions Endnotes 427 425 425 427 Copyright 2018 Cengage Learning. 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WCN 02-200-203 Contents xi CHAPTER 14 Consumer Stakeholders: Effect and Service Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . 432 14.1 Two Central Issues: Quality and Safety 14.1a The Issue of Quality 433 14.1b The Issue of Safety 436 14.1c Effect Liability 441 433 14.2 Consumer Effect Safety Commission 445 447 14.3 Food and Drug Administration 14.4 Business’s Response to Consumer Stakeholders 14.6 Total Quality Management Programs 14.7 Six Sigma Strategy and Other Processes Summary 452 Key Terms 453 Discussion Questions Endnotes 454 448 448 14.5 Customer Service Programs 450 451 453 CHAPTER 15 Sustainability and the Natural Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 457 15.1 The Sustainability Imperative 15.2 The Natural Environment 458 460 15.3 A Brief Introduction to the Natural Environment 461 15.4 The Impact of Business on the Natural Environment 15.4a Climate Change 463 15.4b Energy 463 15.4c Water 464 15.4d Biodiversity and Land Use 465 15.4e Chemicals, Toxics, and Heavy Metals 466 15.4f Air Pollution 467 15.4g Waste Management 467 15.4h Ozone Depletion 469 15.4i Oceans and Fisheries 469 15.4j Deforestation 470 462 15.5 Responsibility for Environmental and Sustainability Issues 15.5a Environmental Ethics 471 15.5b The NIMBY Problem 472 471 15.6 The Role of Governments in Environmental and Sustainability Issues 473 15.6a ...
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