The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Wednesday, August 31, 2011

Strategic CSR - Walmart (II)

The best comment I saw on the dismissal of the class action sex discrimination suit against Walmart over the summer was the op-ed article in the url below. Although the link between the argument presented by the author and the legal standing of the class-action suit in the Walmart case is a bit tenuous at times, the author raises some insightful points about how some of the current policies in place at Walmart seem to present more challenging barriers to promotion for women to overcome than men. For example:

Recognizing that workers steeped in that culture make poor candidates for assistant managers, who are the front lines in enforcing labor discipline, Wal-Mart insists that almost all workers promoted to the managerial ranks move to a new store, often hundreds of miles away. For young men in a hurry, that’s an inconvenience; for middle-aged women caring for families, this corporate reassignment policy amounts to sex discrimination.

In essence, the policy:

… forces ambitious workers to choose between job and family.

A second example:

The workweek for salaried managers is around 50 hours or more, which can surge to 80 or 90 hours a week during holiday seasons. Not unexpectedly, some managers think women with family responsibilities would balk at such demands, and it is hardly to the discredit of thousands of Wal-Mart women that they may be right.

Reading through the article, I thought it would make a good ethical dilemma for in-class discussion. For example, I can see how Walmart would think it more effective for employees recently promoted to a position of authority in charge of discipline if they did not have close social ties with the employees they now have to oversee. It also seems clear, however, that insisting on such a policy firm-wide would be a much more substantial barrier to progress for employees who are least mobile for whatever reason (although family commitments would seem to be a common reason). Is this discrimination, as the author states, or is it an effective business policy derived from years of experience with a particular issue (i.e., how best to enforce discipline in a standardized way across a huge corporation)? Discuss.

BTW: I thought the graphic used in the article to support the author’s political message does so in a powerful way:

Monday, August 29, 2011

Strategic CSR - Walmart (I)

In case you missed it over the summer, the article in the url below reports the U.S. Supreme Court’s decision on the Walmart discrimination case that the firm has been fighting for the past decade:

The Supreme Court on Monday threw out an enormous employment discrimination class-action suit against Wal-Mart that had sought billions of dollars on behalf of as many as 1.5 million female workers. The suit claimed that Wal-Mart’s policies and practices had led to countless discriminatory decisions over pay and promotions.

While not deciding the merits of the case (i.e., whether Walmart actually discriminated against some of its female employees in terms of equal pay and promotion opportunities), the Court decided that the case cannot proceed as a class action. Essentially, this means that, in the eyes of the Court, there was insufficient evidence that Walmart had pursued a systematic policy of discrimination, centrally coordinated.

Walmart’s defense against the class-action was that, because it devolved most hiring and promotion decisions to the local store manager, although individual instances of discrimination may have occurred, they were not a result of the firm’s policies and practices.

Additional background to the case and its possible implications (both for Walmart and for the possibility of future class-actions being brought against all firms) appeared in two additional stories in the paper on the same day:

Friday, August 26, 2011

Strategic CSR - Japan

The article in the url below contains one of the more amazing facts from the aftermath of the Japanese earthquake, tsunami, and nuclear power disaster that occurred earlier this year:

Japanese citizens, long renowned for their diligence in returning lost items, have turned in more than $78 million in cash, most of it from lost wallets that washed ashore and some of it from safes found under rubble, in the aftermath of the devastating March earthquake and tsunami.

I have often thought that a good indicator of the strength of a society is how quickly it breaks down under stress. When you think about what happened in New Orleans after Katrina and the recent riots and looting in the UK, it is a phenomenal comment on Japanese society that it remained so strong when so much was thrown at it.

I lived and worked in Japan for six years and know that there are significant disadvantages as well as advantages to such strong social rules and norms. I am enormously proud of my ties to Japan, however, when the advantages are on display as an inspiration to other societies greatly in need of a little more structure and discipline.

Have a good weekend.

Wednesday, August 24, 2011

Strategic CSR - Welcome Back!

Welcome back to the Strategic CSR Newsletter!
The first Newsletter of the Fall semester is below.
As always, your comments and ideas are welcome.

Over the summer, a number of important CSR stories emerged,  some of which I will comment on in upcoming Newsletters. Among the doom and gloom of ongoing financial crises, political incompetence, and corporate malfeasance, however, is the enduring belief that for-profit firms remain the beacon of hope for the CSR project. If we are to plot a sustainable future moving forward, it is corporations that possess the capability to mobilize sufficient resources in ways that can make a difference. While a lot of the negative stories seem to find their way into these Newsletters (the media latches onto negative stories more readily than positive stories), this article from The Economist at least starts us off on the right track!

The article in the url below attempts an interesting exercise—to compare the relative influence of IBM and the Carnegie Foundation over the last 100 years. Both organizations were founded in 1911 and, as such, both turn 100 years old in 2011. The Economist’s goal is to identify which organization (for-profit or non-profit) has “done more for society” during its lifespan.

Two things struck me reading the article. First, that it is not a very close contest. While the Carnegie Foundation certainly did some good things early on in its life, it has faded significantly in recent decades. The clinching argument for me was that:

IBM, by contrast, is now as influential as it has ever been, with a stockmarket value of around $200 billion and nearly 427,000 employees, many of them in the developing world. … Its corporate philanthropy has grown steadily, so that its annual grants now exceed those of the Carnegie Corporation.

Second, I think the article speaks volumes of how far The Economist has come regarding CSR that it was willing to even attempt the exercise. I think The Economist of 10 years ago is not even interested in this question and would consider the answer a foregone conclusion. Instead, it makes a valiant attempt to compare the two organizations; so much so that I felt the Carnegie Corporation remained in the running longer than it should have. Rather understating the case for IBM (after pointing out many of the errors made by the firm over the years, including its brush with Hitler and the Holocaust), The Economist concludes:

Judged on the past 50 years, there is a strong case for saying IBM has had more impact than Carnegie—especially if you count its accidental contribution to philanthropy by incompetently failing to stop Mr Gates from creating Microsoft. In part this is because its business, the management of information, has unusually large social benefits, and causes relatively few social or environmental costs.

Ultimately, the weight of evidence sits strongly in favor of IBM. The advantage of the for-profit firm is its ability to adapt and re-invent itself, while the Carnegie Foundation has found its enthusiasm slowly wane over time:

Another reason for Carnegie’s relative decline may be that 100 years is too old for a philanthropic foundation. The absence of an existential threat may have made it too comfortable. IBM transformed itself under Lou Gerstner when it nearly ran out of cash in the early 1990s, and again more recently under Mr Palmisano when Indian rivals threatened to steal its business. By contrast, it is not clear what, if anything, keeps the people in charge of the Carnegie Corporation awake at night. The passage of time saps a foundation of the unique energy of its founder. Carnegie said of the unknown future leaders of his foundation that “they shall best conform to my wishes by using their own judgment.” That much they have done, but he would probably have fared better.

The article is an interesting thought-experiment, but, ultimately, reaffirms that, regarding CSR, while for-profit firms are a big part of the problem, they are also the main hope for a solution.

Take care

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The Centenarians Square Up: IBM v Carnegie Corporation
June 11, 2011
The Economist
Late Edition - Final