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

To sign-up to receive the CSR Newsletters regularly during the fall and spring academic semesters, e-mail author David Chandler at david.chandler@ucdenver.edu.

Showing posts with label IBM. Show all posts
Showing posts with label IBM. Show all posts

Monday, September 17, 2018

Strategic CSR - WeWork

The article in the url below covers the decision over the summer by WeWork to exclude meat from its offices. Specifically, the company announced it will no longer pay for any meals that include meat – whether that is catered events in their offices or any reimbursed meal by employees anywhere (inside the office or at a restaurant):
 
"The company will no longer serve red meat, pork or poultry at company functions, and it will not reimburse employees who want to order a hamburger during a lunch meeting. In a memo to employees announcing the new policy, Miguel McKelvey, WeWork's co-founder and chief culture officer, said the decision was driven largely by concerns for the environment, and, to a lesser extent, animal welfare."
 
WeWork has grown quickly in recent months and now employs 6,000 employees (aside from the various companies/entrepreneurs that rent its work spaces). As such, as McKelvey noted in the email he sent to employees explaining the decision, the firm can have an impact. What is interesting, however, is that this decision has little to do with animal welfare and everything to do with climate change:
 
"'New research indicates that avoiding meat is one of the biggest things an individual can do to reduce their personal environmental impact — even more than switching to a hybrid car,' he wrote. Additionally, WeWork could save 'over 15 million animals by 2023 by eliminating meat at our events.'"
 
Beyond WeWork, however, the article raises a more fundamental point about values in the workplace. Rather than the company reluctantly reflecting the values of its employees who pressure it to adopt this policy or that practice, it is companies that are shaping the behavior (and values) of their employees:
 
"In ways large and small, companies are imposing corporate values on the personal lives of their employees. Hobby Lobby has refused to pay for birth control for its employees, citing the owner's Christian values. And the chief executives of companies including Koch Industries and Westgate Resorts have sent memos and informational packets to employees suggesting how they vote. Other companies have tried to prevent employees from using everything from Uber to cigarettes. In 2015, IBM banned employees from using ride-sharing apps, citing safety and liability concerns. (Employees rebelled, and the company did a U-turn a day later.) And several big employers, including General Electric, have successfully paid employees to quit smoking. Scotts Miracle-Gro even has a policy of not hiring smokers, a move it says helps keep health care costs down."
 
Among this growing evangelism, however, "WeWork appears to be the first big company to tell its employees what they can and can't eat." The article suggests that removing choice is difficult for a company to do. Far more effective is to maintain at least the illusion of choice through the power of nudges:
 
"… at Google, two of the many cafes at company headquarters tried out 'meatless Mondays,' going vegetarian for just one day a week. Employees rebelled, throwing away silverware and staging a protest barbecue. Meatless Mondays didn't last at Google. But in time, the company made changes to the cafeterias — like offering smaller plates and making salad bars more prominent — that improved employees' eating habits."
 
For McKelvey, however, this is an issue larger than diet and larger than any one person:
 
"At WeWork, a company led by idealistic co-founders who got their start with an eco-friendly co-working space in Brooklyn, the move to vegetarianism is a reflection of their unconventional personalities. 'I don't eat meat, but I don't consider myself a vegetarian,' Mr. McKelvey said. 'I consider myself to be a 'reducetarian.' I try to consume less and be aware of the decisions I'm making. Not just food, but single-use plastics, and fossil fuels and energy.'"

More than an imposition on his employees that he needs to apologize for, therefore, McKelvey sees it as his duty to influence their lives:
 
"As Mr. McKelvey sees it, imposing his values on his employees is a natural part of being a corporate leader today. 'Companies have greater responsibility to their team members and to the world these days,' he said. 'We're the ones with the power. Large employers are the ones that can move the needle on issues.'"
 
As such, it seems that there is more to come:
 
"Uncomfortable as the new dietary policy may be, Mr. McKelvey said WeWork is only just getting started. The company is phasing out leather furniture, single-use plastics and is going carbon neutral. In time, he said, the company will evaluate its consumption of seafood, eggs, dairy and alcohol."
 
Take care
David
 
 
Instructor Teaching and Student Study Site: https://study.sagepub.com/chandler4e
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: https://strategiccsr-sage.blogspot.com/
 
 
Memo from the Boss: Meat is not an Option
By David Gelles
July 22, 2018
The New York Times
Late Edition – Final
BU3
 

Monday, September 22, 2014

Strategic CSR - Conflict minerals (I)

As part of the Dodd-Frank Law that was passed in 2010, firms were required to report on the presence of "conflict minerals" in their supply chain. The first deadline for reports was in early June. In the aftermath of that deadline, a number of issues have become apparent. As a result, all three CSR Newsletters this week will focus on some of these issues. Today, we will start with some of the information that was unearthed by companies as they began to learn more about their supply chains, as reported in the article in the url below:
 
"As companies scrambled to meet a deadline to report whether their suppliers used minerals from mines controlled by armed groups in the Congo region, they stumbled on something even more troubling: Many of their products may contain North Korean gold. Dozens of companies disclosed over the past week that their suppliers used gold refined by North Korea's central bank. These companies include Hewlett-Packard Co., Ralph Lauren Corp., International Business Machines Corp., Rockwell Automation Corp., and Williams-Sonoma Inc."
 
The Dodd-Frank conflict minerals clause was specifically drafted to identify whether any of four materials (gold, tungsten, tantalum, or tin) that appeared in any firm's products or production processes (anywhere in the supply chain) were sourced from mines controlled by armed groups in the Congo or used to fund wars in that region. As part of the process of better understanding their supply chains, however, the companies identified the North Korean connection. The U.S., of course, currently imposes sanctions on North Korea, which prevents any U.S. company from doing business with any North Korean entity:
 
"U.S. sanctions law bars importing materials from North Korea even if they come from deep within a supply chain and are in a completely different form by the time they reach the end user, sanctions experts said. 'It's a problem even if the raw materials are coming very indirectly through suppliers,' said Alexandra Lopez-Casero, an attorney at Nixon Peabody LLP who specializes in sanctions."
 
To the companies' credit, they have declared this potential issue, even though, for many, they cannot be sure whether North Korean gold was used, or not. What this reporting process is revealing, however, is how little many firms know about their own supply chains. They are having difficulty identifying the source of many raw materials primarily because they have never bothered to find out up until now.
 
Chalk one up for regulation that has prompted firms to discover information in an area of operations about which it is in their interest to know as much as possible!
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


Gold From North Korea Stymies U.S. Firms
By Joel Schectman
June 5, 2014
The Wall Street Journal
Late Edition – Final
B1
 

Wednesday, May 7, 2014

Strategic CSR - Taxes

I have long wondered why corporations avoiding state and federal taxes by incorporating overseas is not a bigger problem than it is. The recent decision by Starbucks to re-locate their European HQ to the UK (in order to pay a ‘fairer’ amount of tax) indicates stakeholders elsewhere are bringing pressure to bear on firms that seek to avoid contributing to the economies in which they operate. In the U.S., however, this issue has lagged. In the face of inaction by the federal government, individual states are gradually beginning to recoup their share of the lost revenue, which is significant:
 
“Offshore tax shelters cost the federal government $30 billion to $90 billion annually, according to a 2013 Congressional Research Service report. The U.S. Public Interest Research Group, which tracks corporate taxes, puts the amount that states lose at $20 billion a year.”
 
The states are doing so by passing legislation that counts revenues booked in overseas countries as taxable income that must be declared on the firms’ state income tax returns:
 
“Oregon enacted a bill last June for the 2014 tax year identifying 39 countries and territories—including Barbados, Liberia, and the U.S. Virgin Islands—as corporate shelters. The state counts profits that corporations and their subsidiaries stash in shelter countries as taxable income, and companies that do business in the state must report it on their state tax returns and pay up.”
 
Some firms will face significantly higher tax bills as a result:
 
“Microsoft, Apple, and IBM accounted for $37.5 billion, or 18.2 percent, of the total increase during the past year. Caterpillar avoided $2.4 billion in U.S. taxes over more than a decade by shifting profits from a parts business to a subsidiary in Switzerland, according to a report issued on March 31 by a Senate committee.”
 
There is scope for many other states to follow suit:
 
“Few of the states that have passed or are contemplating tax-haven legislation are home to a large multinational such as Microsoft, which is based in Washington, or Apple in California, IBM in New York, or Caterpillar in Illinois. Those states would stand to collect far more from such measures. California lost the most to offshore havens in 2011, an estimated $3.3 billion, the Public Interest Research Group reports.”
 
The graphic that accompanies the article provides additional detail:
 
 
Take care
David
 
David Chandler & Bill Werther
 
Instructor Teaching and Student Study Site: http://www.sagepub.com/chandler3e/
Strategic CSR Simulation: http://www.strategiccsrsim.com/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


U.S. States Target Corporate Cash Stashed Overseas
By Mark Niquette
April 17, 2014
Bloomberg Businessweek
 

Monday, April 2, 2012

Strategic CSR - IBM

The article in the url below is topical given that the U.S. Masters golf tournament will be taking place in Georgia later this week. It concerns the membership policy of Augusta National (the host golf club) and, in particular, its refusal to admit female members. This issue was a featured issue and case in the first edition of Strategic CSR (Issues: Diversity—Discrimination, U.S. Masters, p165):

In 2003, it was Martha Burk, then the head of the National Organization for Women, who decided to press the issue of Augusta’s all-male membership, but now, it stems from I.B.M.’s decision last year to name Virginia M. Rometty as its chief executive.

In particular, the problem stems from the golf club’s policy of traditionally inviting IBM’s CEO to be a member. So far in IBM’s history, all its CEOs have been men; Rometty is the firm’s first female CEO. The article below notes that Augusta’s policy:

… isn’t a tradition that would get shoved aside lightly because I.B.M. remains one of only three main sponsors of the Masters. But Augusta has not only never had a female member, its former chairman Hootie Johnson famously responded to Burk’s [2003] challenge with his declaration that he wouldn’t be forced “at the point of a bayonet” to admit women.

In the past, this ‘modern, progressive’ organization has proved its ability to be ‘flexible’ when expedient:

It is worth noting that Augusta sidestepped similar questions about racial discrimination by quietly admitting two black members in 1990, shortly after the discriminatory practices of P.G.A. Championship host Shoal Creek in Birmingham, Ala., came to light and ended in the club agreeing to invite black members.

So far, however, Augusta:

… has chosen not to take that route with women.

This may have to change. Spotting an opportunity to revive her 2003 campaign, Martha Burk has jumped back into the fray (http://onpar.blogs.nytimes.com/2012/03/29/burk-augusta-gender-issue-is-now-i-b-m-s/), saying that:

I.B.M. has an obligation not to let Augusta slide on this. ‘They have a moral obligation to their customers; they have a moral obligation to their new C.E.O. … I think the board of directors and [former IBM CEO] Sam Palmisano has to tell Augusta National to extend membership to their new C.E.O. and if it doesn’t, they will pull the sponsorship. … “If they don’t, they are saying that the values of the club are the values of the company.’

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
David


Instructor Teaching Site: http://www.sagepub.com/strategiccsr/
The library of CSR Newsletters are archived at: http://strategiccsr-sage.blogspot.com/


The Centenarians Square Up: IBM v Carnegie Corporation
June 11, 2011
The Economist
Late Edition - Final
64-66

Monday, April 20, 2009

Strategic CSR - PepsiCo

The article in the url below details the results of an attempt by PepsiCo to calculate the carbon footprint of a carton of its Tropicana orange juice:

“PepsiCo finally came up with a number: the equivalent of 3.75 pounds of carbon dioxide are emitted to the atmosphere for each half-gallon carton of orange juice.”

PepsiCo is one of the first U.S. firms to calculate a specific number for the carbon footprint of a specific product (although my recollection is that Timberland has also been doing this with its shoes for a while now):

“The list of companies that have taken steps to reduce carbon emissions includes I.B.M., Nike, Coca-Cola and BP, the oil giant. Google, Yahoo and Dell are among the companies that have vowed to become ''carbon neutral.'' PepsiCo is among the first that will provide consumers with an absolute number for a product's carbon footprint, which many expect to be a trend.”

The article reports, however, that PepsiCo is unsure whether or not to use this information in its marketing or product packaging. There are two concerns: First, whether consumers care about this information or are able to understand what it means: and, second, there is still disagreement about the methods used to calculate a product’s carbon footprint and what the specific number actually represents:

“Nancy Hirshberg, vice president for natural resources at the yogurt maker Stonyfield Farm, said measuring a carbon footprint is a ''fabulous tool'' for pinpointing areas to reduce emissions. … But she said there were so many variables in determining a carbon footprint that an absolute number was meaningless as a marketing tool.”

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006

How Green Is My Orange?
By ANDREW MARTIN
1074 words
22 January 2009
The New York Times
Late Edition - Final
http://www.nytimes.com/2009/01/22/business/22pepsi.html

Wednesday, March 26, 2008

Strategic CSR - Microsoft

The article in the url link below reports on a recently announced offer from Microsoft to donate parts of its MSN software code to high schools around the world:

“The bid to attract future developers is the latest extension of Microsoft's long-running battle to keep open-source software at bay, while also fending off advances by companies like IBM and Adobe.”

Microsoft is clear that its goal is competitive—to encourage software students to learn about its technology and integrate it into their work, but there is also an implicit message of social responsibility (i.e., the firm is donating this code for the good of society). Is this social responsibility, however, or is it just common sense competitive business strategy? Is it philanthropy or is it shrewd marketing? Is Gates adding social value by helping educate the software developers of the future, or is he detracting value by squeezing open source software and limiting competition (or both)?

“As many as 40m students around the world who study maths or science-related subjects will eventually have access to the software, Microsoft executives estimated.”

And, is this story so different from the recent story in which McDonald’s (Issues: Wages, p204; Special Cases of CSR: Fast-Food Industry, p283; McDonald’s, p295 and p305) was forced to withdraw its sponsorship of school report cards due to consumer concerns over advertising to children? Maybe I am becoming too skeptical, but my sense is that Microsoft is wrapping an effective business strategy in clever CSR marketing.

Take care
Dave

Bill Werther & David Chandler
Strategic Corporate Social Responsibility
© Sage Publications, 2006
http://www.sagepub.com/Werther

Gates woos schools with free software.
By RICHARD WATERS
430 words
19 February 2008
Financial Times
London Ed2
Page 25
http://www.ft.com/cms/s/0/6202f720-de7b-11dc-9de3-0000779fd2ac.html