Balancing Profit and People: Corporate Social Responsibility in Business Education

[We’re pleased to welcome authors Shannon Deer of Mays Business School, and Jill Zarestky of Colorado State University. They recently published an article in the Journal of Management Education entitled “Balancing Profit and People: Corporate Social Responsibility in Business Education,” which is currently free to read for a limited time. Below, Deer discusses the research:]

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Together several events and circumstances motivated us to research sustainability education in business schools.

  1. My co-author, Jill, and I have PhDs in Education and Human Resource Development, with an emphasis in adult education. Jill has a background in mathematics and mine is accounting and finance.  Our experience in the PhD program really highlighted for us the lack of attention to issues of social justice in business and STEM disciplines. I could see a strong desire in my business students to make a difference in the world by addressing significant problems. This study, and the associated business solutions to social problems class, were one way for us to give them an outlet for exploring such issues.
  2. Mays Business School just developed a new strategic vision. Our vision statement is advancing the world’s prosperity.  To achieve this vision, we are challenging our students to broaden their focus from primarily profit driven to all three Ps – people, planet, and profit.  In the class studied in this article, students explored profitable ways to address problems we don’t always talk about in business schools – hunger, literacy, and human trafficking.  At Mays, we believe businesses can help fill the gap left by government and nonprofit organizations in solving the big economic, environmental, and social problems facing the world.  We are excited to see our students make an impact in this area in the future.
  3. At the same time, the Association to Advance Collegiate Schools of Business (AACSB) updated their requirements to require sustainability education in business curriculum. As instructors and researchers, we wanted to make an impact, but we were developing a new course with a paucity of research related to incorporating sustainability into business curriculum.  There are some programs that have done it well for a while, but limited information on how they did it and to what effect.  We wanted to research our process in implementing this curriculum to help others starting this journey.

A happy accident in the research was finding sustainability curriculum is also a great vehicle for teaching critical thinking.  The students chose problems they were motivated to solve – big problems without simple solutions.  The students gained confidence in their ability to solve big problem through exposure to the curriculum.  The course culminated in a case competition. The winning team developed a prototype for a backyard cricket farm using repurposed food barrels.  Families, especially in developing countries, can use the system to produce a quality protein source.  Though unconventional, cricket flour is becoming a popular, healthy alternative to wheat, even the US.  This was an innovative use of existing materials and technology to solve an emerging problem, which demonstrated the critical thinking skills we hoped students would develop.

As scholars, we took away a renewed hope in our students. Despite some faculty who grumble about Millennials, we saw a students who are truly committed to doing the work to help improves the lives of others was really heartening. These rewards are what make teaching worthwhile.

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Interactions Between Justice Levels and Trajectories Predicting Behavioral Reciprocity

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[We’re pleased to welcome authors Alex Rubenstein of the University of Memphis, David G. Allen of Texas Christian University, and Frank A. Bosco of the Virginia Commonwealth University. They recently published an article in the Journal of Management entitled “What’s Past (and Present) Is Prologue: Interactions Between Justice Levels and Trajectories Predicting Behavioral Reciprocity,” which is currently free to read for a limited time. Below, Rubenstein discusses the events and circumstance that inspired his research:]

JOM_42_5_Covers.inddWe began this paper by considering the nature of how people experience fairness in the workplace. Certainly any instance of fair or unfair treatment can have an effect on employee’s attitudes and behavior in the future, but we were also interested in how the past can differently shape employee’s interpretation of the present. For instance, imagine two employees who think their organization is moderately fair. Previous studies would expect them to have similar attitudes and be equal organizational citizens in the future. However, we wondered whether past fairness experiences—specifically, the trajectory of experienced justice in the past, if has been getting better, worse, or staying the same—could color the interpretation of the present differently for these employees.

Our results, which are arguably the first that specifically examine how employees behaviorally reciprocate to this interactive pattern of past and present treatment, show that indeed the past is prologue when it comes to justice. We examined how present justice levels and trajectories over time interacted to predict helping behavior as well as future employee turnover behavior. That is, two employees who rate the exact same levels of current fairness at work may reciprocate differently (in terms of helping other employees and even their decision to remain a member of the organization) because of potentially different past trends of experienced justice. We found that the highest levels of helping, and the lowest levels of turnover were for those employees with high current levels of perceived fairness, along with a positive past trajectory. It seems that employees are most willing to reciprocate to their organizations when things are currently quite fair AND if things have been getting progressively better over time.

I think this research will spur new studies that consider the dynamic nature of organizational phenomena, and the value in looking at variables’ change over time. I feel the methodology of change modeling has only recently caught up to the theory, and a lot of fascinating contributions can be made regarding how growth and decline in phenomena (thoughts, feelings, behaviors) affect individuals, teams, and organizations as a whole.

I think new scholars looking at organizational justice can continue to take a dynamic look at its change over time, both in the short and long term. My main advice would be to brush up on research methods, such as latent growth modeling and structural equation modeling. We all have lots of questions, and its is important that researchers be equipped with the methodological tools to test those questions.

I think the most influential piece of scholarship I have read recently was Alvesson, M., & Sandberg, J. 2011. Generating research questions through problematization. Academy of Management Review, 36: 247–271. An important part of framing your study is not just “gap-filling”, but demonstrating how your study solves a problem, and this paper does a good job of explaining how to do this.

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Scales photo attributed to Artsybee. (CC)

 

Refugee Resettlement Volunteers: Committed or Compelled?

map-of-the-world-1005413_1920[We’re pleased to welcome author Kirstie McAllum of the Université de Montréal, Canada (Ph.D, University of Waikato, New Zealand). McAllum recently published an article in Human Relations entitled “Committing to refugee resettlement volunteering: Attaching, detaching, and displacing organizational ties,” which is currently free to read for a limited time. Below McAllum summarizes her research and findings:]

HUm coverBy summer 2015, one in every 122 human beings was a refugee, internally displaced person or asylum seeker. Volunteers play an essential role in helping newly arrived refugees adapt to their new country and local community, but sometimes volunteering can be difficult or disappointing when refugees do not want to be helped or expect volunteers to deliver the help differently. When this happens, volunteers can find staying committed difficult, and they often drop out.

This study focused on how the network of people around refugee resettlement volunteers influenced their involvement: the non-profit organization that recruited and supported them; the refugees they worked with; and their own families, friends, and work colleagues. These ‘others’ made a difference in decisions about committing depending on their presence (they were there for volunteers or they expected volunteers to ‘be there’ for them) or absence (they were not there when volunteers needed them).

Volunteers felt forced to be present at the beginning of their six month placement because of the small number of volunteers and the needs of highly vulnerable families. The organization focused on how volunteers could manage this pressure by creating ‘boundaries’ that would protect them from getting over-involved. Over the course of the placement, volunteers found these boundaries hard to manage. Over-worked and under-funded staff at the non-profit organization were frequently ‘absent’ or unavailable to help volunteers to furnish refugees’ new homes or deal with crises like the arrest of a family member. Their absence pushed volunteers to step in to make sure that refugees received support. Refugees, on the other hand, encouraged volunteers to be continually present. Volunteers were pulled toward the relationship for several reasons: the learning and pleasure involved in the placement; awareness of refugees’ needs; and at times, refugees’ demands that they visit more often, stay longer, or support them in a range of activities, even including driving lessons. Volunteers were only able to maintain their presence when their own family and friends supported them.

After six months, only a few volunteers kept up their relationships with families and the organization, because the organization had been there in difficult moments. Most volunteers stopped volunteering for the organization, but kept in touch with the family. They did not think they needed the organization’s help, since they had managed so far without it, but they felt guilty about stepping back from a rich, rewarding relationship with a family who needed ongoing emotional support or had major problems. A third group of volunteers abandoned the role completely. Guilt didn’t ‘work’ for the last group of volunteers, for whom volunteering had been a highly negative experience: the organization had been absent, their own social networks pressured them to be present elsewhere, and refugees had made too many unreasonable demands on them to be present.

Although the non-profit organization cannot influence the quality of the relationships that volunteers develop with refugees, the findings suggest that having professional staff to help volunteers deal with crises and manage day-to-day boundaries might stop experienced volunteers from dropping out. To do this, this non-profit organization needs to lobby decision-makers for more resources for volunteer support.

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Migration photo attributed to kalhh. (CC)

 

Big-Science Organizations as Lead Users: A Case Study of CERN

switzerland-93275_1920[We’re pleased to welcome authors Poul Andersen of Aalborg University, Denmark and Susanne Åberg of Uppsala University, Sweden. Andersen and Åberg recently published an article in the Competition and Change entitled “Big-science organizations as lead users: A case study of CERN,” which is currently free to read for a limited time. Below, Andersen reflects on the inspiration for conducting this research:]

ccha_21_3.coverWhat kind of customer is CERN – the leading research organization for nuclear research in Europe – and what can a supplier learn from collaborating with them? In this paper we pursue questions that was originally raised by Susanne Åberg – one of the authors – during her study of collaboration between CERN and Swedish suppliers (see Åberg, S. (2013). Science in business interaction: A study of the collaboration between CERN and Swedish companies (Doctoral dissertation, Företagsekonomiska institutionen, Uppsala Universitet. The dissertation can be downloaded, using this link:  http://www.diva-portal.org/smash/get/diva2:575589/FULLTEXT01.pdf).

In the paper, forthcoming in Competition and Change, we pose the question: What characterizes interacting with big-science organizations as lead users and how does it impact on suppliers’ potential innovation benefits?

We depart from Von Hippel’s Lead user concept to scrutinize user-supplier interaction and learning. We find that the lead-userness of CERN differs from other lead users on a number of vital points. Big-science organizations (BSOs), such as CERN represent a special breed of lead users as their demands are not necessarily the avant-garde of a coming market. Yet, they may be leading in other ways: they provide a valuable test bed for suppliers, because they are pushing the boundaries of technological capacities and thus challenging suppliers’ talents. Also, they are prestigious collaboration partners that help producers to be acknowledged as being at the technology forefront. Moreover, they are often deeply engaged in their suppliers’ manufacturing and development activities, which is seen as a characteristic of the customer-active paradigm, upon which the lead user notion builds. This paper investigates whether and how interacting with CERN concerning their development needs may contribute to suppliers’ innovation.

We believe that both managers and designers of innovation policy may learn from our study. Viewing CERN and other BSOs as lead users change the traditional science-push perspective on knowledge dissemination from leading science. Managers considering engaging with CERN and other BSOs can also learn more about potential benefits and challenges from engaging with customers such as CERN.

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Can Unions, by Themselves, Help Curb CEO Pay?

[We’re pleased to welcome author Muhammad Umar Boodoo of the London School of Economics and Political Science. Boodoo recently published an article in the ILR Review entitled “Do heavily-unionized companies compensate their CEOs less in periods of financial distress?,” which is currently free to read for a limited time. Below, Boodoo reflects on the inspiration for conducting this research:]

ILR_72ppiRGB_powerpointWord on the street is that CEO pay is too high, and more must be done to curb it and reduce inequalities in society.  This topic is quite timely given that the World is still recovering from the effects of the financial meltdown.  The topic of CEO pay is fascinating in and of itself: why is it that some research find that CEO pay is not actually linked to corporate performance?  Why do CEOs still (seem to) earn sizeable bonuses and options when their companies are performing poorly?  These questions remain intriguing, and still attract the interest of various groups in society.  The primary question I ask in my paper is whether labor unions have any influence on CEO pay.  Unions are known to compress pay; they stand for fairness and strive to mitigate the inequalities in their workplaces and in society in general.  Some research also suggest that unions are bad for company profitability.  Is it possible, therefore, that unions reduce profits of companies and/or put pressure on compensation committees to reduce the pay of CEOs in companies where they are organised?

My paper finds that companies which are more heavily unionized tend to pay their CEOs higher salaries and pension benefits.  The same CEOs do not receive lower bonuses or lower options.  In other words, CEOs of densely-unionized companies get paid higher than their counterparts who manage low-unionized companies.  The first result about salaries and pension benefits is not such a surprise, considering that unions do tend to prefer fixed incomes over variable incomes for their own members, which may then also be the case for their management and CEO.  What may be a surprise is that unions do not reduce the profitability of companies, and do not reduce the sensitivity of CEO bonuses and options to corporate performance and market valuation of firms.  In other words, unions do not affect bonuses, options and restricted units of CEO pay.

While the results of this paper are based during the financial crisis, there are a few questions that need to be answered, perhaps in a more “normal” period.  If unions are not the answer to curbing CEO pay, then what can help?  Do we need employee representation on Boards of Directors so that there are more checks and balances?  Should we even be interested in curbing CEO pay, or should we rather focus on closing tax loopholes that allow CEOs (and others) to port money overseas to tax havens?  More research is also warranted on voluntary sorting of CEOs into companies.  It is plausible that older, more mature, experienced CEOs sort themselves into companies that are heavily unionized, while younger CEOs flock more towards lower-unionized firms.  Older CEOs may also be more risk-averse and may prefer higher fixed incomes and security.  They may not care too much about performance-related pay such as bonuses and equity compensation, and may in fact support rather than thwart unions.  These are plausible research questions that need further investigation.

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Stages of Corporate Sustainability: Integrating the Strong Sustainability Worldview

[We’re pleased to welcome author Nancy E. Landrum of Loyola University Chicago. Landrum recently published an article in Stages of Corporate Sustainability: Integrating the Strong Sustainability Worldview,” which is currently free to read for a limited time. Below, Landrum reflects on the inspiration for conducting her research and her contribution to the field:]

O&E_72ppiRGB_powerpointI recently read sustainability reports produced by mining companies.  The reports stated the companies were balancing economic, social, and environmental responsibilities, their environmental impact was minimized while their social benefits were maximized, and they were striving to be environmental leaders.  Yet the dictionary describes sustainability as using a resource in a way that it is not depleted or permanently damaged.  I thought it was ironic that mining companies could claim they were operating sustainably since resource depletion is the purpose of mining.

I went back to the literature on the sustainability spectrum which suggests that sustainability is a continuum that ranges from weak to strong sustainability.  It occurred to me that while the mining companies’ activities did not match my understanding of sustainability, there could, in fact, be multiple interpretations of sustainability.  Companies’ activities could be placed along the sustainability spectrum to define whether they were following the principles of weak sustainability, strong sustainability, or somewhere in between.

This lead to the integration of 22 micro- and macro-level models of stages of development in corporate sustainability which were then aligned with the sustainability spectrum.  I found that existing models had numerous stages that aligned with weak sustainability but did not include stages that aligned with strong sustainability.  The integration of existing models and subsequent alignment with the sustainability spectrum resulted in the creation of a new unified model for stages of corporate sustainability that now included strong sustainability.

This new model allows us to see that companies can be at varying points along the sustainability spectrum and reveals multiple interpretations of sustainability.  While mining companies might be at one end of the spectrum, more progressive companies might be further along the spectrum; they are at different stages based upon their differing interpretations of corporate sustainability.  Most importantly, with the inclusion of strong sustainability, this new model expands our view beyond what currently defines corporate sustainability and opens new territory for the pursuit of a more sustainable future.

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The Warm Glow of Restaurant Checkout Charity: Do You Participate?

5390059375_4cb242cbbc_z.jpgIt’s often seen and experienced that retail stores, restaurants, and supermarkets ask for a donation to the cause of the season when you checkout. How often do you donate and agree to that $1-$5 on the pin pad? If you do donate, do you feel like an avid supporter of both the store you’re shopping at and the featured charity? Researchers and authors Michael Giebelhausen, Benjamin Lawrence, HaeEun Helen Chun, and Liwu Hsu go so far as to say people feel a “warm glow” when agreeing to donate on a whim.

They recently published an article in Cornell Hospitality Quarterly entitled, “The Warm Glow of Restaurant Checkout Charity,” which is currently free to read for a limited time. The abstract for this article is below:

Checkout charity is a phenomenon whereby frontline employees (or self-service technologies) solicit charitable donations from customers during the payment process. Despite its growing ubiquity, little is known about this salient aspect of the service experience. The present research examines checkout charity in the context of fast-food restaurants and finds that, when customers donate, they experience a “warm glow” that mediates a relationship between donating and store repatronage. Study 1 utilizes three scenario-based experiments to explore the phenomenon across different charities and different participant populations using both self-selection and random assignment designs. Study 2 replicates with a field study. Study 3 examines national store–level sales data from a fast-food chain and finds that checkout fund-raising, as a percentage of sales, predicts store revenue—a finding consistent with results of Studies 1 and 2. Managers often infer, quite correctly, that many consumers do not like being asked to donate. Paradoxically, our results suggest this ostensibly negative experience can increase service repatronage. For academics, these results add to a growing body of literature refuting the notion that small prosocial acts affect behavior by altering an individual’s self-concept.

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Donation box photo attributed to Zhu (CC).