BA History 476 Corp Image Gov Econ (1).pdf
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BA / HISTORY 476 Plan for the Day The Image of Corporate Responsibility ● ● ● Healthy social conditions meant greater opportunity for financial success ○ Humanitarian motives, a s well a s profits made sense in the long run. Railroad business established their own YMCA because workers were aw...
BA / HISTORY 476 Plan for the Day The Image of Corporate Responsibility ● ● ● Healthy social conditions meant greater opportunity for financial success ○ Humanitarian motives, a s well a s profits made sense in the long run. Railroad business established their own YMCA because workers were away from home with a lack of food and other accommodations. ○ Bedrooms and dining facilities, reading rooms/swimming pools, death and disability insurance programs Healthy happy workers were good business and good public relations Timeline of Corporate Responsibility Progression ● ● ● ● In the 1920’s major companies tried to instill a sense of corporate service in the minds of the public ○ Executives took the lead in charitable and fundraising drives ○ Business leaders formed memberships and trusteeships on college and university boards, and a s public officials in school districts and in local government. In the 1940’s, there was greater involvement in higher education After 1954 companies tried to reduce racial tensions in their plants and offices ○ These new interests were efforts to reduce growing criticism of corporate economic behavior Corporate giving increased from 30 million in 1936 to 482 million by 1960 Contestants: Contestant #1: IBM ● Founded by Charles Flint in 1911 a s “Computing-Tabulating-Recording Company” (CTR) ○ ○ ○ ● 70% of computers had IBM trademark Dominated industry from talent retainment Focus on tech consulting and manufacturing technology hardware Thomas J . Watson was the CEO and President in its initial years ○ Established company rules - perception of Man in Gray Flannel Suit Contestant #1: IBM (past perception) ● Company rules (Thomas J. Watson) ○ ○ ○ Expected to give allegiance Belief that profits were a measurement of performance Ranged from cosmetic to significant ■ ● white shirts, plain ties with suits of neutral color Critics of IBM company culture ○ ○ ○ Traded individuality for job security Internal criticisms of management did not occur “IBM” = I’ve Been Moved, criticizing number of transfers Contestant #1: IBM (current perception) ● 1950s: Public Image Changed ○ ○ ○ ● ● Decentralized organization Ended hourly wages Reduced number of transfers annually In 2012: ○ ○ ○ ○ Highly regarded Barron’s #2 Most Respected Company Fortune #5 Most Admired Company Innovative, successful in its field, great for leaders, sustainable ○ Corporate Social Responsibility In 2020 Forbes Top 100 List #11 Contestant #2: Mary Kay ● ● ● Mary Kay Ash founded the company in 1963 after being passed up for a promotion Originally set out to write a book about helping business women ○ Example of how many of the business elite weren’t a “rags to riches” story - but rather a “upper middle-class to wealthy” story ○ However, Mary Kay Ash was unique in that she was an entrepreneur Beauty consultants model supported Mary Kay Ash’s vision of female empowerment Reverse Gray Flannel Suit ● ● ● ● Highly Individualistic Flexible ○ Could work from anywhere; not dependent on husband’s job or location ■ Could set own hours Hard work Upward mobility of women ○ Women could work even if their husbands’ jobs were the priority Corporate Image ● Corporate Responsibility and Image ○ Mary Kay Ash’s image = Mary Kay Cosmetics’ Image ■ Mary Kay Foundation ■ Mary Kay Ash normally presented a favorable image for the company ○ Upward mobility and female empowerment ■ Business model led to a favorable brand image Criticism of 19th and 20th Century Businesses ● ● In the last two decades of the 19 th century and the first two decades of the 20 th the image of the businessman and his corporation suffered from attacks by: ○ Farm organizations ○ Journalists ○ Politicians Businesses were accused of abusing the powers of corporate wealth by: ○ Populists ○ Muckrakers ○ Progressives Social Media a s the new muckraking? (no politics) Contestant #3: Nike ● ● Nike has been heavily criticized for their use of sweatshops to make their clothing: ○ 1992: an expose of Nike is published, highlighting their disastrous working conditions in Indonesia ○ 1996: workers conditions come to the spotlight a s a national issue ■ Nike established a department tasked with working to improve the lives of factory laborers ○ New CEO: Phil Knight gives a speech fully acknowledging the problem and puts forth a series of steps to improve ○ 1999: Nike creates the Fair Labor Association Nike continues to post its commitments, standards, and audit data a s part of its corporate social responsibility reports ○ Nike was the first in its industry to publish a complete list of factories it contracts with CSR: Environmentally conscious clothing line LuluLemon vs. Nike LuluLemon: takes ‘full’ corporate responsibility for their working conditions ● But… does not have their own factories: Contestant #4: JPMorgan...A Self-Made Man? ● ● ● JPMorgan: From the self-made man into the Industrial Bureaucrat JPMorgan, successfully, falsely embodied the identity of a “man who achieved massive wealth despite humble origins.” ○ Reality: he followed his wealthy father into the banking business in the late 1850s Departure from uneducated success leaders and their children began going to university Robber Baron or Captain of Industry? ● ● ● ● Poor conditions for their workers Drained country of natural resources Destroyed competitors Lobbied the law in their favor ● ● ● ● Built factories and boosted supply of goods Developed arts through philanthropic efforts Created jobs Expanded markets History Repeating Itself ● ● ● ● In 2000, The Chase Manhattan Corp. merged with J.P.Morgan & Co. Incorporated In 2008, JPMorgan Chase & Co. acquired The Bear Stearns Companies Inc. Strengthened: prime brokerage, cash, clearing and energy trading globally. CSR- JPMorgan’s Detroit Initiative, given $150M to the city’s rejuvenation Global Top Brands Contestant #5: PepsiCo ● PepsiCo was established through the merger of Pepsi-Cola and Frito-Lay in 1898 ○ Major products of Pepsi-Cola include Pepsi-Cola (1898), Diet Pepsi (1964) and Mountain Dew (1948) ○ Major products of Frito-Lay included Fritos (1932), Lay's brand potato chips (1938), Cheetos (1948), Ruffles (1958) and Rold Gold pretzels (acquired 1961) ● Over the years, Pepsi h a s faced many challenges with their corporate image ○ ○ Obesity epidemic Infamous Kendall Jenner advertisement “Good For You” Brands Pepsi and Obesity Epidemic ● ● ● ● From 2011 to 2015, PepsiCo gave millions to various health organizations but spent the same amount on lobbying against reducing soda consumption. PepsiCo only generates 37% of its total revenue from sodas. Other 63% comes from juices, waters, and snacks. By 2025 PepsiCo hopes to reduce saturated fat and sodium in their products. Stated that obesity is mainly due to a lack of exercise, yet hopes to expand its “Good For You” brands. PepsiCo ‘Progress?’ in Response to Changing Perceptions and Trends ● ● Health Goals: ○ Reduced added sugars ○ Reduced saturated fats ○ Increase positive nutrition Environment ○ Climate-friendly vending machines ○ Frito-Lay unveils its first compressed natural g a s (CNG) fueling station ○ Since 2015, removed 100 million pounds of packaging from the market ○ Striving for 100% recyclable packaging Pepsi & The American Business Creed (1945) ● ● ● ● The belief that the American economic system was “coherent, unique and consciously designed” Business enterprise gave the nation vast material goods Success = the acquisition of a greater number of possessions by more people PepsiCo was founded on these ideals; it has acquired numerous businesses from the get-go Contestant #6: National Football League ● ● ● ● NFL founded in 1920 Employee benefits include: ○ Dental & Vision Health care ○ Short-term (STD) & Long-term disability (LTD) insurance ○ Basic life insurance Similar to 1920’s when companies volunteered their employees to charitable and social organizations, the NFL does a s well Initiatives: ○ NFL ‘play 60’ ○ American Cancer Society ○ Breast cancer awareness g a m e s Domestic Violence and Concussions ● ● The league’s new domestic violence policy calls for a six-game suspension without pay for a first-time offender ○ Lost some of female fan base NFL tried to cover up Chronic Traumatic Encephalopathy discovered in 2005 by Dr. Omalu ○ Ordered research to be taken down ○ Study came about that NFL players are 19 times more likely to get dementia than general population ○ New concussion protocol introduced in 2009 ○ Before 2009 players had to be unconscious to come out of g a m e s Oversaturation and Changing Consumer Viewing Habits ● ● ● ● TV schedule first began with Sunday, now you can watch the NFL Mondays, Thursdays, and Sundays (combined with more college football days) Fewer U.S. homes are getting TV service Many more channels for people with TV service (Netflix, Amazon Prime, Hulu) NFL does not incorporate data from most other streaming options Public Relations ● ● ● ● Protests have separated the NFL fanbase into supporters and opposers. “Healthy happy workers were good business and good public relations” Although protests have had some impact on ratings, the NFL’s ratings decline is not a s sharp a s the ratings decline for general programming (ABC,NBC, CBS), oversaturation, and cord-cutting 2020 first time owners support players and public does as well NFL’s Impact on Sponsors 2018 “We respect individuals’ rights to express their views, even if they are not ones we share. That’s part of what makes America great.” CEO- “NFL leadership has hurt P ap a John's shareholders. Leadership starts at the top and this is an example of poor leadership” Who do you want to be America’s next top company? Decide as a Team Standard Oil and Busting Trusts ● Rockefeller formed the Standard Oil Trust Agreement in 1882 ● Sherman Anti-Trust Act forbade monopolistic practices in industries engaged in interstate commerce in 1890. ● Clayton Anti-Trust Act forbid price discrimination, the granting of exclusive contracts to one firm without competing bids, and combinations of competing companies against one another. National Industry Recovery Act (1933) What is it?: Liaison between government and business developed during New Deal Robert Moley presented the plan: ● ● ● ● ● ● ● Codes of fair competition Hour and wage laws Fair prices for consumers Industry, government, and labor developed standards Right to collective bargaining by labor Stifled small business growth Shot down by government by 1935 Fair Labor Standards Act (1938) ● ● ● Severe labor unrest at the end of World War II due to shortage of materials and great imbalance between classes After war, most workers lost much, if not all, of the overtime pay which they had received during the conflict ○ But prices remained firm, resulting in workers’ standard of living reduced Act created a s part of the New Deal ○ Established a minimum wage and maximum work week (eight hour days for five days). ○ ○ ○ Created restrictions on child labor. Children under eighteen could not do certain jobs that were considered unsafe Children under the age of sixteen could not work during school hours Agricultural Adjustment Act (AAA) Agricultural Depression Begins: Surplus → Low Prices President Roosevelt Steps in with the AAA Agricultural depression worsens with Great Depression AAA’s constitutional reemergence AAA ruled unconstitutional Takeaway: Federal Government highly involved in the private sector 35 Agricultural Adjustment Act (AAA) ● ● The government virtually controlled the supply and demand There was backlash due to the government's involvement ○ ○ Some in the agricultural industry were harmed (processors & sharecroppers) However, in total the AAA was successful in alleviating some of the agricultural depression ■ ● Crop prices rose a s planned Crop subsidies continue into the present day ○ Controversy surrounding subsidies is still prevalent ■ Aiding the wealthy, not the rural poor ■ Monsanto debate Securities Act of 1933 ● ● ● ● ● Part of Roosevelt’s New Deal First major federal legislation to regulate offer and sale of securities (regulate National Stock Exchange) Uniform set of rules to protect investors against fraud Publicly traded corporations need to register with FTC Before going public, companies had to submit information made readily available to investors to the commission Securities Exchange Act of 1934 ● ● ● ● ● Congress created SEC (Securities and Exchange Commission) assumed security registration of the FTC Could not sell securities in interstate commerce/use mail service unless registered with SEC Officers/directors now required to disclose personal holdings Securities brokers/dealers also had to register and provide individual financial information Authorized commission to regulate sales and exchanges of securities Questions? https://www.forbes.com/sites/forbess taff/2023/03/22/americas-best-largeemployers-2023-the-top100/?sh=427af8551d81
