BUS 250 wk 2 Disc. 1 replies (100 words each)(DO NOT CHANGE THE PRICE) IF YOU DO I WILL NOT SEND A HANDSHAKE.

7 Equity, Ethics, and the Role of Government in CSR Bet_Noire/iStock/Thinkstock Learning Objectives After reading this chapter, you should be able to:1. Explain the debate betw een competition and collaboration, including its impact on sustainability issues.

2. Summarize the political, philosophical, economic, and psy chological roots of equity.

3. Summarize the rights of corporations.

Identify how discrimination based on r ace, gender, age, sexual orientation, and disabilities persists and discuss ways to address these biases.

2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.1 Competition or Collaboration: Framing the Debate Pretest Questions 1. Collabor ation is more likely than competition to result in more ethical and sustainable corporate behaviors. T/F 2.

E conomic equity is the ability to have equal access to all the factors of production. T/F 3.

Thr oughout U.S. history, corporations have enjoyed the same rights as individuals. T/F 4.

Discrimination in hiring is a f orm of waste. T/F Answers can be found at the end of the chapter. Introduction This chapter discusses the concept of equity and addresses how equity drives and results from CSR and sustainability efforts. We describe two different worldviews on the topic, both of which are frequently used to frame the issue of equity in most political, social, and eco - nomic discussions. Specifically, the topics of competition and collaboration describe the rift between those who favor gaining advantage and those who favor gaining equity. 7.1 Competition or Collaboration: Framing the Debate We live in a world where both competition and collaboration drive behavior. Most of us are sympathetic to ideas from both sides of the seemingly endless debate about which approach should dominate. The first view sees humans as inherently competitive. According to this view, humans have always had to compete with other people—and the environment—for sustenance. By extension, organizations compete with each other for market dominance. In the modern world, competition motivates us to excel by pitting ourselves and our organiza- tions against each other. We win the competition by doing and amassing more than others.

Firms win when they amass more customers or market share than their competition.

An alternate view of human motivation sees humans as collaborative. Basic human behavior teaches us that we can do more by leveraging group members’ various talents and abilities. While people must redirect some energy toward sustaining the group and managing relationships, ultimately it is collaboration that helps them reach the utilitarian ethical goal of doing the great- est good for the greatest number of people (Kant, 1781/1998). This view suggests that long-lasting survival results from collabo- ration , which motivates individuals and corporations to help each other serve com- mon causes. By extension, organizations Kathy Willens/AP Images As evidenced by the pervasiveness of adver- tisements, there is stiff competition among organizations to capture a market.

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.1 Competition or Collaboration: Framing the Debate that collaborate may expand industries, accelerate innovation, and create networks that sus- tain the people and businesses within them.

When taken to their extreme, these approaches describe polar opposites: One view focuses on winning as evidenced by gaining something before someone else; the other focuses on winning by achieving a state of fairness and equity, where no entity stands out considerably more than another. The debate between these worldviews manifests itself in political, social, and economic discussions in almost all cultures. Most political systems embody some form of this debate. Gaining even a simplified understanding of how these worldviews collide and inform government allows us to see how different groups conceptualize CSR, sustainability, environmental responsibility, and other key ideas discussed in this book.

In the United Kingdom the differences between the Labour Party and the Conservative Party could be distinguished by their emphasis on competition or on collaboration. In the United States the differences between conservative and liberal viewpoints, or Republicans and Dem - ocrats, similarly revolve around their stance on these issues. Socially, individualism and col- lectivism offer another manifestation of the competitive or collaborative worldview. Individu- alists want efforts to be fully rewarded, while collectivists want rewards to be distributed so they sustain the community.

This chapter is about managing the space between these polar opposites. It considers the fol- lowing questions:

• When is it best to collaborate, and when is it best to compete?

• Which paradigm, in what situations, is more likely to lead to more CSR and sustainability?

• Which paradigm is more ethical?

Collaboration and Competition Adam Smith is often regarded as the original economist (Smith, 1976). Throughout his writ- ings, which were published in the 1700s, Smith argues that there is an “invisible hand” or competitive self-interest that guides economic behavior. Each of us acts in our own self- int erest, directly competing with others to survive. For Smith, competition is a positive force that drives humanity to higher levels of productivity, despite the price that some pay when they lose in any given competition (Smith, 1976).

According to Smith, anything that might interfere with competition in the marketplace—such as regulation or monopolization—reduces competition and ultimately production (Kennedy, 2009). But unrestricted competition in practice has a high casualty rate and may also not be as productive as tempered competition that spreads risk through collaboration.

Rosen (2009) notes that collaboration improves when highly competitive environments eschew a command-and-control organizational structure. In other words, competition is not necessarily bad when it forces us to look for opportunities to connect with others and be more creative and productive. Research shows that collaboration leads to higher achievement and increased productivity. Research in multiple contexts supports the idea that collective \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.1 Competition or Collaboration: Framing the Debate actions significantly boost corporate aspirations, motivational investment, morale, and resil- ience (Poquérusse, n.d.).

Corporate social responsibility implies that corporate actors have not only an ethical obliga- tion to advocate for the corporation’s self-interest, as Smith would suggest, but that they also have a responsibility to those outside the corporation. Research on collaboration suggests that people and corporations can further their self-interest by strategically collaborating, while at the same time fulfilling a responsibility to the community and the greater good.

Collaboration Typically Promotes CSR and Sustainability In a highly active marketplace with frequent social and business transactions, an individual will at some point be disadvantaged. Eventually, all people will face a problem they cannot solve or miss an opportunity, thus causing them to lose a competition of some kind. For some, this failure will exclude them from participating in the marketplace. For others, the inability to compete in a particular market competition will be economically fatal.

Collaboration allows individuals and organizations to hedge risk; particularly the risk of hav - ing a fatal market experience. The basic idea of reciprocity, or “I’ll watch your back if you watch mine,” helps humans learn to moderate competition in order to share risk and success with others. In 1944 Oskar Morgenstern began to mathematically measure the power gained through collaboration using a process known as game theory. According to Myerson (1991), game theory is “the study of mathematical models of conflict and cooperation between intel- ligent rational decision-makers” (p. 1). Game theory research shows that while individuals might win in competition in the short term, in the long term collaboration creates more elo- quent and sustainable solutions in complex systems.

Collaboration bonds humanity and creates advantage by creating a safety net for the tempo- rarily unlucky or permanently vulnerable. This net reduces waste and increases risk toler- ance. Collaboration may also allow society to integrate talent and resources, which, when people and firms pool resources toward common goals, drives innovation, creativity, and indi - vidual and collective success. Advocates of a collaborative approach to society might argue that CSR and sustainability result from combined efforts to help and assist, to coexist; the search for more equity (rather than to win at someone’s expense) drives CSR efforts and endeavors (Rosen, 2009).

Collaboration Promotes Ethical Outcomes One question in this debate asks: Is a less competitive and more collaborative environment more ethical? We answer that it certainly meets the utilitarian standard of the “greatest good for the greatest number of people.” Research and experience show that excessively competi- tive environments have excessive casualties that are avoidable (Garfield & Edelglass, 2011).

The complex challenges faced by most corporations are beyond the comprehension of a single individual. The simple act of complying with environmental regulations requires expertise that goes beyond the average executive. Collaboration allows for the creation of corporate communities that give voice, privilege, and value to the expert while fostering \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.2 Equity interdependence, which reduces conflict (Rosen, 2009). In order to collaborate in competi- tive work environments, most people need to feel like they will be treated fairly. The sense of fairness required to produce this result can be described as equity, which we define and discuss in the next section. 7.2 Equity Equity theory describes the idea that we all have the ability and propensity to determine whether resources are fairly distributed within a partnership, group, or society. People mea- sure equity by comparing the costs of collaboration with the benefits or rewards received.

Equity theory suggests that we are unlikely to enter into a collaborative relationship if we do not perceive a return on our investment (Guerrero, Anderson, & Afifi, 2014). Behavioral psy - chologist J. Stacy Adams (1965) was the first to articulate equity theory by explaining that in a workplace, employees seek to maintain equity between their contributions and the rewards they receive. Adams argued that people value fair treatment; it motivates them to maintain a fair system and nurture mutually beneficial relationships with coworkers and the organiza- tion. We argue that equity theory goes well beyond the workplace and has broader implica - tions for political and economic relationships. In this way equity also has a philosophical and psychological aspect. Later sections will also cover environmental and individual equity. Political Equality Political equality (or political equity) means that everyone receives the same treatment in the political sphere. This suggests, for example, that everyone has the same status and is treated equally under the law—such an ideal underscores the practice of entitling everyone to legal representation or letting every eligible citizen vote.

The most prolific author on political equity may have been John Locke, an English philoso- pher born in 1632. Locke believed that humans were born into a state of nature that was insufficient to establish a civil society. To him, equity was ideal but unobtainable; inequity was inherent. In order to resolve the inherent conflicts created in human beings’ inequitable interactions, humans created government (Locke, 1690). In other words, in Locke’s view, government regulates interaction in order to create equity. Locke (1690) believed that indi- viduals are justified in overthrowing a government that fails to provide the kind of equitable civil society they expect. His ideas profoundly influenced the U.S. Constitution as well as the Declaration of Independence.

Locke’s Second Treatise of Government had a profound influence on a French philosopher named Jean-Jacques Rousseau, who argued that it is absurd for humans to surrender free- dom for bondage. He said that all humans have the right to choose the laws under which they live; he suggested that they create a social contract with each other to safeguard and regulate property ownership and create practical equity (Rousseau, 1762). In other words, one of the responsibilities of a democratic government is to regulate property ownership with as much equity as possible. The social contract proposed by Rousseau makes the modern corpora- tion possible because it suggests it is the role of government to legitimize property claims and authorize the exchange of property and goods (Rousseau, 1762).

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.2 Equity In addition, both Locke (1690) and Rousseau (1762) influenced the documents that created American democracy. For example, their ideas are evident in The Federalist Papers, which are a collection of 85 articles and essays on the nature of governance that Alexander Hamilton, James Madison, and John Jay wrote prior to the ratification of the U.S. Constitution. Hamilton makes the case for a bill of rights in Federalist 84 and suggests again that individuals have certain rights that cannot be taken away by a government or a commercial entity. In other words, individuals, rich and poor, bond and free, male and female, have rights that make them equal to all other individuals.

The ideas of both philosophers relate to CSR in that they explain the purpose and role of government and offer justifications for the pursuit of equity. In addition, the ideas of Locke and Rousseau help define the limits and purposes of government mandates. By definition, CSR involves voluntary behaviors—CSR exists where mandates do not or where they fail to accomplish key goals.

These ideals also relate to modern CSR in that political equity is the foundation of human rights work. As stated earlier, some people define CSR work in social terms. For many, CSR means ensuring and improving the rights of workers, suppliers, consumers, and other stake- holders. As such, many CSR efforts relate to equal access, health and safety, job security, and wages. Over time, the concept that all humans deserve “equal protection under the law” has become a stated goal for American democracy and a key measuring stick for human rights advocates (Jackson, 1995). The idea of equal access and options has spread from politics to the realm of work and personal relationships.

Regarding human rights, the United Nations General Assembly adopted the Universal Decla- ration of Human Rights (UDHR) in 1948. In doing so, it offered the first global expression of rights to which all human beings are inherently entitled. The UDHR establishes that individu- als have inalienable rights of conscience; to practice religion; and to expect a rule of law that includes free political expression. This is the first foundational concept in the broader notion that society is more sustainable when democracy rules and equity abounds. However, the UDHR makes no actual mention of corporations, commercial entities, or any rights that such entities may possess. This will be important when we later discuss the emergence of corpora- tions as entities that possess rights similar to humans.

Economic Equity Some find it difficult to separate political equity from economic equity, particularly in a capi- talist economic system. People with equal voting rights often exercise that right to secure others, such as equal access to education, capital, or political opportunity. Economic equity refers to people’s ability to equally access factors of production (things that enable profit) such as money, advice, natural resources, and education. People who lack economic equity may want governments or companies to create more economic equity; such desires also inform and inspire some CSR efforts, which in turn produce such equity.

Karl Marx (1818–1883) was a German philosopher and revolutionary socialist who argued that the fundamental role of government is to enforce equity in all institutions, including gov - ernment, the marketplace, and corporations. Marx wanted society to achieve a more level economic playing field. He noted that employees often contributed as much or more to the \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.2 Equity corporation—through their physical and mental labor—than did managers and agents who provided the capital for the business. He believed that situation should be more balanced (Mehring, 2003).

Marx’s ideas are found in the American concepts of equity, in terms of access to goods and ser - vices. His ideas continue to echo in the sentiments of some leaders and certain corporate and social practices, including some CSR policies. For example, goals of pay equity, equal access to work and promotion, and the existence of labor councils to manage conflict between employ - ees and managers have some roots in Marxism’s practical and philosophical aspects (Oakley, 1983). To some extent, the pursuit of greater economic equity enabled more sustainable and humane work practices, even when that pursuit has not necessarily improved or equalized workers’ take-home pay.

Philosophical Equity Born in 1724, Immanuel Kant was a Prussian philosopher who expressed concerns about philosophical equity even prior to Marx. In 1781 he published the Critique of Pure Reason, which outlined a concept known as the categorical imperative. The categorical imperative suggests morality stems from rationality (thinking and being logical) and that moral judg- ments have rational support. Kant introduced the idea of deontological (duty-based) ethics, or behaviors that are rooted in the concept that all citizens have equal responsibility. In other words, all people who want a moral society have an equal duty to act morally. Kant notes that some behaviors are universally attractive or repulsive; for these, he suggests that choosing action is simple—what is right is right and what is wrong is wrong. This can be best under - stood by considering the most basic taboos that exist across many societies; for example, murder is categorically wrong, and caring for the helpless is categorically right. Kant sug- gests that all human beings who claim to be moral have a duty to unconditionally follow this imperative. People cannot stand aside and claim that certain issues are “not my problem.” Kant’s maxim is profoundly simple, despite being delivered in the language of a 17th-century philosopher. He makes clear the impact of individual action on the whole and argues we are all equally accountable to a universal law. He advocates that before we act, we should ask our- selves a simple question: “What would happen if everyone did what I’m going to do?” In Kant’s view, a moral society relies on morality applying equally to everyone (Kant, 1781/1998).

Kant’s categorical imperative and corresponding question can also apply to corporations.

Philosophical equity—more specifically, the idea that people generally abide by the cat - egorical imperative to do what is right—relates to CSR in that it holds organizations and people accountable for addressing environmental and social concerns. The business land- scape would look very different if leaders of firms that pollute or use large amounts of natu - ral resources (such as water) were to ask themselves what would happen if every company behaved like theirs.

Psychological Equity In addition to political, economic, and philosophical equity, Adams’s theory of psychological equity also informs CSR behaviors. Adams (1965) argued that employees seek to maintain \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.2 Equity equity between the inputs they bring to a job (such as effort, concentration, and time) and the outputs they receive from the work (such as money, title, prestige, and promotions). As shown in Figure 7.1, if people believe they are treated fairly, they stay motivated to maintain the organization’s structures. If they believe they are treated unfairly, they will take steps to balance the relationship. Typical balancing behaviors when employees believe they are being treated unfairly include stealing small amounts of a work product or office supplies, slacking while being paid to work, or undermining change efforts. Typical balancing behaviors when employees feel overly rewarded include staying late, helping others at work, volunteering to take on additional work, and otherwise supporting employer needs and requests.

Figure 7.1: Basic principles of psychological equity f07_01 Individual’s Outcomes Individual’s Own Inputs = Organization’s Outcomes Organization’s Inputs Source: Adapted from “A New Perspective on Equity Theory: The Equity Sensitivity Construct,” by R. C. Huseman, J. D. Hatfield, and E. W. Miles, 1987, Academy of Management Review, 12 (2), 222–234.

Equity theory helps explain why pay and conditions alone do not determine employee moti- vation (Adams, 1965). The theory also explains why giving one person a promotion or pay raise can have a demotivating effect on others. When people feel fairly or advantageously treated, they respond with positive feelings and motivation; when they feel unfairly treated, they tend to feel disaffected, demotivated, and sometimes retaliatory.

Employees seek to maintain equity between the inputs they bring to a job (“inputs” can also mean “effort”) and the outcomes they receive from it; they do this both in isolation (that is, by considering only their own situation) and in comparison to the perceived inputs and out- comes of others. According to equity theory, managers who want to enjoy maximum output from employees need to attend to the perceptions of fairness in the work environment to maintain the balance.

Adams believes that humans have a basic understanding of what fair treatment is, and in their workplace, family, or social environment, they act to maintain balanced and equitable rela - tionships. When those relationships become unbalanced, people take steps to restore balance.

Equity theory and equity-related work behaviors relate to CSR and sustainability in many ways. For example, when firms start or expand CSR efforts, many employees understand and value the attention to equity that is implied. If the work of CSR and sustainability projects is unfairly distributed or unevenly discussed (either overly praised or criticized), employees may treat the effort the same way they treat anything they perceive as inequitable—by avoid - ing, ignoring, or undermining it. If CSR efforts are handled equitably and work to build equity, employees will be more likely to support and advance the work.

Equity theory relates to CSR and sustainability in that it helps explain when and how employ - ees react to changes within and outside the firm. It can also help motivate people to restore balance and equity to those currently not enjoying fair treatment. \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.3 The Rights of Corporations It is important to understand that equity has at least four different meanings. Each type of equity has a different definition that focuses on some aspect of individual political rights, economic access, philosophical duties, or psychological need. Most concepts of equity suggest that the individual is the locus of equity. In the next section, we move from considering the individual to considering the organization by examining what legal, political, economic, and psychological rights corporations have. 7.3 The Rights of Corporations Following the U.S. Civil War and the abolition of slavery, the Constitution was amended to include a prohibition against depriving any person of life, liberty, or property without due process of law (the 14th Amendment). In other words, all citizens of the United States were afforded equal protection under the law.

While the language of the 14th Amendment makes no reference to the concept of corpo - rate personhood, in 2010 the U.S. Supreme Court ruled that corporations have some of the same rights afforded to individuals. The change had significant implications for CSR and sus- tainability efforts, in part because it made it easier for firms to do what people do, but on a larger scale.

Free Speech The U.S. Supreme Court’s ruling in the case of Citizens United v. Federal Election Commission upheld the rights of corporations to make political expenditures, including purchasing political ads and voicing political views. The court essentially ruled that corporations have the same rights as people when it comes to expressing interests and supporting political speech (Smith, 2009).

Citizens United, the plaintiff in the case, is a political action committee (PAC) founded by a political consultant but funded by the Koch brothers, industrialists who own the second larg- est privately owned company in the United States. The PAC was formed to promote the interest of corporations and to further specific political causes. Citizens United brought suit in 2009 against the Federal Election Commission for restricting the amount of money it could spend on political advertising, arguing that this limit was tantamount to restricting free speech. The court ruled in the group’s favor; the justices argued that collective speech from corporations should be protected under the First Amendment, just as is citizens’ individual speech.

The justices concluded that the First Amendment protects a person’s right to speak, as well as the act of speech itself. From this perspective, the First Amendment thus protects the speech of corporations and unions. In addition, the court asserted that spending limits prevent the public from exercising its right to access all available information.

The 2010 ruling remains controversial. Groups that oppose the decision argue that corpora- tions should not enjoy the constitutional rights that protect individuals. They also argue the decision undermines equity and the pursuit of CSR and sustainability because firms have \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.3 The Rights of Corporations more money than individuals, and many firms (and firm managers) would rather pursue commerce at the expense of the environment or some stakeholders—such people can use firm assets to gain privilege that individuals cannot.

Corporate Accountability and CSR Given the relatively recent timing of the ruling, the concept of corporate rights is new, and there has not been enough time to see how the implications of the ruling play out in the legal system. Corporations are held responsible for complying with regulations, just as individuals are required to obey laws. Corporations pay taxes, as do individuals. Corporations can be sued when corporate officers or employees are negligent, just as individuals can be sued for negli- gent behavior. The idea that corporations have the same rights as individuals relates to sus- tainability and CSR in that corporations have more power and freedom as a result of Citizens United. This means that the reach of CSR efforts might be stronger and that the implications of negative corporate behavior might equally be broader.

Environmental Equity Chapters 5 and 6 described individual, corporate, and governmental efforts to improve the environment. Chapter 5.2 outlines the NIMBY attitude, illustrating the difficulty of equita- bly spreading environmental impacts. In any system organized around efficiency, some loca- tions will be more impacted than others when it comes to resource extraction and alloca- tion. Environmental equity refers to the development, implementation, and enforcement of environmental policies to ensure that no group or community bears a disproportionate share of pollution or other environmental hazard because it lacks economic or social power (Environmental Equity, n.d.).

Perhaps one of the largest efforts to improve equity in environmental justice issues was the Paris Agreement.

Paris Agreement On December 12, 2015, 200 nations signed an agreement to reduce carbon emissions in order to mitigate global warming. Carbon emissions in economically developed nations are signifi - cantly higher than in less developed nations, and there are global problems with environmen- tal pollution, including clean water and clean air. Named for the city in which it was signed, the Paris Agreement holds developed and developing nations accountable for carbon emis- sions in an attempt to ensure that everyone in the world lives in an equally healthy environ- ment (United Nations, 2015).

The implications of the Paris Agreement will unfold for years, even decades. Some analysts suggest that entire industries will have to adjust in order to respond to its measures, because the effects of climate change are spreading across the planet, costing trillions of dollars. These same analysts suggest that in some industries, the cost of not responding to climate change has now exceeded the cost of responding (Doyle & Lewis, 2015). The Paris Agreement also \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.4 Individual Rights, Equity, and Inequity sent a significant signal to investors worldwide that it can be less risky to invest in sustainable and greener practices than in fossil fuels.

The Paris Agreement may create more level ground for companies that must focus on their carbon footprint. It may no longer be profitable to move high-impact activities to locations where environmental regulations are more relaxed, as countries whose leaders signed the agreement may not be able to welcome high polluters. Equally, the events in Paris signal a small step toward a value system that privileges the right to live in an environment free from pollution-related health hazards, which in turn may drive corporate decisions. Furthermore, this ideal shares similarities to those expressed in the 1947 UDHR, stating that all human beings should be afforded basic human rights. The agreement creates both the incentive and the support system for innovations in CSR and sustainability, as entire countries have now made bold public statements and set aggressive public goals. 7.4 Individual Rights, Equity, and Inequity The search for more equity is both a motivator for CSR and sustainability efforts and an out- come of them. Usually, equity is experienced on an individual level. The rest of this chapter examines the history of inequality within countries, cultures, and organizations and includes a discussion of the systematic victimization of certain groups. Such inequity has led govern- ments to adopt policies that protect certain classes or groups of people. Future CSR efforts must comply with existing regulations but can also work to further address and eliminate such inequalities. In this section, we look at protected classes and the effort to bring equality into the workplace.

Discrimination as a Sustainability Issue Popular media often highlights current problems with equity, discrimination, and bigotry as a plague of modern times. However, the issue is long-standing and therefore a prime topic for change and improvement—CSR efforts can help make headway in this area. The topic relates to CSR and sustainability in several ways. First, unequal treatment of certain groups discounts and undermines all of society and directs human and environmental systems away from sustainability. Second, CSR efforts must have a direction, a purpose, and clear objec- tives. Increasing the richness, variety, and equity in human systems can provide these mark - ers. Third, socially responsible and sustainable systems are healthy, robust, thriving systems.

Underappreciating, underemploying, and underutilizing people wastes opportunities for col- laboration, innovation, and talent development—and, as we have already discussed, waste in human and environmental systems threatens sustainability and true thriving. Thus, under - standing and eliminating discrimination remains a key goal of CSR and sustainability work.

A complete history of discrimination and bigotry is beyond the scope of this book, but this chapter discusses a few historical situations to introduce the topic and explores the range of implications heralded by this behavior. \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.4 Individual Rights, Equity, and Inequity Historical Overview of Discrimination Throughout history, classes of people deemed different from the politically powerful and dominant are subject to either overt violence or covert discrimination. Discrimination, or bigotry, does not just have roots in race, gender, or sexual orientation; society’s layers of dis - crimination also stem from religious discrimination.

Common in many societies is discrimination against people who are not orthodox believers in the dominant religion. This discrimination is part of the history of Christianity, Islam, Bud- dhism, and many other religions. In times of extreme theological and political turmoil, bigotry against people who hold different beliefs has created conflict that results in violence, the con- fiscation of property, or the denial of political and social rights.

When discrimination has not been based on orthodoxy, it has been steeped in biases and divisions related to property ownership. Most civilizations prior to the 1800s gave privilege to people who owned property. People who did not own property were considered serfs or peasants, or they became indentured servants who worked for those who did own property.

Landless people did not have the right to vote in some communities. In other places they were not allowed to attend school. Property ownership often went along with status and privilege; access to property was often a closed system that operated on the basis of inheritance.

Another form of discrimination or bigotry emerged out of the identity of being either a slave or free man (women had separate issues, regardless of race). While most Americans think of slavery as an institution that was abolished during the Civil War and perhaps limited to the southern states, various forms of slavery existed throughout history and continued well past 1865. Many of the early pilgrims and settlers, for example, came to the United States as indentured servants. In order to pay for passage from Europe to the United States, they had to give 5 years’ labor to someone who owned them. Africans were captured and sold to slave traders, who frequently sold them to plantation owners in the southern United States. These slaves were not considered fully human and were traded as property—the accompanying biases based on skin color linger today.

Relatedly, another form of inequality in the United States stems from discrimination based on national origin. Economic hardship in parts of western Europe and Asia forced people to migrate to the New World. For example, in 1847 the potato famine forced the migration of more than a third of Ireland’s population. Many of the Irish who stayed behind starved to death, and today the population of Ireland remains lower than what it was prior to 1847 (Ranelagh, 1994). Yet when the Irish began migrating to American cities, the immigrants who had arrived before them were not welcoming; they did not want the additional competition for limited jobs and resources. For example, some shop owners posted help-wanted signs that read, “Irish need not apply.” Discrimination was not just reserved for the Irish, however. In the 1880s it was the Irish working in the coal mines of central Wyoming who rioted against the influx of Chinese workers; many actively campaigned to drive the Chinese out of town (Ham- mond, 2014).

Different forms and manifestations of these conflicts are present in almost every other nation.

For example, the migration of Muslims into Europe since 2000 has caused social and politi- cal tension in England, France, Germany, and all the Scandinavian countries. Each of these \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.4 Individual Rights, Equity, and Inequity countries, as well as the United States, has laws to regulate immigration and also attempt to achieve equity and punish discrimination. But all also continue to experience tension around race, gender, religion, and other forms of difference.

Discrimination and inequity of any kind impose a moral and a practical cost, one that is hard to measure but easy to see and feel on a personal level. It erodes our confidence and sense of justice when we see others treated as less. In addition, human capital is wasted when people are not allowed to develop and work to their highest potential. This waste is evident when classes of people are denied employment or treated differently in the workplace. The next sections focus on improving and rectifying the problems and costs of bias.

Programs to Address Workplace Bias Lawmakers, courts, corporations, and educational institutions have historically turned to some form of affirmative action to address the issue of discrimination by using policy. Affir- mative action is a mandatory policy intended to break the pattern of discrimination and big- otry and create an equal playing field for people outside of the dominant workplace group.

Proponents of policy-based solutions feel it is not enough to say, for example, “We welcome diverse people into our neighborhood” or “into our workplace” or “into our schools.” Affirma - tive action policies turn such words into mandated targets and goals.

The notion of affirmative action stems from a legal and moral perspective put forth in a famous U.S. Supreme Court case. On May 17, 1954, the Supreme Court ruled to end racially segregated schools in its decision on a case known as Brown v. Board of Education.

Brown v. Board of Education opened a series of legal cases, bills, and executive orders that extended voting rights, ownership rights, access to education, access to jobs, and general pro- tections not only to people of all races, but also to people of all genders, religions, and sexual orientations and those with disabilities. For example, one executive order reads: It is the policy of the government of the United States to provide equal oppor - tunity in federal employment for all persons, to prohibit discrimination in employment because of race, color, religion, sex, national origin, handicap, age, sexual orientation or status as a parent, and to promote the full realiza- tion of equal employment opportunity through a continuing affirmative pro- gram in each executive department and agency. This policy of equal opportu- nity applies to and must be an integral part of every aspect of personnel policy and practice in the employment, development, advancement, and treatment of civilian employees of the federal government, to the extent permitted by law. (Executive Order No. 11478, 1969, p. 34) The remaining sections of this text provide an overview of current American workplace prac- tices that aim to bring equity and protection to specific groups who are legally deemed to be in a protected class. Corporations and the managers within them must consider these issues when it comes to making hiring, firing, headquartering, and site location decisions.

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.4 Individual Rights, Equity, and Inequity Racial Bias Most developed nations and specifically the United States outlaw racial discrimination in the workplace. The 14th Amendment of the U.S. Constitution was insufficient in guarantee- ing equal protection under the law; thus, under Title VII of the Civil Rights Act of 1964, it became illegal to not hire or promote someone because of their race. The act also makes it illegal to fire, discipline, or offer fewer benefits to employees based on race. These provi- sions made most modern organizations very sensitive to providing ample growth and equal opportunity for people of all races. The act’s final provision makes it illegal to classify or segregate employees or applicants based on race. This means the ideal goal is for people of all races to work the same shift, in the same place, with the same benefits and opportunities as everyone else.

Passing laws is not enough to completely eliminate discrimination and inequity. Overt dis - crimination that is intentional is fairly easy to identify. The perpetrator acknowledges intent and acts in ways that are designed to discriminate against a particular person or group. But covert discrimination is harder to see. People are often unaware of their own racist intent or behavior. They may rely on others to point out these biases. That skill requires self-awareness and ongoing effort. Such trainings can be part of organizational CSR efforts, and CSR will have advanced significantly when such trainings become less necessary.

Many studies and accounts of people’s lived experiences indicate that racial discrimination remains alive and well in many workplaces. For example, the National Bureau of Economic Research conducted a unique field study in Chicago and Boston. It found help-wanted ads and responded with résumés that were identical in every way except for the fact that some had African American names and some featured Caucasian-sounding names. Researchers then tracked the number of callbacks each résumé received. They found that the average White résumé got about 1 callback for every 10 résumés, while those with African Ameri- can names had to send out 15 résumés to get 1 callback (Bertrand & Melainathan, 2004).

The findings suggest that even after decades of employee enlightenment, affirmative action policies, and legal efforts to create a level playing field for people of all races in the work - place, a covert bias against people of color continues to exist. This problem remains a key element of CSR efforts, and such efforts therefore often include work on diversity, work - place bullying, workplace safety, workers’ rights, and other issues related to employee health and well-being. If an employee cannot reach his or her full potential at work for these or other reasons, then potential is wasted and performance and productivity suffer. Thus, tackling all forms of bias and discrimination remains a core value of social sustainability and CSR efforts.

Gender Bias A friendly work environment is where people make contributions without fearing any form of discrimination, including gender discrimination or sexual harassment (which can affect all genders). Female employees’ struggle for equality has grown to include measures that ensure women have equal consideration for promotion and hiring. In the United States and most developed nations, it is illegal to deny a job or a promotion based on gender. These efforts, while extensive, have not resulted in a gender-neutral environment in which performance determines success. Data suggest that slow progress is being made in the United States. The Bureau of Labor Statistics (2014) indicates that in 1970 women contributed 27% of total \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.4 Individual Rights, Equity, and Inequity family income. That number grew to 37% in 2011 but is still far from the equity goal of 50%.

Moreover, when women are competitive, equally educated, and similarly trained as male col- leagues, data from the Bureau of Labor Statistics (2013) found that American women receive only $0.77 for every dollar that men earn for equivalent work.

Commentators on the issue suggest there are many possible explanations besides (or in addi - tion to) discrimination for why some women are paid less. One is that women may have less work experience if they took time off to raise children or pursued a less competitive career path in exchange for flexibility for domestic or other lifestyle reasons (Bureau of Labor Sta - tistics, 2014). However, many counter that women face discrimination before they exercise these options, or early enough to affect their long-term career choices and training.

There is also a significant deficiency of women in positions of power, of leadership, and on corporate boards. In addition, women have different expectations for workplace equity; they typically want more help with family matters such as child care and health care, more flex - ibility in work hours to accommodate child care, and more flexibility in career paths (Bureau of Labor Statistics, 2013).

Internationally, gender equity varies immensely between developed and developing nations.

For a variety of reasons, some developed nations have difficulty integrating women into the workforce. The ILO has made strong efforts to promote gender equality, with four key conven- tions that argue for equal pay, equal opportunity in the workplace, access to family and family responsibilities, and maternity protection. The ILO’s goal is to promote equal opportunities for men and women to obtain decent work and earn fair wages under conditions of freedom, equality, security, and human dignity.

Age Bias Kenichi Sato worked for 20 years in his Japanese factory before being promoted to a mana - gerial position. In his culture, it is not unusual to wait that long for a promotion. In the Japa- nese “job-for-life” culture, promotions are reserved for older employees who have earned the respect of younger employees. Junior employees are expected to work hard and “pay their dues” over a long period. Performance is as important as loyalty, which is measured by time; commitment is also rewarded in traditional Japanese culture (“Sayonara,” 2008).

The situation is not as clearly delineated in the United States, and given US culture’s empha- sis on valuing youth, American employers and employees are less likely than their Japanese counterparts to value the contributions of older workers. The United States has laws to pro- tect employees over age 40 from inequity. In some states, the age for protection is lower.

The federal government argues that age discrimination involves treating an employee or an applicant unfavorably because of his or her age. The law covers all aspects of employment, including hiring, firing, pay, assignments, benefits, and issues related to the work environ- ment. The latter means that a coworker, supervisor, customer, or client cannot persistently harass an older person and create an unfriendly work environment (U.S. Equal Employment Opportunity Commission, n.d.).

It is difficult to determine how pervasive age discrimination is in the United States because victims are often unwilling to report it. However, data suggest that hiring practices in the \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.4 Individual Rights, Equity, and Inequity United States either deliberately or inadvertently discriminate against age. A 2015 study by three economists measured the callbacks received after mailing in résumés to companies with open positions. Applicants in the 29- to 31-year-old age range received almost 20% more call - backs then those in the 64- to 66-year-old age range, even though their qualifications were exactly the same. Those in the 49- to 51-year-old age range suffered a 10% lower callback rate than applicants who were in the 29- to 31-year-old range. The study did not identify what motivates this discrimination, but the sample size and results show it can be more difficult for older people to secure employment than younger people (Matthews, 2015). Organizations interested in addressing this bias can educate human resource recruiters about the advan- tages of hiring older workers, as well as openly discuss the issue to keep it at the forefront of their agenda.

Disability Bias Today’s workplace is very different compared to the one 25 years ago, not just in terms of gender and racial composition but regarding how people with disabilities are hired, treated, and supported in commerce (ADA.gov, n.d.). Prior to the 1990 Americans With Disabilities Act (ADA), there were no mandated parking places reserved for those with disabilities, nor wheelchair ramps going into public buildings. Disabled workers were accommodated on an individual basis, if at all. The ADA not only changed the composition of the workplace but also made a profound statement about equality in the workplace.

The ADA prohibits discrimination against persons with disabilities in the workplace, as well as in procuring state and local government services, public accommodations, commercial facilities, and transportation (ADA.gov, n.d.). There are some exceptions, as it is understood that people with some disabilities cannot do certain jobs, but reasonable accommodations could be made for almost everyone. For example, the ADA mandates that telecommunications devices for the deaf and telephone relay services be established, requires all public restrooms to be accessible to people with disabilities, and mandates that public transportation accom- modate people with disabilities (ADA.gov, n.d.).

As a result of ADA legislation and corporate compliance, the U.S. Department of Labor claims there has been a steady increase in the number of people with disabilities entering the work - force. This is a win–win–win situation. Companies win by hiring talented people regardless of physical ability. Individuals win because they can enjoy a fulfilling life and career along with the fact that they have a disability. Society wins because taxpayers no longer need to provide social services to people with disabilities who previously lacked self-sufficiency because they were not employed. However, as Figure 7.2 illustrates, the workforce participation rate for people with disabilities is well below that of people without disabilities. While the low rate may be due to the fact that some people with disabilities do not have the confidence or ability to participate in the workforce, it is also true that discrimination against people with disabili- ties likely persists (National Council on Disability, 2007).

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Section 7.4 Individual Rights, Equity, and Inequity Figure 7.2: Percentage of people with and without a disability in the workforce, 2013 90 Percent Age 80 70 60 50 40 30 20 10 0 With a disability With no disability f07_02 16 years and older 16 to 19 years 20 to 24 years 25 to 34 years 35 to 44 years 45 to 54 years 55 to 64 years 65 years and older Source: From “Employment of People With Disabilities in 2013,” by Bureau of Labor Statistics, 2014 ( http://www.bls.gov/opub/ted/2014/ ted_20140626.htm ) The chart reveals a greater number of people with disabilities are in the workforce as a result of the ADA and other legislation and suggests there are increased opportunities for people interested in advancing the CSR and sustainability agenda in this category. One way to address inclusion in the workplace is to educate employers and colleagues about different types of disabilities and acknowledge that many disabilities do not affect work product. Also, employers can evaluate whether there are certain positions that can be filled by people with disabilities and can recruit and train workers accordingly.

The ADA extends to disabled veterans in the United States. For example, Hire Heroes USA (ht tps://w w w.hireheroesusa.org/ ) is one of many organizations that help recovering dis- abled veterans find meaningful work. To date, it has placed nearly 5,000 veterans in jobs by helping them improve their job search and résumé writing skills and by creating a work envi- ronment that takes into account each veteran’s unique disability. The organization’s website claims to place nearly 120 disabled veterans in jobs every week.

Sexual Orientation Bias Varying federal and state labor laws exist to protect against discrimination based on sexual orientation, including harassment or differential treatment based on someone’s perceived or actual gay, lesbian, bisexual, or heterosexual orientation (Lambda Legal, 2016). Sexual orien- tation discrimination includes denial of a promotion, wrongful termination, unfair discipline, and negative treatment based on sexual orientation and not work performance. Examples of the latter include comments and name-calling regarding sexual orientation.

\251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Chapter Summary In 2015 the U.S. Supreme Court ruled that gay couples have the same rights to marry as hetero- sexual couples. Same-sex marriage is now allowed in all states. Human Resource departments in most large companies had already anticipated this development and extended spousal benefits to gay couples. While same-sex couples may experience inequity and discrimination in some social circles, same-sex discrimination in the workplace is a form of sexual discrimi- nation and bears the same penalties. In cases where a workplace’s social situation does not synchronize with laws and policies, CSR and sustainability interventions related to training and education can improve the situation and begin to reduce the inequity. Apply Your Knowledge: Creating Equity in the Workplace Suppose you are a corporate manager. Considering equity and regulations, discuss and resolve the following situations and identify what questions you would ask and what actions you would take.

There are two employees in a branch office, but business issues require downsizing. One of the employees must be terminated, and both perform equally. One is a 35-year-old woman, and the other is a 63 -year-old man. Neither will accept voluntary termination. How would you decide?

A 44-year-old woman comes to you and says she is experiencing gender discrimination in the workplace. Her 10-year performance evaluations are below average. She has been passed over for promotion several times. Her immediate supervisor has placed her on warning on two occasions in 10 years. How would you approach this situation?

Your business serves a community whose residents are 45% African American, yet only 10% of your workforce is African American. You are currently hiring for three new positions. The hiring committee ranked the candidates based on qualifications, and the Black candidates were at the bottom of the list. What is your next step? Chapter Summary This chapter began by discussing dominant themes that motivate people and businesses and the pressures related to competition and collaboration. Both topics can motivate CSR and sustainability. Collaboration also introduces the idea of equity. This chapter clarified that the topic of equity crosses many boundaries, including political, philosophical, economic, and psychological. When equity is discussed in the workplace, it introduces moral and legal issues that are related to access and fair treatment as well as hiring and promoting. It explained that discrimination and bias can cause human talent to be underutilized, which is a CSR and sus- tainability issue related to waste.

Speaking from a purely economic perspective, bias equates to underdevelopment and under - use (w aste) of talent, skill, and resources. It affects the whole system. Social, political, and economic systems that actively promote equity also move toward stability when fewer mem- bers are underutilized, are marginalized, or have their talent wasted. To some extent, history supports the notion that equity creates stability and sustainability. Inequity and the search \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Chapter Summary to eliminate it drives the search for justice, fuels ambitions to improve work and social situa- tions, and provides reasons to innovate. Leaders and managers who assess and address their own biases can set a positive example and enact policies that create supportive and high- functioning workplaces.

Posttest 1. Game theory suggests indi viduals are better off .

w orking on their own and creating winning strategies b.

collabor ating with others to create competitive advantage c.

collabor ating only with other winners d.

not bearing the cost of collabor ation 2.

The “in visible hand” described by Adam Smith is the force of .

competition b. collabor ation c.

self-interest d.

equity 3.

A ccording to equity theory, when humans experience fairness in a system, they .

eng age in excessive competition b.

eng age in excessive collaboration c.

become v ested in maintaining the system d.

become v ested in disrupting the system 4.

was primarily concerned with economic inequity and the difference in value between the contributions of labor and capital.

Kar l Marx b.

Immanuel Kant c. John Lock e d.

Thomas Jeff erson 5.

The Citiz ens United Supreme Court ruling granted corporations the right to .

bear arms b. equal access c. fr ee speech d.

a fr ee press 6.

En vironmental equity means that all corporations must .

bear r esponsibility for caring for the environment equally across industry b.

jointl y give input on environmental law c.

mak e sure everyone in the corporation equally bears responsibility d.

bear r esponsibility for employees’ individual behaviors \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Chapter Summary 7. Under Title VII of the Ci vil Rights Act of 1964, all of the following types of discrimina- tion are illegal EXCEPT discrimination based on .

r ace b.

gender c. national origin d. disability 8.

Y our company has had a bad year and needs to downsize. As a result, management decides to lay off the workers who are closest to retirement, as they feel these work- ers are less productive than their younger counterparts. What sort of lawsuit could the company face if it goes through with this plan?

age discrimination b. misuse of compan y resources c.

illeg al termination of contract d.

disability discrimination A nswers: 1(b); 2(c); 3(c); 4(a); 5(c); 6(a); 7(d); 8(a) Critical-Thinking Questions 1. Do y ou think it’s possible to eradicate all discriminatory behavior? Why or why not?

2. Explor e possible sources of bias. How can they be eliminated or changed? Why, from a business perspective, is it important to do so?

The P aris Agreement acknowledged that developed nations have different abilities to monitor, regulate, and control air pollution than developing nations. Thus, the stan- dards for developed and developing nations are different. Do you agree or disagree with the idea that standards and policies should be different for developed countries?

What information do you need to be more informed? Where would you find the information?

Ho w far should the concept of equal protection under the law extend in business? For example, should individuals whose religious beliefs oppose gay marriage be required by law to hire a gay person in their business? To provide service to gay customers?

How is this a sustainability issue?

T o what extent should governments and pseudogovernments (like the United Nations) become involved in enforcing environmental equity? Economic equity?

Political equity? Individual equity? Why?

Ha ve there been times in your life when you benefited from inequity? Have you been motivated to accomplish things you otherwise would not have in a completely equi- table environment?

What ar e additional regulations or business practices that can prevent inequity in the workplace? \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Chapter Summary Additional Resources Consider the following document about viewing corporations as individuals or separate entities: https://www.hofstra.edu/pdf/academics/colleges/HCLAS/CLD/cld_rlr_bansal_spr06.pdf For more information on the impact of gender equity on a global scale, visit: ht tp://w w w.mckinsey.com/global-themes/employment-and-grow th/ how-advancing-womens-equalit y-can-add-12-trillion-to-global-grow th For information on the rights of disabled veterans, visit: ht tp://explore.va.gov/disabilit y-compensation?utm_source=SEM&utm_ medium=TEXT&utm_campaign=SEM-DISABILITY For information on the Americans With Disabilities Act, visit: ht tps://w w w.dol.gov/odep/topics/ADA.htm Answers and Rejoinders to Chapter Pretest 1. T rue. Collaboration typically leads to a broader systems view and not just short-term wins.

T rue. Economic equity does not mean all people have the same things; it means they have access to the same things.

F alse. Citizens United (2009) relatively recently granted free speech rights to corporations.

T rue. Discrimination in the workplace wastes human capital by preventing people from working to their highest potential. Rejoinders to Posttest 1. Game theory gi ves a mathematical measurement to the advantage of collaboration.

2. A dam Smith argued that self-interest is the unseen driving force in a market economy.

E quity theory, according to Adams, suggests humans become vested in a system that provides the predictability of fairness.

Kar l Marx was concerned that labor was discounted in a capitalist system in favor of investments. He worked for worker rights.

Aft er Citizens United, corporations are seen as having rights to free speech.

En vironmental equity means each corporation must be responsible for environmental action.

Title VII of the Ci vil Rights Act protects from discrimination against someone based on race, color, religion, sex, or national origin. Discrimination based on disability was not prohibited until the Americans With Disabilities Act of 1990.

La ying off employees based on their nearness to retirement is a form of age discrimi- nation, which is illegal in the United States. \251 2016 Bridgepoint Education, Inc. All rights reserved. Not for resale or redistribution. Chapter Summary Key Terms collaboration A paradigm or worldview that suggests that inequity should be miti- gated to foster human interaction and collec- tive problem solving.

competition A paradigm or worldview that suggests that inequity is inherent and the search for more benefits and rewards moti- vates people to act and pursue excellence.

economic equity Equal economic opportu- nity and economic benefit, including regard- ing access to opportunity.

environmental equity Equal exposure to environmental hazard and risk; also relates to treating the environment as fairly as humans treat people.

equity theory Assumes that humans assess fairness and assume reward for their invest- ment in a collaborative relationship.

game theory Shows the mathematical advantage of collaboration. philosophical equity A philosophical posi- tion that all humans have equal value.

political equality (or political equity) A belief that all people should enjoy equal pro- tection and equal rights under the law.

protected class A group of people who have experienced historic discrimina- tion and are protected by law; tends to include women, elderly, people of color, and children.

psychological equity Psychological ideas that suggest equity promotes social stability.

rights of corporations Pseudohuman rights of free speech granted to corporations under the Supreme Court ruling in Citizens United.

social contract A concept proposed by Jean-Jacques Rousseau whereby people cre- ate rules to safeguard and regulate property ownership and create practical equity.