Business Ethics and Social Responsibility
- 5d Explain corporate missions, corporate culture, corporate social responsibility, human resource management, and labor unions (CLO 7)
Corporate Social Responsibility
Equity Issues
Freedom from Sexual Harassment
What is sexual harassment? The law is quite precise:
- Sexual harassment occurs when an employee makes "unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature" to another employee who doesn't welcome the advances.
- It's also sexual harassment when "submission to or rejection of this conduct explicitly or implicitly affects an individual's employment, unreasonably interferes with an individual's work performance or creates an intimidating, hostile or offensive work environment".
To prevent sexual harassment – or at least minimize its likelihood – a company should adopt a formal anti-harassment policy describing prohibited conduct, asserting its objections to the behavior, and detailing penalties for violating the policy. Employers also have an obligation to investigate harassment complaints. Failure to enforce anti-harassment policies can be very costly. In 1998, for example, Mitsubishi paid $34 million to more than three hundred fifty female employees of its Normal, Illinois, plant to settle a sexual harassment case supported by the Equal Employment Opportunity Commission. The EEOC reprimanded the company for permitting an atmosphere of verbal and physical abuse against women, charging that female workers had been subjected to various forms of harassment, ranging from exposure to obscene graffiti and vulgar jokes to fondling and groping.
Equal Opportunity and Diversity
People must be hired, evaluated, promoted, and rewarded on the basis of merit, not personal characteristics. This, too, is the law – namely, Title VII of the 1964 Civil Rights Act. Like most companies, P&G has a formal policy on hiring and promotion that forbids discrimination based on race, color, religion, gender, age, national origin, citizenship, sexual orientation, or disability. P&G expects all employees to support its commitment to equal employment opportunity and warns that those who violate company policies will face strict disciplinary action, including termination of employment.
Equal Pay and the Wage Gap
The Equal Pay Act of 1963 requires equal pay for both men and women in jobs that entail equal skill, equal effort, equal responsibility, or similar working conditions. What has been the effect of the law after forty years? In 1963, women earned, on average, $0.589 for every $1 earned by men. By 2010, that difference – which we call the wage gap – has been closed to $0.812 to $1, or approximately 81 percent. Figure 2.10 "Median Annual Earnings by Gender and Race" provides some interesting numbers on the differences in annual earnings based not only on gender but on race, as well. Figure 2.11 "Median Annual Earnings by Level of Education" throws further light on the wage and unemployment gap when education is taken into consideration.
Figure 2.9 Median Annual Earnings by Gender and Race
What accounts for the difference, despite the mandate of federal law? For one thing, the jobs typically held by women tend to pay less than those typically held by men. In addition, men often have better job opportunities. For example, a man newly hired at the same time as a woman will often get a higher-paying assignment at the entry level. Coupled with the fact that the same sort of discrimination applies when it comes to training and promotions, women are usually relegated to a lifetime of lower earnings.
Figure 2.10 Median Annual Earnings by Level of Education
Education pays in higher earnings and lower unemployment rates.
Note: Data are 2010 annual averages for persons age 25 and over. Earnings are for full-time wage and salary workers.