Whose Values Count? The Hobby Lobby Decision and Corporate Social Responsibility

David Levy, Professor and Associate Dean in the College of Management at UMass Boston and Director of the Center for Sustainable Enterprise and Regional Competitiveness

Women held placards proclaiming “Bosses out of My Bedroom” to protest last week’s Supreme Court decision in the Hobby Lobby case, which permits privately-held corporations to exclude coverage for contraception from health insurance coverage on religious grounds. In the media, opponents of the decision saw the issue as corporate owners imposing their religious beliefs on all the employees in Hobby Lobby’s nearly 600 stores. The decision has been widely condemned by feminist and other progressive groups, who smell a theocratic agenda that represents discrimination against women (Viagra and vasectomies are covered by insurance), a threat to women’s health, and a continuation of efforts to control female sexuality. The Court itself was divided along gender lines for this and the follow up Wheaton College decision regarding exemptions for religious non-profit organizations, in which the three female judges issued a sharp dissent. For women, reproductive freedom and economic independence are closely intertwined, as Justice Ginsburg noted in her dissent: “The ability of women to participate equally in the economic and social life of the Nation has been facilitated by their ability to control their reproductive lives.”

But the Hobby Lobby (HL) case is not just about corporate control over women’s work and health; it holds broader significance for corporate governance. The decision severely undermines those who seek to use corporate social responsibility (CSR) to hold business accountable and to channel the vast financial, technological, and organizational resources of business to advance social goals. The heart of the HL case turned on the technical question of whether a for-profit corporation, as a legal person, has the same rights as an individual to exercise religion under the 1993 Religious Freedom Restoration Act (RFRA). On the face of it, the idea of a corporation having a religion is somewhat bizarre. After all, we don’t see corporations being baptized or singing at a Bar Mitzvah ceremony. But if a corporation, as a person, does have values or religion, whose are they? A small group of owners, or the wider community?

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No harm, no foul? A new study calls for more discussions on deceptive advertising

By Vincent Xie and Heidi Moesinger.

We as consumers often watch or receive ads that promote things we care about. Like it or not, the first question a rational consumer has to ask is how truthful an ad is. Some argue that regulators such as the Federal Trade Commission (FTC) have drawn a clear line on what is deceptive or not for advertisers. Over the years, the FTC has filed many lawsuits against a number of big name brands. The risk for companies running false or misleading ads is too high to afford. So most of time, we as consumers don’t have to worry about advertising deception. Do we?

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Slumdog Millionaires: Can Impact Sourcing Alleviate Poverty?

By Chacko Kannothra and Stephan Manning.

Call centers, tech support, payroll processing – more and more service jobs are performed abroad. Global outsourcing is one of the most controversial trends of our time. To some, it is mainly a cost-cutting exercise which has led to job losses in Western economies and has started a ‘global race to the bottom’. The recent shift of clients and providers to second and third-tier outsourcing locations to keep labor costs low is an indicator of that. To others, outsourcing has also generated new income and entrepreneurial opportunities especially in developing countries. Clearly, in particular for the young and educated in urban areas, such as Bangalore in India, the outsourcing sector has been a career stepping stone. But how about the vast majority who still live in poverty? Will the global service industry widen the gap between the new urban elite and the rest? Maybe not if we believe in the new trend of ‘impact sourcing’ – the creation of outsourcing jobs and training opportunities for the poor and disadvantaged, in particular from slums and rural areas. Impact sourcing was celebrated a few weeks ago at the 17th World Outsourcing Summit as a promising way of combining business and social benefit. The Rockefeller Foundation even calls it a means towards reducing poverty. But are these claims realistic?

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Transforming Academia: From Silo to Vehicle for Social Change

By Stephan Manning.

There has been a lot of talk about the alienating nature of academic work. Nick Kristof argues in his recent New York Times article that academic research is increasingly irrelevant for public debates and that public intellectuals have become a dying species. Academics are increasingly driven by the pressure to publish rather than by curiosity and the need to better understand the world we live in, as Suhaib Riaz points out in his recent blog. In a nutshell, academia has become a silo in which peer recognition counts the most, whereas making a broader impact is seen as a distraction. Given the enormity of unsolved social and environmental problems facing our planet, we need to re-embed academia into society and turn it into a vehicle for social change. But how?

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HBS’s apology misses the mark

or why 250 female-headed cases won’t change the world

By Michelle Kweder, a UMass Boston student on the Organizations and Social Change track of the PhD in Business Administration.  This is reposted from her blog Bricolage. Twitter: @MichelleKweder

Harvard Business School (HBS) Dean Nitin Nohria apparently made an “extraordinary public apology” at a glitzy ballroom in San Francisco for HBS’s bad behavior towards women as outlined September 2013 New York Times article “Harvard Business School Case Study:  Gender Equity.”  Nohria’s goal of doubling the percentage of women who appear as protagonists in Harvard Business Publishing (HBP) cases in the next five years is lackluster if not meaningless.

Apparently HBP cases account for 80% of cases studied in business schools globally. The last time I checked the online case database included 10,148 (December 2013) HBS/HBP cases.  (Note: HBP also disseminates cases from similar collections such as Darden and Ivey.)  Without a doubt, HBP/HBS is the thought leader and standard bearer in what I call mainstream graduate management education (MGME).

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Of Davos, Luxury Boats and Downward Spirals

By Suhaib Riaz.

At the recently concluded gathering of world elites, also known as the World Economic Forum at Davos, one issue seemed to come up more than it has in the recent past: societal inequality. Oxfam released a well-timed report on economic inequality and directly asked for world elites at Davos to turn their attention to it.

The report highlighted how the 85 richest people in the world (who could hypothetically fit Oxfam reportinto a double-decker bus) now own wealth equal to the lower 3.5 billion people (half the world’s population). Interestingly, the Oxfam site’s link to the report had the picture of a boat, or more precisely, that of a luxury yacht – presumably the kind that those elites may own or have access to. The water all around it seems stable and beautiful as ever. It is hard to resist a metaphor here, which I will expand on through this article.

On the face of it, the call by Oxfam can be puzzling. The fact that societal elites are being asked to give attention to inequality raises a fundamental question: Why should they care?

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Addressing Inequality with a New Business Architecture

by David Levy

Last week, Bill de Blasio was sworn in as the Mayor of New York, and in a ceremony replete with references to sharp class and racial divides in the city, de Blasio pledged to devote his energies to “put an end to economic and social inequalities.” So what can a new administration with a solid mandate for progressive policies do to encourage shared prosperity in a major urban region? Even large cities have limited power and resources, and they are tightly integrated into the wider national and global economy. Inequality is largely a function of more structural economic forces, from the dominance of the financial sector to the pressures created by immigration, globalization, and technological change.

De Blasio’s plans for addressing inequality remain rather unclear. His most substantive proposals include building more affordable housing and raising taxes on the wealthiest New Yorkers to pay for universal kindergarten. His wide margin of victory indicates some appetite for redistribution, but higher taxes are often perceived as “anti-business”, deterring mobile investment and hurting employment. Indeed, De Blasio is proposing to raise taxes by less than $1000 on those earning between $500,000 and $1 million a year. De Blasio has also supported raising the minimum wage, but the city is powerless to act on this without support from the state legislature.  Other proposed measures, such as helping people enroll for food stamps and other benefits to which they are entitled, are important steps but their limited scope means they won’t have much of a systemic impact. Continue reading