Friday 4-30

Hello All: I will be returning to class on Friday 4-30.

Goldman Political Contributions

Here is the news article I was referring to in our discussion in class yesterday about whether or not corporations should contribute to political campaigns:

http://www.usatoday.com/news/politics/2010-04-20-goldman-sachs-donations_N.htm

To me it certainly seems like there is a strong correlation between the amount of money Goldman Sachs has contributed- especially to people in Finance overseeing positions and the fact that the specific case the SEC is bringing up against Goldman Sachs is not necessarily an easy case to win. The SEC could have gone a different route and gotten them in trouble for unethical behavior but instead they have chosen to sue them for something which leaves them room to potentially escape unscathed. What is the motivation of the SEC for doing this? In my opinion: $$$.

Freedom of Speech (South Park/Muslim Controversy)

The radical Islamic Web site Revolutionmuslim.com is going after the creators of the TV cartoon series "South Park" after an episode last week included an image of the Prophet Mohammed in disguise.

Revolutionmuslim.com, based in New York, was the subject of a CNN investigation last year for its radical rhetoric supporting “jihad” against the West and praising al Qaeda leader Osama bin Laden. Its organizers insist they act within the law and seek to protect Islam.

On Sunday, Revolutionmuslim.com posted an entry that included a warning to South Park creators Trey Parker and Matt Stone that they risk violent retribution– after the 200th episode last week included a satirical discussion about whether an image of the prophet could be shown. In the end, he is portrayed disguised in a bear suit.

The posting on Revolutionmuslim.com says: “We have to warn Matt and Trey that what they are doing is stupid and they will probably wind up like Theo Van Gogh for airing this show. This is not a threat, but a warning of the reality of what will likely happen to them.”

Theo van Gogh was a Dutch filmmaker who was murdered by an Islamic extremist in 2004 after making a short documentary on violence against women in some Islamic societies. The posting on Revolutionmuslim.com features a graphic photograph of Van Gogh with his throat cut and a dagger in his chest.

The entry on Revolutionmuslim.com goes on to advise readers:

“You can contact them [the makers of South Park], or pay Comedy Central or their own company a visit at these addresses …” before listing Comedy Central’s New York address, and the Los Angeles, California, address of Parker and Sloane’s production company.

Contacted by CNN, the author of the post, Abu Talhah al Amrikee, said that providing the addresses was not intended as a threat to the creators of South Park but to give people the opportunity to protest.

Over still photographs of Parker, Stone, van Gogh and others, the Web site runs audio of a sermon by the radical U.S.-born preacher Anwar al-Awlaki, who is now in hiding in Yemen. The sermon, recorded some time ago, talks about assassinating those who have “defamed” the Prophet Mohammed – citing one religious authority as saying “Harming Allah and his messenger is a reason to encourage Muslims to kill whoever does that.” U.S. officials say al-Awlaki is on a list of al Qaeda leaders targeted for capture or assassination.

The clip ends with a warning on a graphic directed at Parker and Stone, saying “The Dust Will Never Settle Down.”

Al Amrikee said the purpose of including the al-Awlaki sermon in his posting was to remind Muslims that insulting the prophet is a severe offense for which the punishment in Islam is death. He said RevolutionMuslim may hold protests about the show.

Calls to Comedy Central were not returned.

http://news.blogs.cnn.com/2010/04/19/security-brief-radical-islamic-web-site-takes-on-south-park/

Internet

After watching this video, I thought it was somewhat dumb that she is complaining about not having the internet in her community. However, after actually thinking about what is going on in the world and the necessity for technology it got me to thinking that her arguments are pretty fair. As we get farther into the 21st century technology becomes more of a necessity and part of everyday life. With out it, many things in your everyday life like your job, communicating with other and entertainment is in jerpody. The need for the internet is crucial and makes sense of her plead to help bring it to her community. With dial up as we remember is very slow and now a days we complain when the internet takes more than 10 seconds. So after viewing this video I feel that having the internet in your community is assential and her arguments make sense.

At first I thought the video was a joke.... but the more I thought about it the more I realized how important broadband internet is. We take it for granted and even get upset if USD internet is running "slow" but do you remember dial up?

She had some valid points and I think something needs to be done, but I do not think every person has the right to free broadband....

Justice Alito - State of the Union Address

CHHS Interview Citizens United

Citizens United Video

Understandable...

I understand Rhonda Locklear's concern for her son's lack of advantages through internet use but I think that the idea of the Digital Divide goes deeper than just people who are lacking internet use. The schooling system has attached computers, which coincide with the use of internet for schooling, so dependently as a learning tool that it will not be surprising to find in the future everything from books to teacher's lessons solely learned through the internet. The idea of a classroom is starting to fall apart. Yes. There needs to be efficient internet access for people like Rhonda's son who depend on the internet to do homework. BUT, there needs to be a reevaluation of this Digital world that is taking over the nature of learning.

Digital Divide

After watching Rhonda’s comment on the digital divide, I was not really moved or touched by her reaction. This is simply because I instinctively reflected on my home town, Jakarta, Indonesia where most of the people still do not have proper houses to stay let alone own a computer that can access internet with cable speed. Some of them even do not have enough money to keep themselves alive, so sometimes they cannot buy books to read. Therefore, they have to go to the library to borrow books or borrow their friend’s book and share the cost. And surprisingly, some of these people became successful without the help of the best technology and live their lives happily without whining and complains.

My point is not that I am opposing this idea of allowing students in America to have access to the best technology, but one can still survive without these technologies. We tend to forget that we are becoming more and more attached to these technologies and we are oblivious that living life in a simple way may bring us more happiness in life.

Digital Divide

The digital divide is something that many people do struggle with today, and I see how a student could be put at a disadvantage, however, I do not think that this is something that the government should be focusing on. There are a lot larger issues that are more prevalent for our nation to be worrying about such as homelessness. " One approximation of the annual number of homeless in America( from a study by the National Law Center on Homelessness and Poverty,) estimates between 2.3 and 3.5 million people experience homelessness. " This is something that the nation should be worried about, not whether students have the newest and best technology available. I grew up with dial up, I survived, and did pretty well in school.

Digital Divide

I think that not having access to the internet is a disadvantage especially to students. However i also believe that having a dial-up connection is better than nothing and that there are so many families that would be happy with just that, to be connected in some way. Since Lochlear mentioned about her children having to complete assignments online I assume that the school or local library could provide the needed internet to complete these assignments. Overall I do not think that she is entitled to have internet given to her. People who do not have cell phones are put at a disadvantage but if they cannot afford to pay the bill there is nowhere saying that they are entitled to staying connected. The internet is quickly becoming a necessity but I think it is premature for her to be asking for high speed internet because it is still a service that must be paid for, especially in the case that she does not complain about not having internet at all, but that it is just not fast enough.

Digital Divide Video

I think that Rhonda makes a good point about the internet divide. It is important to have internet provided to all people at a a reasonable price and not have people stuck with dial-up. It does put children at a great disadvantage when they do not have access to the internet to do their homework assignments. Now a days most school assignments require the use of the internet and it is difficult if the students do not have access to an adequate source of internet service. Every child should have the same type of internet available to them so they can be on an equal playing field. The school system is already divided we should not add another source of division between students and their education. There is a problem with the internet divide and it should be addressed, but Rhonda was a little too emotional about it.

Rhonda Locklear's Digital Divide Concern

I feel that what she is saying it absolutely true that the internet has become an entity of practically everyone's daily lives (especially for students). Students are at a disadvantage if they cannot conduct research, do homework assignments, and projects if they have poor internet providers, or just dial-up in general. And since there are people, like Rhonda Locklear, who cannot provide a good internet source to their families, there should be some kind of assistance to these families, so that their children are not caught within the digital divide. And also so they can use this powerful tool to help them in completing assignments and projects for school. The internet has and will continue to become more of a necessity as the years progress. Also those that do have access to good internet sources will be at a higher advantage, especially in the schooling system, than those who are not.

In-Class Assignment - Citizens United v. FEC

Business & Society – Custin – April 19, 2010

In essay form, please answer the following questions:

1. Please describe the United States Supreme Court’s rationale or reasons for their decision in United States Supreme Court case of Citizens United v. Federal Election Commission.
2. Describe your prediction as to how this important legal decision will affect decisions corporations will make concerning contributions to political candidates.
3. Do you believe that corporations should contribute to political campaigns? Fully discuss.

Summit on High Speed Internet

Obama Says Tea Party Protestors Should Thank Him

http://www.examiner.com/x-19632-Salt-Lake-City-Headlines-Examiner~y2010m4d16-Obama-said-that-Tea-Party-protestors-should-thank-him-for-cutting-taxes-video

Assignment for Monday April 19

1) Read and Study Chapter 9 in Text
2) Locate and be familiar with the United States Supreme Court case of Citizens United v. Federal Election Commission. McCain Feingold Campaign Financing

Is Health-Care reform Constitutional?

http://www.washingtonpost.com/wp-dyn/content/article/2010/03/19/AR2010031901470.html

WSJ- Study of Ethics

By BETH GARDINER - Wall Street Journal 4-14-10

The study of ethics, once an academic orphan, is grabbing a more central role at many business schools since the financial crisis shone a spotlight on the damage that can be done by irresponsible business practices and an exclusive focus on the bottom line.


Critics have suggested that B-schools bear some responsibility for the culture of excessive risk-taking that helped trigger the credit crunch, saying they failed to teach students that there is more to business than just making money. Many schools have responded by re-examining their priorities, and giving ethics more classroom time, either in modules of its own or incorporated into key classes like strategy, finance and accounting.

Faculty are defining the subject broadly, arguing that ethical business practice is not just about refraining from cheating and corruption, but recognizing that a company has responsibilities beyond its shareholders' wallets—to employees, community, customers and the environment.

Schools may have erred in the past by assuming students were sufficiently aware of the importance of responsible behavior and failing to give it enough emphasis in the classroom, says Caroline Wang, who teaches a new, mandatory course on responsible leadership and ethics at the Hong Kong University of Science and Technology Business School.

By focusing on profit without talking enough about a company's wider responsibilities, "we gave people the impression that only profit counts," she says. "We must bring out the other elements."

Ms. Wang, whose course is required of both M.B.A. and executive M.B.A. students, takes a novel approach, using examples from outside the business world to demonstrate the power of strong leadership. She sees good leaders as the linchpin of ethical businesses, and holds up Antarctic explorer Ernest Shackleton and Anne Sullivan, who taught Helen Keller, as models.

Although Shackleton's 1914-1916 mission failed when his ship the Endurance became trapped in ice, his success in keeping his crew safe and undivided by infighting holds valuable lessons in responsibility for everyone who manages people, Ms. Wang tells students. At the heart of Shackleton's approach was his honesty in warning potential crew members of the hardships of their mission before it began, she says.

"He set the right expectations, and that really helped him to manage the morale when they did encounter difficulty," she says. "The majority of entrepreneurs fail, but if they are good leaders people follow them again, and eventually I think they will succeed with a group of passionate people."

Many B-schools boosted their offerings on ethics and responsible business practice several years before the financial crisis, after the scandals at companies like Enron and WorldCom, says Huw Morris, chairman of the Association of Business Schools in London.

Businesses have let schools know it matters.

"Companies, when they used to come to the school, they used to start with 'We want talented people,' but now they start their speech with 'We need people with very good ethics,' and after that they talk about" skills, says Pascal Krupka, M.B.A. director at Rouen Business School in France.

In a survey by the London-based Association of M.B.A.s and northern England's Durham Business School, B-school administrators rated ethics the most important subject for students in the current business climate. Seventy-nine percent of schools and 59% of alumni questioned said M.B.A. programs should teach what's called a stakeholder approach—focusing on companies' responsibilities to communities, customers, employers and society at large—rather than encouraging students to think only of their obligations to shareholders.

Despite the increase in interest, there are pressures on schools to produce students who make money their top priority, particularly from school rankings that are based partly on how much salaries increase after graduation, Dr. Morris says.

"Built into those structures are incentives to behave unethically," he argues.

The increased focus on ethics is not just happening in the West.

Students in China are more interested than ever in issues like social responsibility and sustainability, says Charles Chen, director of executive M.B.A. programs at the China Europe International Business School, or CEIBS.

"Although the economy has been in a boom, pollution is terrible, and people can see that if we don't do anything about it, we will be hurt," he says. "If the corporations do not act responsibly, there's no way the economy can keep on growing."

Dr. Chen says he talked to students in one recent executive M.B.A. class about what happens when powerful companies push their suppliers too hard in an effort to maximize profits, citing as examples Toyota's recent quality problems and the toxin-tainted milk that sickened about 300,000 babies in China in 2008 and 2009.

"If you have a dominant position in a supply chain, you could squeeze upstream and downstream to the limit, but there is a point beyond which it will break up," he says.

At Rouen, Mr. Krupka has found an unusual way to engage students in the subject. He regularly invites Benedictine monk Didier Le Gal, who comes in traditional robe and sandals from a nearby monastery, to his classes. Dom Le Gal, whose abbey operates a successful document-scanning business—an outgrowth of the monks' ancient skill at copying books by hand—talks about ethical ways to manage people and make money.

Dom Le Gal brought a book by St. Benedict about "how to manage a monastery, how to manage people, how to make decisions," Mr. Krupka recalls. "He said in this book, you can replace brothers with colleagues, you can replace the word priest with leader," and its lessons are relevant for modern executives.

Dr. Morris noted that the teaching of ethics often comes into fashion during economic downturns and after scandals like the junk bonds of the 1980s. "This has happened before," he says. "I suppose we'll have to wait and see how long our collective and corporate memories will be" this time.

Health Care Reform Discussion on April 14

Please provide your follow-up comments to the Constitutional issues concerning the health care reform. Please consider all of the cases we discussed: Wickard, Heart of Atlanta Motel and Lopez (regulation of non-economic activity). Also consider Article I section 8, the Commerce Clause, the 10th Amendment and the legal requirement to purchase of health insurance.

Please review this Video re: L3C - Social Responsibility

L3C Assignment

Please bring to class your draft paper on the L3C Low Profit Corporation. Please also bring copies of any articles or reference material cited in your draft paper. The final paper for each group is due on Monday. Please also post your final paper on the Blog for comment and review on Monday A.M. Rick Custin

L3C

http://richiericher.wordpress.com/2009/09/04/foundations-listen-up-why-pris-and-l3cs-matter/

Corporate Social Responsibility & Green Business Panel

Thursday, April 15th

IPJ Theatre

12:30pm – 2pm

Moderated by Professor Patricia Marquez

Panelists to be announced

Whistle-Blowing seems to work in targeting corporate misdeeds. It uncovers corporate misconduct.

Since we spent a considerable amount of time talking about whistle-blowing, this may be useful.

Whistle-blowing by employees and insiders is a “useful mechanism” for uncovering corporate misbehavior, with clear economic and governance impact on the companies involved, according to a new academic study.

“Whistle-blowing allegations had an immediate negative economic consequence for target firms,” the study found. On average, the stock price of a target company fell 2.8 percent in the five days around the day an allegation became public and even more severely – an average of 7.3 percent - when the whistle-blower alleged “earnings management.”

The paper – Whistle-Blowing: Target Firm Characteristics and Economic Consequences – was written by Robert Bowen and Shiva Rajgopal, Professors of Accounting at University of Washington, and Andrew Call, Assistant Professor of Accounting at the University of Georgia. Highlights of the paper were first posted on the Harvard Law School Forum for Corporate Governance and Financial Regulation.

In the wake of scandals at Enron, WorldCom and other companies, the Sarbanes-Oxley Act of 2002 incorporated provisions to encourage and protect whistle-blowers, including requirements for whistle-blowing “hotlines” that facilitate employee reporting. The paper addresses critics who have argued that whistle-blowers often misjudge a situation and “indulge in trivial or frivolous complaints.”

“Our results suggest whistle-blowing is far from a trivial nuisance for targeted firms,” the paper reports, and provide “indirect evidence on the efficacy” of whistle-blowing protections in the Sarbanes-Oxley Act.

The researchers found that whistle-blowing generally led to more earnings restatements, more shareholder lawsuits, and “relatively poor operating and stock return performance” compared to other firms. “Whistle-blower allegations appear to be an early indicator of future negative economic consequences for targeted firms,” the study found.

On average, whistle-blowing targets exposed in the press “improved several dimensions of governance relative to the year before the whistle-blowing event” and relative to a matched sample of control firms. Those governance improvements were not apparent for firms subject to whistle-blowing allegations that were not widely disseminated, the researchers said.

High-growth companies and those with strong stock market performance are more likely to encounter whistle-blowing, according to the study, as are those that have recently made reductions in work force. “Employees, especially former employees who have been let go, are more likely to make public allegations following layoffs,” the paper says. “Further, layoffs can increase the animosity between the firm and existing employees, and if existing employees perceive their job as being less secure, the potential cost of blowing the whistle decreases.”

Corporate social responsibility worth the additional costs? Yes since consumers are willing to pay more for socially responsible corporations. This proves it increases brand value, the intangible assets.

American consumers are willing to pay a premium for goods from socially responsible companies, with 70 percent saying they would pay more for a $100 product from a company they regard as responsible, according to a new survey.

Despite the economic recession, 59 percent of those responding said they plan to spend the same or more on products from socially responsible companies.

The second annual Corporate Social Responsibility Perceptions Survey was conducted by research-based consultancy Penn Schoen Berland in partnership with brand consulting firm Landor Associates and strategic communications firmBurson-Marsteller. The results are based on 1,001 online interviews with the general public in the U.S. conducted in mid-February 2010.

The survey found that 75 percent of consumers say it is important for companies in each of the 14 industries tested to be socially responsible. Of those industries, Food, Consumer Goods and Retailers were perceived as performing best, while Financial Services, Healthcare and Media were perceived as performing worst.

Food giant General Mills was perceived to be the most responsible of 64 tested brands.

The survey found that more than half (55%) of consumers are unsure about the meaning of “corporate social responsibility.” Of those who do know what “CSR” means, 20% percent said it involves “giving back to the community” while 19% say it is about “self-regulation and accountability.” Responsible environmental (16%) and employment (16%) practices were seen as the top ways to be socially responsible, the survey found.

Seventy-eight percent of employees are “unclear or unaware” of their employers’ CSR activities, according to the survey. One third of workers said they would take a pay cut to work for a socially responsible firm. About one half (49%) of 18-24 year old employees would take a pay cut to work at a socially responsible firm compared with 33% of 35-39 year olds and 25% of employees 65 years of age and older, the survey found.