By assessing the corporate responsibility audit of a Fortune 500 company, you will better understand how companies can make an impact on society through their social responsibility.

The paper is intended to be an evaluation of the corporate responsibility reports of a fortune 500 company to assess their position on social responsibility. The Corporate Responsibility along with Social Audit Stands and Social Reporting are introduced.

Question: Evaluate the corporate responsibility reports of a fortune 500 company and assess their position on social responsibility, addressing Global Impact, Ethics, Public Policy, Environment, Technology, Workforce or Stakeholder Rights.

Discussion Case: Corporate Social Responsibility at Gravity Payments

Dan Price, the founder of Gravity Payments, a small, privately owned company that provided high-service and low-cost credit card processing, surprised his 120-person staff when he announced in 2015 that over the next three years he would raise the salary of all employees, even the lowest paid clerk, customer service representative and salesperson, to a minimum page 72of $70,000. The average annual salary at that time at Gravity was around $48,000, so the increase would nearly double some employees' salaries. Price explained that he would pay for the wage increases by cutting his own salary from nearly $1 million to $70,000 and using 75 to 80 percent of the company's anticipated $2.2 million in profit.

Price's announcement was met with mixed reactions. Some employees were thrilled, clapping and whooping when they heard the announcement. "I'm freaking out," said one employee. Others?many from the financial services community?said that this was just a costly publicity stunt. However, others were supportive. Talk show hosts lined up interviews with Price. Job seekers by the thousands sent in resumes. Harvard business professors flew out to Gravity Payment's headquarters to conduct a case study. Third graders wrote Price thank-you notes, and single women wanted to date him.

Price was no stranger to the spotlight. He had earned the honor of Entrepreneur of the Year in 2014 from Enterprise Magazine. GeekWire named Price its Young Entrepreneur of the Year in 2013, and in 2010 he received the Small Business Administration's National Young Entrepreneur of the Year award. Price also annually donated 10 percent of Gravity's profits to charity. The equitable employee salary announcement seemed like another step toward achieving Price's goals as a business owner. Price launched Gravity (a name, Price explained, that was selected since "you could understand [it] on the phone") while attending college, but the firm actually grew out of a technology consulting business he created while in high school. His goal was to manage credit card transactions for small businesses, like coffeehouses, in a more affordable and transparent way. "I never intended to make a lot of money, or really any," said Price. "I was really upset at this industry for the way they were treating my [consulting] clients, and I just wanted to blow the thing up. So I was like, 'I'm going to charge a third of what everyone [else does].'"

Financial analysts recognized Gravity Payments' success; his company processed nearly $10 billion in credit card transactions and generated revenues of about $150 million annually. When asked why he did not "cash out," Price responded, "I'll ask my friends who have sold their businesses, 'Did that business get to the goal that you originally had in mind?' And they're all happy they sold because of the phenomenal financial outcome. But when I ask them, 'Did you actually accomplish the nonfinancial goal that you set out in starting a business?' ... they almost all say no."

Price encountered hard times in 2008 when Gravity lost 20 percent of its revenue nearly overnight because customers were running less volume through the system during the economic recession. Price recalled that half of his staff was in his office asking for raises and the other half was definitely afraid they were going to lose their jobs. So, he called his employees together and explained that the company had eight months of cash in the bank. "If we hold our expenses steady and just sell the same amount every month for five months, we'll get back to break-even and not have to do eny benefit cuts, any layoffs, anything like that," he told his staff. Given Price's response during the economically challenging times, it did not surprise his employees when he took the bold move of promising every employee a salary of $70,000 annually that involved him taking a million-dollar pay cut in 2015.

Price's commitment to a new company minimum wage captured national attention given the soaring disparity between executives' pay and that of their employees. In the United States, where the pay gap was the greatest for any country, chief executives earned more than 300 times what the average worker made (as discussed in more detail in Chapter 13). Some people, like Gilded Age's executive J. Pierpont Morgan and management scholar Peter Drucker, advocated a 20-to-1 executive to average employee ratio. Price's 1-to-1 ratio was unprecedented in the business community. "The market rate for me as a CEO compared to a regular person is ridiculous, it's absurd," explained Price, who admitted that his only extravagances were snowboarding and picking up the bar bill for his friends. He drove a page 7312-year-old Audi, which he received in a barter for service from the local dealer. "As much as I'm a capitalist, there is nothing in the market that is making me do it," said Price, referring to paying wages that would make it possible for his employees "to go after their own American dream, buy a house and pay for their children's education."

Price admitted that hearing his employees' problems with making ends meet on wages that were well above the $7.50 per hour minimum wage or even at $40,000 a year "just eats at me inside." He wanted to address the social issue of wage inequality and felt that as a business leader he was in a position to do something, but he wanted to do something that would not result in raising prices for his customers or cutting back on services. Hayley Vogt, a 24-year-old communications coordinator at Gravity who earned $45,000 annually, said, "I'm completely blown away right now [after hearing Price's announcement]." She said she had worried about covering rent increases and a recent emergency room bill. "Everyone is talking about this $15 minimum wage in Seattle and it's nice to work someplace where someone is actually doing something about it and not just talking about it."

Fifteen months after Price's unprecedented announcement, his employees decided that he should not be driving around in his 13-year-old Audi, so they bought him a Tesla. Price posted to his Facebook page, "Gravity employees saved up and pitched in over the past six months and bought me my dream car. A brand new, gorgeous blue #Tesla. Still in shock. How do I even begin to say thank you?"

In 2020, Price claimed his minimum wage policy was still a success. He decided to open a second office in Boise, Idaho, and implement the same policy of a $70,000 minimum wage by 2024, even though the cost of living in Boise was much lower than in Seattle. Price argued, "When you're being paid a living wage, then you feel valued as an employee and you feel like, wow, this company respects my intellect and my ability."

As for the pay raises, commentators remained divided. Paul Davidson of USA Today commented, "Big pay hikes may yield surprisingly beneficial results, especially in the current tight labor market." Yet, other experts said that the outsized, across-the-board increase Price shelled out should not set a benchmark for most companies.

FIGURE 3.2 Evolving Phases of Corporate Social Responsibility Source: William C. Frederick, "Corporate Social Responsibility: From Founders to Millennials," in James Weber and David M. Wasieleski (eds.) Business and Society 360: Corporate Social Responsibil Publishers, 2018). Phases of Corporate Social Responsibility CSR Drivers CSR Policy Instruments CSR Corporate Social Stewardship Executive conscience Philanthropic funding Early in the 20th Corporate philanthropy-acts of charity Company image/reputation Public relations century but Managers as public formally in the Trustee-stewards 1950s-60s Balancing social pressures CSR2 Corporate Social Responsiveness Social unrest/protest Stakeholder strategy 19605-70s Social impact analysis Repeated corporate misbehavior Regulatory compliance Strategic priority for social response Public policy/government regulation Social audits Organizational redesign and training Stakeholder pressures think tank Public affairs function for responsiveness policy papers Governance reform Stakeholder mapping and Political lobbying implementation CSR3 Corporate/Business Ethics Religious/ethnic beliefs Mission/vision/values 1980s-90s Foster an ethical corporate culture Technology-driven value changes Statements Establish an ethical organizational Human rights pressures CEO leadership ethics climate Code of ethics Recognize common ethical principles Ethics committee/officer/audits Ethics training Stakeholder negotiations CSRA Corporate/Global Citizenship Global economic trade/investment Intergovernmental 1990s-present Stakeholder partnerships High-tech communication networks compacts Integrate financial, social, and Geopolitical shifts/competition Global audit standards environmental performance Ecological awareness/concern NGO dialogue Identify globalization impacts NGO pressures Sustainability audits/ Sustainability of company and reports environment CSR 5 Toward a Millennial Future Sustainability processes In determinate, 2000-3000 Integrating culture and nature Generational changes speculative Seeking corporate and Metaphysical beliefs Awaits Millennials' planetary sustainability control of corporate Comprehending planetary processes processesFIGURE 3.5 The Stages of Global Corporate Citizenship Source: Adapted from the Boston College Center for Corporate Citizenship's "Stages of Corporate Citizenship: A Developmental Framework," by Philip Mirvis, Ph.D. and Bradley K. Googins, Ph.D., 2006. Citizenship Strategic Issues Stakeholder Content Intent Leadership Structure Management Relationships Transparency Stage 5: Change the Market Visionary, Mainstream: Defining Multi- Full Transforming game creation or ahead business driven organization disclosure social change of the pack Stage 4: Sustainability Value Champion, Organizational Proactive, Partnership Assurance Integrated or triple proposition in front of it alignment systems alliance bottom line Stage 3: Stakeholder Business Steward, Cross- Responsive, Mutual Public Innovative management case on top of it functional programs influence reporting coordination Stage 2: Philanthropy, License to Supporter, Functional Reactive, Interactive Public Engaged environmental operate in the loop ownership policies relations protection Stage 1: Jobs, profits, Legal Lip service, Marginal, Defensive Unilateral Flank Elementary and taxes compliance out of touch staff-driven protection