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The concept of social and civic responsibility of organizations and their people recognizes that conditions beyond the immediate domain of one’s particular organization are important and merit attention and care. Assuming such responsibilities may also foster the development of mechanisms to meet the challenges of local communities as well as the planet. By all accounts, the United States and the world face increasingly urgent challenges.
This research-paper establishes the urgency of issues facing the nation and explains why civic and social responsibility hold relevance in the 21st century. Distinctions are made between the concepts of social responsibility and civic responsibility, and their historic roots are explored. The model of society found in the Constitution of the Commonwealth of Massachusetts is presented as guidance for today.
Business organizations provide the focal point for this research-paper. The context of the origins of debates with regard to the social and civic responsibility of business is described. The need for the enhancement of human intellectual capital for problem framing and problem solving is set forth, with cross-sector frameworks presented as assets to enhancing needed human intellectual capital. The impact of an increasingly unscripted future is detailed and strategies for fostering civic and social responsibility are discussed.
The U.S. economy has been undergoing a major transition for over half a century. This change has been detailed by numerous scholars and is generally described as a shift from the Industrial Age to the Information or Knowledge Age. Just as there was a significant transition from the Agrarian Age, where most people farmed and produced agricultural goods, to the Industrial Age when the assembly line and mass production were introduced, so now the U.S. economy is engaged in a monumental shift that is just as significant, if not more so, than anything ever experienced in the United States. As noted economists Reich (1992) and Rifkin (1996) point out, the economy has transitioned from work in buildings, plants, and assembly lines as creators of wealth to work in the creation, development, and implementation of ideas as creators of wealth. Fueled by technology and globalization, the shift to the Knowledge Age emphasizes information, knowledge, expertise, and creativity. Knowledge must be created, learned, categorized, evaluated, analyzed, retrieved, stored, indexed, made accessible, and transmitted. Massive transformations in social institutions are occurring as a result. Old economic forecasting models are out of date.
The forces of globalization and technology are changing the way we think and live in a myriad of unanticipated ways. Going beyond the remote control on the television set, people are increasingly getting their information from specialized sources and connecting all over the world via wireless technologies—YouTube and iPods to name a few.
While the United States was once the unquestioned economic superpower on Earth, it is now freely acknowledged that its exalted status is in great jeopardy, as the economies of China, India, the European Union, and others are emerging at a previously unfathomable pace. Friedman’s (2006) work in this area described how technology makes it possible for people in other parts of the world to take on jobs in U.S. corporations that Americans once held, at a fraction of the wage, causing considerable upheaval in the United States while fueling a rapidly expanding middle class in India and China.
All the while, in a separate but related development, the reality of global warming and climate change is appearing as the defining issue of the century, threatening not only endangered species and island nations in the Pacific, but also possibly human society as we know it. The documentary film An Inconvenient Truth and the book by that title, both featuring former vice president Al Gore, have brought the urgency of global warming to the attention of the American people. More recently, the massive and detailed report by Sir Nicholas Stern of the Treasury of Great Britain speaks of the consequences of climate change in the starkest of terms, with the possibility of posing threats previously unknown to human civilization. The Stern report includes ways in which economies can be strengthened by addressing climate change issues.
In a knowledge-based society, it is clear that human intellectual capital is required in order to meet these challenges (as well as many others not discussed here and not yet realized). Human intellectual capital refers to the capacity to marshal key relevant knowledge and expertise, creative genius, and analytical and problem-solving skills to certain ends. Human intellectual capital provides the skills necessary from which to draw multiple perspectives in framing issues and creating solutions.
It is within the context of these dramatic upheavals that issues of civic and social responsibility are considered. While such responsibilities may often be seen as “optional” for management and organizations, taking on such responsibilities is now often a necessary skill for individuals and communities. Engagement with social and civic responsibility enhances the development of human intellectual capital in the United States and the world, and thus is key to meeting the challenges facing the global community.
Civic responsibility and social responsibility are not standard ideas in management texts. In many ways, these ideas are new to the management field, though they are most closely linked to ideas found in ethics, business, and societal concepts. This research-paper addresses the roots of social and civic responsibility, the role of such responsibility in human intellectual capital development, and how such responsibility is fostered.
Social And Civic Responsibility
To begin, it is important to distinguish between social responsibility and civic responsibility. While related, these two concepts have distinct differences.
Social responsibility and civic responsibility are concepts that refer broadly to accepting responsibility for improving our communities and acting for the common good. People and organizations assume this responsibility in recognition of the reality that conditions beyond the immediate domain of the organization (whether it is a corporation, small business, government agency, or nonprofit) are important and merit attention and care. Exercising such responsibility entails acquisition of knowledge about conditions in society and framing an approach or action and the application of knowledge to the issues at hand. In general, exercising social responsibility can refer to anything from serving food in a local soup kitchen, to picking up trash on the side of a highway, to reading to children in school, to volunteering in a hospital, to being a foster parent. These activities are often tied to participation in community-based organizations that work to address problems in communities and society.
Broadly speaking, what is being described as social responsibility is the ability to identify something that can be done to make things better in the community and then to act on that realization. While the United States has a long history of such citizen involvement, Putnam’s research, reported in his book, Bowling Alone (2000), points out that Americans are increasingly isolated and disengaged from their communities and that a precipitous drop in social capital is the result. At the same time, a multitude of nonprofit organizations such as religious charities, public schools, universities, nonprofit and public hospitals, and other public benefit organizations operate with missions directed at enhancing the common good. People in these organizations may see themselves engaged in social responsibility and social capital formation by virtue of their employment in and/or volunteer contributions to organizations of this type.
Related to social responsibility is the concept of civic responsibility. Civic responsibility has the same goals as social responsibility—to address problems in society and advance the common good—but does so by way of the political structure of the U.S. democracy as a means to get things done. Civic responsibility includes the fundamental responsibility to citizenship in a free society: voting in elections for the public officials who make decisions on our behalf. In addition, efforts to influence political decisions, such as writing letters to the editor or one’s elected representatives are also examples of exercising civic responsibility. Lobbying lawmakers, working on petitions, working on political campaigns and initiatives, and other forms of political activism are among the ways in which people exercise their civic responsibility. Government and legislative bodies, public agencies, and related organizations are most closely tied to this concept.
The following ways to address the issues of poverty and homelessness serve to clarify further the distinctions between social responsibility and civic responsibility. Helping to serve food in the local soup kitchen is exercising social responsibility. Civic responsibility on the same issue might include lobbying state and local officials about addressing issues of affordable housing, about raising the minimum wage, or joining an affordable housing coalition or a living wage advocacy organization that lobbies for policy change. Note in this example that while civic and social responsibility address the same issue, civic responsibility does so by leveraging the role of government.
Civic responsibility is grounded in civic knowledge, which is a fundamental understanding of how the government works and whom in the government to contact for what. For example, it may not be helpful to attend a local city council meeting with the intent of securing a change in U.S. foreign policy. Nor is it useful to lobby one’s U.S. senator about a burned-out streetlight in the neighborhood.
With approximately 90,000 tax-levying governmental entities in the United States (including cities, counties, towns, states, water districts, and school districts), there is a need to have an understanding of the structure of governments in the nation, as well as the principles and premises upon which one’s government is based. In the United States, that would be the U.S. Constitutional democracy.
As has been demonstrated, there is considerable overlap between social and civic responsibility. Both concepts require the development and use of important skills for the Information Age—the important human intellectual capital skills of problem identification and problem solving. These concepts are rooted in concern for the common good and in a desire to improve situations for communities and fellow citizens. Both are grounded in the embrace of human dignity and in the belief that individuals can make a difference.
The rest of this research-paper details the roots of social and civic responsibility in the United States, the shifting context of such responsibilities in a global community, and the impact that an increasingly unscripted future will have on civic and social responsibility of business organizations and their people in the 21st century.
Origins of Social and Civic Responsibility in the United States
In the United States, the origin of social and civic responsibility clearly dates back to the founding of the Republic. The latter part of the 18th century saw the colonies break away from Great Britain, wage a revolutionary war against the greatest military power on Earth, complete with colonists renouncing their British citizenship, and engage in the remarkable founding of what is now the United States.
Driven by ideals of the Enlightenment—equality and liberty—the Grand Experiment established a democratic constitutional Republic by which the citizens1 elected their leaders. In building a new government and a society of promise, the purpose of government was clearly set forth as enhancing individual benefit and the common good. As one example of how these concepts were expressed by the founders, we turn to the oldest working government constitution in existence, the Constitution of the Commonwealth of Massachusetts (Massachusetts, 2007). This document expresses the vision that many of the founders worked to establish.
As the precursor to the U.S. Constitution in terms of provisions, goals and ideals, the Constitution of the Commonwealth of Massachusetts was crafted primarily by John Adams, who would become the second president of the United States. The role and purpose of government, and the description of what the “body politic” entails, gives a stunning description of what the founders viewed as the means and ends of the Grand Experiment of self-rule.
The following indented paragraphs are taken directly from the Constitution of the Commonwealth of Massachusetts (Massachusetts, 2007). These paragraphs are included here to enhance understanding of the founding ideals of the United States. Notice that the first paragraph of the Preamble sets forth the role of government: to give individuals the power to enjoy “the blessings of life,” and that if the government fails in this regard, then the people have a right to change the government:
PREAMBLE The end of the institution, maintenance, and administration of government, is to secure the existence of the body politic, to protect it, and to furnish the individuals who compose it with the power of enjoying in safety and tranquility their natural rights, and the blessings of life: and whenever these great objects are not obtained, the people have a right to alter the government, and to take measures necessary for their safety, prosperity and happiness.
In addition to charging government with the responsibility of facilitating a better life for people is the idea that the people had a right to change the government, to depose leaders of their government. This “power to the people” was a truly remarkable notion at the time within the context of centuries of rule by kings and royalty.
Turning now to the following second paragraph of the Preamble, note that the body politic is defined as a voluntary association, creating a “social compact” where all citizens work together for the common good.
The body politic is formed by a voluntary association of individuals: it is a social compact, by which the whole people covenants with each citizen, and each citizen with the whole people, that all shall be governed by certain laws for the common good. It is the duty of the people, therefore, in framing a constitution of government, to provide for an equitable mode of making laws, as well as for an impartial interpretation, and a faithful execution of them; that every man may, at all times, find his security in them.
Note here that fairness in the law (making and interpreting) is set forth as a value. Adams also establishes the principle that people find security in the rule of law. No one is exempt, and the law is not to be applied unevenly among members of society.
Turning to Article VI of the Constitution, which follows, note how it clearly sets forth a defining position on the value of equality and the distain for privilege.
PART THE FIRST: Article VI. No man, nor corporation, or association of men, have any other title to obtain advantages, or particular and exclusive privileges, distinct from those of the community, than what arises from the consideration of services rendered to the public; and this title being in nature neither hereditary, nor transmissible to children, or descendants, or relations by blood, the idea of a man born a magistrate, lawgiver, or judge, is absurd and unnatural.
Note that in this article on assumptions of or granting of privilege, particular associations of people (be they religious groups or business groups) are not to hold any advantages or privilege over anyone else.
In the following Article VII are details of the extent to which government is to act for the common good and not for the private gain of one person over another.
Article VII. Government is instituted for the common good; for the protection, safety, prosperity and happiness of the people; and not for the profit, honor, or private interest of any one man, family, or class of men: Therefore the people alone have an in-contestable, unalienable, and indefeasible right to institute government; and to reform, alter, or totally change the same, when their protection, safety, prosperity and happiness require it.
As you can easily see, Article VII reinforces the previous ideas of equality and fairness set forth in the Constitution. Recognizing that any government is an instrument of power, Adams and others sought to ensure that the power would be fairly distributed for the benefit of all.
Reinforcement of the notion that the people have a right to change their leaders if it turns out that the leaders are not serving them well is strongly set forth in Article VIII.
Article VIII. In order to prevent those, who are vested with authority, from becoming oppressors, the people have a right, at such periods and in such manner as they shall establish by their frame of government, to cause their public officers to return to private life; and to fill up vacant places by certain and regular elections and appointments.
It is important for all who benefit from the American democratic system to recognize and understand the principles established in the Constitution of Massachusetts. These principles, articulated and codified in the late 18th century, form the foundation for civic and social responsibility in the 21st century. These principles include that individuals are responsible for their government and for the common good. Individuals are entitled to the benefits of sound government and a functioning society. Individuals are equal and have equal rights. The benefits of society and government are to be distributed fairly. Individuals can make a difference. With these principles, the foundation for the nation, and for the growth and development of human intellectual capital, was born.
While many Americans see the founding of the nation as a given, the effort at the time was tremendously complex. For example, it was challenging to convince many new Americans, who had just broken with Great Britain over the overbearing power of the King, that they would benefit from a Constitution and a central government. The issue at hand was concern for the concentration of power.
Three of the founders, Alexander Hamilton of New York, James Madison of Virginia, and John Jay of New York published a series of essays in newspapers throughout the colonies (published over the same signature: Publius), arguing for a central government and for the Constitution. Madison, who would become the fourth president of the United States, in his Federalist 51 essay pointed out that since men are not angels, there is a need to have a state which is governed by law.
If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself. A dependence on the people is, no doubt, the primary control on the government: but experience has taught mankind the necessity of auxiliary precautions. (Madison, 1788/2007a)
Remember that the founders were seeking to establish a society and government characterized by equality and fairness, as expressed by the Constitution of Massachusetts. Yet here, Madison acknowledged a fundamental quality of human society that people need government to ensure that fairness because “men are not angels.” This precaution had to be taken and developed into the structural systemic precaution of the checks and balances built into the U.S. Constitutional system.
It is important to note that at that time, the 18th century and earlier, it was astonishing for citizens to be deemed capable of the enormous responsibility of selecting their government and its leaders. But Madison argued that all citizens were imbued with this task in order for the government to be formed and to function. Madison wrote in Federalist 572:
Who are to be the electors of the federal representatives? Not the rich more than the poor; not the learned more than the ignorant; not the haughty heirs of distinguished names more than the humble sons of obscurity and unpropitious fortune.
The electors are to be the great body of the people of the United States. They are to be the same who exercise the right in every state of electing the corresponding branch of the legislature of the state. (Madison, 1788/2007b)
The premise of this entire effort of establishing a Constitutional democratic republic was that citizens would then, now, and in the future take civic responsibility. On this and this alone is the future of the Republic grounded. For citizens to do less is to jeopardize the continuance of the Republic.
Turning now to social responsibility, as explained previously, this concept is closely aligned with and derived from civic responsibility. The birth of the Republic posed expectations that were consistent with emerging voluntary associations engaged in actions to secure the social compact, of which Adams spoke. Many scholars have detailed how Americans voluntarily came together for the common good in the early days of the Republic. Voluntary groups and federations began to appear in New England in the 1820s. Churches, federations and leagues, poor houses—a myriad of associations began to emerge in the early 19th century.
In short, it is clear that civic responsibility is a foundation of the nation. Selecting the leaders of the government was an unprecedented role for the common citizen and tremendously empowering. If people could be entrusted with such a task, then surely they could be expected to address problems around them. Social responsibility is thus an outgrowth of civic responsibility. The ultimate purpose of such responsibilities is action for the common good. This responsibility is accorded to each citizen regardless of income or position in life. No one is exempt.
One can argue that as long as there are identified ways to improve society and the world, then people have a responsibility to help make things better. While numerous public benefit organizations (government agencies and nonprofit organizations) exist for that explicit purpose, such organizations are unfortunately by no means immune from corruption and dishonest actions, as Madison clearly understood. Rather than consider how these organizations can foster civic and social responsibility, it is argued that such responsibility is what they do. Attention is turned here to business organizations.
Social And Civic Responsibility Of Business Organizations
There is no question that multitudes of past and current leaders of business in the United States have taken and do take very seriously their social and civic responsibilities. That said, there is legitimate ambiguity regarding the proper role of business organizations in civic responsibility. Few would agree that employers should tell their employees for whom to cast their votes, for example. Many employers do encourage civic participation among employees by giving them time off work to cast their ballots, as well as by other means. Clearly, directing employees to vote for or against a candidate for public office is not considered appropriate civic engagement for business leaders.
Turning to social responsibility of business organizations, the debates here tend to center on the function of these organizations in a free market capitalistic economy. The background of these debates draws out the tensions between the role of government and the role of business in society.
It is useful to recognize the contrasting arguments in a long-standing debate as to the social responsibility of business in society. The arguments are fully considered in the research-paper of this volume that discusses business and society. Some scholars, such as Dahl (1998), argue that democracy and market capitalism are fundamentally not compatible, because market capitalism creates inequalities and that inequalities can lead to political unrest. In this situation, some citizens have undue advantages, as Adams would say, and the fairness of government and of the law is compromised.
Some hold the view that expecting business organizations to embrace social responsibility is a weak attempt to make capitalism compatible with democracy. When businesses do openly engage in social responsibility, cynics accuse the leaders of these organizations of simply making use of their good actions to market themselves as solid citizens.
That aside, it is important to focus attention on this important context of social and civic responsibility. Just briefly: while most of modern economics goes back to the mid-18th century in Scotland, to the writing of Adam Smith and his portrayal of the “invisible hand” of the marketplace, the debate on social responsibility can be said to start with Smith as well. A moral philosopher, he was heavily influenced by John Locke’s “social contract” theory. Locke’s ideas are familiar to those students of the Constitution of the Commonwealth of Massachusetts, as Locke links the legitimacy of government to the government’s ability to provide needed protections for citizen’s basic rights.
Smith’s Theory of Moral Sentiments, published before An Inquiry as to the Nature and Causes of The Wealth of Nations, clearly details the role of sympathy in human relations, decrying exploitation and the relentless pursuit of greed. Smith’s attention to moral sentiments is significant as his “invisible hand” idea is often cited in support of any undesirable consequences of the free market on those who are less privileged. While the “invisible hand” might not be governed by Locke’s “social contract,” moral sentiments would compensate, assuring equality and fairness.
Turning to more contemporary times, the latter part of the 20th century saw a growing national debate in the United States regarding the role of business in society. Famed economist Milton Friedman (1970) asserted that “the only social responsibility of business was to make profits.” At the same time, economist John Kenneth Galbraith (1973) argued for an enhanced governmental role in ensuring an economically just society. Both economists agreed on the same ends—a vibrant society in which everyone benefits. Their disagreement was on the means to those ends. But it is important to understand that often the debate on social responsibility of business is grounded on the divergent premises of the arguments of these two prominent economists.
Milton Friedman’s views, in concert with supporting political ideologies, prevailed during the last three decades of the 20th century and still prevail in the United States today. Corporate accountability to the investor and dedication to profits has become the hallmark of many of the largest U.S. corporations. To make a long story short, the latter part of the 20th century saw a dramatic turn away from the view that companies and firms had responsibility to employees and communities, in addition to their responsibilities to investors. During these decades, investors became the only legitimate stakeholder in corporate America; the investor became the only entity to whom companies and firms are accountable.
Two dominant changes also came into play during the last decades of the 20th century that contributed to corporate action. These changes are technological advances and globalization. Without advancing technologies that have replaced workers in the manufacturing plant and enabled the production of X-rays easily read by doctors overseas who command far less pay than U.S. radiologists, the employee might still have an honored status in corporations.
Corporate actions made possible by technology and globalization include the closing of manufacturing facilities and outsourcing of jobs to cheaper labor markets in other countries and overseas. The long-held “psychological contract” between companies and employees has been abandoned. U.S. employees are learning new rules of survival. No longer is competence on the job enough—people have to retrain, get reeducated, and prepare for an increasingly unscripted future for themselves and their children. For those who remain employed in these firms, they too tend to see themselves as at risk.
Scholars and the media alike point out that in the wake of losses in middle-class jobs, most of which were supplanted by lower paying service-sector employment, millions of Americans have seen their retirements decimated, lost their health insurance, amassed huge medical bills, lost their homes through foreclosure, and plunged into debt (Warren & Tvaqi, 2003). American families have used their credit cards for food and house payments, with the mistaken optimistic belief that their next job would be a better one than the one they just lost. Personal bankruptcies have continued at high levels for years in a row, and approximately 50% of the bankruptcies have been due to medical bills. In the first research to connect middle-class families to the need for charitable assistance, DiPadova’s (2001) research on welfare reform in the late 1990s indicated that charitable leaders were most surprised to see the increase in the numbers of two-earner middle-class families coming to them for help.
Criticism of U.S. corporations for their practices, as well as government inaction to help those families affected, has become widespread. Even Lou Dobbs (2004, 2006), financial commentator for CNN News, began to criticize free trade and champion the plight of the middle class in books and on his daily newscasts. Other voices included New York Times writer Louis Uchitelle (2006) and Yale political science professor, Jacob Hacker (2006). Increasingly since 2003, other print and broadcast media have drawn attention to the middle class, as well and it surfaced as a campaign issue in some of the congressional elections in 2006.
The 2006 midterm elections in the United States saw a rise of populism, free-trade critics, and isolationism, as attention by candidates to the middle class became more pronounced. Concerns regarding growing income inequality in the United States and even CEO compensation were set forth as an issue by Senator James Webb of Virginia in delivering the Democratic Response (Webb, 2007) to President George W. Bush’s State of the Union Address. In fact, just 6 months earlier, Secretary of the Treasury and former CEO of Goldman Sachs, Henry Paulson, expressed his concerns regarding widening income inequality in an address at the Columbia Business School, delivered shortly after his confirmation (Paulson, 2007). Deviating from his prepared remarks, he indicated that growing income inequality in the United States was his greatest concern, for when people lose confidence in the system, it begins to break down, prohibiting progress on other policy priorities (social security, trade, and energy).
The dynamic of the impact of globalization and technology on American business came at an unfortunate time for that sector. The United States experienced several decades of very public business and corporate scandals and associated ethical lapses, greatly intensifying public and academic critical attention to the role of business in society. These scandals further eroded public trust in corporations, raised corporate governance issues, and directly led to the passage of the Sarbanes-Oxley Act in 2002. More recent scandals are detailed on a number of Web sites (Patsuris, 2002; Associated Press, 2007; Citizen Works, n.d.; Economist, 2002; Chilinguarian and Doyle, n.d.; Masters, 2005).
In response to growing concern about American business issues, in the mid-1990s schools of business in the United States intensified “coursework in business ethics, responsibilities of leadership, and business and society” to the point of being “installed and almost universally adopted, especially in AACSB accredited schools” (Kolenko, Porter, Wheatley, & Colby, 1996, p. 134). Ethics courses in business and public administration graduate programs nationwide have been increasingly emphasized because of the public’s concerns.
Presenting a compelling solution to current issues facing corporate America, Waddock (2002) argued that U.S. corporations’ acknowledgment of investors as the only stakeholder is fundamentally flawed. She pointed out that there are multiple stakeholders (including communities, employees, customers, suppliers) and multiple bottom lines. In addition, she called for fundamental vision and value shifts in order to meet the global challenge. These shifts incorporate
social responsibility as part of standard operating procedure by recognizing multiple stakeholders, building a better world, seeing “business as integral to society” rather than as separate, and valuing democracy over authority and respect over hierarchy (pp. 323-325). Her groundbreaking work can be seen as a thorough attempt to make market capitalism compatible with democracy.
As is seen, the debate on social responsibility of business organizations is ongoing, and the role of government is still part of the debate. However, considering the magnitude of the challenges facing the nation and the planet, it may be that the time has come for a paradigm shift of enormous proportions. The new paradigm recognizes that business and government must work in tandem to address the challenges ahead, along with institutions of the nonprofit sector, or civil society. Developing the needed human intellectual capital required to address the issues of the day is a dire and common concern for all organizations across all sectors.
The workforce in the United States is already cross-sector, as described next. This factor enhances the development of human intellectual capital, as employees learn from experiencing different sectors throughout their careers.
21st-Century Multisector Reality
This section explores the need to abandon the sector-centric mindset that dominates professional education and organizations in the 20th century. The sector-centric mindset is the insistence of pursuing the perspective and interests of one sector of society (business, government, or nonprofit) to the exclusion of recognizing the value and legitimacy of the other sectors. The sector-centric mindset does not match the requirement of organizations to work with other organizations across sectors in order to meet their goals. Nor does the sector-centric mindset match the reality of people’s lives, and many find employment in multiple sectors during their careers. Further, the sector-centric mindset is damaging to the development of human intellectual capital in the United States, as it denies the legitimacy and value of experience across sectors.
Historically, American management education has been characterized as sector-centric. That is to say, business managers and leaders, educated in university business programs, often viewed themselves as having little in common with government or public managers and leaders, who were educated primarily in university departments of political science. Vastly separate degree programs and course curricula followed suit. This means that the conceptual framework within colleges and universities and with which organizations cast the work, problems, and issues of business, government, and nonprofits, is a siloed, narrow, limited, departmentalized framework.
While U.S. society has multiple sectors (the economic/ business sector, the public or governmental sector, and the nonprofit sector—the sector known as civil society, third sector, or the independent sector), the sector-centric mindset still prevails. This mindset extends to devising frameworks for addressing challenges of the day. These frameworks tend to gravitate to an either-or stance: either as prompting business solutions or requiring government action. This either-or stance exists in part because business organizations, like government agencies and nonprofit organizations, traditionally have been seen as encased in separate and discrete sectors of society. However, maintaining this mindset is unfortunate because increasingly, real and urgent solutions need to draw on the resources and capacity and contributions of all sectors of society. It is no longer enough to rely on simply one.
While the sectors of society are typically presented, discussed, and studied as separate entities, in reality they function in a mutual and symbiotic set of relationships. Each of the three sectors of societal organizations is critical for the well-being of the society as a whole, or the competitiveness of the nation, and for the development of human intellectual capital. Organizations in each sector have a stake in the viability and missions of organizations in the other sectors. “When any one of these sectors gains too much power and influence, the delicate system that operates for the common good is jeopardized” (DiPadova, 2000).
Businesses and firms need the structure and benefits of government in order to operate; the intractable problems faced by businesses in Russia where contractual agreements are not honored, is but one example of the difficulties of operating firms in an environment where contracts are not honored. In contrast, note that business firms are flourishing in China, fueled in part by a strong central Communist government.
Likewise, governments are challenged during severe economic downturns, such as what is happening in states and communities with high foreclosure rates. State and local jurisdictions and school districts face dramatically decreasing funds as residents lose their jobs and their homes; this dynamic limits funding for schools and other services. The nonprofit sector, that which includes religious and other charitable organizations, foundations, associations, and other public benefit organizations, provides the lifeblood of modern society, marshalling creativity and resources to address challenges of communities. Corporate layoffs and downsizing often have a direct impact on government coffers and subsequent ability to provide needed social services. The ability of local public educational institutions to provide an educated and competent workforce impacts business decisions to locate in a certain city or metropolitan area.
The work of business does not take place in a vacuum, and the health of business, government, and nonprofit organizations are inextricably intertwined. All are stakeholders in the common good. Businesses unavoidably impact the societies in which they operate and need to be accountable not only for the positive, but also for the negative byproducts of that intersection.
Business leaders often contribute to the nonprofit sector, serving on boards of directors. Business school graduates who assume positions in corporations frequently change
careers and take on responsibility in nonprofit organizations and government agencies. Prominent business leaders sometimes accept a call for public service and may lead a public agency; Secretary of the Treasury Paulson is among this group.
Additionally, public policy and business interests converge in key areas. Successful business leaders know how to interact effectively with public policy makers in a wide variety of forums. For example, in various states, councils of business leaders are set up to advise government agencies charged with implementing new welfare policies. Under welfare reform, many businesses are engaged in the training and hiring of welfare recipients, helping them to attain a measure of self-sufficiency (DiPadova, 2001).
The importance of the multisector perspective is emphasized by the fact that distinctions between organizations in the various sectors are blurred. Some government functions, such as the management of prisons and other correctional institutions, are being privatized; many businesses routinely engage in the government function of tax collection; sometimes nonprofit organizations accumulate considerable wealth.
At the same time, many leadership and management concepts find application to all organizational settings, regardless of sector. Churches, government agencies, multinational corporations, small business companies, foundations, schools, hospitals, and nonprofit organizations experience the organizational dynamics and authority issues, as well as leadership and management principles and competencies—in different settings.
Organizations in each sector may have a great deal to learn from those in the other sectors. As Peter Drucker (1998) pointed out, business and government organizations alike might gain from the practices of nonprofit organizations; perhaps something can be learned about motivating paid employees by examining the practices of those who manage volunteers.
The challenges of the nation and the globe require engagement from the three sectors that comprise modern society. One way to develop needed human intellectual capital to address the challenges facing the nation and the world is to draw on the varied experience of employees who change jobs from one sector to the next. Such changes are not unusual at the highest levels of government. For example, U.S. President Dwight D. Eisenhower was a military general as well as a past president of Columbia University. U.S. President Woodrow Wilson had been president of Princeton University. Learning from varied experience can be enormously helpful to enhancing the requirements of the current job position, and bringing better problem-framing and problem-solving skills to situations.
Many people change careers (not merely jobs) seven to nine times on the average during their work life. Individuals in the United States are gaining cross-sector experience, learning from that experience and thus increasing their human intellectual capital skills. While this situation and contribution of employees is not currently framed in terms of human intellectual capital enhancement, the point is that once organizations come to regard their employees’ cross-sector experience as a critical resource for different perspectives and problem solving, employee-enhanced human intellectual capital can be recognized and acknowledged.
U.S. managers and leaders across all sectors—business, government, nonprofit, health care, education—are increasingly aware of the need to reach across sectors to move their organizations forward. All are aware of challenges from globalization, technological advances, and international affairs. Gradually, the silos of leadership and management between sectors may break down.
By all accounts, government and business efforts across sectors will increase during the 21st century as the barriers between sectors become increasingly blurred. Particularly in the global arena, daily business operating decisions, such as the establishment of working conditions, treatment of workers, production efficiency, and by-products are increasingly of governmental and public concern. Effective business leaders know how to operate responsibly and with positive societal impacts to avoid problems and ensure that their businesses gain reality-based reputations as good corporate citizens.
Increasingly a cross-sector nondepartmentalized framework will be embraced for several reasons:
- On the macro level, the challenges of facing the nation and the world require cross-sector thinking to forge creativity and problem solving. As increasingly the nation’s work is beyond boundaries, so too must be the problem framing and solving.
- On the micro or individual level, it is important that employees be prepared to work in various sectors and between sectors. As just mentioned, the “psychological contract” between employers and employees has been shattered. Employees are “free agents” in the global workplace. As this understanding of the need to constantly be prepared and update one’s skills grows, more cross-sector thinking will be embraced. Individually, as Americans consider the problems and challenges of the day and of their lives, they typically do not THINK in cross-sector terms. This characteristic is changing as more work is done between sectors and people take jobs in various sectors over a career span.
As is clear, Americans live and work in a multisector environment. This holds enormous promise for needed learning to face the challenges of the times. Learning how to draw on this readily available resource is a key organizational skill for the enhancement of human intellectual capital.
The Unscripted Future
As many writers and scholars have pointed out, the American middle class has long been accustomed to following unspoken rules and having predictable results: gaining
an education, obtaining a secure job with decent pay, purchasing a home, having affordable health insurance, preparing for children’s college education, having a pension for retirement, and securing jobs at decent pay. These Americans had grown to expect that if they worked hard, their jobs, homes, health insurance, retirement, and children’s futures would be secure (Warren &Tvagi, 2003; Florida, 2005; Dobbs, 2006). Meeting this set of expectations was a “script,” providing a scripted future.
However, during the past two decades, Americans have learned that this is no longer the case; they increasingly understand that they face an “unscripted future.” The media reports that more than 50% of Americans no longer believe in the American Dream. Further, as jobs and associated benefits have become more tenuous, other unexpected and disturbing conditions have unfolded.
Thus, Americans increasingly recognize that they, their children, and fellow Americans face an unscripted future, which is characterized by the following:
- Vast social, economic, employment, environmental, technological, and global changes affecting citizens and the world
- Changes so unique and unprecedented that researchers may have no data for how to assess their impacts or how to deal with them
- Changes that are beyond partisan politics
- Increased perception of personal and global impact or even risk
Dr. Derek Bok, past president of Harvard University, in his 1996 book, The State of the Nation, was one of the strongest voices in the late 20th century to detail “. . . ways in which the United States has fallen behind most other advanced democracies” (p. 406), contributing to the unscripted nature of the future of individuals and families in the United States. Most of the items on Bok’s list reflect a lack of national will to invest in much-needed human intellectual capital. The list includes
- high cost and limited coverage of America’s health care system;
- inability of many families to provide for adequate care in the event of chronic or long-term illness if old age;
- limited safeguards given to workers in case of layoff or unjustified discharge;
- failure to meet national goals for vaccinating infants or to do more to provide adequate nutrition to small children, make quality child care available or preschool opportunities widely available, or guarantee parental leave following the birth of a baby;
- disappointing performance of American students in math and science;
- excessive burdens of rent borne by many low-income families;
- existence of urban neighborhoods marked by high concentrations of poverty, high rates of unemployment, and heavy incidence of crime, drug use, and teenage pregnancy. (p. 406)
Other items related to human intellectual capital that might be added to Bok’s list refer to groups of Americans whose intellectual capital is not being used for the competitive and civic health of the nation. These groups include
- Prisoners—the U.S. incarcerates more citizens in prison than does any other country, and twice as many as China.
- Adult jobless—as people have lost high-paying jobs, many have simply opted out of the workforce and are living off the equity in their homes.
- Middle and high school students—the school dropout rate is both enormous and damaging for this age group in the United States (Bridgeland, Diluilo, & Morison, 2006).
- College-aged and adult learners—the cost of higher education and retraining is less affordable for many.
Bok’s list, along with the additional items just specified contribute to a stark sense among the vast multitude of the American middle and working class that life is not improving for many people and that the nation does have human intellectual resources that remain undeveloped and unused. Meanwhile, China, India, and other developing countries are amassing enormous economic strength by deliberately investing in and developing their human intellectual capital.
Global competition demands that the United States marshal all of its human intellectual capital possible. At the same time, the nation and the planet face challenges of huge proportions, including climate change. For the first time in human history, human actions and inaction has the potential to change the planet.
All organizations, as global citizens, need to call attention to these immense changes, challenges and opportunities facing people and the world. Organizations can help employees collect an array of tools, knowledge, and resources designed to help people “scan the environment” to understand what is happening and at what pace, and to formulate what can be done to address these issues.
Fostering Social and Civic Responsibility
Organizations foster civic and social responsibility in a number of ways. They allow employees to take time off to vote in elections for public officials without penalty. Corporations often establish a foundation to fund local projects.
Given the need to enhance human intellectual capital required to face the challenges of the future, every organization and its people might consider the important work of creating a dynamic learning environment at virtually every level of the organization to enhance social and civic responsibility. Some ideas for such an environment include the following:
- Determine to embrace cross-sector knowledge and skills. Value and recognize managers and employees who bring learning from another sector to their work. Have these managers and employees share their experiences with other employees.
- Resolve to abandon all antibusiness rhetoric and ideology (if a government agency) and all antigovernment rhetoric and ideology (if a business firm).
- Deliberately recognize the urgent need to use the capacity, expertise, and knowledge from all sectors to examine critical issues.
- Develop a multisector mindset by helping managers and employees pair up with managers and employees in another sector organization.
- Invite people from other sector organizations/or faculty from local colleges and universities to conduct a series of discussions on cross-sector learning.
- Do not confine talk at the office to workplace issues. Look for issues facing the world and instigate discussions of those issues.
- Encourage and fund learning by employees at every level.
- Encourage interest in and knowledge of international, national, and public affairs by making key publications available in offices and encouraging employees to read and discuss them.
- Partner with a local college or university to develop an enhancing human intellectual program or an unscripted future program.
- Partner with local public schools, developing programs that encourage students not to drop out.
- Establish a series of events for debating issues and acknowledging the strengths of all sides of public issues affecting the world.
Engagement with pressing issues demands our attention as global citizens. Such engagement will increasingly be recognized as key to the competitiveness of the nation and perhaps survival of some human societies. Organizations and their people in the 21st century will certainly embrace social and civic responsibility in ways that were rare during the last half of the 20th century. Yet the centuries-old model inherent in the view of society and government in the Constitution of the Commonwealth of Massachusetts gives guidelines for developing the human intellectual capital and vision that would meet the challenges of the time. Organizations will recognize shared threats that require new paradigms of problem identification and problem solving. Organizations and their people can act through planned social and civil responsibility. Developing and enhancing human intellectual capacity is key. The need to draw on the capacity of all sectors of society is urgent.
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