Designing Curriculum Instruction and AssessmentAssignment1. Ma.docx

Designing Curriculum Instruction and Assessment
Assignment
1. Make the corrections in the highlight area of your
instructional plan.
2. Create assessment data from instructional plan. Highlight
area.
Setting/Grade Level: Grade 6
Subject(s): Reading/Language Arts School: Florida
Theme/Title: Poem- Lincoln the Leader
1. PLANNING
Standards Addressed
This lesson Address the History of United States of America
and the poem that describes President Abraham Lincoln.
1. The National Center For History in Schools- the student gets
the opportunity to engage in historical study and interpretation
hence is able to understand diverse historical information.
2. NCTE Standards for English Language Arts- Students read
widely to develop their understanding of texts, themselves and
the cultures of the United States and other countries of the
world, to gain knowledge on how to respond to various needs of
the society and for personal fulfillment.
3. Florida State Standards: Students will use primary and
secondary information sources to study and interpret the history
of United States, to describe important events in the past and to
interpret different perspectives.
LAFS.6.L.3.5: Demonstrate understanding of figurative
language, word relationships, and nuances in word meanings.

a) LAFS.6.RL.1.1: Cite textual evidence to support analysis of
what the text says explicitly as well as inferences drawn from
the text.
b) LAFS.6.RL.2.6: Explain how an author develops the point of
view of the narrator or speaker in a text.
c) LAFS.6.SL.2.4: Present claims and findings, sequencing
ideas logically and using pertinent descriptions, facts, and
details to accentuate main ideas or themes; use appropriate eye
contact, adequate volume, and clear pronunciation.
d) LAFS.6.RL.2.4: Determine the meaning of words and
phrases, as they will; be used in a text including figurative and
connotative meanings; analyze the impact of a specific word
choice on meaning and tone.
e) LAFS.6.W.3.9 Draw evidence from literary or information
texts to support analysis, reflection and research. (a) Apply
grade 6 reading standards to literature.
1. PLANNING
Learning Outcomes/SMART Goals
Instructional Time: 4 hours.
Make corrections: Add smart goals in this lesson.
What should students know and be able to do because of this
lesson?
· Using the poem “Lincoln Walks at midnight,” students will
understand that poet depicts the ghost of Lincoln pacing the
streets of Springfield, Illinois his hometown tormented by the
dreadful slaughter of the war.

· Student will be able to identify how figurative language,
vocabulary and imagery affect the mood and tone of the poem.
· Using the poem, student will be able to visualize the events
that formed Lincoln.
· Using the poem students will be able to write a position paper
using textual evidence to support their claim about Lincoln in
the poem.
1. PLANNING
Learning Objectives (at least two)
a) Students will understand the use of figurative language,
vocabulary and historical connotations to form images and
enhance understanding of the main ideas presented in a poem.
(Make corrections: How is this measureable?
b) Students will understand what a poem is and how it is wrote.
c) Be able to visualize the events and symbols that formed
Lincoln's burdens.( This is not specific enough)
1. PLANNING
Bloom’s Revised Taxonomy
☐ Remembering
☐ Understanding
☐ Applying
☐ Analyzing

☐ Evaluating
☐ Creating
1. PLANNING
Real World Contexts
Real world context included in this lesson is the
existence of warlords around the world. This lesson makes the
readers understand Lincoln’s desire for world peace. The
student has the opportunity to improve their vocabulary, reading
ability as well as improve their comprehension of literary
works. These skills are of great important for their college life.
1. PLANNING
Collaboration
Students can also learn through collaboration:
· By using heterogeneous small group activities, student can
learn through collaboration and cooperation with peers.
· Listen to and Read. The second Inaugural Address of President
Abraham Lincoln, Washington, DC, and March 4, 1865.
Students will use a Venn diagram or T-Chart discuss the
similarities and differences regarding Lincoln’s character as
found in the poem.

2. METHODOLOGY
Learning Experience/ Activity
Introductory/Anticipatory Set ( Make corrections add sensory
chart)
The teacher will introduce Abraham Lincoln to the class,
providing an overview of his work using mind map to facilitate
discussion as well as to assess the student’s prior knowledge.
The student will be expected to respond to questions such as;
a) Who was Lincoln?
b) What were some notable events during his presidency?
c) What was his professional background?
d) What do you know about the civil war?
Building/Applying Knowledge and Skills by engaging students
in their learning.
a) The teacher will make use of a portrait of Abraham Lincoln
to introduce Lincoln, activate prior knowledge regarding the
civil war and Lincoln himself.
b) The teacher will divided into heterogeneous groups
consisting of low performing and high performing students. The
poem “Lincoln Walks at Midnight” will be introduce to the
students. Each student is the provided with a copy of the poem.
The teacher will then read the poem loud and provide the
students with an audio copy of the poem.
c) Students proceed to read the poems in their respective groups
first as an individual then as a group.

d) The teacher will then model a think-aloud situation for
students to enable them comprehend the idea that are expected
of them when analyzing a poem stanzas. The reading &
understanding poetry the teacher document walks teacher
through the questions and answers need for the think-aloud of
the first stanza.
e) The teacher will also show the sensory details charts that may
assist student comprehension. The sensory details chart is
scaffold to support students to identify the senses used in the
poem to understand the mood and tone of the piece as well as
the images created by the poet.
f) The teacher will then ask each small group to continue with
the reading of the poem. Students will take marginal notes in
their groups and discuss their finding with their groups.
Students will use their reading and understanding poetry
document and the sensory detail charts to make their notes.
g) The teacher will then give a whole group final oral reading or
presentation of the poem or opt for the audio link. Both teacher
and student share their thoughts and finding. Students will
clarify vocabulary and reference. In order to fully comprehend
the poem and its message. The teacher will share the
presentation rubric with students before students return to work
in their small groups.
Extension/Enrichment/Transfer or Generalization of Knowledge
that engages students in their learning.
a) At the end of the lesson, post a memorable quote of Lincoln
on the board every day for a week with a minute reference to it
and its meaning. Students could react to each quotation in their
journals.
b) Encourage students to do further research and independent
studies on Abraham Lincoln using references listed in lesson

plan.
c) Invite a Lincoln historical interpreter to speak to the class.
d) Organize a student trip to Abraham Lincoln Birthplace
National Historic Site to allow students view historical
artifacts, photographs, curriculum guides and other resources.
Diversity of instruction in the lesson:
Audio recording facilities will be availed to students to assist
those who need further assistance to improve their listening
comprehension skills.
Think-Pair-Share: Students will divided into heterogeneous
groups to work on their understanding of the poem and share
their findings with the whole class.
Synthesis/Closure:
a) Students engage in a final oral discussion to analyze poetry,
poetic language as well as express their final thoughts about the
contribution of Abraham Lincoln to the country as well as the
image painted of Abraham Lincoln in the poem.
b) Review concepts of the lesson and refer to the essential
questions written on the board. Ask students to respond to the
on-demand writing prompt. Use rubric on prompt to score
writing and assess learning of lesson concepts
2. METHODOLOGY
Instructional Strategies
☐
Constructions
Standard:
Objective:

☐
Nonlinguistic Representations
Standard:
Objective:
☐
Cooperative Learning
Standard: LAFS.6.RL.2.6
Objective: Explain how an author develops the point of view of
the narrator or speaker in a text.
☐
Peer Editing
Standard:
Objective:
☐
Discovery
Standard:LAFS.6.RL.2.4
Objective: Determine the meaning of words and phrases as they
are used in a text, including figurative and connotative
meanings

☐
Practice/Drill
Standard:
Objective:
☐
Discussion/Questioning
Standard: LAFS.6.RL.2.4
Objective: analyze the impact of a specific word choice on
meaning and tone.
☐
Practicum
Standard:
Objective:
☐
Experiment
Standard:
Objective:
☐

Problem Solving
Standard:
Objective:
☐
Field Study
Standard:
Objective:
☐
Questions, Cues, and Advance Organizers
Standard: LAFS.6.SL.2.4
Objective: Present claims and findings, sequencing ideas
logically and using pertinent descriptions, facts, and details to
accentuate main ideas or themes; use appropriate eye contact,
adequate volume, and clear pronunciation
☐
Graphic Organizers
Standard:
Objective:
☐
Reflection/Response
Standard: LAFS.6.L.3.5
Objective: Demonstrate understanding of figurative language,

word relationships, and nuances in word meanings
☐
Generating and Testing Hypothesis
Standard:
Objective:
☐
Reinforcing Effort and Providing Recognition
Standard:
Objective:
☐
Homework and Practice
Objective:
☐
Reporting
Standard:
Objective:
☐
Identifying Similarities and Differences

Standard:
Objective:
☐
Role-playing
Standard:
Objective:
☐
Independent Learning
Standard:LAFS.6.RL.1.1
Objective: Cite textual evidence to support analysis of what the
text says explicitly as well as inferences drawn from the text.
☐
Setting Objectives and Providing Feedback
word relationships, and nuances in word meanings.
☐
Journal
Standard:
Objective:
☐
Simulation

Standard:
Objective:
☐
Laboratory
Standard:
Objective:
☐
Summarizing and Note Taking
word relationships, and nuances in word meanings.
☐
Lecture
☐
Viewing/Listening/Answering

☐
Library Research
Standard:
Objective:
☐
Other (Please specify)
:
Standard:
Objective:
The strategies takes the student through the six levels of Bloom
Taxonomy: Knowledge, Comprehension, Application, Analysis,
Synthesis and evaluation. The students reached the evaluation
level of taxonomy.
The activities that support these areas of Bloom taxonomy
includes individual reading, group reading, discussion, and
class presentation and teacher guidance.
Teacher will divide the class into groups. The groups shall be
heterogeneous consisting both low performing and high
performing students. This will allow the students learn through
collaboration and cooperation with peer.
3. MATERIALS

Materials Used
T = FOR TEACHER
S = FOR STUDENT
Include at least one digital material.
T
S
Materials used
T
S
Technology utilized
☐
☐
Lincoln Walks at Midnight
☐
☐
Cassettes/CDs
☐
☐
Mood and Tone
☐
☐
Graphing or Scientific Calculator
☐
☐
Position Paper Rubric
☐

☐
Slides
☐
☐
Lincoln 4 corners
☐
☐
Tape Recorder
☐
☐
Lincoln Guiding Questions
☐
☐
VCR/TV/DVD/Laser disc
☐
☐
Lincoln Presentation Rubric
☐
☐
Assistive Technology
☐
☐
Lincoln Reading and Understanding Poetry
☐
☐
Cell Phone/Mobile Device
☐
☐
Lincoln sensory details chart
☐
☐

Digital/Video Camera
☐
☐
☐
☐
Concept Mapping Software
☐
☐
☐
☐
Social Networking
☐
☐
☐
☐
Virtual World (e.g., Second Life)
☐
☐
☐
☐
Interactive Gaming
☐
☐
☐
☐
Interactive White Board (e.g., SMART Board)
☐
☐
☐
☐

Distance Learning/Webcast
☐
☐
☐
☐
Computer Software
☐
☐
☐
☐
Weblog (Blog)
☐
☐
☐
☐
Wiki
☐
☐
☐
☐
Internet Research/Website
☐
☐
☐
☐
Podcast/Vodcast
☐
☐
☐
☐

E-mail
☐
☐
☐
☐
Presentation Software (e.g., PowerPoint)
☐
☐
☐
☐
Virtual Field Trip
☐
☐
☐
☐
Interactive Gaming
☐
☐
☐
☐
Other (Please specify):
Worksheet
Why did you choose these materials?
The materials will aid the student identify how figurative
language, vocabulary and imagery affect the mood and tone of a
poem. Using the materials the students will be able to visualize
the events and symbols that formed Lincoln's burdens. The
materials will enable the students write a position paper using
textual evidence to support their claim about Lincoln in the
poem.

1. ASSESSMENT/EVALUATION
Assessment Options
☐
☐
Application Exam
Standard:
Objective:
☐
☐
Objective Test
Standard:
Objective:
☐
☐
Concept Mapping
Standard:LAFS.6.L.3.5
☐
☐
Observation
Standard:
Objective:
☐
☐
Parent Evaluation
Standard:
Objective:
☐
☐

Contract
Standard:
Objective:
☐
☐
Peer Evaluation
Standard:LAFS.6.L.3.5
☐
☐
Checklist
Standard:
Objective:
☐
☐
Self-Evaluation
☐
☐
Performance Task
☐
☐
Inventory
Standard:
Objective:
☐
☐
Portfolio

Standard:
Objective:
☐
☐
Quantitative Scale
Standard:
Objective:
☐
☐
Rating Scales
Standard:
Objective:
☐
☐
Rubric
Standard:
Objective:
☐
☐
Scored Discussion
Standard:
Objective:
☐
☐
Journal
Standard:
Objective:
☐
☐
Problem-Solving Assessment
Standard:
Objective:
☐

☐
Other (Please specify):
Standard:
Objective:
Teacher will use series of tasks that measure student
achievement of one or more objectives. They will include
formative and summative assessment.
Summative Assessment: Essay
· What kind of image does the poet create when describing
Abraham Lincoln? Cite evidence from the poem to support your
point of view.
· Because students are familiar with the peer-editing model and
teacher provided rubric from the previous lesson in this unit.
Students will work in their identified small groups and give, and
receive feedback from teacher and peers regarding their position
papers by using the peer-editing model and the teacher will
provide rubric.
· Student will then re-write their papers base on the feedback.
Teacher will then provide feedback to students via the position
paper rubric with a final grade.
Formative Assessment:
· Teacher will introduce who Lincoln was as well as his work
and era by using web/mind map to activate prior knowledge and
to enable discussion. Teacher will let students’ responses to the
following questions: Who was Lincoln? What was his original
profession? If students have no or limited background
knowledge, teacher will use the link from the lesson content
section to assist with the information.
· Students will read the poem and take marginal notes in order
to answer the questions regarding imagery and vocabulary for
understanding and inference. The teacher will model this
activity to ensure that students understand the expectation and

requirements. The teacher will monitor comprehension of the
activity by interacting with small groups and by asking
questions. The teacher may use the presentation rubric to ensure
that all students in small groups are participating.
· Students will work on highlighted vocabulary on the teacher
copy of the poem with the assistance of four comer graphic
organizer in their reading response journals. The teacher will
model activity using the attachment “Four Comers First Stanza”
so that students will be familiar with understanding the meaning
of the archaic language found in the poem.
Feedback to Students:
· Teacher will use “Think-A-Louds” and complete the Lincoln
“Web” on board with the assistance of students.
· Teacher will give written feedback in reading response
journals to address the comprehension of guiding questions,
vocabulary and using the four corners graphic organizer. The
teacher will choose a few journals daily to review while
students work on guiding questions and vocabulary.
These assessments will help me determine if my students have
achieved the goals that I set for this lesson. This lesson’s main
objective to be ensures that students are able to read and
comprehend poems.
These assessments are, done in the initial stages of the lesson
and towards the end of the lesson. This way the tutor is able to
gauge improvements that the students have gained because of
the lesson.
How will you use this assessment data to inform your
instruction? Use current literature (within the last five years) to
support your rationale.
The use of student data to improve instruction is a central tenet

of current education policy. Current efforts to improve school
performance are calling on teachers to base their instructional
decisions on data. Assessment drives instruction since it
provides information that helps the teacher develop the next
steps for varied learners and the class. Assessment should be
continuous from the time the class begins, throughout the unit
and towards the end of the unit. Assessments are, carried out to
determine the readiness, interest and learning capabilities of the
students.
Means, B., Chen, E., DeBarger, A., & Padilla, C. (2011).
Teachers' Ability to Use Data to Inform Instruction: Challenges
and Supports. Office of Planning, Evaluation and Policy
Development, US Department of Education.
1. LEARNERS
Differentiation
Curriculum may vary in complexity to align to the
respectable level of every student in the class. The teacher will
differentiate the curriculum by putting in place clear academic
criteria that students understand. The curriculum will, be
aligned to learning target of this topic to ensure it addresses
significant content.
How will you differentiate instruction to meet diverse student
needs?
a) Allow time for plenty of practice and learning.
b) Use peer tutors.
c) Underline important directions, key words.
d) Tape-record stories and use other technologies of recording
audio classes and poems
e) Keep directions simple, write them out, or give them orally.
f) Provide low reading level, high-interest reading material

geared to the student’s interests.
g) Use visuals and manipulative materials when available.
h) Use cooperative learning strategies.
How will you differentiate assessment to meet diverse student
needs?
a) Give shorter assignments, and allow more time for
completion.
b) Break assignments into smaller, manageable parts.
c) Give immediate feedback and lots of encouragement
5. LEARNERS
Diversity
The teacher will be at all times sensitive to cultural diversity of
the students. Ensure that the student is able to translate,
comprehend and interpret the information correctly.
· The audio recording will assist students who are struggling
readers and who need additional assistance with listening
comprehensions skills with the reading and re-reading of the
poem.
· Teacher will discuss interpreting elements of prose and poetry
with students so that they understand the difference between
literal meaning and figurative meaning as well as the elements
that create images in the reader’s head.
Student Work Samples
Assess the students’ knowledge of the subject prior to the
learning activities.

Administer a test at the end of the lesson to assess the student’s
comprehension of the lesson. Student assessment based on the
lesson goals.
Performance task
In this assessment, students should be able to:
Students should be able to clearly, describe whom Lincoln was.
Know what kind of image the poet creates when describing
Abraham Lincoln citing relevant evidences from the poem.
Students should be able to remember some notable events
during Lincoln presidency.
Students should be able to explain professional background of
Lincoln about civil war.
Students should be in a position to fully understand and analyze
the poem.
Students should be in a position to identify and explain the
stylistic devices used by the poet through the help of
illustrations from the poem.
Performance rubric
Criteria
Levels of achievement
3 points
2 points
1 points
Content
All the questions are well covered. The student is able to
analyze the content clearly. The student is able to bring extra-
points. Ability to analyze the poem extremely good fully with
all the required points
All the questions are covered. The student is able to analyze
content. Major points, were brought up, correctly. Points are,
brought out correctly. the poem is analyzed correctly
Almost all questions are covered. Fair analysis of the poem with
few major points brought up. The student fairly analyzes the

poem
Quality of information
Discussion was detailed, thorough, and supported with peer-
reviewed, research and examples.
Well discussed points with few illustrations
Fairly discussed points with very few or no
example/illustrations
Organization
Introduction and conclusion are included. Information is very
organized with well-constructed paragraphs
Introduction and conclusion are included and the work is quite
organized
No introduction and conclusion and fairly organized work
Format
Minimal or no grammatical, spelling, or punctuation errors are
present
Some grammatical errors and few punctuation error
Poor grammar and numerous punctuation errors
Section 2: Create assessment data of your instructional plan
Reference
Means, B., Chen, E., DeBarger, A., & Padilla, C. (2011).
Teachers' Ability to Use Data to Inform Instruction: Challenges
and Supports. Office of Planning, Evaluation and Policy
Development, US Department of Education.
Bloom’s Taxonomy action verbs.
California State University, Fresno. (n.d.). Bloom’s taxonomy
action verbs. Retrieved December 6, 2015, from
http://www.fresnostate.edu/academics/oie/documents/assesment
s/Blooms%20Level.pdf

Lincoln the Leader
http://www.cpalms.org/Public/PreviewResourceLesson/Preview/
44310
Copy of Smart goal chart: Need to be added in lesson plan.
The Wal-Mart Effect and Business, Ethics, and
Society
R. Edward Freeman*
S
ome time around 1980 or so, when the business
world was abuzz with In Search of Excellence, I
happened to work on an executive education
program with Tom Peters. He told me that I just
had to go and visit a Wal-Mart. This crazy guy,
Sam Walton, was going to change the landscape
of business, and in Peters’ eyes the guy was “bril-
liant.” Taking Peters seriously, and as a former
K-Mart employee, I sought out a Wal-Mart. I
walked in with a “scientific” mindset to see what
the fuss was about. The greeter welcomed me with
a friendly smile and a “Welcome to Wal-Mart.” I
found myself looking to buy something within 5
minutes. A lot of water has gone over the Wal-
Mart dam in the last 25 years. And, recently, we
have been treated to articles, books, films, and

cases on what is now an American icon.
The rise of Wal-Mart has produced a number of
effects that many commentators find surprising. I
want to argue that our understanding of Wal-Mart
illuminates a large gap in our understanding of
business organizations. However, I want to suggest
that what a recent observer calls “the Wal-Mart
effect” (Fishman 2006a; 2006b) can be better de-
scribed as “the stakeholder effect.” If we can un-
derstand Wal-Mart with a stakeholder context,
then we can see what is wrong with our current
understanding of business; what went wrong at
Wal-Mart; and what the company is currently
doing to make things right.
The Wal-Mart Effect
I
n a recent essay, Charles Fishman has suggested
that Wal-Mart is reshaping how we see business
(Fishman 2006a). He takes us conceptually in-
side Wal-Mart and asks us to make some judg-
ments about how the company is managed and
what its effects really are. What he is really doing
is a kind of clinical case study complete with real
people. Wal-Mart and its stakeholders are human-
ized, not made into qualitative variables that have
inter-rater reliability. The stakeholders that Fish-
man writes about portray what McVea and Free-
man (2005) call “a names and faces approach.”
This approach is especially important for re-
search in business, ethics, and society. Too much

work has already been done in the spirit of making
the field legitimate—i.e., conducting studies that
are “acceptable” to mainstream management jour-
nals. Yet, business, ethics, and society as a field
is— or should be—profoundly critical. Scholars in
this area should be critical of the research meth-
ods— or “methodolatry” as some have suggested
(Freeman 2005)—assumptions, conceptual
schemes, and requisite apparatus of mainstream
scholarship. Fishman shows us one path to accom-
plish such a critical perspective. His analysis yields
insight and is enormously pragmatic.
Unlike many scholars in business, ethics, and
society, Fishman has an open mind about Wal-
Mart. Unfortunately, he seems to have missed the
fact that a number of scholars simply “know” that
Wal-Mart is the cause of much of the misery that
goes on in the world, from poverty to outsourcing.
Fishman fails to recognize that what he is really
arguing against is the traditional theory of business
and capitalism.
This traditional theory, or standard story, or
“narrow economic view of business,” holds that we
should be able to understand what goes on at
Wal-Mart in purely economic terms. The tradi-
tional theory says that Wal-Mart, like any busi-
ness is trying to maximize returns for shareholders,
that it provides benefits to customers and employ-
* R. Edward Freeman ([email protected]) is the Elis and Signe
Olsson Professor of Business Administration & Director,
Olsson Center for Applied Ethics at the Darden School of
Business of the University of Virginia.

38 AugustAcademy of Management Perspectives
ees which are understandable in purely economic
terms. Of course there may be some “knock-on”
effects, but for the most part these will be minimal
and manageable by government. Wal-Mart is no
different from any other business, according to
this standard account.
Nothing could be further from today’s business
reality. The traditional theory simply can’t ac-
count for the growth and development of eco-
nomic, political, social, and technological enter-
prises like Wal-Mart, Hewlett Packard, Citibank,
and others. The impact, which Fishman calls “the
Wal-Mart effect,” reaches far beyond economic
consequences and motivations. Not only does
Wal-Mart affect its customers through offering
“everyday low prices,” its employees by their jobs
and benefits, and its shareholders through returns,
it also impacts communities, suppliers, NGOs,
media, governments, critics, and a host of others.
In fact, what Fishman discovers is less about Wal-
Mart and more about our common (and flawed)
understanding of business and capitalism.
The Stakeholder Effect
F
ishman claims that the sheer scope and scale of
Wal-Mart is what gives rise to these effects. He
is correct that the scope and scale of Wal-Mart
makes these effects impossible to miss, but they

have been present since the opening of the first
Wal-Mart and every other business start-up. Any
business is a set of relationships among at least
customers, suppliers, employees, communities,
and financiers (the people with the money). At
some particular points along a business’ develop-
ment one or some of these stakeholders may be
more important than another. Once a business is
established, all of these stakeholders become im-
portant to the value creation process and the
management’s job is to keep these stakeholder
interests all moving in the same direction. As
companies get even bigger, other groups become
stakeholders. In Wal-Mart’s case these include
governments, NGOs, critics, academics, media,
and others. Let’s call this idea the Stakeholder
Effect and define it in the following way:
Any business affects or can be affected by the actions
of customers, employees, suppliers, communities, fin-
anciers, and possibly others. As companies grow and
develop, some stakeholders become more important
than others, and new stakeholders sometimes emerge.
If you expect the stakeholder effect to be visible
in purely economic terms, you will have ignored
most of the actual practice of business during the
past century. The stakeholder effect is not new.
Perhaps at the turn of the twentieth century it
might have been called the “Carnegie effect” or
later the “DuPont effect.” In some industries we
may have called it the “Medicare effect” or “oil
shock effect.” From the old adage about “What’s
good for General Motors is good for the USA,” to
the current public policy about oil prices, global

warming, and environmental policy, business has
never been “just about the economics.”
Until very recently we had little systematic way
to account for and understand these stakeholder
effects. However, for the past 40 years a group of
scholars, working primarily in the area of manage-
ment known as “Business, Ethics, and Society”
have developed a way of advancing our conversa-
tion about the stakeholder effects of business.
They have employed a variety of concepts such as
stakeholder theory, corporate social responsibility,
the triple bottom line, social contracts, and oth-
ers. The point here is not that one or more of
these are correct, but that there is a body of work
that validates exactly what Fishman is telling us.
Wal-Mart and the Stakeholder Effect
T
hrough this lens, we can see what has really
gone wrong at Wal-Mart. By focusing its busi-
ness strategy within the context of the tradi-
tional theory, Wal-Mart executives could come to
see their fanatical emphasis on “Always low
prices. Always.” as clearly acceptable. In fact, we
should not be surprised to find that they are in fact
surprised when their critics take them to task for
being “good businesspersons.” Fishman tells us as
much. The Wal-Mart executives would naturally
see themselves as acting within the accepted
bounds of our common understanding of capital-
ism. Competition is supposed to lower prices. Cus-
tomers are supposed to win. Businesses are ex-
pected to continually build better mousetraps to

stay ahead of the competition. And, Wal-Mart
has been a continuous source of innovation that
2006 39Freeman
has affected all stakeholders that it touches. And,
all is expected to be right with the world if this is
done.
Business is just more complex. In today’s world
the first and most important question for a busi-
ness executive to ask is: “What is our purpose, and
how does it make each of our stakeholders better
off?” At a minimum a business should be able to
articulate a clear and agreeable answer for custom-
ers, employees, suppliers, financiers, and commu-
nities. If there is no answer, then in a relatively
free and open society, these groups or their repre-
sentatives (some self-appointed) will use the po-
litical process to try and find redress.
And, that is the current mess in which Wal-
Mart finds itself. It can’t do much right, simply
because it is trying to tell its story in the narrow
economic mode. Wal-Mart’s response to critics
who say it is ruinous of communities should be,
according to the standard theory: “Well, mom and
pop shops have been ripping you off for years, and
people vote for us by shopping at Wal-Mart, even
those who don’t like us.” Unfortunately, this re-
sponse is beside the point. It couches the new
“stakeholder reality” in the old economic story.
Fortunately, there is a clear and compelling

path for Wal-Mart, one on which they have al-
ready embarked. They must adopt a philosophy of
“stakeholder engagement” and apply the same
level of passion and engagement to making the
rest of their stakeholders better off, in addition to
customers. There is little reason to believe that
Wal-Mart cannot do this, if they see the need.
Already, they have undertaken to work on the
community issue by addressing the environmental
impacts of their stores and goods, as well as their
impact on existing businesses in new communities
in which they want to locate. They have begun a
process to repair the relationship with their asso-
ciates, and I’m sure there are other initiatives of
which I am unaware.
Is it too late? Only if Wal-Mart’s executives
and critics alike fail to see that the stakeholder
effect is in fact the reality of twenty-first century
business. Executives ignore stakeholders at the
peril of the survival of their companies. Critics
need to see companies as better able to engage
their concerns directly, rather than through the
coercive power of government. All of us need to
come to see capitalism and business for what it
really is: a system of voluntary social cooperation
through which we create value for each other.
The old story about Wal-Mart is long dead. Long
live the new Wal-Mart.
References
Fishman, C. 2006a. Wal-Mart and the decent society: Who
knew shopping was so important? Academy of Manage-
ment Perspectives, 21(3).

Fishman, C. 2006b. The Wal-Mart effect. New York: Penguin
Press.
Freeman, R. E. 2004. The relevance of Richard Rorty to
management research. Academy of Management Review,
29: 127–130.
McVea, J. F. & Freeman, R. E. 2005. A names-and-faces
approach to stakeholder management: How focusing on
stakeholders as individuals can bring ethics and entre-
preneurial strategy together. Journal of Management In-
quiry, 14: 57– 69.
40 AugustAcademy of Management Perspectives
Unconventional
Insights for Managing
Stakeholder Trust
S U M M E R 2 0 0 8 V O L . 4 9 N O . 4
R E P R I N T N U M B E R 4 9 4 1 3
Michael Pirson and Deepak Malhotra
Please note that gray areas reflect artwork that has
been intentionally removed. The substantive content of
the article appears as originally published.

SUMMER 2008 MIT SLOAN MANAGEMENT REVIEW 43
I
nitiatives to build and maintain trust with various stakehold-
ers — customers, employees, suppliers and investors — have
risen to the top of the executive agenda at many organiza-
tions. We continually hear about “tr ansparency”
initiatives, open-door policies and 360-degree evaluations,
customer-retention programs, voluntary product recalls,
initiatives for corporate social responsibility, rethinking of
“customers as partners” and other trust-building moves. But
the problem is that most companies don’t really understand
how to manage stakeholder trust effectively. In fact, our
research suggests that many of the trust-building initiatives and
approaches that organizations invest in may be of questionable
value. Others might actually destroy trust.
One of the reasons managing stakeholder trust is difficult is
because there are many different stakeholder groups, each with
its own particular needs and perspective. That is, trust is multi-

dimensional, and it’s not obvious which dimension executives
need to focus on when dealing with any particular constituency.
Consider
the following: An employee might trust his supervisor because
he believes
that she expresses genuine concern for his well-being, or
because she is a
very competent manager, or for both reasons. In turn, the
supervisor might
trust the employee because she perceives that his values are
congruent with
hers, or because she can rely on him to get work done
efficiently, or for both
reasons. In a different context, the investment community might
trust
a company because top executives are perceived as having
integrity, or
because they possess superior management skills, or because
they have
taken steps to increase transparency, or because of some other
reason
entirely. And so on.
So which dimension of trust should companies target?

Specifically, what’s
more important for building trust: a reputation for kind-hearted
benevolence
or for fair-minded integrity? Which is more critical: managerial
proficiency
or technical competence? When does value congruence matter?
And are
initiatives aimed at increasing transparency worth the effort?
Unconventional Insights for
Managing Stakeholder Trust
Michael Pirson is a research fellow with the Hauser Center for
Nonprofit Organizations at
the John F. Kennedy School of Government, Harvard University
and a lecturer at the Harvard
Extension School. Deepak Malhotra is an associate professor of
business administration at
the Harvard Business School and the coauthor of Negotiation
Genius (Bantam Books, 2007).
Comment on this article or contact the authors at
[email protected]
Many companies
invest considerable
time and energy
trying to build trust
with customers,

employees, suppliers
and investors. Why are
some of those efforts
doomed to fail?
Michael Pirson
and Deepak Malhotra
M A N A G I N G R E P U T A T I O N
SLOANREVIEW.MIT.EDU
www.sloanreview.mit.edu
44 MIT SLOAN MANAGEMENT REVIEW SUMMER 2008
SLOANREVIEW.MIT.EDU
To investigate such issues, we conducted a study of stake-
holder trust in four different organizations. (See “About the
Research,” p. 47.) The research analyzed the relevance (if any)
of
various factors (benevolence, integrity, managerial competence,
technical competence, transparency and value congruence) to
different stakeholders (customers, suppliers, employees and
investors). In essence, we asked what matters — and to whom.

Some of the results were unsurprising. Customers, for instance,
stated that a company’s level of technical competence strongly
influences the degree to which they trust the company. Other
findings were unexpected, and a few were even counterintuitive,
leading us to the following key insights: Transparency is over-
rated; integrity is not enough; the right kind of competence
matters; building trust with one group can destroy it with
another; and value congruence matters across the board. (See
“The Truth About Stakeholder Trust.”) A closer look at each
insight provides important lessons for companies trying to build
and sustain trusting relationships with stakeholders.
Transparency Is Overrated
The 2001 collapse of Enron Corp. and a slew of other corporate
scandals in the United States helped usher in an era of general
distrust of big business. Most observers, including many public
policymakers, concluded quickly that a lack of transparency was
the problem. As a consequence, most of the proposed remedies
have focused on increasing the availability of information to
stake-

holders who might be vulnerable. Thus, the Sarbanes-Oxley Act
of 2002 requires companies to follow better reporting standards;
the U.S. Securities and Exchange Commission’s Regulation Fair
Disclosure regulates against the selective disclosure of
information
to analysts and influential stockholders; and corporate
governance
codes call for the publication of executive compensation
packages.
These remedies presumably increase transparency, making it
difficult for executives to engage in illicit activities. If this is
so,
they serve a very important purpose.
We have found, however, that transparency seems to have little
relevance in terms of building stakeholder trust. That is,
whether
Conventional Wisdom Reality
To increase stakeholder trust,
companies need to make their
operations more transparent.

Transparency actually can diminish trust depending on what is
disclosed.
Transparency with respect to executive compensation, for
example,
might easily decrease trust if it reveals no apparent link
between pay
and performance.
Integrity is crucial for building trust. Integrity is important, but
stakeholders who engage with the company on a
regular basis (many employees and customers, for example)
must also feel that
the organization cares about their personal well-being. Even
well-meaning, ethical
organizations can destroy trust if they are perceived as being
fair but callous.
To engender trust, businesses must
continually display competency in
what they do.
Nobody trusts the incompetent, but people don’t all demand the
same kind of
know-how. Employees and investors look most for managerial
competence,
whereas customers and suppliers are more concerned about
technical proficiency.
When trust is compromised, a company
should act quickly to remedy the situa-
tion with the stakeholder group that’s
been affected.
Managers first need to determine who all the relevant
stakeholder groups are.
Only then can they deploy a balanced approach to managing

trust that takes into
account the various concerns and interests of the different
parties. Otherwise, an
organization might find itself exacerbating one problem even as
it solves another.
The desire to identify with the values of
an organization is an important factor
in building trust only for employees,
regular customers and others who have
a close relationship with the company.
Identification (or value congruence) is important for all
stakeholders. That is, not
only employees and customers, but also suppliers, investors and
stakeholders of all
types are interested in associating with organizations that they
can identify with —
and that they perceive match their values.
The Truth About Stakeholder Trust
SUMMER 2008 MIT SLOAN MANAGEMENT REVIEW
45SLOANREVIEW.MIT.EDU
companies disclose information may have little effect on their
perceived trustworthiness. In fact, of the various factors we
stud-
ied, transparency was the only one that did not affect trust for
any

stakeholder group. What explains this?
First, consider that forced disclosure might actually reduce the
quality of what is disclosed. Although fair-disclosure
procedures
ensure that every investor is provided with the same information
at the same time, there is some evidence that the quality of
infor-
mation shared has diminished since Regulation Fair Disclosure
went into effect.1 Some Wall Street observers complain that
companies that used to share sensitive information willingly
(with at least a subset of stakeholders) are now delaying or
with-
holding important information. In addition, past research
suggests that career concerns among executives can create
perverse incentives in the face of financial disclosure:
Executives
might focus more on managing the visible numbers (the stock
price, market share and so on) than on strategic initiatives that
could improve the long-term survival and profitability prospects
of the company but that are not rewarded in the short run.2

Second, whether information is disclosed might matter less
than what is disclosed. For example, transparency regarding
executive compensation might do little to build trust if it
reveals vast disparities between the pay of people on the front
lines versus those in the corner offices. Fairness perceptions are
crucial to building trust within organizations, and seemingly
oversized executive pay packages make it difficult for
employees
to identify with management.3 Especially when there is no
apparent link between executive compensation and perfor-
mance, perceptions of fairness are damaged and trust
diminishes.
In such cases, attempts to build trust through transparency can
easily backfire.
Finally, some empirical evidence suggests that disclosure, far
from being a remedy, can in fact exacerbate the problems it is
supposed to fix. In a fascinating experiment inspired by recent
accounting scandals, participants playing the role of “adviser”
had to tell their “clients” that they had a vested stake in
overstat-

ing the value of a particular asset. Theoretically, the disclosure
of
a potential conflict of interest should result in a more honest
interaction, eventually leading to a more trusting relationship.
But what really happened? Advisers who were required to dis-
close their bias felt more comfortable exaggerating information.
After all, they reasoned, “I already told them I was biased.”
Worse
still, clients perceived these advisers as more trustworthy
because
they had disclosed their conflict of interest. In other words,
advisers would have been more truthful, and clients would have
been more careful, if there had been no disclosure at all.4
For a real-life example of the disconnect between transpar-
ency and trust, consider Porsche Automobil Holding SE, the
German luxury-car manufacturer. Ever since Deutsche Börse
AG, the German stock exchange, implemented new reporting
standards in 2001, Porsche has refused to submit the required
quarterly reports. The company contends that quarterly num-

bers can be misleading because of its highly cyclical business,
and it has criticized Deutsche Börse for placing more value on
formal rules than on the quality of information disclosed.5 As a
result of its stand, Porsche has been excluded from the mid-cap
index and has faced threats of being delisted, but the company
still refuses to comply and continues to publish only six-month
and full-year results.
The result of the standoff? Following its exclusion from the
mid-cap index in 2001, Porsche share prices plummeted by 40%
in six weeks. But the stock then rebounded, returning to its pre-
exclusion level within four months, and it has steadily advanced
to new heights each year since. Not only do investors continue
to
trust the company, but prospective employees do as well:
Porsche
remains among the most popular potential employers in Europe.
In one study, graduating engineers placed the company on the
top of their employer wish list.6 Other stakeholders concur. The
general public consistently lists Porsche as one of the most
repu-

table businesses in Germany, and customers worldwide have
rewarded the company with continuously rising profits at a time
when many other car manufacturers around the world have seen
their profits decline.7
Integrity Is Not Enough
Not surprisingly, perceptions of honesty and integrity are
crucial to trust for all stakeholders. However, for people who
engage with an organization on a regular basis, integrity is not
enough. These “high-intensity” stakeholders also must perceive
that the organization cares about their well-being. In other
words, benevolence toward the individual, not just good
character and fair dealing, is critical.
Product recalls are a case in point. In 2007 alone, hundreds of
products were recalled for reasons ranging from Salmonella
bacteria in spinach to exploding batteries in computers. Com-
panies that recall defective products early and proactively are
likely to be perceived as having greater integrity than those that
deny or ignore the problem until action is forced on them by

public or governmental pressure. But even some high-integrity
companies that issue voluntary recalls find that they have
irrevo-
cably damaged consumer trust, whereas others walk away from
the experience unscathed — or in some cases with enhanced
consumer trust. The difference is in the degree to which a com-
pany is able to signal concern for the well-being of individual
consumers.
Consider what happened to The Coca-Cola Co. in Europe. In
early June 1999, more than 240 people in Belgium and France
reported intestinal problems after drinking Coke, prompting the
Belgian government to ban Coke products for 10 days. Even
though there was no clear evidence that Coke products were the
SLOANREVIEW.MIT.EDU
culprit, the company decided to recall beverages from five
Euro-
pean countries, 17 million cases in total, making it the biggest
recall

in the company’s history. CEO M. Douglas Ivester publicly
stated
that ensuring the quality of its products was Coca-Cola’s
highest
priority. “For 113 years our success has been based on the trust
that
consumers have in that quality,” he said. “That trust is sacred to
us.”8 Coca-Cola quickly apologized and assumed responsibility,
citing two quality-control issues (impure carbon dioxide and
contaminated wooden pallets) as potential causes. Although it
was
later found that Coke products were not responsible for the
reported health problems, the company had proactively demon-
strated benevolence not just in word but also in deed by offering
to
cover health care costs for anyone who had been affected by the
incident. Moreover, as a gesture of goodwill, Coca-Cola also
offered free products to each of Belgium’s 4.4 million homes.
Less
than two months after the initial incidents, research indicated
that

core consumers of Coke products reported the same levels of
intent to purchase as before the crisis had hit.9 Three years
later,
sales in Belgium were reportedly better than ever.10
Contrast that with Coca-Cola’s experience in India. In August
2003, a report by the Centre for Science and Environment, a
New
Delhi, India-based environmental advocacy group, argued that
Coca-Cola and other producers of soft drinks were selling
bever-
ages containing high levels of pesticides. Here, Coke decided to
approach the problem differently. Along with other soft-drink
producers, Coca-Cola quickly refuted CSE’s claims, presented
its
own data to the public, accused the CSE of attacking it to
further
CSE’s own cause and announced it would sue the organization.
Those actions might have bolstered the public’s perceptions of
Coca-Cola’s integrity, but they displayed a conspicuous lack
of concern for the well-being of individual consumers. The
result:

Sales dropped by 30% to 40% in only two weeks, leading to a
yearly
sales decline of 15% in 2003 (compared with prior annual
growth
rates of 25% to 30%).11 Moreover, even after India’s health
minister had questioned the validity of CSE’s methods12 and
governmental as well as independent research labs had cleared
Coca-Cola of the allegations, the company still paid for a loss
of
consumer trust. In 2006, it reported continuously declining sales
volumes and losses that far exceeded the investments made.13
Other companies have also learned the importance of demon-
strating concern for the well-being of customers. In July 2007,
Apple Inc. introduced the iPhone, a much anticipated product,
and priced it at $599. But only two months later — sooner than
anyone had anticipated — the price dropped to $399. People
who
had already purchased the product felt mistreated and sent angry
e-mails to the company. In response, CEO Steve Jobs issued an
open letter to Apple customers. He first defended the price cut
as

the right strategic move for Apple and justified the decision by
stating that substantive drops in price were standard in the
technology industry — in other words, that Apple had not acted
unethically. But Jobs then acknowledged that Apple needed
“to do a better job taking care of our early iPhone customers. …
Our early customers trusted us, and we must live up to that trust
with our actions in moments like these.” He then offered $100
in
store credit for Apple products to anyone who had purchased the
iPhone at the higher price. In doing so, he helped maintain
a sense of trust among the company’s most ardent fans and
customers.14 Without that gesture of benevolence, Apple might
have faced a huge consumer backlash.
The Right Kind of Competence Matters
Nobody trusts the incompetent, but people don’t all demand
the same kind of know-how. Internal stakeholders, such as
employees and investors, look most for evidence of managerial
competence: executives’ ability to control costs and lead the
work

force in the organization’s efforts to be competitive and create
value. External stakeholders, such as customers and suppliers,
typically care less about managerial competence and much more
about technical know-how: the organization’s ability to produce
goods and services of high quality and deal effectively with
supply-chain issues. Even high levels of competence in one area
can’t offset insufficient competence in the other, sometimes
leading to stakeholder distrust and organizational failure.
Delta Air Lines Inc. provides a vivid example. Hailed widely
for its operational excellence, Delta has been credited with the
invention of the hub-and-spoke model for airlines and for
being at the forefront of state-of-the-art technology, including
internal management software, ticket kiosks and online travel
agencies. Delta has also been touted as a pioneer in travel
comforts, being among the first to offer iPod plug-ins and
airline seats that allow passengers to lie flat. Such technical
accomplishments helped Delta gain the trust of its external
stakeholders, especially customers.15

Unfortunately, Delta failed to demonstrate similar levels of
managerial competence. Among its various missteps were a
highly publicized executive compensation scandal that
destroyed
trust between management and workers, massive layoffs in 2004
that continued through 2006 and a delay in pursuing cost-
cutting
strategies even in the face of rising fuel costs and increased
competition from low-fare carriers.16 Not only did such
episodes
of managerial incompetence eventually force the airline to
declare bankruptcy in September 2005 (it later emerged from
bankruptcy and announced its intention to merge with North-
west Airlines), they also severely shook the trust of internal
stakeholders — both employees and investors.
On the other hand, managerial proficiency without technical
competency can be equally damaging. In early 2004, Sprint was
the third largest wireless phone company in the United States,
serving about 20 million customers. Its primary competitors had
each managed to acquire twice as many customers due to a

series
of mergers (Cingular Wireless, which acquired AT&T Wireless
Systems, had approximately 46 million customers, and Verizon
Wireless served about 41 million people). Sprint responded by
acquiring Nextel Communications, the fifth largest wireless
phone provider, which had 15 million customers, becoming
Sprint Nextel Corp. Sprint’s management was determined to
boost investor confidence by building market share with a deal
that was expected to create synergies and
reduce costs. Analysts applauded the merger,
and the company’s stock rose by almost 30%
over the next 15 months.
But others weren’t so enthusiastic. Motorola
Inc., one of Nextel’s key suppliers, soon discov-

ered that its proprietary network would be
phased out within two years of the merger in
favor of a system run by Sprint. This reduced
Motorola’s commitment to the relationship,
and the transition was beset with technical
problems.17 In 2006, 300,000 customers can-
celed their service, mostly blaming the poor
quality of the former Nextel network, and
Sprint’s reputation for customer service took a
huge hit.18 In an April 2007 poll by Zogby Inter-
national Inc., Sprint ranked lowest in a customer
service satisfaction rating of all industry players
in the United States. Customer complaints
became so frequent that in an unprecedented
move, Sprint itself decided to terminate at least
1,000 service contracts with people who had
called customer service “too often.”
In the case of Delta, no amount of technical

competence and innovation could have
salvaged the trust lost with employees and
investors due to perceived managerial incom-
petence. With Sprint, a focus on long-term
viability and competitiveness (managerial
competence) did little to offset the distrust of
customers who had suffered from a lack of
technical competence.
Building Trust With One Group Can
Destroy It With Another
Managing trust is a complex process because
stakeholder groups have different needs, and
efforts aimed at solving one trust problem
can exacerbate others. Consider the case of
Deutsche Bundesbahn, the German railway,
which was once a state-owned organization
known for its technical excellence. Customers
trusted its service and reliability so much that
they used the compliment, “You are as punctual as the Deutsche

Bundesbahn.” Unfortunately, though, the organization was not
being run as efficiently as it could be, suffering high operating
losses. In an effort to boost managerial competence, the railway
was privatized as Deutsche Bahn Aktiengesellschaft in 1994.
The result? The organization is now earning substantial profits
and is preparing for an initial public offering. According to
We have studied trust in organizations across four major
categories of stakeholders:
customers, employees, suppliers and investors. (Note: We
define trust as the psycho-
logical willingness of a party to be vulnerable to the actions of
another individual or
organization based on positive expectations regarding the other
party’s motivation
and/or behavior.) To aid in our analysis, we developed a
framework that differenti-
ated across stakeholder groups along two dimensions. The first
measures the
intensity of a relationship, based on length and frequency of
interactions. The
second relates to whether a stakeholder is inside or outside the
organization.

The two dimensions — intensity and locus — create four
archetypes of stake-
holders. (See “Categorization of Stakeholders,” p. 48.) It should
be noted that actual
stakeholder groups will not necessarily be perfectly aligned
with any of the four
archetypes. For example, a stakeholder’s relationship with an
organization can be
of “moderate” intensity (instead of “high” or “low”), and some
stakeholders will have
multiple affiliations (for example, as an employee and a
customer). As such, the four
quadrants of stakeholders should be viewed more as a general
“map” rather than as
a table of four clearly demarcated cells. As an example that
approximates the model
case in reality, each stakeholder group in our study can be
associated with one of the
archetypes: customers (high-intensity, external), suppliers (low-
intensity, external),
employees (high-intensity, internal) or investors (low-intensity,
internal).
We investigated trust across the different categories of
stakeholders at four

differently structured organizations: a small- to medium-sized
manufacturer in
Switzerland, a large logistical company in Germany, a Western
European branch of
an international consulting firm and a public university in
Switzerland. In particular,
we studied the importance of six factors — integrity,
managerial competence,
technical competence, benevolence, transparency and
identification (or value
congruence) — to the different stakeholders.
Nearly 1,300 stakeholders — employees, customers, investors
and suppliers —
from the four organizations participated in the study. People
who reported more
than 100 interactions and more than three years of contact with
the organization
were classified as having a high-intensity relationship. Those
with fewer than 100
interactions or less than three years of contact were classified as
low-intensity
stakeholders. In addition, by definition people were classified
as either internal
(employees and investors) or external (customers and

suppliers). (Note: Investors
are classified as internal because they are, in effect, owners of
the organization.)
From the data, we were able to determine what factors were
important to which
stakeholders. (See “What Matters to Whom,” p. 49.) For
instance, we found that people
in low-intensity relationships did not base their trust on
benevolence (the perceived
concern of the organization toward the stakeholder), but people
in high-intensity rela-
tionships did. And integrity was significantly more relevant for
people in low-intensity
relationships than in high-intensity ones. Some of the findings
were surprising and a
few were even counterintuitive. Those results are discussed in
detail in this article.
About the Research
SLOANREVIEW.MIT.EDU
almost any standard, it is a successfully managed operation. But
there’s a problem: Customer trust has plummeted. Poor service

and constant delays have led to consistently poor reputation
ratings even as profits have increased. The lesson is that unless
a company takes a balanced approach to managing stakeholder
trust, it can find itself exacerbating one problem even as it
solves another.
Consider toymaker Mattel Inc.’s painful saga. In August 2007,
consumers learned that several of Mattel’s toy products were
defective and that others were contaminated with lead paint. In
the following weeks, the company issued three major product
recalls involving more than 20 million items.19 In an effort to
rebuild customer trust, CEO Robert A. Eckert publicly declared
that Mattel itself had been “betrayed” by its Chinese suppliers.
He
asserted that these subcontractors had violated the company’s
standards and had used unauthorized lead-based paint. To avoid
future problems, Mattel management promised to implement
a strict system that would include pre- and post-production
controls aimed at suppliers and products.20 In addition, Mattel

terminated its relationship with several suppliers.
The aggressive response might have helped salvage customer
goodwill, but the consequences for trust with other important
stake-
holders were devastating. The Chinese government was
outraged by
Mattel’s attack on Chinese businesses and institutions, and the
owner of one Chinese toy factory reportedly committed suicide.
Later, after it was found that most of the recalled items (17.4
million)
had nothing to do with lead paint but rather with malfunctioning
magnets, Chinese governmental officials demanded an
apology.21
On September 21, Thomas Debrowski, Mattel’s executive vice
presi-
dent for worldwide operations, flew to Beijing and publicly
issued
the following mea culpa: “Mattel takes full responsibility …
and
apologizes personally to you, the Chinese people. ... it’s
important for
everyone to understand that the vast majority of these products
that

we recalled were the result of a flaw in Mattel’s design, not
through
a manufacturing flaw by Chinese manufacturers.”22 This time,
Mattel’s strategy was aimed at rebuilding trust with the Chinese
government and the Chinese suppliers, but this too led to its
share of
backlash. Sen. Charles Schumer echoed the reaction of
consumer
advocates across the United States when he likened Debrowski’s
words to a “bank robber apologizing to his accomplice rather
than
the person who was robbed.”
Although trust trade-offs are sometimes unavoidable, they can
often be anticipated and their negative consequences mitigated.
The key is to avoid defining the set of relevant stakeholders too
narrowly. If Mattel had, from the outset, identified the multiple
stakeholder groups that were affected by the recalls — and
which
would thus be affected by the company’s response — it might
have
taken a more balanced approach that considered the various

concerns and interests of all those parties.
Value Congruence Matters Across the Board
One of the most underestimated determinants of trust is the
desire of stakeholders to identify with the values of an
organiza-
tion. Many people believe that value congruence is important
only in relatively few, close relationships, for example, between
spouses, friends or close business partners. But we have found
that although value congruence matters most to employees (that
is, to individuals who are indeed closest to the organization), it
is
also an important factor for every other stakeholder group we
studied. In other words, stakeholders of all types are interested
in
associating with organizations with whom they can identify —
and with whom they perceive a match in values.
Google Inc. illustrates the critical role that value congruence
can
play — both positively and negatively. When Sergey Brin and
Larry
Page took Google public in 2004, they created two share

classes: Class
A (for outside investors) would have just one-tenth the voting
rights
of Class B (for insiders). This sent a signal that Google insiders
would
remain in charge and that no outsiders could impose their
values.23
Stakeholders can be categorized according to the intensity
of their relationship with the company (based on length
and frequency of interactions) and their locus (that is,
whether they are inside or outside the organization). Those
two dimensions — intensity and locus — can be plotted to
create four archetypes. It should be noted that actual stake-
holder groups will not necessarily be perfectly aligned with
any of the four archetypes. For example, a stakeholder’s
relationship with an organization can be of “moderate”
depth, instead of “high” or “low.” But as a rough simplifica-
tion that approximates the modal case in reality, the major

categories of stakeholders — customers, suppliers, employ-
ees and investors — can be loosely associated with one of
the archetypes.
Categorization of Stakeholders
Locus
Intensity
External
Internal
Low High
Investors Employees
Suppliers Customers
“[We] intend to operate Google differently, applying the values
it has
developed as a private company to its future as a public
company,”
Page explained. “We will live up to our ‘don’t be evil’ principle

by
keeping user trust and not accepting payment for search results.
…
[We] will do our best to make Google a long-term success and
the
world a better place.”24 Various stakeholders embraced
Google’s
values, which engendered high levels of trust. The company was
named the best place to work;25 in several surveys it received
stellar
marks for its reputation;26 and its stock price soared.
Recently, however, Google has come under fire, and a big
source of the problem appears to be the company’s espoused
values. In order to serve the Chinese market, Google made a
deal
with the government there to accept self-censorship for certain
topic areas, such as the Tiananmen Square massacre, Tibet and
the independence of Taiwan. Although competitors Microsoft
Corp. and Yahoo! Inc. had made similar concessions, Google’s
actions were seen as particularly reprehensible by many users
because of the company’s values pledge (“don’t be evil”).27 As

a
consequence, people’s trust was severely shaken. Google execu-
tives were compared to Nazi collaborators and had to appear in
Congressional hearings to explain their actions. Protestors
marched at the company’s headquarters in Mountain View,
California.28 Later, Sergey Brin would admit that, “on a
business
level, that decision to censor ... was a net negative.”29
The online classified service craigslist inc. is another organiza-
tion that views value congruence as a core company asset.
Founder
Craig Newmark is more likely to reference “the golden rule”
than
“the profit motive” when discussing appropriate guides for
iden-
tifying and achieving organizational objectives, and CEO Jim
Buckmaster has told investment bankers and Wall Street
analysts
that monetizing its services and finding additional revenue
sources in an effort to maximize profits is “not part of the
goal.”30

This approach appeals to craigslist’s customer base and employ-
ees. (Our own data suggests that many stakeholders mistrust
businesses in part because companies have a fiduciary responsi-
bility — and usually strong incentives — to maximize
shareholder
value, and their behavior is hence perceived as
opportunistic.31)
But, of course, investors have a different perspective altogether.
How might companies deal with this dilemma?
On the one hand, craigslist has been growing at a remarkable
rate and its expected market value (were it to issue an IPO)
continues to increase even as it clings to the values it espoused
at
its founding. This suggests that a company can be values-driven
without necessarily incurring a penalty in its market value.
Furthermore, the success of “socially conscious funds”32
suggests
that the conflict between investor values and the values of other
stakeholders might be diminishing. On the other hand, unless
a business is privately held (which craigslist is), it will likely

encounter great difficulty if it continually resolves trust trade-
offs
by giving short shrift to investors. Rather, a more effective
long-
term approach might favor values-congruent operations and
objectives within the constraints of fiduciary responsibility.
Research has shown that, despite their fiduciary duty to maxi-
mize shareholder value, managers have much more latitude in
managing social responsibility than is often assumed. Moreover,
a meta-analysis of past studies has found that the effect of
corpo-
rate social responsibility on financial performance is small but
positive.33 In other words, companies can appease a diverse set
of
stakeholders (at least to a degree) without offending investors.
Unfortunately, businesses seem to be doing poorly in terms of
perceived value congruence and trust, and the overall reputation
of
corporations in the United States (and throughout the world)
leaves
much to be desired. In 2005, 71% of respondents in an annual

survey rated the reputation of U.S. businesses as “not good” or
“ter-
rible.”34 Global businesses, meanwhile, were awarded negative
trust
ratings by a majority of respondents in more than 14 countries
surveyed by the World Economic Forum in 2006.35 This is
certainly
bad news for businesses as a whole. But it also suggests an
Different stakeholder groups do not place the same impor-
tance on the different factors of trust studied: integrity,
managerial competence, technical competence, benevo-
lence, transparency and identification (or value congruence).
For example, people in low-intensity relationships with a com-
pany do not base their trust on benevolence, whereas people
in high-intensity relationships do.
What Matters to Whom
Identification
Managerial
Competence
Technical
Competence

Benevolence
Integrity
Identification
Managerial
Competence
Technical
Competence
Benevolence
Integrity
Identification
Managerial
Competence
Technical
Competence
Integrity
Identification
Managerial
Competence
Technical
Competence
Integrity

Locus
Intensity
External
Internal
Low High
Indicates that a specific trust element matters relatively more
in this type of relationship than in another type of relationship.
SLOANREVIEW.MIT.EDU
opportunity to build trust and leverage it as a core asset for any
company that can successfully balance fiduciary responsibility
with
a strong emphasis on stakeholder value congruence.
STAKEHOLDERS DIFFER WITH REGARDS to the kinds and
degrees of
vulnerability they face. What they need to believe before they
will
trust a company also differs. Managers need to consider those
varying needs and anticipate the trade-offs that exist in

strength-
ening relationships with employees, customers, suppliers,
investors and others. In short, companies can’t take a one-size-
fits-all approach to managing stakeholder trust. Nor can they
simply leverage conventional wisdom.
Our work provides an initial step toward building a stakeholder-
specific model of organizational trust. The framework
challenges
some existing beliefs and sheds light on a number of areas that
companies would be wise not to ignore. In particular, our
results
suggest that managers need to better understand the seemingly
expansive role of value congruence and identification, more
fully
consider the contexts in which integrity without benevolence is
a recipe for distrust, more carefully investigate the distinction
between managerial and technical competence, and more rigor-
ously evaluate the costs and benefits of transparency initiatives.
Deeper knowledge in these and other areas will help companies
become more adept at managing stakeholder trust so that they

might reap the numerous benefits, including improved coopera-
tion with suppliers, increased motivation and productivity
among
employees, enhanced loyalty from customers and higher levels
of
support from investors.
REFERENCES
1. J. Weber, “Commentary: Give ‘Fair Disclosure’ Time to
Work,” Busi-
ness Week, Jan. 8, 2001.
2. See, for example, A. Brandenburger and B. Polak, “When
Managers
Cover Their Posteriors: Making the Decisions the Market Wants
to See,”
RAND Journal of Economics 27, no. 3 (autumn 1996): 523-541.
3. W. George, “Bill George: Nonperforming CEOs,” Sept. 6,
2007, www.
businessweek.com.
4. D.M. Cain, G. Loewenstein and D.A. Moore, “The Dirt On
Coming
Clean: Perverse Effects of Disclosing Conflicts of Interests,”
Journal
of Legal Studies 34 (2005): 1-25.
5. “Porsche Faces Delisting From Index as Deutsche Boerse
Readies
Decision,” Aug. 7, 2001, www.cfo.com.

6. “Porsche Is Highly Regarded By Students in Europe,” July
30, 2007,
www.automotoportal.com.
7. “Porsche Tops Quality Survey,” June 8, 2006,
http://money.cnn.com;
“Porsche Earnings Rise,” January 18, 2002,
http://archives.cnn.com;
and R. Alsop, “Corporate Reputation Survey: Best-Known
Companies
Aren’t Always Best Liked,” Wall Street Journal, Nov. 15, 2004,
p. B4.
8. “Ivester Responds to Belgian Product Withdrawal,’’ KO
Now, June 16,
1999; and “Coca-Cola ‘Regrets’ Contamination,” June 17, 1999,
http://
news.bbc.co.uk.
9. V. Johnson and S.C. Peppas, “Crisis Management in Belgium:
The
Case of Coca-Cola,” Corporate Communications 8 (2003): 18-
22.
10. S. Leith, “Three Years After Recall, Coca-Cola Sales in
Belgium Are
Better Than Ever,” Atlanta Journal-Constitution, Aug. 26, 2002.
11. J. Kaye and P. Argenti, “Coca-Cola India,” Tuck School of
Business
at Dartmouth case no. 1-0085 (Hanover, New Hampshire: Tuck
School
of Business, 2004).
12. “India: Behind the Scare Over Pesticides in Pepsi and

Coke,” Busi-
ness Week, Sept. 4, 2006.
13. I. Basu, “Coke Still Floundering in India,” Asia Times, June
23, 2006.
14. J. Pine and J. Gilmore, “Apple’s ‘Phony’ Reaction to iPhone
Custom-
ers,” Sept. 10, 2007, http://conversationstarter.hbsp.com; and J.
Martellaro, “iPhone Pricing: No Conspiracy, Rather Nimble
Reactions,”
Sept.14, 2007, www.ipodobserver.com.
15. P. Williams and J. Williams, “Why Good Companies Go
‘Bad’ —
By Trying to Be Somebody They’re Not,”
www.ravenwerks.com.
16. Williams and Williams, “Good Companies.”
17. J.E. Lappin, “The Unmaking of Motorola,” Jan. 25, 2007,
www.forbes.com.
18. C. Oster, “The Customer Service Hall of Shame,” April 26,
2007,
http://moneycentral.msn.com.
19. P.B. Kavilanz, “U.S. Biz Blamed for Dangerous Chinese
Products,”
Aug. 2, 2007, http://money.cnn.com.
20. “Mattel Recalls 18.2 Million Chinese-Made Toys,” Aug. 14,
2007,
www.ctv.ca.
21. C. Chandler, “Why Mattel’s ‘Apology’ to China Only Makes

It Worse,”
Sept. 25, 2007, http://chasingthedragon.blogs.fortune.cnn.com.
22. “Mattel Sorry for ‘Design Flaws,’” Sept. 21, 2007,
http://news.bbc.co.uk.
23. M. Lewis, “The Irresponsible Investor,” New York Times
Magazine,
June 6, 2004.
24. L. Page and S. Brin, “Letter From the Founders,” Aug. 18,
2004,
http://investor.google.com.
25. “100 Best Companies to Work for: 2007,” Fortune, Jan. 22,
2007.
26. “How Boss’s Deeds Buff Firm’s Reputation,” Wall Street
Journal,
Jan. 31, 2007; and R. Alsop, “Ranking Corporate Reputations —
Tech
Companies Score High in Yearly Survey As Google Makes Its
Debut in
Third Place,” Wall Street Journal, Dec. 6, 2005, p. B1.
27. “Don’t Be Evil: Restoring the Public Trust in Business,
Politics and
the Media,” June 6, 2006, www.dontbeevil.com.
28. C. Thompson, “Google’s China Problem (and China’s
Google
Problem),” New York Times Magazine, April 23, 2006.
29. J. Martinson, “China Censorship Damaged Us, Google
Founders
Admit,” Guardian, Jan. 27, 2007.

30. “Craigslist Meets the Capitalists,” Dec. 8, 2006,
http://dealbook.
blogs.nytimes.com.
31. M. Pirson, “Facing the Trust Gap: Measuring and Managing
Stake-
holder Trust” (Ph.D. diss., University of St. Gallen, 2007),
www.unisg.
ch/www/edis.nsf/.
32. S. Asci, “Socially Conscious Fund Firms Spread Their
Asset-Class
Wings,” Investment News, Dec. 10, 2007.
33. J. Margolis and J.P. Walsh, “Misery Loves Companies:
Rethinking
Social Initiatives By Business,” Administrative Science
Quarterly 48, no.
2 (June 2003): 268-305.
34. Alsop, “Ranking Corporate Reputations.”
35. B. Coursey, “Trust Trends: Confidence in NGOs On the
Rise,” Feb.
13, 2006, www.ethicalcorp.com.
Reprint 49413.
Copyright © Massachusetts Institute of Technology, 2008. All
rights reserved.
www.businessweek.com
www.cfo.com
www.automotoportal.com

http://news.bbc.co.uk
www.ethicalcorp.com
www.unisg.ch/www/edis.nsf/
http://dealbook.blogs.nytimes.com
www.dontbeevil.com
http://news.bbc.co.uk
www.ctv.ca
http://money.cnn.com
http://moneycentral.msn.com
www.forbes.com
www.ravenwerks.com
www.ipodobserver.com
http://conversationstarter.hbsp.com
http://chasingthedragon.blogs.fortune.cnn.com
PDFs ■ Reprints ■ Permission to Copy ■ Back Issues
Articles published in MIT Sloan Management Review are
copyrighted by the Massachusetts Institute of Technology.
Electronic copies of MIT Sloan Management Review
articles as well as traditional reprints and back issues can
be purchased on our Web site: sloanreview.mit.edu or
you may order through our Business Service Center
(9 a.m.-5 p.m. ET) at the phone numbers listed below.
To reproduce or transmit one or more MIT Sloan
Management Review articles by electronic or mechanical
means (including photocopying or archiving in any
information storage or retrieval system) requires written
permission. To request permission, use our Web site
(sloanreview.mit.edu), call or e-mail:
Toll-free in U.S. and Canada: 877-727-7170
International: 617-253-7170

Fax: 617-258-9739
e-mail: [email protected]
Posting of full-text SMR articles on publicly accessible
Internet sites is prohibited. To obtain permission to post
articles on secure and/or password-protected intranet sites,
e-mail your request to [email protected]
Hyperlinking to SMR content: SMR posts abstracts of
articles and selected free content at www.sloanreview.mit.edu.
Hyperlinking to article abstracts or free content does not
require written permission.
MIT Sloan Management Review
77 Massachusetts Ave., E60-100
Cambridge, MA 02139-4307
e-mail: [email protected]
Reproduced with permission of the copyright owner. Further
reproduction prohibited without permission.
Instructions:
Answer the following two essay questions. Be sure to answer
all parts of each question thoroughly and to cite your sources
using APA citation formatting. You are welcome to use this
document and type your answers right underneath the question
you are answering.
Stakeholder vs. Stockholder Theory
a. Explain both the stakeholder theory (stakeholder model of

business) and stockholder theory (stockholder model of
business) and discuss the differences
between the two.
b. Discuss some of the potential benefits of the stakeholder
theory. Discuss some of the potential challenges of the
stakeholder theory. (note: benefits and challenges are plural)
c. Discuss some of the potential benefits of the stockholder
theory. Discuss some of the potential challenges of the
stockholder theory. (note: benefits and challenges are plural)
d. Provide an example of an organization that we have not yet
studied in this class that exemplifies either the stakeholder or
the stockholder model. Be sure to explain why you have
reached your conclusion.
Ethical Theories/Decision Making
Read the following ethical dilemma and write an essay response
to the questions posed at the end of the narrative.
WHOLE FOODS RAHODEB
(Robbins and Judge, 2012)
In this class we’ve read about and discussed Whole Foods and
its co-founder and past CEO John Mackey. Whole Foods is a
fast-growing chain of upscale grocery stores and has long been
a Wall Street and business press favorite. It regularly appears
high on Fortune’s list of 100 Best Companies to Work For, and
it has spawned its share of competitors, including Fresh Market,
Trader Joe’s, and Wild Oats.
Given that most industry analysts see a bright future for

upscale, organic markets like Whole Foods, it’s no surprise that
the market has attracted its share of investor blogs. One of the
prominent bloggers (posting hundreds of blog entries)
“Rahodeb” has consistently extolled the virtues of Whole
Food’s stock and derided its competitor Wild Oats. Rahodeb
predicted that Wild Oats would eventually be forced into
bankruptcy and that the stock price of Whole Foods would grow
at an annual rate of 18 percent. Rahodeb’s Yahoo! Finance blog
entries were widely read because he seemed to have special
insight into the industry and into Whole Foods in particular.
In 2007, Rahodeb was exposed as Whole Foods co-founder and,
at the time, CEO, John Mackey. (“Rahodeb” is an anagram of
“Deborah,” Mackey’s wife.) What’s more, while Rahodeb was
talking down Wild Oats stock, Whole Foods was in the process
of acquiring Wild Oats, and talking down the company may
have made the acquisition easier and cheaper. Because the
companies often have stores in the same cities, the Federal
Trade Commission (FTC) attempted to block the acquisition,
and the FTC was responsible for “outing” Mackey. In response,
Mackey said: “I posted on Yahoo! under a pseudonym because I
had fun doing it. Many people post on bulletin boards using
pseudonyms. The views articulated by Rahodeb sometimes
represented what I believed and sometimes they didn’t.”
a. Were Mackey’s actions ethical? Be sure to use the ethical
theories we discussed in class (e.g., utilitarianism, free-market
ethics) and the discussions about ethical decision making (and,
of course, any other relevant topics) to analyze this ethical
dilemma and to support your conclusion.
b. Given what you already know about Mackey from this course,
are you surprised by his actions? Explain why or why not? As
always, be sure to use course readings/concepts/theories to
explain your answer.

Designing Curriculum Instruction and AssessmentAssignment1. Ma.docx

Designing Curriculum Instruction and AssessmentAssignment1. Ma.docx

More Related Content

Similar to Designing Curriculum Instruction and AssessmentAssignment1. Ma.docx (20)

More from simonithomas47935 (20)

Recently uploaded (20)

Designing Curriculum Instruction and AssessmentAssignment1. Ma.docx