Chapter 10 Business Ethics/ Social Responsibility/ Environmental Sustainability

Strategic Management: Concepts & Cases 13th Edition Fred David

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Ch 10 -1

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Ch 10 -2

Business Ethics Social Responsibility Environmental Sustainability

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Business Ethics

Principles of conduct within organizations that guide decision making and behavior

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Business Ethics

Code of Business Ethics

A document that provides behavioral guidelines that cover daily activities and decisions within the organization

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Ethics Culture

Ethics training should include:

A message from the CEO Development and discussion of codes of ethics Procedures for discussing and reporting unethical behavior

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Ethics Culture

To align ethical and strategic decision making:

Incorporate ethical considerations into longterm planning Incorporate ethical considerations into performance appraisals Encourage whistle-blowing Monitor department and corporate performance regarding ethical issues
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Bribes

A gift bestowed to influence a recipients conduct Illegal in many countries, acceptable in others

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Business Ethics Social Responsibility Environmental Sustainability

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Social Responsibility

Actions an organization takes beyond what is legally required to protect or enhance the well-being of living things

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Ch 10 -10

Social Policy

Concerns what responsibilities the firm has to its employees, consumers, environmentalists, minorities, communities, shareholders, and other groups Should be considered during each stage of strategy formulation, implementation, and evaluation
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Social Policies on Retirement

Worker shortages in countries around the world are leading to changes in retirement and immigration policies

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Business Ethics Social Responsibility Environmental Sustainability

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Environmental Sustainability
The extent that an organizations operations and actions protect, mend, and preserve rather than harm or destroy the natural environment

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Ch 10 -14

Environmental Sustainability

Strategies of companies are scrutinized and evaluated from a natural environment perspective

Employees, consumers, governments, and society are resentful of firms that harm rather than protect the natural environment
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Sustainability Report

Reveals how a firms operation impact the natural environment These reports are not required, but are a good business practice

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Lack of Standards Changing

Making a claim that a product or process is green is becoming more difficult as standards are put into place

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Obama Regulations

New clean technology business start ups

Solar Wind Biofuels Insulation

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Managing Environmental Affairs in the Firm

Managers must formulate strategies that preserve and conserve natural resources and control pollution Environmental strategies could include Developing or acquiring green businesses Divesting or altering environment-damaging businesses Striving to become a low-cost producer through waste minimization and energy conservation Pursuing a differentiation strategy through green product features
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Students and Environmental Training

Companies prefer to hire graduates with training in environmental issues

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Reasons Why Firms Should Be Green

Consumer demand Public opinion Environmental advocacy groups Federal and state environmental regulations Lenders Consumers, suppliers, distributors, and investors Liability suits and fines
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Be Proactive, Not Reactive

Proactive do more than the bare minimum Reactive changing only when forced to by the law or consumer pressure

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ISO 14000/14001 Certification

International Organization for Standardization (ISO) A network of standards institutes of 147 countries Largest developer of sustainability standards in the world Compliance is voluntary
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ISO 14000/14001 Certification

ISO 14000 - a series of voluntary standards in the environmental field ISO 14001 a set of standards included within ISO 14000 Adopted by thousands of firms worldwide to certify that they are conducting business in an environmentally friendly manner Results in an environmental management system (EMS)
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Electric Car Networks

Government funding for manufacturing Recharging stations being installed in many cities Extensive research and development within the auto industry Companies are replacing gasoline powered vehicles with hybrid electric-natural gas vehicles
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March 2009 Copenhagen Meeting

Scientists warned that global warming is worse than expected Companies and governments encouraged to vigorously implement strategies to cut greenhouse gases Kyoto Protocal expires in 2012 Results of March 2009 Copenhagen Meeting are expected to replace the Kyoto Protocal
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