Chapter 10 Business Ethics Social Responsibility Environmental Sustainability

Chapter 10 Business Ethics/ Social Responsibility/ Environmental Sustainability Strategic Management: Concepts & Cases 13 th Edition Fred David Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 1

Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 2

Business Ethics Social Responsibility Environmental Sustainability Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 3

Business Ethics n Principles of conduct within organizations that guide decision making and behavior Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 4

Business Ethics n Code of Business Ethics q A document that provides behavioral guidelines that cover daily activities and decisions within the organization Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 5

Ethics Culture n Ethics training should include: A message from the CEO q Development and discussion of codes of ethics q Procedures for discussing and reporting unethical behavior q Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 6

Ethics Culture n To align ethical and strategic decision making: q q Incorporate ethical considerations into longterm planning Incorporate ethical considerations into performance appraisals Encourage whistle-blowing Monitor department and corporate performance regarding ethical issues Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 7

Business Ethics Social Responsibility Environmental Sustainability Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 8

Social Responsibility n Actions an organization takes beyond what is legally required to protect or enhance the well-being of living things Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 9

Social Policy n Concerns what responsibilities the firm has to its employees, consumers, environmentalists, minorities, communities, shareholders, and other groups n Should be considered during each stage of strategy formulation, implementation, and evaluation Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 10

Business Ethics Social Responsibility Environmental Sustainability Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 11

Environmental Sustainability n The extent that an organization’s operations and actions protect, mend, and preserve rather than harm or destroy the natural environment Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 12

Environmental Sustainability n Strategies of companies are scrutinized and evaluated from a natural environment perspective n Employees, consumers, governments, and society are resentful of firms that harm rather than protect the natural environment Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 13

Sustainability Report Reveals how a firm’s operation impact the natural environment n These reports are not required, but are a good business practice n Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 14

Managing Environmental Affairs in the Firm n n Managers must formulate strategies that preserve and conserve natural resources and control pollution Environmental strategies could include q Developing or acquiring green businesses q Divesting or altering environment-damaging businesses q Striving to become a low-cost producer through waste minimization and energy conservation q Pursuing a differentiation strategy through green product features Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 15

Reasons Why Firms Should “Be Green” n n n n Consumer demand Public opinion Environmental advocacy groups Federal and state environmental regulations Lenders Consumers, suppliers, distributors, and investors Liability suits and fines Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 16

ISO 14000/14001 Certification International Organization for Standardization (ISO) n A network of standards institutes of 147 countries n Largest developer of sustainability standards in the world n Compliance is voluntary n Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 17

ISO 14000/14001 Certification n n ISO 14000 - a series of voluntary standards in the environmental field ISO 14001 – a set of standards included within ISO 14000 q Adopted by thousands of firms worldwide to certify that they are conducting business in an environmentally friendly manner q Results in an environmental management system (EMS) Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall 18