Module 10 Business Ethics Social Responsibility Environmental Sustainability

Module 10 Business Ethics/ Social Responsibility/ Environmental Sustainability Ch 10 -1

Ch 10 -2

Business Ethics Social Responsibility Environmental Sustainability Ch 10 -3

Business Ethics n Principles of conduct within organizations that guide decision making and behavior Ch 10 -4

Business Ethics n Code of Business Ethics q A document that provides behavioral guidelines that cover daily activities and decisions within the organization Ch 10 -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 Ch 10 -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 Ch 10 -7

Bribes n n A gift bestowed to influence a recipient’s conduct Illegal in many countries, acceptable in others Ch 10 -8

Business Ethics Social Responsibility Environmental Sustainability Ch 10 -9

Social Responsibility n Actions an organization takes beyond what is legally required to protect or enhance the well-being of living things Ch 10 -10

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 Ch 10 -11

Social Policies on Retirement n Worker shortages in countries around the world are leading to changes in retirement and immigration policies Ch 10 -12

Business Ethics Social Responsibility Environmental Sustainability Ch 10 -13

Environmental Sustainability n The extent that an organization’s operations and actions protect, mend, and preserve rather than harm or destroy the natural environment Ch 10 -14

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 Ch 10 -15

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 Ch 10 -16

Lack of Standards Changing n Making a claim that a product or process is “green” is becoming more difficult as standards are put into place Ch 10 -17

Obama Regulations n New “clean technology” business start ups Solar q Wind q Biofuels q Insulation q Ch 10 -18

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 Ch 10 -19

Students and Environmental Training n Companies prefer to hire graduates with training in environmental issues Ch 10 -20

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 Ch 10 -21

Be Proactive, Not Reactive Proactive – do more than the bare minimum n Reactive – changing only when forced to by the law or consumer pressure n Ch 10 -22

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 Ch 10 -23

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) Ch 10 -24

Electric Car Networks n n 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 Ch 10 -25

March 2009 Copenhagen Meeting n n 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 Ch 10 -26