Policy and Strategy- VII

WilSte78

UnitVII_Chapter10Presentation.pdf

Home >Business & Finance homework help >Management homework help >Policy and Strategy- VII

Strategic Management Concepts: A

Competitive Advantage Approach,

Concepts and Cases Seventeenth Edition

Chapter 10

Business Ethics,

Environmental

Sustainability and

Corporate Social

Responsibility

If this PowerPoint presentation contains mathematical equations, you may

need to check that your computer has the following installed:

1) MathType Plugin

2) Math Player (free versions available)

3) NVDA Reader (free versions available)

Learning Objectives

10.1 Explain why good ethics is good business in strategic

management.

10.2 Explain why whistle-blowing, bribery, and workplace

romance are strategic issues.

10.3 Discuss why environmental sustainability is a key issue

in strategic planning.

10.4 Discuss why corporate social responsibility (CSR) is a

key issue in strategic planning.

After studying this chapter, you should be able to do the following:

10.1 Explain why good ethics is good business in strategic management.

10.2 Explain why whistle-blowing, bribery, and workplace romance are

strategic issues.

10.3 Discuss why environmental sustainability is a key issue in strategic

planning.

10.4 Discuss why corporate social responsibility (CSR) is a key issue in

strategic planning.

Figure 10.1 The Comprehensive,

Integrative Strategic-Management Model

Source: Fred R. David, “How Companies Define Their Mission,” Long Range Planning 22, no. 1 (February

1989): 91. See also Anik Ratnaningsih, Nadjadji Anwar, Patdono Suwignjo, and Putu Artama Wiguna, “Balance

Scorecard of David’s Strategic Modeling at Industrial Business for National Construction Contractor of

Indonesia,” Journal of Mathematics and Technology, no. 4, (October 2010): 20.

This chapter is highlighted in the strategic management model on this slide.

Note that the material in this chapter informs all of the earlier steps in the

model.

Business Ethics

• Business Ethics

– principles of conduct within organizations that guide

decision making and behavior

Good business ethics is a prerequisite for good strategic management; good

ethics is just good business!

Social Responsibility, Environmental

Sustainability

• Social Responsibility

– actions an organization takes beyond what is legally

required to protect or enhance the well-being of living

things

• Sustainability

– the extent that an organization’s operations and actions

protect, mend, and preserve rather than harm or

destroy the natural environment

Business ethics, social responsibility, and environmental sustainability issues

are interrelated and impact all areas of the strategic management process.

Table 10.1 Seven Principles of

Admirable Business Ethics

1. Be trustworthy; no individual or business wants to

engage in business with an organization it does not trust

2. Be open-minded, continually asking for "ethics-related

feedback" from all internal and external stakeholders.

3. Honor all commitments and obligations.

4. Avoid misrepresenting, exaggerating, or misleading with

print materials, actions, or words.

5. Visibly be a responsible community citizen.

6. Use your accounting practices to identify and eliminate

questionable activities.

7. Follow the Golden Rule: "Do unto others as you would

have them do unto you."

All strategy formulation, implementation, and evaluation decisions have ethical

ramifications. It does pay to be ethical; high-performing companies generally

exhibit high business ethics.

How to Establish an Ethics Culture

Code of Business Ethics

• To ensure that the code of ethics is read, understood,

believed, and remembered, periodic ethics workshops are

needed to sensitize people to workplace circumstances in

which ethics issues may arise.

A key ingredient for establishing an ethics culture is to develop a clear code of

business ethics. Merely having a code of ethics, however, is not sufficient to

ensure ethical business behavior.

Business Ethics Topics That Have

Become Important

• Whistle-blowing

• Bribery

• Workplace romance

Three important business ethics topics of current importance are whistle-

blowing, bribery, and workplace romance.

Whistle-Blowing

• Whistle-blowing refers to employees reporting any

unethical violations they discover or see in the firm

Employees should practice whistle-blowing, and organizations should have

policies that encourage whistle-blowing.

Avoid Bribery

Bribery

• the offering, giving, receiving, or soliciting of any item of

value to influence the actions of an official or other person

in discharge of a public or legal duty

• a crime in most countries of the world, including the United

States

The gift may be any money, goods, actions, property, preferment, privilege,

emolument, object of value, advantage, or merely a promise or undertaking to

induce or influence the action, vote, or influence of a person in an official or

public capacity.

Workplace Romance

Workplace romance can be detrimental to morale and

productivity

• favoritism complaints can arise

• confidentiality of records can be breached

• reduced quality and quantity of work could result

• personal arguments can lead to work arguments

• whispering secrets can lead to tensions

• sexual harassment charges may ensue

• conflicts of interest could arise

Workplace romance is an intimate relationship between two consenting

employees, as opposed to sexual harassment, which the Equal Employment

Opportunity Commission (EEOC) defines broadly as unwelcome sexual

advances, requests for sexual favors, and other verbal or physical conduct of a

sexual nature.

Environmental Sustainability

• Employees, consumers, governments, and society are

especially resentful of firms that harm rather than protect

the natural environment.

• Conversely, people today are especially appreciative of

firms that conduct operations in a way that mends,

conserves, and preserves the natural environment.

The ecological challenge facing all organizations requires managers to

formulate strategies that preserve and conserve natural resources and control

pollution.

Sustainability Reports

Sustainability report:

• reveals how a firm’s operations impact the natural

environment

• discloses to shareholders information about the firm’s labor

practices, product sourcing, energy efficiency,

environmental impact, and business ethics practices

A bad sustainability record will hurt the firm in the market, jeopardize its

standing in the community, and invite scrutiny by regulators, investors, and

environmentalists.

ISO 14000/14001 Certification (1 of 2)

• The I S O 14000 family of standards concerns the extent to

which a firm minimizes harmful effects on the environment

caused by its activities and continually monitors and

improves its own environmental performance.

Based in Geneva, Switzerland, the International Organization for

Standardization (ISO) is a network of the national standards institutes of 147

countries, with one member per country. The ISO is the world’s largest

developer of sustainability standards.

ISO 14000/14001 Certification (2 of 2)

• I S O 14001 is a set of standards adopted by thousands of

firms worldwide to certify to their constituencies that they

are conducting business in an environmentally friendly

manner

• Results in an Environmental Management System (E M S)

The ISO 14001 standard offers a universal technical standard for

environmental compliance that more and more firms are requiring not only of

themselves but also of their suppliers and distributors.

Reasons Why Preserving the

Environment Should Be a Permanent

Part of Doing Business (1 of 2)

• Consumer demand for environmentally safe products and

packages is high.

• Public opinion demanding that firms conduct business in

ways that preserve the natural environment is strong.

• Environmental advocacy groups now have more than 20

million Americans as members.

• Federal and state environmental regulations are changing

rapidly and becoming more complex.

The next two slides identify reasons why preserving the environment should

be a permanent part of doing business.

Reasons Why Preserving the

Environment Should Be a Permanent

Part of Doing Business (2 of 2)

• Many lenders are examining the environmental liabilities of

businesses seeking loans.

• Many consumers, suppliers, distributors, and investors

shun doing business with environmentally weak firms.

• Liability suits and fines against firms having environmental

problems are on the rise.

Corporate Social Responsibility

• Ralph Nader proclaims that organizations have

tremendous social obligations.

• Milton Friedman asserts that organizations have no

obligation to do any more for society than is legally

required.

Some strategists agree with Ralph Nader, who proclaims that organizations

have tremendous social obligations. Friedman may contend that it is

irresponsible for a firm to give monies to charity.

Corporate Social Responsibility

(CSR) and Performance

• Research reveals a u-shaped relationship between CSR

and corporate financial performance, whereby firms with

the greatest CSR are generally also the firms with the

highest financial performance; firms with the lowest CSR

tend to have higher performance than those with moderate

social responsibility.

• Important to know that no social need can be met if the

firm fails.

CSR is related to firm financial performance.

Food Suppliers and Livestock

Welfare

• Consumers expect humane treatment of animals.

• Consumers are flocking to organic products.

Many consumers expect that animals will be treated humanely and that

organic options be available.

Wildlife Welfare

• Consumers globally are becoming increasingly intolerant

of any business or nation that directly or indirectly destroys

wildlife, especially endangered wildlife, such as tigers,

elephants, whales, songbirds, and coral reefs.

Affected businesses range from retailers that sell ivory chess pieces to

restaurants that sell whale meat.

Table 10.5 10 Companies With The

Best CSR Reputation as Rated by

Consumers

1. The Lego Group

2. Microsoft

3. Google

4. Walt Disney Company

5. BMW Group

6. Intel

7. Robert Bosch

8. Cisco Systems

9. Rolls-Royce Aerospace

10. Colgate-Palmolive

Figure 10.2 How to Gain and Sustain

Competitive Advantages

Slide 1: Strategic Management Concepts: A Competitive Advantage Approach, Concepts and Cases
Slide 2: Learning Objectives
Slide 3: Figure 10.1 The Comprehensive, Integrative Strategic-Management Model
Slide 4: Business Ethics
Slide 5: Social Responsibility, Environmental Sustainability
Slide 6: Table 10.1 Seven Principles of Admirable Business Ethics
Slide 7: How to Establish an Ethics Culture
Slide 8: Business Ethics Topics That Have Become Important
Slide 9: Whistle-Blowing
Slide 10: Avoid Bribery
Slide 11: Workplace Romance
Slide 12: Environmental Sustainability
Slide 13: Sustainability Reports
Slide 14: ISO 14000/14001 Certification (1 of 2)
Slide 15: ISO 14000/14001 Certification (2 of 2)
Slide 16: Reasons Why Preserving the Environment Should Be a Permanent Part of Doing Business (1 of 2)
Slide 17: Reasons Why Preserving the Environment Should Be a Permanent Part of Doing Business (2 of 2)
Slide 18: Corporate Social Responsibility
Slide 19: Corporate Social Responsibility (CSR) and Performance
Slide 20: Food Suppliers and Livestock Welfare
Slide 21: Wildlife Welfare
Slide 22: Table 10.5 10 Companies With The Best CSR Reputation as Rated by Consumers
Slide 23: Figure 10.2 How to Gain and Sustain Competitive Advantages
Slide 24: Copyright