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

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

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

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

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

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

Ethics Culture To align ethical and strategic decision making: Incorporate ethical considerations into long-term 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

Bribes A gift bestowed to influence a recipient’s conduct Illegal in many countries, acceptable in others Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

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

Social Responsibility 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

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

Social Policies on Retirement Worker shortages in countries around the world are leading to changes in retirement and immigration policies Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

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

Environmental Sustainability 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

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

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

Lack of Standards Changing Making a claim that a product or process is “green” is becoming more difficult as standards are put into place Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

Obama Regulations New “clean technology” business start ups Solar Wind Biofuels Insulation Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

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

Students and Environmental Training Companies prefer to hire graduates with training in environmental issues Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

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

Be Proactive, Not Reactive Proactive – do more than the bare minimum Reactive – changing only when forced to by the law or consumer pressure Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall

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

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

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

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

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