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Chapter Objectives
1. Explain why good ethics is good business instrategic management.
2. Explain how firms can best ensure that theircode of business ethics guides decision making
instead of being ignored.
3. Explain why whistle-blowing is important to
encourage in a firm.4. Discuss the nature and role of corporate
sustainability reports.
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Chapter Objectives (cont.)
5. Discuss specific ways that firms can begood stewards of the natural
environment.
6. Explain ISO 14000 and 14001.7. Discuss recent trends in bribery law.
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A Comprehensive Strategic-
Management Model
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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 organizations operations
and actions protect, mend, and preserverather than harm or destroy the natural
environment
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Business Ethics
Business ethics
principles of conduct within organizations that
guide decision-making and behavior
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Seven Principles of Admirable
Business Ethics
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Code of Business Ethics
To ensure that the code of ethics is read,
understood, believed, and remembered,
periodic ethics workshops are needed to
sensitizepeople to workplace
circumstances in which ethics issues may
arise
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An Ethics Culture
Whistle-blowing
refers to policies that require employees to
report any unethical violations they discover
or see in the firm
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An Ethics Culture
Ethics trainingprograms should include
messages from the CEO or owner of the
business emphasizing ethical business
practices, the development and
discussion of codes of ethics, and
procedures for discussing and reporting
unethical behavior
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Bribes
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
is a crime in most countries of the world,
including the United States
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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
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Environmental Sustainability
Employees, consumers, governments, and
society are especially resentful of firms that
harmrather than protectthe natural
environment
Conversely people today are especially
appreciativeof firms that conduct operations
in a way that mends, conserves, andpreserves the natural environment
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The Top 20 Companies in the
World on Sustainability
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Lack of Standards Changing
Uniform standards defining environmentally
responsible company actions are rapidly
being incorporated into our legal landscape
It has become more and more difficult for
firms to make green claims when their
actions are not substantive, comprehensive,
or even true
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Managing Environmental
Affairs in the Firm
Environmental strategies can 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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Reasons Why Firms Should
Be Green
1. Consumer demand for environmentally safeproducts and packages is high.
2. Public opinion demanding that firms conductbusiness in ways that preserve the naturalenvironment is strong.
3. Environmental advocacy groups now have over
20 million Americans as members.4. Federal and state environmental regulationsare changing rapidly and becoming more
complex.
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Reasons Why Firms Should
Be Green
5. More lenders are examining the environmentalliabilities of businesses seeking loans.
6. Many consumers, suppliers, distributors, andinvestors shun doing business withenvironmentally weak firms.
7. Liability suits and fines against firms having
environmental problems are on the rise.
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Be Proactive, Not Reactive
A proactive policy views environmental
pressures as opportunitiesand includes
such actions as developing green
products and packages, conserving
energy, reducing waste, recycling, and
creating a corporate culture that is
environmentally sensitive.
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ISO 14000/14001 Certification
The ISO 14000 family of standards
concerns the extent to which a firm
minimizes harmful effects on the
environment caused by its activities and
continually monitorsand improvesits own
environmental performance.
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ISO 14000/14001 Certification
ISO 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
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Major Requirements of an EMS
Show commitments to preventionof
pollution, continual improvement in
overall environmental performance, and
compliancewith all applicable statutory
and regulatory requirements
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Major Requirements of an EMS
Identify all aspects of the organizations
activities, products, and services that
could have a significant impact on the
environment, including those that are not
regulated
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Major Requirements of an EMS
Set performance objectives and targets
for the management system that link back
to three policies: (1) prevention of
pollution, (2) continual improvement, and
(3) compliance
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Major Requirements of an EMS
Meet environmental objectives that
include training employees, establishing
work instructions and practices, and
establishing the actual metrics by which
the objectives and targets will be
measured
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Major Requirements of an EMS
Conduct an audit operation of the EMS
Take corrective actions when deviations
from the EMS occur
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