Bài giảng Crafting & Executing Strategy - Ch 9: Ethics, corporate social responsibility, environmental sustainability, and strategy

CHAPTER 9ETHICS, CORPORATE SOCIAL RESPONSIBILITY, ENVIRONMENTAL SUSTAINABILITY, AND STRATEGYSTUDENT VERSIONWHAT DO WE MEAN BY BUSINESS ETHICS?Business EthicsIs the application of general ethical principles to the actions and decisions of businesses and the conduct of their personnel.Are not materially different from ethical principles in general because business actions have to be judged in the context of society’s standards of right and wrong.WHERE DO ETHICAL STANDARDS COME FROM—ARE THEY UNIVERSAL OR DEPENDENT ON LOCAL NORMS?The School of Ethical UniversalismThe School of Ethical RelativismIntegrated Social Contracts TheorySources for Ethical Standards9–3EXAMPLES OF ETHICAL RELATIVISM ISSUESThe Use of Underage LaborThe Payment of Bribes and KickbacksRelativism Equates to Multiple Sets of StandardsThe Use of Local Morality to Guide Ethical BehaviorVariations in Ethical Standards9–4INTEGRATIVE SOCIAL CONTRACTS THEORYProvides a middle-ground balance between universalism and relativism.Posits that the collective views of multiple societies form universal (first order) ethical principles that all persons have a contractual duty to observe in all situations.Within the contract, cultures or groups can specify locally ethical (second-order) actions.9–5CONSEQUENCES OF ETHICALLY QUESTIONABLE STRATEGIESSizable civil fines and stockholder lawsuitsDevastating image and public relations hitsSharp stock price drops as investors lose confidenceCriminal indictments and convictionsWhen Strategies Fail the Ethical Litmus Test9–6WHAT ARE THE DRIVERS OF UNETHICAL STRATEGIES AND BUSINESS BEHAVIOR?Unethical Strategies and Business BehaviorsFaulty Oversight and Self Dealing Pressure for Short-term PerformanceA Weak or Corrupt Ethical Environment9–7WHAT ARE THE DRIVERS OF UNETHICAL STRATEGIES AND BUSINESS BEHAVIOR?Drivers of Unethical Business Behavior:Faulty internal oversight allows self-dealing in the pursuit of personal gain, wealth, and self-interest.Short-termism pressure to meet or beat short-term performance targets.A culture that puts profitability and business performance ahead of ethical behavior.9–8WHY SHOULD COMPANY STRATEGIES BE ETHICAL?The Moral Case for an Ethical Strategy:Because a strategy that is unethical is morally wrong and reflects badly on the character of the firm’s personnel.The Business Case for Ethical Strategies:Because an ethical strategy can be both good business and serve the self-interest of shareholders.9–9STRATEGY, CORPORATE SOCIAL RESPONSIBILITY, AND EVIRONMENTAL SUSTAINABILITYCorporate Social Responsibility (CSR)Is a firm’s duty to operate in an honorable manner, provide good working conditions for employees, encourage workforce diversity, be a good steward of the environment, and actively work to better the quality of life in the local communities where it operates and in society at large.9–10WHAT DO WE MEAN BY SUSTAINABILITY AND SUSTAINABLE BUSINESS PRACTICES?SustainabilityIs the relationship of a firm to its environment and its use of natural resources.Sustainable Business PracticesAre those practices of a firm that meet the needs of the present without compromising the ability to meet the needs of the future.9–11SUSTAINABILITY AND SUSTAINABLE BUSINESS PRACTICESEnvironmental Sustainability StrategyConsists of the firm’s deliberate actions to:Protect the environment.Provide for the longevity of natural resources.Maintain ecological support systems for future generations.Guard against ultimate endangerment of the planet.9–12CRAFTING CORPORATE SOCIAL RESPONSIBILITY AND SUSTAINABILITY STRATEGIESPursuing a Sustainable CSR Strategy in the Firm’s Value Chain ActivitiesBusiness Case:Competitive AdvantageMoral Case:Stakeholder Benefits9–13THE MORAL CASE FOR CSR AND ENVIRONMENTALLY SUSTAINABLE BUSINESS PRACTICESOperate ethically and legallyProvide good work conditions for employeesBe a good environmental stewardDisplay good corporate citizenshipThe Implied Social Contract:“To Do the Right Thing”9–14THE BUSINESS CASE FOR CSR AND ENVIRONMENTALLY SUSTAINABLE BUSINESS PRACTICESIncreased reputation and buyer patronageReduced risk of reputation-damaging incidentsLower turnover costs and enhanced employee recruiting and workforce retentionIncreased revenue enhancement opportunities due to support of CSR and sustainabilityCSR and sustainability best serve long-term interests of shareholders9–15COMBATING THE EVASION OF CSR AND SOCIALLY HARMFUL BUSINESS PRACTICESHarmful and Unethical Business Actions and BehaviorsIncreased public awareness of misdeeds of bad behavior by firms Increased legislation and regulation to correct and punish firmsRefusal to do business with irresponsible firms9–16