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

CHAPTER 9ETHICS, CORPORATE SOCIAL RESPONSIBILITY, ENVIRONMENTAL SUSTAINABILITY, AND STRATEGYStudent VersionMcGraw-Hill/IrwinCopyright đ2012 The McGraw-Hill Companies, Inc.WHAT 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 StandardsThe School of Ethical UniversalismEthical UniversalismHolds that common understandings across multiple cultures and countries about what constitutes right and wrong give rise to universal ethical standards that apply to all societies, all firms, and all businesspeople.Effect on Business EthicsWhether a business-related action is right or wrong is judged by universal standards.The School of Ethical RelativismEthical RelativismHolds that differing beliefs, customs, and behavioral norms across countries and cultures give rise to multiple sets of standards of what is ethically right or wrong. Effect on Business EthicsWhether business-related actions are right or wrong depends on local ethical standards.Integrated 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.Application of Integrated Social Contracts Theory to Multinational BusinessEffects on Ethical Standards:Adherence to universal ethical norms takes precedence over local norms.A local custom is not ethical if it violates universal ethical norms.Application of codes of ethics should first follow universal standards with allowance for local ethical diversity and influence.HOW AND WHY ETHICAL STANDARDS IMPACT THE TASKS OF CRAFTING AND EXECUTING STRATEGYThe Ethics Code Litmus Test:Is what we are proposing to do fully compliant with our code of ethics? Are there areas of ambiguity?Is this action in harmony with our core values? Are any conflicts or potential problems evident?Is there anything in the action that is ethically objectionable? Would our stakeholders, our competitors, the SEC, or the media view this action as ethically objectionable?Consequences 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 TestWHAT 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 EnvironmentWHY SHOULD A FIRM’S STRATEGIES BE ETHICAL?Moral Case:Because a strategy that is unethical is morally wrong and reflects badly on the character of the firm’s personnel.Business Case:Because an ethical strategy can be both good business and serve the self-interest of shareholders.CORPORATE SOCIAL RESPONSIBILITY, EVIRONMENTAL SUSTAINABILITY, AND STRATEGYCorporate 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.Crafting Corporate Social Responsibilityand Sustainability StrategiesPursuing a Sustainable CSR Strategy in the Firm’s Value Chain ActivitiesBusiness Case:Competitive AdvantageMoral Case:Stakeholder BenefitsThe 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”The 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 opportunities for revenue enhancement due innovation in support of sustainability and CSRSupport for the long-term interests of shareholdersCombating 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 correct and punish firmsRefusal to do business with irresponsible firms