Chapter 10

Business Ethics/ Social Responsibility/

Environmental Sustainability

Strategic Management:
Concepts & Cases
13th Edition
Fred David

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Publishing as Prentice Hall

Ch 10 -1

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Ch 10 -2

Business Ethics
Social Responsibility
Environmental Sustainability

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Ch 10 -3

Business Ethics

Principles of conduct within

organizations that guide decision
making and behavior

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Ch 10 -4

Business Ethics

Code of Business Ethics

A document that provides behavioral

guidelines that cover daily activities
and decisions within the organization

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Ch 10 -5

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

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Ch 10 -6

Ethics Culture

To align ethical and strategic decision

making:

Incorporate ethical considerations into longterm planning

Incorporate ethical considerations into
performance appraisals
Encourage whistle-blowing
Monitor department and corporate
performance regarding ethical issues
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Ch 10 -7

Bribes

A gift bestowed to influence a recipients

conduct
Illegal in many countries, acceptable in
others

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Ch 10 -8

Business Ethics
Social Responsibility
Environmental Sustainability

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Ch 10 -9

Social Responsibility

Actions an organization takes beyond

what is legally required to protect or
enhance the well-being of living things

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Ch 10 -10

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
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Ch 10 -11

Social Policies on Retirement

Worker shortages in countries around the

world are leading to changes in retirement
and immigration policies

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Ch 10 -12

Business Ethics
Social Responsibility
Environmental Sustainability

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Ch 10 -13

Environmental Sustainability

The extent that an organizations

operations and actions protect, mend,
and preserve rather than harm or
destroy the natural environment

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Ch 10 -14

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
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Ch 10 -15

Sustainability Report

Reveals how a firms operation impact

the natural environment
These reports are not required, but are
a good business practice

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Ch 10 -16

Lack of Standards Changing

Making a claim that a product or

process is green is becoming more
difficult as standards are put into place

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Ch 10 -17

Obama Regulations

New clean technology business

start ups
Solar
Wind
Biofuels
Insulation

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Ch 10 -18

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
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Ch 10 -19

Students and Environmental Training

Companies prefer to hire graduates

with training in environmental
issues

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Ch 10 -20

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
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Ch 10 -21

Be Proactive, Not Reactive

Proactive do more than the bare
minimum
Reactive changing only when
forced to by the law or consumer
pressure

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Ch 10 -22

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

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Ch 10 -23

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)
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Ch 10 -24

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
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Ch 10 -25

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
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Ch 10 -26

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mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.

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Ch 10 -27