1.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -1
Chapter 10
Business Ethics/ Social Responsibility/
Environmental Sustainability
Strategic Management:
Concepts & Cases
13th Edition
Fred David

2.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -2

3.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -3
Business Ethics
Social Responsibility
Environmental Sustainability

4.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -4
Business Ethics
 Principles of conduct within
organizations that guide decision
making and behavior

5.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -5
Business Ethics
 Code of Business Ethics
 A document that provides behavioral
guidelines that cover daily activities
and decisions within the organization

6.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -6
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

7.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -7
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

8.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -8
Business Ethics
Social Responsibility
Environmental Sustainability

9.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -9
Social Responsibility
 Actions an organization takes beyond
what is legally required to protect or
enhance the well-being of living things

10.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
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

11.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -11
Business Ethics
Social Responsibility
Environmental Sustainability

12.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -12
Environmental Sustainability
 The extent that an organization’s
operations and actions protect, mend,
and preserve rather than harm or
destroy the natural environment

13.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -13
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

14.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -14
Sustainability Report
 Reveals how a firm’s operation impact
the natural environment
 These reports are not required, but are
a good business practice

15.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -15
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

16.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -16
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

17.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -17
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

18.
Copyright © 2011 Pearson Education, Inc.
Publishing as Prentice Hall
Ch 10 -18
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)